Scott MacStravic, PhD
Given our country’s propensity to declare “war” on things we are trying to eliminate, or at least dramatically reduce in our society – drugs, cancer, terrorism, drunk driving, etc. – there are at least prospects for a declaration of war against sickness. After all, what we mistakenly deem “healthcare costs” are almost entirely generated by sickness, since only about 5% or so relates to preserving, protecting, or improving health. And practically everybody deems such costs as outrageous, unaffordable, anti-competitive, and otherwise not in anyone’s best interests, save for sickness care providers.
Recently, Medicare announced a policy of no longer paying for “preventable” sickness care costs related to conditions that arise in hospitals as avoidable consequences of care, rather than conditions that patients bring with them. [R. Pear “Medicare Says It Won’t Cover Hospital Errors” New York Times Aug 19, 2007 (www.nytimes.com)] Imagine what would happen if it simply extended this policy to include all conditions that it figures patients, physicians, and other providers should have prevented in the first place.
There have been both tracking and reporting of “avoidable” hospital admissions that best care practices could have prevented through ambulatory care for years. While this has been used merely for quality measuring and reporting thus far, it wouldn’t take much to translate it into another category of “preventable” and therefore ineligible for payment sickness care. And while the current Medicare policy would only affect some millions of dollars in payment each year, this broader definition could take billions out of sickness care revenue, while doing nothing about providers’ costs, unless they eliminate or dramatically reduce such conditions.
While “procedure specialists” who depend as much on sickness care revenue and volume as do hospitals would also be affected, they could at least partially make up for lost sickness care revenue by becoming disease managers instead of merely disease treaters. Already, some insurers and employers are paying endocrinologists for managing diabetes patients, for example. While these payments by no means make up for the sickness care utilization and expenses that such management can prevent, it can at least motivate some specialists toward “prevention” vs. treatment alone.
As for primary physicians, their efforts to regain a position of power and prestige relative to “sickness specialists” has already led to a wide array of transformations. Their “medical home” concept, “chronic care model”, and TransforMED efforts all fit with the movement toward preventing sickness rather than merely treating it. The Family Physicians of Western Colorado, Grand Junction, for example, have demonstrated their ability to manage diabetes patients for only $104 per patient per year in “management” fees, though they failed to get enough payors to pay even these affordable costs. [P. Mohler & N. Mohler “Improving Chronic Illness Care in a Private Practice” Family Practice Management 12:10 Nov/Dec 2005 50-56]
Hospitals, by contrast, along with large physician groups and integrated health systems, have generally failed to either keep their costs low enough, or generate enough revenue to make comprehensive disease management programs work, even with diabetes, which has a huge population of patients and high sickness care costs to reduce. [I. Urbina “In the Treatment of Diabetes, Success Often Does Not Pay” New York Times Jan 11, 2006 (www.nytimes.com)]
On the other hand, hospitals and large physician groups are also major employers, and have as strong a reason as any other employer to manage their employees health, and perhaps their dependents as well. Many hospitals are already engaged in comprehensive employee health management (EHM) efforts, often saving millions of dollars in labor expenses, counting reduced absenteeism, presenteeism, and turnover, as well as sickness care costs. Fairview Health Systems and Vanderbilt Medical Center, along with Mayo Clinic are some examples. And Northwestern Medical Center in Chicago recently announced the opening of an Integrated Wellness Center that will serve local employers in EHM as an added source of revenue.
Given the fact that physicians are perhaps the strongest source of influence and motivation for patients to engage in personal health management efforts, or enroll in formal health management programs, hospitals and physicians should be strong contenders in the EHM and other health management markets. If they can get over their tendency to insist on high-cost approaches to care and adjust both the “quality” and cost of health management efforts to the potential savings for payors, they should be able to join in the war on sickness, instead of being bombed out of existence by it.
Although many hospitals and physician practices had a head start in the EHM market when they offered occupational health services, medical fitness centers, and similar “sidelines”, they will only be able to succeed in the full EHM market if they can create and manage comprehensive solutions that deliver the overall economic value that employers are demanding. And the EHM is by far the best market available, since the savings resulting from successful employee health programs are from two to five times as great as those from reducing sickness care costs alone.
Moreover, the kinds of health challenges that cause the most labor costs, productivity and performance impairment among employees are not traditional “sicknesses” that generate the most sickness care revenue. Hospitals and physicians could easily engage in EHM with relatively modest losses in sickness care revenue, at least in the short run. And since it will take a long time to develop the EHM market to its full potential, they may well be able to manage a good mix of health and sickness services as the balance shifts over time. It would enable them to at least be “combatants” rather than “victims” in any war on sickness that emerges.
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