Scott MacStravic, PhD
Hospitals and physicians are “under attack” as never before in terms of squeezing payments to them for what have always been essential services to people. Medicare threatens to reduce payments to physicians by 10% in 2008; outpatient care is going to be packaged for “wholesale” payment, which seems sure to be less than it is now; states are cutting payments for Medicaid beneficiaries in order to balance their budgets. Nowhere does there seem to be any kind of “social contract” where governments are obligated to pay providers any more than they feel like or have available in their budgets.
Add to this, as far as not-for-profit hospitals are concerned, are growing pressures at both state and federal levels to “rethink” the charitable “community benefit” tax exemptions that support them in significant ways, both in seeking charitable donations, and in reducing their costs significantly. A recent report by the IRS noted that many hospitals spend 3% or less of total revenue on care for the poor and non-paying patients. The threat is that governments will set some arbitrary minimum that many hospitals will not meet, and they will lose their tax exemptions, and perhaps be driven out of business.
But in addition to the traditional “community benefit” of giving some services away to the poor and taking losses on others because of having to serve everyone who shows up, hospitals have what may be an even more valuable community benefit, whether or not they make money at it. Many hospitals throughout the country are acting in a manner that not only does not benefit them, but severely risks their long-term survival and prosperity – by striving to reduce the demand for sickness care that can be avoided by better health care.
One of the best and most common examples is in the arena of Disease Management (DM), aimed at minimizing the crises, complications and worsening of chronic diseases that are the cause of 75-85% of sickness care use and expense. Would any organization that is not mission and community-benefit driven strive deliberately to reduce the demand for its profitable services? Yet dozens of hospitals operate diabetes DM centers or programs, which have precisely that effect. And in addition to hospitals, many physician groups have adopted DM programs based on the Chronic Care Model, purely in the interests of their patients and community benefit.
The fact that these programs generate revenue should not hinder recognition of their community benefit. The only way that hospitals and physician practices can afford to deliver free or money-losing services is to generate revenue elsewhere. They are not like “pure” charities that derive revenue solely from charitable donations; in fact, only a tiny portion of the revenue that makes not-for-profit private hospitals possible comes from donations. And services that are delivered for their benefit to the community in spite of their overall cost to providers in terms of their sickness care revenue should qualify as “community benefit” as much as care that is given away.
Diabetes Centers for proactive management of patients are largely a losing proposition. In New York City, for example, of four hospital-sponsored diabetes centers that emerged to deal with the rapidly growing population of diabetes patients in that city, two were forced to shut their doors because of inadequate revenue, though one re-opened thanks to charitable donations. [I. Urbina “In the Treatment of Diabetes, Success Often Does Not Pay” New York Times Jan 11, 2006 (www.nytimes.com)]
The Family Physicians of Western Colorado, a Family Physicians group in Grand Junction, CO operates a DM program for its diabetes patients despite having only one local insurance plan that pays for it, and as a result, losing over $25,000 per year in the effort. P. Mohler & N. Mohler “Improving Chronic Illness Care in a Private Practice” Family Practice Management 12:10 Nov/Dec 2005 50-56. The CareSouth Carolina physicians group in rural South Carolina managed to keep costs for treating its diabetes patients to over $1000 less per year than patients treated elsewhere, but received no added compensation for this performance. [R. Chaufournier & K. Reims “Hidden Opportunities for Cost Savings in Disease Management” Healthcare Savings Chronicle (Coalition America, Inc.) Mar 10, 2005 (www.imakenews.com]
Many hospitals around the country have initiated internal measures that have dramatically reduced the costs of caring for and managing chronic disease patients. But instead of being rewarded for this, they are actually punished, because good patient management reduces the need for sickness care, and the best patient care often reduces the cost of treating them when they are admitted. Duke University Medical Center’s Congestive Heart Failure DM program saved nearly 40% or $8000 per patient, but gained only reduced revenue, while insurers pocketed the savings. [R. Herzlinger “Where Are the Innovators in Health Care? Wall Street Journal July 19, 2007 p. A15]
Many other hospital systems, including the Virginia Mason Medical Center in Seattle and Intermountain Health Care in Utah have found the same consequences when they have improved the care of patients. As long as payers pay for “procedures” rather than health outcomes, on chargeable coded clinical tests and interventions, instead of “cognitive services” that physicians and their staff provide to protect or improve patients’ health, the healthcare system will remain a sickness care system that is, itself, sick.
