Transcript What Ails Healthcare--- And What Can Really Heal It?

Consumerism in Healthcare--
The Next “Best” Thing?
Jon R. Comola
Marcia L. Comstock, MD MPH
Wye River Group on Healthcare
June 7, 2005
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What are you going to hear?
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WRGH
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Who are we?
Do we know anything useful?
CDHC
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How /why did we get here?
Should we be here?
What are we trying to accomplish?
What do providers think about it?
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WRGH
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NP NFP health policy group
Not a “think tank;” A catalyst for collaboration
OR…The “Marriage Counselors” of Health Care!
Philosophy:
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“all the players playing”
Engage communities in the healthcare debate
Define the problem before pushing solutions
Active in WDC and 12 “model” communities
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WRGH
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We have opinions….on most everything!!!!
…but we are not here to impose them.
Rather, we try to reflect the diverse
perspectives of stakeholders we work
with……….
Do we know anything useful?
YOU DECIDE!!
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CDHC: How/Why did we get here?
A natural evolution… ‘Back to the future’
 1945-1970: ‘mutuality of interests’ enabled
scientific progress
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1964: ‘Great Society’ movement adds more
demands through Medicare and Medicaid
1970’s: tension develops as consumer
appetite for ‘medical marvels’ outstrips
capacity to cover costs
1974: HMO Act
1980s & 90’s: Employers apply business
practices to health care
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It’s Cultural, Stupid!
We have no vision!
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Rugged individual self-determination wins over
social responsibility and equity!
Latest attempt to navigate the tensions between
limited resources and unlimited expectations
The shifting locus of blame…., I mean,
control!!
Rejection of “Mother may I?”……cultural
mistrust/abhorrence of “Big Brother..”
Costs…..costs…costs….costs….costs
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OK, REALLY, WHY??
It’s simple!!!….we’ve tried
everything else….and culturally
we react negatively to any
entity that tries to substitute its
priorities for those of
individuals!
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Who should make the tough
decisions??
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The health reform debate gets down to the
fundamental question: who will control health
care decisions - bureaucracies or individuals?
If we cannot finance all the services that might
provide some benefit to some people, choices
need to be made!
Who better to make those choices than those
whose lives are affected??
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And then there is pluralism….
The pluralistic nature of our country and
increasing diversity in health-related
attitudes and preferences, which vary
across communities and even over the
lifespan, is another strong argument for
choice………..
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CDHC:
The “Whys” & “Therefores”
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Consumerism is ‘timely’
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For consumers…”Put me in the driver’s seat!”
For providers….”I’ll ride shotgun!”
For employers…”Give me predictability!”
For financial industry….”I see a piece of a big
pie!”
For insurers….”OK, I’ll analyze, explain and
pass costs on!”
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Consumerism
Consumerism is a powerful force that
has transformed industries like
telecommunications, financial
services, travel and entertainment in
ways that could hardly have been
predicted a decade ago
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Consumerism in other industries—
a model??
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Consumerism in other industries has
largely supported the 21st century notion
of more choice, lower cost, higher
quality……….
(BUT…Higher quality, lower cost has yet to
be proven in healthcare, much to the
chagrin of purchasers….)
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CDHP…..
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How does this evolution translate??
(more on that later……..)
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Will consumerism in healthcare
represent a true cultural shift, or just
a cost-shift??
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CDHP…..
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The market is well into the first generation and moving
rapidly into the second generation
1st generation: savings account + hi-deductible
insurance policy; emphasis on plan design; not attractive
to a diabetic
2nd generation: add disease management, incentives and
rewards; emphasis on behavioral change
3rd generation: broaden focus to integrated health and
performance management
4th generation: personal health care based on genomics,
predictive modeling; focus back to the individual
Ron Bachman, PWC
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Is this the right direction??
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Don’t know……..
“Consumer cost-sharing may contribute to
bottom up health system reform after the
exhaustion of governmental and corporate
initiatives.” [Jamie Robinson]
…actuarial models in health care “conflict with
a sense of justice and social responsibility.” [Victor
Fuchs]
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The question is moot if this is the only
culturally palatable or politically viable
direction…..
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“The revoluTion of rising expecTaTions,
coupled with the elastic definition of
health, accentuates the sentiment that
health care is a matter of satisfying
diverse individual preferences rather
than providing a one-size-fits-all
soluTion.”
Jamie Robinson
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What are we trying to
achieve??
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A pluralistic system that empowers patients
and demands accountability from individuals
and healthcare organizations, while supporting
the needs of the disadvantaged [from WRGH
‘Communities’ initiative]
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‘Collaborative care’ with an engaged patient
and a partnering physician sharing expertise,
as contrasted with ‘traditional care’ with a
passive patient and a dominant physician
seeking compliance with instructions [T. Bodenheimer]
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The Reality….
