American People's Online Health Summit

AMERICAN PEOPLE'S ONLINE HEALTH SUMMIT

 

Center for Health Transformation

 

An ongoing, online Summit with the American People to discuss solutions to transform our country’s healthcare system.

 

Featured topic today Saturday February 20, 2010

 

Lowering Healthcare Costs: Bending the Cost Curve

through Competition, Quality, and Consumerism

 

What are the best solutions to not just slow healthcare

costs, but to actually bring them down?

 

As a nation, we spend a staggering amount of money on healthcare.  Just to put the size and scope of our healthcare system in context, think of it this way: according to CMS, last year we spent $2.3 trillion— more than 16 percent of our entire economy— on healthcare.

This is almost the entire gross domestic product of France and Britain.  What we spend on healthcare is larger than the gross domestic product of more than 170 nations. 

And healthcare costs continue to rise.  According to the Centers for Medicare and Medicaid Services, 2008 was a good year, when healthcare costs rose “only” 4.4 percent.  CMS projects that by 2019, total healthcare spending will double to $4.5 trillion a year and consume nearly 20 percent of our GDP.  As a country, we cannot sustain our current path. 

 

So how do we reverse this?  What can we actually do to “bend the curve”?  From insurance competition to consumerism to price and quality transparency to many other solutions, what do you think will work?

The Economic Impact of Intelligent Health Reform

The cost from being uninsured does not arise solely from unpaid medical bills generated in emergency rooms or doctors and hospitals providing uncompensated care. 

 

According to the Institute of Medicine (IOM) 18,000 people die every year because they are uninsured. The Institute of Medicine estimates that uninsured adults have a 25% greater rate of dying than adults with insurance.  Uninsured trauma victims are less likely to be admitted to the hospital or receive the full range of needed services. They are 37% more likely to die of their injuries.

 

The IOM reports that uninsured children are 70% more likely to go without care for common childhood conditions such as asthma, ear infections, and sore throats.  The uninsured are also 33 percent less likely to get a routine physical examination and 25 percent less likely to visit a doctor for an illness. Uninsured women are 36 percent less likely to get a pap smear and 60 percent less likely to get a mammogram; uninsured men are 40 percent less likely to get a prostate examination. 

 

Numbers are debatable but the effect is not. The ripple effect of the uninsured is felt throughout society. Uninsured children are more likely to have impaired development and poor school performance. Uninsured adults have more absences from work and greater rates of disability.  A 2004 Kaiser Family Foundation national study found that the societal cost of the uninsured is $125 billion. Regardless of how one views the issue, the cost to society is high.

 

Insurance matters. Without insurance, the health, lives and financial security of families are at extreme risk.  Insurance means better access to care, better access to care means better treatments, better treatments means better health.  The Institute of Medicine concluded: “Health insurance is associated with better health outcomes for adults and with their receipt of appropriate care across a range of preventive, chronic and acute care services. Adults without health insurance coverage experience greater declines in health status and die sooner than do adults with continuous coverage.” 

Saving lives and improving the health of Americans is the critical value forming the moral imperative for health reform.  The fiscal reasons for reform are substantial and impact employer benefit plans as well as Medicare, Medicaid, and children’s SCHIP. Increased corporate profits and taxable salary gains from a healthier and more productive work force are recognized fiscal economic gains for the country and can help lower national debt. 

Ron Bachman

Senior Fellow

Center for Health Transformation 

Real Solutions Through Competition and Consumerism

The topic of lowering healthcare costs through competition, quality, and consumerism must be at the forefront of President Obama’s conversation on Thursday.  Finding solutions that factor in these 3 components will absolutely bring about change in lowering our healthcare costs.  Last week, John Goodman (CEO, National Center for Policy Analysis) and I authored an op-ed that ran in the Wall Street Journal titled “Ten GOP Health Ideas for Obama.”  Five of the points listed in the article pertain to this very topic.  I invite you read and react to our suggestions in the following areas:

• Inform Consumers
• Make Insurance Affordable
• Make Health Insurance Portable
• Meet the Needs of the Chronically Ill
• Allow Doctors and Patients to Control Costs

 

Newt Gingrich

Former Speaker of the House of Representatives

Founder, Center for Health Transfromation  

Congressman Michael C. Burgess, M.D.

In 2003, Texas undertook major medical liability reform by placing caps on non-economic damages, among other measures.  If the President and Democrats were serious about including meaningful medical liability changes in health care reform, they should look no farther than to Texas for what should be the national model for how it is done right.  A few of the impressive accomplishments of Texas’ 2003 reforms include:

• Texas has licensed over 15,000 new physicians. This is a 36 percent increase from pre-reform. 
• Thirty-three rural counties have seen a net gain in ER doctors, including 26 counties that previously had none.
• After years of decline, the ranks of medical specialists are growing in Texas.
• In my field of obstetrics, Texas saw a net loss of 14 obstetricians in the two years preceding reform. Since then the state has experienced a net gain of 192 obstetricians, and 26 rural counties have added an obstetrician, including ten counties that previously had none. 
• Charity care rendered by Texas hospitals has increased by 24 percent, resulting in $594 million in free care to Texas’ patients. 
• Texas physicians have saved $574 million in liability insurance premiums, a significant savings that has allowed more doctors to stay in their practice.