There are signs that employers and insurers are embracing the concept of promoting health, reducing risks, and managing chronic diseases as the best, probably the only way to “solve” the health care cost crisis. While the federal government keeps finding mixed results, at best, when examining its own DM demonstration projects, probably not considering how its own bureaucratic methods and selection process limits the potential for success, insurers and employers keep finding significant success, with ROI ratios from 2:1 on up. Perhaps the politicians and bureaucrats who want to test whether not-for-profits deliver enough community benefit should expand their definition to cover all they are gaining as payers, rather than narrowly defined “charity care.”
Dan DeLaySenior Vice President, Supply Chain Analytics, VHA Inc.
On my last business trip, I fell prey to the typical summer travel woes such as weather delays, crowded planes and long security lines. However, it got me thinking.
The airline industry isn’t that much different from health care. They perform different functions – one transports people safely from one place to another and one makes sick people well. Yet they have many similarities:
In an effort to reduce errors (and improve safety), the airline industry has developed infrastructure to support and track everything in real-time. Hospitals are starting to adopt a similar approach – not only to improve utilization and decrease costs, but also to identify best practices. For example, one firm, has developed software tools that help quantify variations in physicians’ approaches to surgical procedures in order to identify best practices, as well as opportunities to improve quality and decrease supply waste. To date, these tools have been installed primarily in hospital operating rooms and cardiac catheterization labs to enable staff members to quantify and compare clinical and economical variations in clinical care. However, they are also starting to be used in orthopedic and spinal procedures as well.
The health care industry must focus on developing a minute-by-minute approach to efficiency if the industry is going to squeeze the most out of the dollars that are spent. These tools provide physicians with the data they need to understand how procedures are being performed so they can begin to identify opportunities to create efficiencies and identify best practices. To paraphrase Eastern Airlines’ old slogan, hospitals need to take care of the details to make sure our patients receive the best case possible because “we have to earn our wings every day.”
Scott MacStravic
One of the most common marketing tactics in marketing of consumer goods is the free trial offer. In a recent example, Kimberly Clark Corporation used an advertising insert in Readers Digest to give its readers a free trial of its Viva paper towel by including a sheet of the product in the insert, so readers could feel and try for themselves its “soft, cloth-like texture”. [E. James “See Me. Feel Me. Buy Me.” The Marketing X Factor July 12, 2007 (www.1to1media.com)]
The idea of offering free trials in healthcare may seem absurd, both because it involves a service rather than a product, and because healthcare organizations (HCOs) need all the revenue they can get, rather than offering anything for free. But this is true only with respect to “reactive sickness care”, the traditional source of the vast majority (less than 5% of healthcare expenditures are for “proactive health care”) of their revenue.
For the growing number of HCOs that are investing in proactive health management (PHM), free trials are actually common. When they offer their own employees PHM services, in efforts to reduce their own sickcare costs, absences, turnover, and improve employees’ productivity and performance, HCOs almost invariably offer these services free to employees, and dependents as well. And these are clearly “trials”, with the “customer experience”, extrinsic rewards and personal health/life quality gains they realize what determines whether they continue, repeat, or “defect” from PHM programs.
Moreover, PHM services are opportunities for employees and dependents of businesses in the community served by the HCO to get a “free trial” of the HCO’s facility, staff, and services. Since their employers also offer any PHM programs operated by the HCO free to staff and family members, those who have not yet had a sickcare experience with the HCO can get a healthcare one free of charge. And since HCO charges are typically inflated outrageously, compared to both costs and usual payments by third parties, free trials of PHM experiences can offer a counter to HCOs’ reputations for over-charging.
But there is yet a third type of “free trial” that has both been offered by a number of HCOs, and offered by third-party payer clients and prospects. These are “free” only in the sense that they will not require client payment unless clients achieve agreed upon results. But this kind of free trial may be necessary for traditional HCOs to overcome the general perception that they are entirely in the sickcare business and tend to overcharge for that.
