Home >Health & Medicine >Reasons for Optimism About U.S. Healthcare by Mary Tolan

Reasons for Optimism About U.S. Healthcare by Mary Tolan

Date post:12-Aug-2015
View:147 times
Download:1 times
Share this document with a friend
  1. 1. Cl. i. .l ii-TiOf it t0l. ?lil, |.li. ll5l, ii. WM 31412-1:-. .u: tI4ri! ,' wsmurml / IIm1n/ Il. wtI= ' llm/ I4ii1uqix mm illliinljf / lljgililll?/fr):rlinit in,3 .2 (Tham:.1 ruarma,-4?-Iillltllmigf mliratluvtllw Ilruuga mu? nunxjInnI1I: m! IIItAddress by MARY TOLAN,Chairman of the Board, Accretive Health Inc. aving founded a company in healthcare and now serving asits chairman,Ive had a chance to observe some interesting develop- ments over the past decade.Iwantto share with you what is going on in healthcarc and what some of the key challenges are,as well as those initia- tives that should give us optimism that we might actually be at a point where some really positive transformation is beginning to take hold. As many of you know,we have dramatically higher healthcare costs in the U. S. than the rest of the developed world whether as a percentage of GDP or on a per-capita basis.Currently,Or- ganization for Economic Corporation and Development (OECD) countries average healthcare costs are running about $3,200 per person,whereas in the United States they have reached 358,200 per person.If we look at the disparity in GDP,OECD nations are running at 9.5 percent of GDR In the United States,the gure is 17.6 percent of GDP But that is not engendering any advantagesriat least as it relates to longevity./ Vhile were the leader on spending,we are not even near the top of the class in terms of longevity. / Vhat then are the pressures that our healthcare providers are experi- encing?When we talk about provid- crs,werc talking about physicians and hospitals.Here in the United States,the typical hospital system is not-for- prot and earning just a two-to-four percent operating margin.Even though thats tax exempt,its really not a very scally strong infrastructure with sufficient capital to invest in mak- ing things better. Signicant initiatives are,indeed,now going on in healthcare reform, / /seeking to move the delivery infra- structure from a focus on volume to value.VVe have expansion of Medicaid and coverage of people who in the past had no coverage.'l"hats a good thing.On the other hand,we havethe advent of state-based insurance exchanges with products likely to shift much more of the cost of healthcare to the individual and to households. Compliance is one area where a great deal is happening.There is a wholesale changing of medical nomenclature and coding into a more granular infrastructure.It will be great for data.It will be great for under- standing.But its also a massive.change in the skill set required for coders.Government and private payers are now looking at patient satisfaction as a key determiner of how providers are going to get paid,which is a positive from an incentive standpoint.At the same time,new pressures are | )ubbling up in light of all these forces. The interesting thing is we do not have equivalent inationary pressures in healthcare in the United States.VVhat do 1 mean by that?The cost of a day in a hospital or the cost and billing of physician time is gener- ally going up at the same rate as the Consumer Price Index (CPI).It was surprising to me the first time I learned that./ Vhat is causing the 2.5 times above normal ination growth in medical expenditures?It is what we call utilization ination.One of its unintended consequences is that physicians have less time to spend with each patient.As we take down their reimbursement,they have to see more patients just to remain constant in their income.Physicians now spend less time with each patient and givevAn_mI_.f: i;i; i;rcx: ii; i.3.
  2. 2. MARY TOLAN287 of the states showing between 4-00 and 735 l)ed days per 1,000. What explains this within one culture,one country,using similar technology? There is,in fact,a genuine human (: ost to this over-treatment.It has been estimated by Shannon Brownlee,who wrote the book,Oz/ erTrral1:d:Why 7&0 M uch {Medicine is Making Usand Poorer.Researchers put the number of deaths due to unnecessary care for elderly Americans at 30,000 a year.This would be the rough equivalent of actually losing a 747 airliner with complete fatalities once a week. What are the core issues that are driving this over-use?Lets start with a variation that can be sourced back to where a physician went to medical school,what they were taught,and how that plays out over time. I was talking to Dr.Arnie Milstein,a Professor at Stanford,who runs the Stanford Clinical Excellence Research Center.I said:Arnie,where are the people in academic medicine in America,who are studying how to get the best quality at the most affordable price with the best patient experi- ence? He answered:Mary,thatsjust not the way our academic medical en- terprise is set up.Theres nobody that I am aware of who is studying that.However,at our research center thats exactly what we have been trying to pull together and inviting academics from around the