CEOspeak: Health care woes and ways to get better
Not only are Jon Ness, Mike Baker and Rick Rasmussen the leaders of their local health care organizations, but each represents a different sector of the medical field.
Ness is CEO of Kootenai Health, by far North Idaho's largest hospital and the region's biggest employer.
Baker is CEO of Heritage Health, formerly Dirne Health Clinic - a nonprofit that began as a safety net for low income patients, which has now grown in size and scope.
Rasmussen is CEO of Northwest Specialty Hospital, a for-profit facility based in Post Falls.
Each was asked to assess problems and suggest possible solutions that could lead to a more effective - and affordable - health care system for all Americans. Here's what they said.
PRESS: Name three key factors you see that contribute to America's health care costs being significantly higher than any other industrialized countries in the world.
RASMUSSEN: Three key factors - Lack of transparency in the U.S. health care system, higher pharmaceutical/medical supply pricing, and greater use of technology (MRI, CTs, etc.) than other countries.
BAKER: In my opinion, the three key factors contributing to the cost of care are waste, reimbursement systems and over-utilization of specialty care, drugs and hospital services.
Waste is found everywhere. Labs and tests that are redone because of poor information systems and record sharing waste money. Too much money is wasted on the administration of health care from insurance companies to general regulations. Reimbursements systems currently pay for services rather than performance or quality. There is an incentive to provide more care because that is how you get paid. PAY FOR QUALITY and this goes away!
We NEED specialists, drugs and hospitals, please don't get me wrong, but the ER is not the place to go for non-emergent services. Specialists are awesome, but they should not be used as the first line of defense in most cases.
No need to explain drug costs. Better nutrition and exercise is cheaper and more effective for many of the primary problems we face in the system. Save the expertise of the specialists and hospitals for emergent problems that come from things we can't control.
NESS: 1. Administrative costs are high.
Many countries have a single-payer system; everyone in the country has the same coverage. In the U.S., we have private insurance, governmental plans, and individuals with no coverage. The process for documenting, coding, submitting, authorizing, and auditing claims and patient bills for reimbursement is expensive and resource-intensive. Teams of dedicated hospital staff work extremely hard to make sure this process is completed timely, accurately and in compliance with insurance and government regulations.
Many people don't realize the tremendous cost associated with this model. For example, the average physician spends 3.8 hours per week working on tasks that are specifically needed to support rules and regulations. A study by the Institute of Medicine in 2009 estimated the cost for administrative services was roughly $361 billion. Roughly 50 percent of that could be eliminated if the system was simplified and best practices used universally. This is a tremendous cost that is unique to the U.S. and adds nothing to the patient's care.
2. Unhealthy lifestyle choices.
Smoking, obesity, diabetes, and other chronic conditions that result from an unhealthy lifestyle contribute to expensive care. Unfortunately, many of these conditions are on the rise. Consider these statistics on obesity from the Centers for Disease Control's Behavioral Risk Factor Surveillance System. In 1990, among states participating in the survey, 10 states had a prevalence of obesity less than 10 percent and no state had prevalence equal to or greater than 15 percent. Twenty years later, in 2010, no state had a prevalence of obesity less than 20 percent. Thirty-six states had a prevalence equal to or greater than 25 percent; 12 of these states (Alabama, Arkansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Oklahoma, South Carolina, Tennessee, Texas, and West Virginia) had a prevalence equal to or greater than 30 percent.
More than 16 million Americans are living with a disease caused by smoking, and the total economic cost of smoking is more than $300 billion a year.
3. Fragmented, complex information makes it difficult to make informed decisions.
Many health care experiences depend upon so many different people and organizations, that it is very difficult to know ahead of time what the cost of care will be. For example, the amount you pay for a surgical procedure will depend upon the price charged for the operating room, the fee from the anesthesiologist, the fee from the surgeon, the cost of any needed supplies for the surgery, as well as the rate your insurer has negotiated with the provider and what your insurance plan will cover. Because the pricing is so complex, patients have been left to focus only on what it will cost them. This exclusive focus on "what does it cost me" eliminates any incentive to seek care from a lower-cost provider. It has been estimated that 70 percent of Emergency Department visits were unnecessary and could have been cared for in a lower-cost setting such as urgent care or primary care office.
Additionally, greater access to medical technology means U.S. patients are more likely than their European counterparts to receive higher levels of care. For example, patients in the U.S. receive CT scans at a rate of 265 per 1,000 people as compared to 123/1,000 in other developed nations. Coronary angioplasty occurs in the U.S. at a rate of 327/100,000 compared to the international average of 188/100,000.
PRESS: The U.S. spends more, per capita, on health care than any other industrialized nation, yet our average life expectancy is among the lowest. Are Americans getting the best bang for their health care dollar? Please explain your reasoning.
NESS: Part of the problem is that we are spending our money on the wrong things. A 2012 report issued by the Bipartisan Policy Center evaluated the things that make us healthy vs. where we spend our health care dollars. They found that our behaviors account for a full 50 percent of our overall health, followed by environment (20 percent), genetics (20 percent), and access to health care (10 percent). However, 88 percent of what we spend on being healthy is spent on medical services and only 4 percent is spent on healthy behaviors. If we could encourage people to think more proactively about improving or maintaining their health, we could make a tremendous impact on our national health crisis.