We have a science-based model
created to support the healthcare
industry. We need a humanisticscientific model that is designed
to support consumers
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Some Purported Advantages
of CDHC
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Creates a true marketplace and put the
consumer-patient at the center of
healthcare
Helps contain health care costs
Helps address the problem of the
uninsured
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Create a true marketplace
Theory
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Enigma theory
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‘Back to the future’ theory
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Scrutiny theory
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Self-empowerment theory
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Doc-Patient relationship theory
Reality
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Awareness reality
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‘Skin in the game’ reality
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Competency reality
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Emotional vs rational reality
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Cost-Containment
Theory
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High-deductible/lower premium
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Decr admin expenses
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Decr ‘discretionary’ care & incr generics
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More efficient networks
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?Healthier lifestyles longer term
Reality
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High users not impacted
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May overcompensate the healthy
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May impact ‘necessary’ care
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Largest tax adv to higher income
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‘Slightly’ & ‘moderately’ sick pay more
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Increase options for uninsured
Theory
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More small businesses will offer help
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More can afford high deductible policy
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Accumulate funds for future needs
Reality
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High-deductible products never popular
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Could fragment risk pool
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Tax advantage not compelling to lower income
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?Sufficient financial subsidies for the poor
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And The Providers Reaction…
As THE social agents for the increase in health
care expenditures…..providers historically added
capacity, technology and services in pursuit of
dual objectives: better outcomes and
higher incomes…..
(Sort of “Who wants to be a Millionaire”)
The Good, the Bad, and the (potentially)
Ugly Sides of CDHC
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Regardless of issues with personal care
accounts, the rising cost of health
insurance premiums could leave providers
saddled with more uncompensated care
as more people are priced out of the
market.
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THE DOCS
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As agents of patients….“Physicians want
to advocate for more social resources to
be devoted to health care, not for a
balancing of their individual patients’
needs with the other economic priorities of
the nation.” [Jamie Robinson]
Physician groups are generally supportive of ‘accounts’
and CDHC, but how it will all play out remains to be seen
So far, little evidence that experience with patients with
HDHPs is different, but penetration quite limited
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Physicians see a number of ‘Pros’
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Clinical:
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May strengthen the ‘doctor-patient’ relationship
Opportunity for longer-term relationship
Encourage greater communication
Emphasize preventive and behavioral services
Admin:
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Decreases non value-added bureaucracy
More plan competition
Some let physicians set fees
May address some of purchasers concerns about
costs
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But then there are those ‘Cons’
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Clinical:
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Impatient patients!!
Questioning patients [will this really be any better than
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Overly ‘netted’ patients [docs drowning in paper]
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The true meaning of ‘informed’…….
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Will this be the end for primary care docs????
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questioning MCOS??]
Admin:
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Transaction fees = more admin costs
When capitation is gone…..will the money come in?
Price transparency—good or bad? No bargaining
please!!
?? Bad debt
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And the real unknowns……
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What does more decision-making between doctor and
patient really mean?
Patients are likely to pay more attention to quality of
care and service…..that’s good, right?
Docs will have more ‘incentive’ to invest in their
business…..they will have to in order to compete!
Competition may be broadened….how many patients will
travel from other cities (?countries!) for higher quality,
lower cost procedures?
(sort of “Dog Eat Dog!!!”)
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Hospitals & Health Systems
In general, much less sanguine than
physicians about the potential of CDHC …..
specifically HSAs and HDHI
Hospitals are in the unenviable position of
having to sort out what they will be in the
future. Few experts see them at the center
of the universe for care in the 21st
century…………
(sort of………”Survivor”….)
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If you are a hospital,
the future has its challenges!!
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Suits about taxexemption status
Accusations of gauging
self-pay patients
Patient safety concerns
Federal scrutiny
End of specialty
moratorium
CON
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Thin margins/future
capital needs
Need for top-line
growth
Payment reductions
Tiered benefits
Competition from offshore facilities
Media target…
Greg Scandlen
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The Latest Media Villain!!
Theme: “Hard working consumers are
being overcharged by dangerous and
poorly run facilities that have
conspired to retain a monopoly
position in the health care system.”
Greg Scandlen
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And on top of all this……
‘consumerism’ ……yada, yada, yada,
…..patients demanding price transparency,
quality information, and customer
convenience, too!!
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(the nerve of them !!!!!)
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So hospitals have some
concerns….
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Individuals may delay seeking care until it
costs more to treat
Limited benefit plans may cap payments
for hospital bills
More patient responsibility in any form
may lead to rising bad debt
Need to review charity care policies
Need to identify patients at potential risk
at the front end
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The reality is…
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Perspectives of individual hospitals are all
over the map….for many it is not on the
radar screen
The jury is still out….so far the impact is
negligible
Some consultants say fear of bad debt is
overblown as the bulk of in-patient costs
will still be covered by insurance
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And a few whispers of optimism
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There is a level playing field…most plans
build on the insurance company’s existing
provider network and negotiated rates
Plans, in theory, have the potential to
make patients more attentive to details of
care and costs
As employers, hospitals recognize the
potential for cost savings
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And the other health-pros?
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Dentists: much dental care has been paid
OOP…duh!! what’s new here??
Nurses: strong supporters of ‘patient-centric’
healthcare in broad sense…no position on
financing issues as don’t bill directly for services
NPs: see significant opportunity….”pay me less
for better care than your GP!”
Pharmacists: Can play valuable role in
supporting self-care…want to get paid for their
services!
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