world to participate.But,to the best of my knowledge,this is still a relatively early,modest elfort. Thats amazing when you think about it.The path of inquiry about how we get the best care at the most affordable or best price has not yet framed a meaningful path of inquiry.Thats disappointing,but,on the other hand,it also gives us room for hope that we are going to be discovering some great future opportunities. In this country,the incentives we have now revolve around paying providers to do things./ Vhy should we be surprised that,on the margins,we actually do much more medically than any other society that doesnt pay on that basis?We also have asituation referred to as supply-in- duced demand.As Shannon Brown- lee chronicled in her book,if youre in Los Angeles,a Medicare bene- ciary,and you live closer to Hospital A versus hospital B,the number ofYou can see it in the Dartmouth Institute study of differences across the country.Many areas are twice as expensive as others.The mortality rates in those more expensive regions are two-to-six percent higher.Higher Why do we remain hopeful?What is it that is leading us to see that there really are breakthroughs? ICU days you will experience in your last year of life will be two times less than at Hospital B.Why is that?Well,hospital B has twice as much ICU bed capacity.Supply-induced capac- ity is the answer. Another thing to consider is so- called Gizmo Idolatry. An impor- tant paper,written by physicians from Johns Hopkins,chronicled the urge that we have to admire new technol- ogy without asking if its increased cost has beenjustietl by increased ef- ficacy.Dr.Charles Sorenson,CEO of Intermountain Healthcare,recently told me:Mary,when somebody has a prostate cancer diagnosis,theres a very effective surgery.It costs about $10,000 and has very good prognosis and outcomes.Theres also this new technology thats been developed called the Proton Beam Accelerator.And it has very similar good out- comes.Its just that it costs several times more than the surgery that we use today.And yet,somehow these two procedures persist side by side in our society as if it were unclear that one is several times more expen- sive than the other while getting the same outcomes. Still another very interesting part of this challenge is that there is sub- stantial variation in how patients are engaged in decision-making about their care and their ability to manage their own desires and values through end-of-life and palliative hospice care.There are numerous reasons why this exists. costs and more expenditures arenot getting us better outcomes.Itis almost certainly linked to that earlier statistic we citedfunnecessary deaths that are happening due to ad- ditional procedures. Why do we remain hopeful?What is it that is leading us to see that there really are breakthroughs?We actually have done national research to learn that somebody is,indeed,breaking through.Somebody is really guring out how to keep populations health- ier;how to engage with the patients;how to work with and empower physicians;and how to achieve de- monstrably better outcomes./ Ve have found those proof points and they are very exciting. Let me share an example with you.One of the largest physician groups in the United States decided a number of years ago that they would become fully accountable for the patients they were caring for.It also agreed to accept an aggregate amount of money to care for pa- tients.Physicians would be account- able to ve-star and quality ratings.And they would be asked to steward those resources for the betterment of their patient population,getting paid essentially for value.This was not a small test.It involved one million patients in California,Nevada and Florida and about 1,000 physicians. This group of physicians was es- sentially saying to insurance com- panies:Well take on these patients at a percentage of premium, I. .etsm_ SEPTEMBER 2013
  3. 3. 288say the premium was,in essence,the going price of covering a life in that market.The insurance company would keep the first l0-to-15 percent for marketing,claims processing and compliance.The physicians would get the other 85 percent to take care of everythingand thats exactly what they were doing.They hadthese physicians could begin to say:No,Ive got l00 patients here who need a lot more of my time.I need to bring Mrs. Jones in for a 90-minute iisk assessment.1 need to understand what all these meds are for,who all these specialists are,and how Im go- ing to finally take on a commanding role,coordinating Mrs. _]oncs care__. _._. _.. ____. _______. ___. ___ When patients are facing signicant healthcare challenges,they should get time with someone they trust tocarefully evaluate their alternatives. ___. __. _____. _.________. .__actually built up a capability that was achieving 152.4 billion in revenue.And they were so successful at bend- ing the cost curve and improving live-star ratings that they racked up a 22 percent margin protunheard of in provider healthcare.Remember that before we talked about hospi- tals that

Click here to load reader

Embed Size (px)