November 17, 2011 -- As healthcare costs spiral out of control, “Medicare makes Social Security look like chump change in terms of what it's going to take to get future liabilities funded,” said Jack Friedman, CEO of Providence Health Plans, the keynote speaker at the Healthcare Information and Management Systems Society conference earlier this week.
Several cost-cutting measures are under way at Providence -- increasing communication between providers to get best results, reducing fee-for-service payments and working with high emergency department users to reduce costs by increasing staffing on the nurse advice line.
Also, among patients who have back surgery, 15 to 20 percent have recurrent problems and don’t recover very well. Friedman wants to improve those outcomes by aggregating the data, then sharing the results with his physicians.
“When you give physicians the right information at the right time, with the right incentive, they almost always do the right thing,” he said.
Asked by an audience member what he considered the ideal size of a healthcare system, Friedman said, “If we honestly were starting from scratch, we'd probably go single payer. But I don't think we can get there from here.”
Work Force Changes
When it comes to improving the health of its work force, Brian DeVore, director of industry affairs at Intel Corporation, took the stage, and compared the search for a new delivery model for healthcare to innovation in technology: “It's only when Apple came out that we saw a shift,” DeVore said, saying there was little interest in personal computers until then.
Intel's human relations department wants to have the happiest, healthiest workforce – but to accomplish this, some basic things must be changed about the work environment, DeVore said.
“It's great that they make us an extra million dollars,” he said of Intel's engineers, “but that quadruple bypass may cost the company more than they will ever make for the company.”
Intel may adopt a health engagement model used by some employers in Oregon, and hire care coordinators to work with employees who have chronic health issues, creating incentives for them to seek primary, rather than emergency care.
DeVore also called for an end to the “arms race” of building new wings for specialty care, and instead develop a “Macy's-Gimbels” relationship among hospitals.
Administrative Costs Drive the System
Focusing on the healthcare transformation process under way, Sen. Alan Bates (D-Medford), a practicing physician, said this is a change long overdue.
Administrative expenses are driving up healthcare costs, including IT, he said, pointing to the mental health and drug and alcohol systems, where providers spend 50 to 60 percent of their time doing paperwork because of outmoded regulations.
Also, a minority of patients produce most of the cost, either because of genetic conditions or lifestyle issues, both of which can be dealt by focusing on preventive medicine.
Bates mentioned a patient he called “Mr. Smith,” a 55-year-old man assessed with a very low IQ and diagnosed with schizophrenia, who’d been having physical health problems. He was shuttled from one facility to another because the mental and physical health systems didn’t communicate with each other – and there wasn’t any way to coordinate his care.
The approach to create coordinated care organizations “can work. It must work,” Bates reiterated. Otherwise, the alternatives facing the state are either cutting reimbursement payments to providers or disenrolling patients from the Oregon Health Plan -- neither of which are desirable.
