The case for health-care reform has been made. Health-insurance costs are a burden for families, businesses and taxpayers. The largest costs fall on taxpayers, since government is the largest purchaser of health care.
Experts question how much longer government will be able to cover growing
Medicaid and Medicare costs, as they consume an ever larger portion of our gross domestic product.
Despite the clear danger signs, health-care consumers and taxpayers are reluctant to embrace the reforms necessary to fix the problem. Until they do, our health-care system will remain on the e
dge of bankruptcy.
Money is not the problem. The U.S. spends much more per patient than any other country in the world. Rather, it’s our spending priorities and the payment incentives in our health-care system that prevent us from efficiently providing quality health care.
Throughout the country efforts are under way to improve the efficiency of delivering health care. Federal health-care reform legislation mandated the move to electronic medical records, which is already improving the quality of care by reducing medical errors and helping control costs by reducing duplicate tests, X-rays and MRIs.
Despite these efforts, comprehensive, sustainable steps to reduce health-care costs will not succeed until three things happen:
•Policymakers change the health-care payment incentives.
•Politicians quit using health care as a wedge issue to divide people.
•A clear majority of consumers demand reform.
Current payment incentives encourage overuse
The U.S. health-care system is fee-for-service. Health-care providers are paid based on the amount of work they perform, not on the quality of their work. This approach means the more you do, the more you get paid regardless of whether it benefits the patient.
Efforts to provide value in health care will not be widely adopted until the payment incentives change. Instead of fee-for-service, physicians and other medical professionals should be paid to promote and practice prevention and rewarded for keeping patients healthy and providing quality care. Changing the compensation system will help eliminate overuse of unnecessary services.
An important part of this approach is to structure the payment system to encourage aggressive management of chronic diseases such as diabetes, asthma and heart disease. This will help ensure patients with ongoing health problems receive the best preventive care possible.
For example, a patient with diabetes might have weekly phone conversations with a nurse about how to test and monitor their blood sugar. This ongoing interaction avoids the need for more intense and costly interventions. Patients stay healthier and avoid unnecessary, expensive hospital stays.
While some of us in health care are trying to reduce costs, we are doing so despite the fact that all the payment incentives in health care are to spend money, not save it. The Everett Clinic is working to reduce the cost of care by 25 percent over the next five years while improving quality. Through prevention, disease management and value-added programs, our goal is to improve patients’ quality of life, reduce hospitalizations and decrease the cost of care.
A change in attitude is needed
Better health starts with the patient. For example, the leading causes of heart disease include obesity, high blood pressure, lack of physical exercise and smoking. Billions of dollars in health-care expenses could be eliminated if more time and effort were spent helping patients adopt healthier lifestyles.
Too often, expensive tests are done to satisfy a patient even though they are not needed. Under the current system, unnecessary tests also generate more profits for the health-care providers. Instead, scientific evidence should be used to develop guidelines that help physicians order the right test at the right time. This is a proven way to save money.
Costs also increase when patients, influenced by TV advertising, demand a specific medication even though a less expensive generic version works just as well. The Everett Clinic hires pharmacists to ensure prescribing is based on science, not advertising. These actions have allowed The Everett Clinic to reduce health-care expenditures for employers and patients by more than $88 million per year with no decline in the quality of care we provide patients.
A thoughtful approach to end-of-life care
Twenty-five percent of Medicare’s budget pays for care in the last six months of life. The medical community continues to go to greater extremes to extend life. The incentives are to provide more treatment, no matter what the costs. But, more is not always better.
One of the latest examples is Medicare’s decision to cover the $93,000 cost to administer Provenge, which has the potential to give patients suffering from the incurable stages of prostate cancer an extra four months to live.
Looking coldly at the cost benefit of spending $93,000 to potentially live an additional four months suffering from a terminal disease, you can question the expenditure. But if the patient is you or a family member, you might not care about the expense and treasure every minute, especially if insurance, Medicare or someone else covers most or all of the cost.
End-of-life care decisions are significant. They need to include an in-depth review of alternatives and choices. Patients, their families and health-care providers need to be involved in an honest dialogue about all the care options, including the limited benefits of various treatments. Shared decision-making between patients and physicians should be mandatory.
Living wills and understanding the options in palliative care (care focused on relieving the pain, symptoms and stress of serious illness) can help patients and families make informed choices. In our community, we partner with Hospice to offer a comprehensive palliative care program to assist patients who are in the last one or two years of life. The goal is to provide care that reflects the patients’ wishes yet helps avoid unwanted hospitalizations and emergency room visits.
Spending a significant portion of the Medicare budget on the last few months of life means that money is not available for other health-care needs. It also adds to the financial burden facing Medicare. Without major changes, Medicare is projected to run out of money in eight years.
It is already difficult for seniors to find physicians willing to accept Medicare because many providers lose money caring for Medicare patients. With the aging population, the demands on Medicare are increasing, but the dollars to pay for it are not there. Change is essential to contain costs, get Medicare on solid financial footing and ensure seniors get the care they need.
Some politicians seeking attention have criticized Medicare Advantage plans as wasteful, but the facts show that is not the case.
The Medicare Advantage plans that focus on value are a step in the right direction. Providers are reimbursed for keeping patients healthy through prevention, care coordination and disease management. This is better for patients, reduces the losses for providers, and long term will help bring down health-care costs. Increasingly, the Medicare Advantage approach is being evaluated as a model for all of health care.
All of these efforts — increasing preventive care, changing the way providers are compensated and empowering patients to make informed health-care decisions — are necessary to curtail rising health-care costs.
Between 1999 and 2010, health-care insurance costs rose 138 percent while wages increased only 42 percent. This disparity cannot continue. It puts a huge financial strain on families.
Businesses and government are also adversely affected by rising health-care costs. The cost of health benefits per employee rose by almost 7 percent in 2010. These increasing costs mean that less money is available to invest in job creation, infrastructure and education.
We know what needs to be done. The question is: Do we have the will?
Richard H. Cooper is chief executive officer of The Everett Clinic, a multi-specialty medical center serving more than 290,000 patients throughout the north Puget Sound region.