A delivery truck carrying your company’s goods is detoured more than 100 miles around a closed bridge, causing it to be late in getting key parts to a supplier, not to mention wasting gasoline and incurring extra labor costs. The decaying bridge could not be repaired because the annual budget for the Commonwealth is out of control due to the ballooning cost of healthcare.
This scenario clearly got the attention of an assembled group of leading corporate CEOs during a recent closed-door meeting. Business needs health reform because healthcare costs are accelerating like a runaway train, and a good portion of those costs make no sense and do not contribute to improving the health and well-being of employees. Let me deconstruct this challenge by first asking several basic questions: What do we spend for care and why?, and What do we get for the money we spend? Then I’ll propose a plan for engagement.
Healthcare costs are the key driver of the federal deficit, especially costs associated with entitlement programs like Medicare and Medicaid. In fact, the percentage of the GDP dedicated to healthcare, perilously close to 18%, is nearly 4 times what the United States spends for our military worldwide. If the entire healthcare industry were to somehow secede from the Union, it would represent the sixth largest GDP in the world! The magnitude of this spending prevents investments in public education, communication, transportation, and places our entire infrastructure at risk.
What do we get for all this massive outlay of spending? In our great Commonwealth, there are thousands of unnecessary hospital admissions, and we spend nearly $1 billion to treat hospital-acquired conditions like severe infections. Finally, Philadelphia County, home of four amazing academic medical centers, ranks dead last with regard to the quality of life in Pennsylvania, when compared to every other county. What is going on here?
The Affordable Care Act does offer some potential solutions for these intractable problems, including the creation of Patient-Centered Medical Homes, where care coordination is paramount. Accountable Care Organizations, which promote transparency and accountability for improving health outcomes for patients, are another potential salvation. Pennsylvania has been a leader for over a decade in state-reported health outcomes through its Healthcare Cost Containment Council (HC4) – a state agency that is the envy of the rest of the nation and promotes transparency regarding patient outcomes for every hospital in the Commonwealth. Data from HC4, and indeed research from around the nation, proves that high quality care, care that is free from complications and errors, actually costs less.
My five-point plan calls for the following initiatives:
- Engage with employees regarding prevention and wellness. There is an average return of $4 for every dollar spent on prevention and wellness programs. These will improve productivity and make for a happier workforce. Fewer days missed from work means higher profits and lower healthcare costs.
- Engage with healthcare providers. I challenged the CEOs to ask tough questions of the hospitals and doctors where their employees are cared for. Are they doing everything possible to make care safer and more effective?
- Engage with the payers – the organizations like Blue Cross and others who pay the bills for patients fortunate enough to have insurance. Payers have every economic incentive to keep their members out of the hospital and healthy. Employers need to do more to engage with payers to promote the concept that health means much more than the absence of disease!
- Engage with other companies by supporting a local business coalition for healthcare and by supporting the annual allocation for HC4.
- Employers should encourage their clinical partners to practice population-based care.
Everyone will benefit when we take two steps back and think about how we spend our money and what kind of clinical outcome we get for that investment. The answer is clear, based on years of research with remarkably consistent results: higher spending does not result in better quality of care, whether quality is measured as adherence to evidence-based guidelines, or survival following such serious conditions as a heart attack or hip fracture, or patient perceptions of the accessibility or quality of their care.
In medicine, less is truly more.
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