The improvements in Texas have allowed physicians to return to the state or their practice, and this is good for patients.

Congressman Michael C. Burgess, M.D., is a member of the House Energy and Commerce Committee and its subcommittee on Health, and in 2009, Burgess founded and is chairman of the Congressional Health Care Caucus.  Prior to becoming a member of Congress in 2002, Congressman Burgess practiced medicine in North Texas for over 25 years.

 

The Pathway to Covering America

BCBSA strongly believes everyone should be insured.  To attain this goal, we must address the underlying problems of our current delivery system.   Escalating costs are the main reason people don’t have health insurance, and rising care costs must be addressed through delivery system reforms that increase quality and enhance value.  A reformed delivery system would ensure patients get the right care at the right time.  Our health care reform proposal, The Pathway to Covering America, focuses on four priorities:

·   Providing information on what works best by comparing the clinical effectiveness of new and existing medical procedures, drugs, devices, and biologics – this is a vital first step in addressing the approximately 30 percent of healthcare spending that goes toward ineffective, redundant, or inappropriate care. 

·   Changing incentives to advance the best possible care, instead of paying for more services that may be ineffective, redundant, or even harmful – because providers are generally paid based on the number of services they provide, regardless of quality or outcomes. 

·   Empowering consumers and providers with information and tools they need to make informed decisions – because too often consumers and providers do not have what they need to encourage the right care at the right time for each and every patient.

·   Promoting healthy lifestyles to prevent chronic illness and work aggressively to help patients with chronic illnesses manage their own health – because one of the greatest challenges facing the healthcare system is managing the care for the growing number of people with chronic illnesses. 

 

Scott Serota

CEO, Blue Cross Blue Shield Association
 

Control Costs with Real Choice, Real Competition, Real Consumerism

As the U.S. Chamber has spelled out, and the Congressional Budget Office (CBO) has also made clear, there are many ideas out there to get health care costs under control. As you can see in the House- and Senate-passed bills, many in Congress believe the best way to control costs is to raise taxes on health care products and insurance, slash payments to doctors and hospitals, create and expand government-run programs for health insurance and long-term care, and force individuals and businesses to purchase what they don’t want or can’t afford. At the Chamber of Commerce, we prefer proposals that will actually increase choice, competition, and consumerism.

Real choice doesn’t come from a new government program. In fact, the “public option,” which might end up as the only option, would be just one more plan, and would cost more than private insurance. Why not break down state barriers, allow consumers to choose from thousands of insurance plans, instead of forcing them to stay in consolidated markets with burdensome coverage mandates? The CBO said that this option alone would both cut health care costs by 5% and save the federal government at least $12 billion. Allowing small businesses to pool together and purchase plans outside of state bureaucrats’ control would save billions more by getting people off of Medicaid and into new, more affordable employer plans.

If we want real competition in health care, we should let people and plans see the costs and quality of providers and procedures. That’s a big project and it will take time, but it could be jump-started by releasing patient-protected CMS claims data to quality reporting organizations. Overnight, we could have massive amounts of data on thousands of hospitals and doctors, and could let people truly see the costs of care. This used to be called the “Clinton-Gregg-Obama” bill.

Once people see the real costs of health care, those costs need to matter – which means a purely third-party-payer system needs some change. For starters, we need many more high-deductible health plan (HDHP) options to give people skin in the game. People often expect their health insurance to cover everything, because it costs so much; HDHPs have lower premiums but do not immediately kick in to cover all costs. But the plans need work – the accounts they are paired with should be able to pay the plan premiums, should have much higher contribution limits (especially for those with chronic conditions or low incomes), and they need to be tweaked to work better with innovative health programs like Patient-Centered Medical Homes and accountable care organizations.

Enact these changes, and we have already cut health care costs, insured more Americans, and created real competition between health plans and providers – while helping people be better health care consumers and giving them the tools to be smart shoppers. And we saved money for the government, without taxes and without infringing on individual or employer autonomy. These few items would not be a comprehensive reform plan, but they would certainly be a good way to start – and they could all garner bipartisan support.

James Gelfand

Senior Manager of Health Policy

US Chamber of Commerce

Promote Choice and Competition to Control Cost

American employers spend billions of dollars each year providing employees and their families with health insurance because they know these valuable benefits help attract and retain quality workers. That’s why today, more Americans get their coverage through their employer than anywhere else.

