Americans Expect More from Their Health Care than They Are Willing to Pay For
As the dust settles after the contentious debate over historic health care reform legislation, and its ultimate passage, all eyes are on implementation. This panel will delve into the complexities involved in expanding coverage and reveal how various industry sectors will be impacted, the opportunities that will arise for them, and how they may respond. Panelists will address the impact of health care reform on the finances of health care insurers and providers, and propose innovative approaches to improve the efficiency, quality, financing, and provision of care.
There is no single silver bullet that can magically rein in health care costs, said the top executives from the nation’s leading health industry organizations at a signature panel session during the University of Miami Global Business Forum Jan. 12-14, 2011. There are ways to lower costs, they said, but the bottom line is that many Americans expect more from their health care than they’re willing to pay for.
 |
|
Panelists (L-R) Cecil B. Wilson, President, American
|
One suggestion to bring costs under control is to change the way providers are paid, emphasizing positive outcomes rather than paying per hospitalization, procedure or doctor visit, which doesn’t encourage providers to practice preventative medicine.
“The reimbursement system is based on volume, not quality,” said physician Jon R. Cohen, chief medical officer of Quest Diagnostics, which sponsored the panel, entitled “Insuring the Future: The Financing of Health Care.” Cohen noted that 25 percent of health care costs pay for paperwork, and 80 percent of health care spending occurs during the last six months of life.
American Medical Association President Cecil B. Wilson added that the current payment system not only wastes money but also makes it harder for patients to get comprehensive care. “Clearly, the payment system does provide for fragmented care,” he said. “The [cost] savings physicians make by keeping patients out of the hospital actually increases the volume of care they give, and they are penalized for that.” Wilson, who is a physician, believes costs could be lowered with the results of comparative-effectiveness studies “so that we can know not just what works, but what works best.”
But Wilson and the other panelists believe consumers must also change the way they manage their health and use health care services. “Seventy-five percent of the costs of health care is related to chronic disease, lung disease, heart disease, diabetes — pretty much preventable conditions,” he said. “Unless we tackle those problems, I would suggest we’re doomed to a lack of effectiveness.”
Richard J. Umbdenstock, president and CEO of the American Hospital Association, agreed that part of the problem lies with consumers, who, he said, view their health insurance as “prepaid health care.” He also pointed out that many of the same people who are demanding lower costs rely on health care companies to be profitable from an investment perspective.
“How many of us have health care stocks in our 401(k) and count on them for our retirement?” he said. “We not only want health care reform that protects us and protects us from costs in our retirement. We also want health care to fund our retirement. You can’t have it both ways.”
Richard L. Clarke, president of the Healthcare Financial Management Association, worries that the current health care debate has focused too narrowly on cutting provider fees. “If you look at the reform bill and if you look at the cost-containment elements within it, the single largest cost containment or cost reduction is payment cuts,” he said. “The unintended consequence of making substantial cuts in any part of the system is it shifts over to another part of the system.”
For example, cuts to Medicare payment rates would only prompt providers to charge private insurance companies more to make up for the loss of income treating Medicare patients, something Clarke called “a hidden tax.” “The private side is actually paying for what the government should have paid for, in my opinion,” he said.
Interestingly, just talking about health care reform may cause a temporary slowdown in cost increases, noted UM President Donna E. Shalala, who was Health and Human Services secretary under President Bill Clinton. She jokingly called it the “jawboning effect.” “During the times in our history in which we’ve debated health care reform, health care costs have actually slowed down,” she said. “If you look at the charts from Nixon, they suggest we should just be debating health care reform for a long period of time.”
It’s possible that some earlier changes are also causing spending to rise. For instance, the United States is one of only two countries in the world that allows drug companies to bypass doctors and advertise directly to consumers. That was the result of a political compromise made during Shalala’s tenure as HHS secretary.
“The administration took the position that if we allowed direct advertising, that it would push up the costs of health care,” she explained. “Senator [Bill] Frist, who was the chair of the committee at the time, argued that it would not and argued that it was necessary for the reauthorization for the FDA. Senator Frist told me last month that it was the biggest mistake he made, because it did indeed push costs up."
Wilson said the now-ubiquitous ads have complicated physicians’ jobs because patients often believe the claims made in the ads and insist on a certain drug no matter what their doctor recommends.
“I can say no once. The next time it’s a little harder. The next time they’ll probably go somewhere else,” he said, though he noted that he has seen a shift away from alternative medical treatments with no scientific basis to advertised drugs, which at least have been tested and approved.
Michael Tuffin, vice president of the industry group America’s Health Insurance Plans, argued that more information for consumers could counteract the effects of drug advertising while improving care and cutting costs. “We’re not equipping doctors and patients with the information they need to make the best decisions,” he said. “If a patient can log on to the Internet and see there are three medications for people like me and this one is the best and lo and behold it’s the cheapest,” that will bring costs down while improving care. Without that kind of readily available information, he said, too many patients demand the costliest care or latest breakthroughs in medicine.
“It’s hard to escape the conclusion that what people want is unlimited access to care and someone else to pay for it,” Tuffin said.
