Health care costs are spiraling out of control. Health care outcomes are lower in the United States than in many other developed countries. There’s a distrust of the medical establishment and false expectations of top of the line procedures. Millions of people are uninsured or underinsured. The Affordable Care Act was meant to address the country’s broken health care system, but will it?
At the REACH Symposium: Healthcare 2015 and Beyond on Tuesday, Trinity University’s Department of Healthcare Administration and Centene Corporation brought together some of the best and the brightest in the world of health care economics and innovation to discuss these problems.
Albert Hawkins, former Health and Human Services executive commissioner, reminded us that the U.S. spends more per capita than most other developed countries but has among the worst health outcomes. Jow Flower, author of “Healthcare Beyond Reform,” put those figures into context. From the 1960s into the early 1980s, health care expenditures in the U.S. were on a par with most other countries.
Then cost controls were introduced. In 1983, the “attempts to control costs became a handbook for how to make more money in health care.” When cost controls shifted health care to a fee-for-service model, the health care system adopted a business model that relies on the consumer purchase of services, regardless of relevance. In markets where one hospital system purchases another, prices have increased as much as 40%, said Jamie Dudensing, CEO of the Texas Association of Health Plans.
The price of an ankle MRI in the Washington, D.C. area ranges from $400 to $2,183 for the same procedure. The same procedure in a doctor’s office often costs as little as one-third of the cost at a hospital.
As one conference attendee explained, his new grandchild was born in England, delivered by a midwife in a birthing center. The panelists described labor and delivery departments as the “cash cow for hospitals.” While Texas laws provide for midwifery care by certified professional midwives (CPMs), certified nurse midwives must work under the guidance of a physician and deliver in hospitals, where the costs are significantly higher. The ideal is to utilize the highly trained specialists, and therefore most expensive, for only those circumstances in which they are required. If a nurse practitioner, physician’s assistant, or midwife can provide the same service, is it necessary to spend five or ten times as much?
Flower said that 20% of the people generate 80% of the cost, 5% of the people generate 50% of the cost and 1% of people generate 20% of the cost. The 1% are the individuals with chronic illness. If we can target efforts on reducing expenditures for that 1% by prevention, we can bring down the overall costs.
Typical employee wellness programs are not very cost-effective, since those who sign up are already the healthiest individuals. However, community efforts that incorporate housing rehabilitation, community based fitness programs, home health care and vaccinations prevent the chronic illnesses that generate the bulk of health care expenditures.
One downside to the Affordable Care Act has been that to cover costs, insurance companies have raised co-pays, according to Paul Hughes-Cromwick of the Center for Sustainable Health Spending. The result is that a higher co-pay for a wellness visit will discourage people from seeing their provider, a visit which could have prevented chronic illness. So instead of preventing illness, we avoid the doctor until our health is in crisis, requiring much more money to get healthy again.
The goal of the Affordable Care Act has been to make health insurance available to all. And it has, mostly. In Texas, there has been a 90% increase in the purchase of individual plans due to the ACA, particularly for those eligible for subsidies. Hawkins noted that this doesn’t necessarily translate to improved access to care: more people may have insurance, but increased co-pays and deductibles may discourage them from using it. Furthermore, the decrease in the number of uninsured Texans is very small, possibly due to the refusal to the state’s refusal to accept federal Medicaid expansion funds.
So what’s the solution?
To bend the cost curve, we need to focus on waste: where are we spending money that’s not necessary?
Years ago my daughter had a rash which looked suspiciously like chicken pox. So I took a picture and sent it to my colleague, a public health physician, who, along with a number of other health professionals in the office confirmed chicken pox. No doctor’s visit, no risk of exposing potentially susceptible or immunocompromised kids in a doctor’s office and because I could rely on my colleagues, no cost.
In normal circumstances a physician could not practically provide such services for free, but could do so at substantially less cost. An important element, though, is having an already established relationship with the provider so that they know the patient’s risk factors, the likelihood of complications and the need for follow-up.
“Know your patients. Know their issues. Coordinate care,” said Farzad Mostashari, Former Coordinator for Health Information Technology, DHHS.
Make technology work for us.
Dr. Jason Hwang, CEO of Icebreaker, wants to empower groups of people who are more affordable, and to put more tools into the hands of patients. Use portable devices, such as a radiology machine, that can be taken to outpatient clinics. When I worked on the Thai-Burmese border in village clinics, our staff conducted ultrasounds on pregnant women. The machine was a small, portable, battery operated device that was more than adequate in these villages with no electricity. Any patient who presented with potentially more severe problems could be taken to hospital for evaluation and a higher level ultrasound. Home health care, bringing equipment to the patient, or to smaller clinics, consistently reduces costs of providing those services.
Utilize a smartphone app to monitor insulin, which then transmits that information to your health care provider. Gurpreet Singh, health industries strategy leader at Price, Waterhouse, Cooper suggests DIY healthcare. That may scare some of us in healthcare, but central to our current situation is the adversarial role in which patients, providers, and insurance providers often find themselves. Consider Michael Balzer. Not a medical professional, but a guru of 3D technology. Then his wife had blurry vision and ultimately a tumor behind her eye. However, given its location, the details of that tumor and the ability to remove it were limited. So he developed a 3D image of his wife’s skull, showing the location of the tumor. They then found a neurosurgeon who would address the tumor in a minimally invasive way.
Ultimately, it all depends on trust. The Balzers were successful because they trusted their providers who in turn trusted and respected their efforts and skill. The current fee-for-service system dictated by insurance providers promotes an adversarial relationship. The lack of transparency of costs erodes trust.
As former Senator Bill Bradley said in his keynote address, polarization has prevented good people from working together – in politics and in our health care. The current battle of caring and collective action versus responsibility and personal action will cripple our health care system. The ACA has been an attempt to improve options for many, but it alone will not bend the cost curve.
*Featured/top image: An attendees asks a question during Trinity University’s REACH Symposium. Photo courtesy Parish Photography.