When CMS offered ten integrated health systems and physician groups the opportunity to engage in a demonstration of disease management PHM, for example, this included a “gainsharing” arrangement, whereby participating HCOs would only be paid if they achieved a greater than 2% reduction in Medicare patient costs relative to predictions. The HCOs would be eligible for 80% of such savings, up to a limit of 5% of overall projected costs, if they achieved both cost savings and quality standards. [“Physician Group Practice Demonstration Bonus Methodology Specifications” Centers for Medicare & Medicaid Services Dec 20, 2004 (www.cms.hhs.gov)]
While only two of the ten participating HCOs achieved the necessary savings from diabetes management in the first year of the demonstration, this was largely attributed to start-up costs. And the two that did achieve savings compared to a local control group – Marshfield (Wisconsin) Clinic and the University of Michigan Faculty Group Practice, Ann Arbor – they earned $7.3 million in pay-for-performance fees out of the $9.5 million they saved Medicare. [“Pay-for-Performance Project Finds Savings” Modern Healthcare’s Daily Dose July 11, 2007 (wwwModernHealthcare.com)]
Other HCOs, including Healthways, Inc., which specializes in PHM, have negotiated performance-based contracts with payers where payments depend largely or entirely on achieving agreed-upon goals. These amount to free trials since payors’ payments depend on their getting the kinds of cost savings they wish. Any traditional HCOs that offer such P4P arrangements are also giving all participants in the PHM projects a free trial of their services.
Hospitals that operate their own PHM programs serving local employers are simply adding “free trial” experiences to those they have been offering through their community benefit free services, occupational health, screening, and other services that are free to those using the services. And with many PHM programs enrolling as much as 95% and more of the employee population, this can mean a large number of prospective sickcare patients are getting a free trial of the HCO’s staff and services, even where its facilities are not involved.
For hospitals that partner with U.S. Preventive Medicine, Inc. in operating “Centers for Preventive Medicine”, which serve local employers through “The Prevention Plan” arrangements, all employees who gain the opportunity to use the hospitals’ diagnostic and coaching services free of charge to them (though their employer pays), the same kind of free trial is involved. [www.uspreventivemedicine.com]
And arguably, hospitals, physician groups, and integrated health systems should be getting their own free trials of PHM when they operate their own, or purchase PHM services from other HCOs. As employers, they will gain the full financial benefits of PHM, in terms of total labor cost reductions, rather than just sickcare cost reductions, and even revenue enhancements based on a happier/healthier workforce. And if they take the trouble to measure these full benefits, they will usually find that not only was the experience free, in terms of net savings vs. costs, but that they made a “profit” in the bargain.
Robert FrombergEditor-in-Chief, HFMA
My father asked Buckminster Fuller, “Do you consider yourself a liberal or a conservative?”
I was about 10 years old, and architect and inventor Buckminster Fuller was having dinner at our home before giving a lecture in town. It was the late 1960s, a time of political unrest, which is probably why my father asked Fuller the liberal-conservative question. Fuller responded, “I’m a conservative; I believe in conserving things.”
I have always appreciated the way Fuller leapfrogged the either-or in my father’s question, landing at a more central truth: if we don’t conserve, political liberals and conservatives will be in an identical predicament.
Perhaps this experience accounts for my resistance to either-or choices. They seem inherently unfair, even immoral. Why should we have to choose between Democrat and Republican, labor and management, Coke and Pepsi, dogs and cats, managing as a business and managing as a community benefit? (Reese’s Peanut Butter Cups have taught us that you don’t have to choose between chocolate and peanut butter.)
In the upcoming August issue of hfm, Jim Collins, author of From Good to Great: Why Some Companies Make the Leap…and Others Don’t, grapples with the potential either-or scenario of leading for-profit versus not-for-profit organizations. Collins is clear about the distinctions between the two types of organizations, including that in not-for-profits, money “is only an input, and not a measure of greatness” and that leaders of not-for-profits have less absolute control than leaders of for-profit companies. However, Collins avoids the either-or trap by emphasizing the commonalities of great leadership: “Greatness is not primarily a function of circumstance; it is a function first and foremost of conscious choice and discipline.”
