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Quote of the Month
"Avoid the unmanageable and manage the unavoidable."
Thomas Friedman
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Skyrocketing Health-Care Costs Could Double Premiums for Many Americans
By Steven Reinberg
HealthDay Reporter
Unless health-care reform becomes a reality, most Americans can expect to pay health insurance premiums that will double by 2016, a new report claims.
Left unchecked, the costs of employer-paid health insurance will jump from $11,381 to $24,291 in the next seven years, according to the report, which was released Wednesday by the Public Interest Research Group (PIRG).
And wasteful spending and inefficiencies are what is fueling the trend, the report contends.
"As costs rise, one out of three American's health-care dollars are going to waste and inefficiency," said report co-author Larry C. McNeely II, a U.S. PIRG Health Care Advocate.
Wasted dollars include inappropriate and unnecessary care, inflated drug prices and administrative bureaucracy, McNeely said.
The total cost in waste in 2007 for insurance bureaucracies, drug companies, medical device manufacturers and providers was $730 billion, according to the Congressional Budget Office.
The models for efficient care are out there, McNeely noted. These include the Mayo Clinic and Utah's Intermountain Health System. Using a coordinated approach to care, these systems improved quality and reduced per-patient costs by 43 percent, he noted.
"If hospitals in America reached the benchmark set by the Intermountain Health System, we would be spending $299 billion less every year on hospital care and getting better outcomes," McNeely said.
Moreover, doctor's pay should be based on the quality of care they provide rather than the number of tests and procedures they order, McNeely noted.
In terms of administrative bureaucracy, the private insurance industries' "red tape" needs to be controlled, McNeely said. Insurers waste billions each year on paperwork that has nothing to do with patient care. One suggestion is to limit the amount of premium dollars that can be spent on administrative costs, he said.
In addition, drug prices need to come down, McNeely said. "You can sever the link between physicians' prescription practices and the incredible amount of marketing dollars that the pharmaceutical industry is pouring into influencing physicians' decisions," he said.
In 2005, pharmaceutical companies spent $11.5 billion in advertising their most expensive drugs, and total drug advertising dollars increased 250 percent from 1997 to 2007, according to the report.
Drug company marketing increases the total number of prescriptions written and increases prescriptions for newer, more expensive drugs over older, less expensive drugs that are just as good, the report said.
Cutting costs has to be part of any overall health care reform program, McNeely said. PIRG supports a private-public partnership that provides high-quality, affordable heath care to all.
Health care policy expert Dr. Steffie Woolhandler, an associate professor of medicine at Harvard Medical School, thinks the only solution to the growing costs of health care is to change the system to a government-run system that reduces costs as it provides universal care.
"Profiteering by the drug, medical device and insurance companies is pushing costs into the stratosphere," Woolhandler said. "Uniquely among developed nations, the U.S. views health care as a business."
"Other affluent nations such as Canada, France and other European countries treat health care as a public good; they have nonprofit, national health insurance," Woolhandler added. "People in those countries live longer than Americans and spend only about half as much for health care."
Greg Scandlen, founder of Consumers for Health Care Choices, said the report correctly identifies the problem areas in health-care costs. However, he thinks the solution is to make consumers pay for their own health care through health savings accounts (HSAs) or other consumer-driven health-care plans.
"It is a lot more efficient to pay cash at the time of service then to process it through some insurance mechanism," Scandlen said. "You can get a dollar's worth of care for a dollar by paying at the time of service."
Scandlen thinks that giving people control over their health-care dollars helps consumers make better choices with medications and procedures, particularly when the money is coming out of their own pocket.
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More
Quotes
"It is a rare mind indeed that can render the hitherto non-existent blindingly obvious. The cry 'I could have thought of that' is a very popular and misleading one, for the fact is that they didn't, and a very significant and revealing fact it is too."
- Douglas Adams -------------------
"In matters of style, swim with the current; in matters of principle, stand like a rock."
- Thomas Jefferson
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| Greetings!
Will this be the year of real change?
