My piece on the potential CVS purchase of Aetna titled Why the Potential CVS Acquisition of Aetna is Brilliant, The Law of Unintended Consequences was published on The Health Care Blog, you can read it here.
I’ve written a fair amount over the years about what is wrong with the American Health Care System from ethics to pricing, structure, incentives etc. So, what needs to be done to fix it? In the end, is there a better way? Listed below are some of the ideas that I think would have a profound impact on lowering costs and improving quality. None are new, but taken together they could be very powerful:
So why would you get more efficient? In healthcare, the question is, why as a health plan would you want to improve the health of your members and seek to prevent illness, thereby reducing the 85% you paid for their medical care; ultimately reducing the 15% for other expenses and profit? Current health plans want to get 15% of an ever-growing number, they want 15% of $10,500 the next year and on and on. This was a fundamental flaw in the ACA. I understand it was to ensure that health plans do not make money by denying services, but there is an upper and lower range to most quality measures not a fixed point and the same goes for healthcare services. Health Plans or those accepting the risk should have a range that their MLR must fall in and/or some way to benefit when they can show that their efforts improved the health of their members and thereby reduced costs.
Well at least they were honest (in front of a friendly audience). Going back to number one, if they have a fixed price (capitation) for the person or population, they’ll figure out once and for all that the hospital is a cost center and reducing beds, not building more, while allowing services to occur through the lowest cost point in their network is the key to profitability. And yes, maybe constructing less gorgeous and elaborate facilities might lower costs as well. Here’s another classic hospital aggregation approach to increase costs, acquire the oncology doctors and then stop providing infusion services in the clinic. Why? Because hospitals can charge 2-4 times as much when the infusion is completed in a hospital outpatient or inpatient facility versus the doctor’s office.
We need to look at issues like Hep C from the patient side. Because of the high costs of the drugs in the United States, there are hundreds of thousands of people who are not getting access to the treatment. Is that good?
We must invest more in the areas that impact health like community, safety, schools, parks, access to housing and food, but, and it’s an important but, we have to hold the organizations that we fund accountable, too many of them exist to exist and offer limited value. Much of this funding could come from savings in healthcare costs. Together can create healthy communities for all our community members.
These ten ideas are but a start and I am certain that there are many other good and viable ideas for fixing our healthcare system. It’s time we got serious and began implementing more of them.
What are your thoughts and ideas?
So where do we go with our healthcare system under the new administration? Will we move to Alternative Payment Models or will FFS continue? A recent study showed that bundled payments for orthopedic joint replacement appeared to be working at lowering costs while maintaining quality.
At the same time, it seems that Dr. Tom Price, the nominee for Secretary of HHS is not a fan of bundled payment.
Let us know what you think.
This is the longer original piece with all the links and images that was the genesis for the Florida Times Union commentary.
This past month I had the opportunity to participate during Humana’s half-day Bold Goal launch conference in Jacksonville, Florida (the county seat is Jacksonville and there has been a consolidated government of Duval County since 1968, so some refer to the broader county). The conference had excellent presentations and I was honored to be included with a distinguished group of panelists from the Health Department, hospitals, providers of care and the Duval County Medical Society. It was nice to be involved in an event and try to play a role in improving the health in the community in which I live.
There are other efforts ongoing to improve community health in Jacksonville, including the Clinton Health Matters Initiative, which has focused on solving the hunger issues and a number of hospitals have launched their own efforts as part of the Community Health Assessment and Improvement Plan. While these programs and others in the community may have made some progress, Jacksonville still faces major health issues and our quality measures are poor:
Some of the major barriers we face include:
As far as data goes, there are plenty of studies available in addition to those cited above. Here are just a few more interesting ones: Continue reading →