Health care systems have traditionally focused on caring for people after they are ill. We actually do this pretty well; however, we have an opportunity to improve on prevention, public health, and programs that aim to keep people healthy before they become sick. A 2013 study estimated that health care spending due to obesity is estimated to be as high as $210 billion annually, or 21 percent of total national health care spending. Diabetes had an estimated cost of about $245 billion in 2012 in the U.S. Imagine where we would be and the improved health of our population if those funds had been spent encouraging good health habits.
BAKER: NO! We spend health care dollars fixing problems that could have been prevented. Most of the care that is provided is focused on mitigating the problems that come from social isolation, unhealthy weight, too much stress and general lifestyle problems. Look up the stream and find the root cause. Spend money there!
I believe that the No. 1 driver of costs in the health care system is waste. We spend way too much time administering health care, worrying about litigation and searching for the quick and easy pill to cure all of our problems. Care is expensive, but we are spending money treating diseases that could have been prevented. Yes, the rest of the world has these problems too, but we seem to expect too much.
RASMUSSEN: Yes, I believe Americans can get their best bang for their health care dollars but they need to be smart consumers and shop for the best quality services at the best prices. Health care in America is about choice and competition. Patients need to research and find the right option for them to give them the best health care results at the best prices. Improved transparency in our healthcare system would assist the consumer in achieving this.
PRESS: If you could wave a magic wand and change three things that would bring down costs and maintain or improve health care performance - healthier and happier patients - what would they be?
BAKER: Improving the health care system is really not that hard in principle. If I could wave a magic wand, I'd restore the relationship between the general practitioner and the patient. We'd spend the majority of our time PREVENTING and CURING diseases before they unleash their damage on the body. We would engage with our patients in an integrated team with the patient at the center of everything we do. Health care problems don't start in a vacuum; they come from a series of lifestyle choices that build up over time.
NESS: In addition to improving all the problem areas noted above, here are three additional areas that should be addressed. Two probably would require a magic wand, but the third is something I believe the employers in our community could begin implementing with results right away.
1. Reduce the cost of medical education.
A 2012 report by the Association of American Medical Colleges showed that most medical students in the U.S. borrow six-figure amounts to help finance their education. In 2011, 86 percent of medical school graduates had education debt, with a median amount of $162,000. A borrower with this debt level would have monthly payments ranging from $1,500 to $2,100 after residency. This may be driving medical students away from primary care fields to more lucrative specialties. It may also deter qualified individuals from applying to medical school. Both of these factors may be contributing to the fact that we do not have enough primary care providers.
Maintaining an adequate number of primary care providers is key to getting people seen for preventive care, establishing a "medical home" model of care, and preventing patients from using the emergency department for situations that are not emergencies.
2. Common IT platform for electronic medical records.
Although the Affordable Care Act is incentivizing hospitals, physicians and other medical providers to use electronic health records, there are many different electronic health records systems available. Unfortunately, they don't all interface seamlessly, which is slowing the progression toward electronically sharing health information, reducing duplication of services and the ability to monitor emerging health trends using big data. If everyone were using integrated electronic health records systems, we would be years closer to seeing the advantages that can be gained through electronic medical record sharing.
3. Employer-supported wellness and prevention.
In addition to work already being done by public entities whose mission is community health, there is tremendous opportunity for employers to encourage wellness and prevention through the workplace. At Kootenai Health, our employees observe a tobacco-free workday, everyone receives appropriate vaccinations, and we have programs to encourage a healthy weight, active lifestyle, financial wellness, stress reduction, and more. On our campus you'll see employees walking during their lunch times or connecting at a yoga class after work. We know the impact personal health has in so many areas, employee engagement, productivity, worker retention, so we've made it a priority. It would be great to see other employers doing the same. Prevention is the best medicine!
RASMUSSEN: If I could wave a magic wand and change three things for America and our health care system I would first require transparency in health care pricing and costs. If consumers knew all the prices and costs for the services from all health care providers, it would allow them to make better informed choices and help drive down the dollars spent on health care. It would create better competition which is the American way and in turn, lower prices for health care services would ensue.
Secondly I would help with obesity. Americans' percentage of the obese is higher than almost all other countries and it leads to so many other medical problems that shorten life expectancy. I am living proof. After my bariatric surgery (laparoscopic sleeve) in which I have lost over 100 pounds, it has helped immensely to lower my blood pressure, lower my cholesterol levels, improve my sleep issues and improve my total quality of life (mentally and physically).
Finally I would help lower the complexity of the administering costs in the health care world. So much money is spent each year on verifying patients' eligibility, verifying authorization for services, re-submitting bills and appealing denials for needed and justified services that if the system was run more efficiently and effectively, much of this administrative spend could be eliminated. Insurance policies and the ACA have become so complex and confusing that more and more dollars need to be spent just to work through the processes, all at no value added to the patients and their care. The ACA has done nothing to bring down the cost of health care at the source. The United States has the best health care in the world but it is just too expensive. The government needs to discuss ways to bring down the cost of health care with those who actually deliver health care, rather than with politicians with much different motives.