In a newspaper article printed below, the reporter indicates that, quoting a health insurance executive, "we're on the path of universal coverage." If that is so, it would mark a very historic change in the way the U.S. approaches health care and the payment for health services. In the article following the universal care story we find that some Nashville physicians are concerned that hospital budget cuts may damage patient care "and alter how hospitals' medical staffs operate." While budget cuts are necessary from time-to-time, it is important to remember that you cannot cut your way to greatness. It is possible, however, to utilize the brainpower of an entire organization to improve quality and lower costs. Of course that approach takes hard work and a real big picture focus. The results generally are far more lasting, measurable and sensible.
Here's something else to think about...
A recent New York Times article was titled "Most Hospital Patients Unable to Identify Their Physicians, Survey Finds." Do you find that as interesting as I do? At a time when the server at your local coffee shop proudly announces "hi, I'm Bruce and I'll be serving you today" "75% of the patients were unable to name a single doctor assigned to their care." As an additional sign of problems, even the majority of those who did name a doctor were incorrect!
I cannot imagine a more personal, more intimate, more direct, human experience and relationship than that between physician and patient and yet we don't even know his or her name - we must truly be looking for generic care from Dr. #227.
Let's get to know each other.
Ken
KenBast@MgtConsultinginHealthcare.com |
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Universal health care gaining momentum
Pittsburgh Business Times - by Kris B. Mamula
America could have universal health care - the sooner the better for Dr. Ken Melani, president and CEO of health insurance giant Highmark Inc.
For years, the country has been moving toward guarantee-issue coverage for all through Medicare, Medicaid and other federal programs.
Commercial insurers have struggled to compete against government health care programs, but it's an unfair fight, Melani said. Private carriers such as Highmark lack the government's clout in dictating the price of medical services in the marketplace and its protection from litigation.
"We're on the path of universal coverage, but it's not a sweeping movement. It's incremental," said Melani, who heads the region's dominant insurer. "Get that off the table once and for all, and focus on the issues of cost and coverage.
"We have a system out of control, so we ought to go directly to the uniform government system."
Recent events are fueling the universal coverage movement. Health care reform is among President Obama's top priorities, and in November, two big health insurance trade groups shifted positions to embrace universal coverage.
"No one should fall through the cracks of our health care system," said Karen Ignagni, president and CEO of America's Health Insurance Plans, a Washington, D.C.-based advocacy group, in announcing the shift.
"Universal coverage is within reach and can be achieved by building on the current system."
The same day, the Washington, D.C.-based Blue Cross and Blue Shield Association also backed an individual mandate and coverage without regard to medical history. The trade association represents 39 Blue Cross and Blue Shield companies.
"It was a change in position, absolutely," said Alissa Fox, senior vice president of the association. "A consensus had really developed."
The escalating cost of health care coverage is not sustainable for businesses, according to Lee Taddonio, president of Churchill-based SMC Business Councils, an advocacy group. But the prospect of a pay-or-play provision in a health care reform bill will sour small business owners.
"Most of our members want to provide insurance, but they've had to drop out because of cost," Taddonio said. "The first thing they have to address is cost.
"They're not really getting at the root of the problem."
Nationwide, half of all employers opposed pay-or-play laws, according to a survey of 3,500 companies conducted in October by Mercer LLC. Requiring businesses to offer health insurance to employees or pay a special assessment also helped doom Pennsylvania's health reform efforts last year.
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Saint Thomas physician leaders question management
By Getahn Ward
THE TENNESSEAN
Physician leaders at three hospitals run by Saint Thomas Health Services in the Nashville area have cast votes of no confidence in management over concerns that an ongoing budget review may lead to deep cuts that damage patient care and alter how the hospitals' medical staffs operate.
The hospital system's top administrator, Chief Executive Officer James P. Houser, responded on Friday by putting the review process on hold for 30 days, until early March, to allow for better communication of the reasoning behind it "to all our stakeholders."
In a letter to doctors and other staff, Houser also disclosed that the health system has suffered a 30 percent loss in an investment fund from which it draws money for major capital projects.