But as anyone following the debate in Washington knows, health care costs are spiraling out of control. They doubled over the past decade, and they continue to rise. As a result, many employers have been forced to drop coverage, cut benefits or pass the increased costs to their workers or customers.

Unfortunately, Congress seems intent on pushing through legislation that will hike costs even higher. Instead of repeating the failed experiments conducted in states like Massachusetts -- which now has the highest premiums and longest physician wait times in the nation -- lawmakers should look to Georgia and other states where free-market reforms are making health care more affordable and available.

Rather than regulating private coverage out of existence, Congress should eliminate mandates that keep insurers from offering cost-effective, competitive health plans with benefits consumers actually want.

Forget new taxes and subsidies, especially in this economy. Instead, make it feasible for people to get insurance outside the workplace by giving them the same tax deduction that employers enjoy today.

Don’t expand inefficient government-run coverage. Audit Medicare and Medicaid -- removing the fraud on their books could save billions. Better yet, let Medicare and Medicaid enrollees use the money Uncle Sam already spends on their coverage to purchase private insurance instead.

Again, choice breeds competition and lowers costs. Government rationing does not. Throw out that idea and set up a Web site where people can see the true costs of their care at different providers and decide for themselves which ones to use.

Finally, instead of simply treating people when they get sick, be proactive. Reward them for keeping healthy -- and reward providers who help them stay that way.

Or don’t. After all, Massachusetts is lovely this time of year.

Ryan Mahoney is Director of Public Policy for the Georgia Chamber of Commerce, the voice of Georgia business in Atlanta and Washington, D.C. He leads development and execution of Chamber initiatives in health care and other areas.

 

The best solutions for bringing down cost AND improving quality of care are

1. EMPOWER the buyer( employers and consumers) with the right INFORMATION to help understand total costs of people with illness and the ability to hold insurance companies accountable for their performance.
2.  ENFORCE  the adoption of technology from the point of purchasing to the point of care, that provides that the necessary insight, to improve the economics and quality of healthcare delivery- without INFRASTRUCTURE and provisions for its investment nothing can be accomplished with sustainable results
3. INCENTIVES to consumers to engage them as active participants in better managing their health
4. PAY FOR PRODUCTIVITY- provide the right metrics for doctors to not just get people well but……. well and back to work

 

Sreedhar Potarazu MD MBA
President and CEO
VitalSpring Technologies

Merrit Quarum, M.D.

To reduce healthcare costs we must control fraud, induce competition and pricing transparency and increase the quality of care. The current pen and paper model for medical billing facilitates abusive and fraudulent practices while simultaneously obfuscating important data that could save money and lives. Costs will remain high unless and until we leverage modern technology to track, audit and report on what is being charged.  Also, a purely digital bill could provide the hyperlinks necessary to equip a consumer with real understanding and choice.
 
We won’t have competition without first having transparency with respect to price and cost. This means getting a handle on fraud and abuse. When we speed up billing, bill review, and payment, individuals and companies will be able to compare prices, target problem providers and control costs. 
 
Getting medical billing completely online, from diagnosis through payment, will save us billions in fraud prevention alone, but the real benefits will come farther down the road when we are able to use large data pools to reveal the true performance of facilities, doctors, procedures and products.  Data driven analytics will reveal latent patterns, differentiating between the legitimate and fraudulent, the safe and the life threatening.  
  
The majority of medical bills and records are paper. Auditing and verifying the accuracy of a paper bill is an arduous and expensive task. Getting electronic bills from providers to payers quickly and securely will save time while cutting costs for all parties involved.

 

Dr. Merrit Quarum is the CEO of Qmedtrix Systems, Inc and a nationally recognized expert on healthcare billing, reimbursement and fraud.

Cost Containment

The irony is that we know what works in controlling and even reducing health care costs; “capitated” payments to integrated delivery systems (the PC word for HMO).

 

Studies have shown that these plans reduce costs (Newhouse 1994, Baker 2000). Some even show that the growth in spending is reduced in areas with high HMO enrollment (Zwanziger 1994). In fact, the growth in per worker spending for employer health benefits declined from over 18 percent in 1989 to just 8 tenths of one percent in 1996, following a huge employer investment in managed care plans (Kaiser Family Foundation).

 

It is not necessary to enroll all Americans in HMOs or other low-cost plans such as HSAs. But the system should create financial incentives to voluntarily enroll in such plans. For example, the Wyden-Bennett bill assures that workers have a choice of coverage and permits families to retain all of the savings - including employer share - from enrolling in a lower-cost plan, without loss of tax benefits.   

 

We need a system that rewards people for voluntarily enrolling in plans where providers have a financial incentive to be efficient.

 

John Sheils

Vice President

The Lewin Group