The recent votes by the medical leadership at Saint Thomas Hospital, Baptist Hospital and Middle Tennessee Medical Center, though, called into question Houser's leadership and amount to an attempt by top doctors to influence the hospital system's board before any budget cuts are made.
"The point of it would be to pressure the administration," said Erie Chapman, a former chief executive of Baptist Hospital.
Doctors say their concerns include the possibility that medical leadership for all the local hospitals may be consolidated into a single committee, and that experienced nurses could be lost to the budget ax.
Some doctors say they also believe Houser may be stretched too thin by his dual role as a top executive here and as overseer of a Birmingham, Ala., health system also owned by Ascension Health, the St. Louis-based nonprofit that owns Saint Thomas Health Services and other hospitals around the country.
Layoffs, cutbacks and freezes in capital spending for construction and equipment are among actions other hospitals have taken as more patients lose health insurance and have trouble paying their medical bills.
Reports due in March
At Saint Thomas Health Services, administrators were expecting reports shortly from 23 teams of employees from across the system searching for ways to improve financial performance. Houser's decision means those teams' findings will now be due in early March instead of early February, the CEO said.
"We do feel that changes are necessary, given the challenging economic environment," said Rebecca Climer, a spokeswoman with Saint Thomas. "We have also emphasized that this will be a prudent, team approach that first considers patient safety and quality of care."
Among cutbacks at other Ascension-owned hospital systems nationwide, the Austin, Texas-based Seton Family of Hospitals placed some technology upgrades and purchases of nonclinical equipment on hold and cut hiring projections in half for this fiscal year.
Climer said that while some hospital systems have switched to a single medical staff leadership setup, Saint Thomas Health Services would consider that only on the advice of physician leaders. She said Houser spends the bulk of his time in Nashville, even though he also is Ascension's market ministry leader for Birmingham.
Saint Thomas posted a loss of $5.1 million for the fiscal year that ended June 30, 2006, according to a filing required of tax-exempt organizations. Last year, net income was $36.8 million with total revenues of $1.1 billion.
Climer said the system is on track to achieve a similar 3.4 percent margin for its current fiscal year, a performance that she considers respectable for not-for-profit hospitals in the current economy. "We've seen significant increases in the number of uninsured patients seeking care from us, patients delaying or avoiding care, and a drastic reduction in our investment income," she said.
Conflict can strengthen
No-confidence votes by a committee of leading physicians at hospitals have become more common as the facilities face pressures from lower reimbursements, increased government regulations and the economic downturn.
Medical executive committees are generally made up of a hospital's most influential doctors or department heads. The committees report to the board and have influence over medical policy and physicians' credentials. Administrators control the purse strings and business operations.
Conflicts can sometimes strengthen ties between a hospital's executive suite and its physicians, if it helps each side understand the other's views more fully. But such battles can lead to a hospital's CEO or some doctors leaving, said John Deane, CEO of Southwind Health Partners LLC.
At least one member of Saint Thomas Hospital's medical executive committee considers the current budget review to be routine.
"All of medicine is cost-conscious now because of the instability in the economy," said Dr. Timothy Mangrum, an internist and associate chief of medicine, "and we're trying to look at efficiency and trying to make sure we're making the best cost-conscious decisions for our patients, and provide the best care."
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Newsletter Archive Page.
(Past Issues)
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World Conference on Quality and Improvement
May 18 - 20, 2009
Minneapolis Convention Center,
Minneapolis, MN
Session Number:
HCW11
Session Title:
Through the Looking Glass - Reviewing & Renewing Your Organization's Commitment to Quality
Session Start/End Time:
Wednesday, May 20, 2009, 8:00 AM -12:00 PM
Session Description:
Ken Bast & Katherine Reller follow a 150-bed community hospital on its journey to improve quality. Discuss the pros and cons of each step the hospital took along the way. What would you have done? Is your hospital at a crossroad? Watch and discuss as a dynamic organization faced difficulties and came out on top by using simple tools.
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