As if to put a ribbon around these thoughts, a friend recently sent me an article from the July-August Harvard Business Review titled “Productivity Is Killing American Enterprise” by Henry Mintzberg, who among other things is director of the McGill University International Masters for Health Leadership program.
Mintzberg argues that productivity--thought to be a core competency of American business--“may be destroying its legendary enterprise and many of its powerful enterprises.” To Mintzberg, improving businesses’ productivity too often has meant “trading away their future health for short-term results” by “firing operating workers and middle managers left and right to cut costs” and “finding all kinds of other ways to cash in the goodwill that accountants and economists have trouble measuring.”
This article reinforces that managing either as a business or as a community benefit is a false choice--if the word “business” denotes a focus on productivity to the exclusion of everything else.
What Mintzberg advocates in for-profit corporations sounds like a central tenet of not-for-profit management: a focus on long-term benefits and on relationships based on trust and respect. Perhaps we need to focus not on either managing for profit or managing for community benefit, but on managing--quoting Mintzberg--“[f]or the sake of American society, as well as the American economy.”
The book How to Lie with Statistics by Huff and Geis has been around for decades, certainly since I went to graduate school in the ‘70s. We used to refer to it as the “little orange book,” since it was a small paperback the size of your hand, back then, though I noticed that the latest edition appears to be blue. It is the most amusing statistics ever written, would be my guess, though that may sound like being “damned by faint praise.”
The content described the incredible variety of ways that people have found or accidentally used when describing statistics about things, usually making them appear to be much bigger than they really are. I found a common approach to this exaggeration in a “Weekly Research Recap” e-mailed by a company on July 5. It included each of the following headlines as “teasers” for various research reports:
None of these headlines was actually used in the titles or content of any of these reports, only in the teasers, but all represent an unfortunately common way to describe how much something that sales prospects might wish to be reduced can be reduced. And none of these two to two-and-a-half degree reductions are mathematically possible, after all. While something can be increased by two or more times, it cannot be so decreased.
Since a “1x” decrease equals total elimination, i.e. a 100% decrease in whatever is to be reduced, there is no way to reduce it by more than 1x, and what the above teasers are probably trying to say is that the costs, time, or whatever else is to be reduced can be cut by one-half or more. I’m guessing that a “2.5x” reduction amounts to 60%, i.e where the old cost per hire is 2.5x the new one, so the new one is 40% of the old. A “3x” reduction would presumably amount to a two-thirds decrease, and I have seen this described in another context, as well.
Many hospitals are in the midst of reducing the prices they charge to uninsured patients, often by half or more, compared to their “list price” used in negotiating or describing discounts given to third-party payors. We can only hope that in addition to ending the egregious and highly unpopular (among consumers) practice of expecting uninsured patients to pay exaggerated list prices, hospitals will avoid the equally misleading use of “2x”, “3x” or any similar expression of how much their price reductions amount to. I have no idea how this latter practice started, but it is certainly a mistake to be prevented.
Mark KnightChief Executive, HFMA-U.K.
Whilst in L.A. recently, I watched SiCKO, and I can see why it is going to be a big challenge for your industry.
I don’t know if you’ve caught up with it, but it really compares the Canadian, U.K., French, and Cuban systems to your own. The U.K. experience was quite accurate, with a trip to the Hammersmith Hospital, amongst other things. Whilst Tony Benn is a little on the left, his observation that there would be a revolution if our health service wasn’t funded the way it is was pretty accurate. As our Chairman said at the ANI in his speech: Universal free care is an accepted right of the British people.
The bit where the doctor from the U.K. talks about getting paid more if people get better is called the Quality and Outcomes Framework (QOF). HFMA-U.K. has a joint committee with NHS Employers that advises on the financial aspects of this framework. This is not quite as rosy as Moore portrays, and of course he doesn’t talk about waiting--which is a maximum of four hours in the emergency room and 18 weeks from referral to treatment. Having said that, when I came back from the ANI, my community physician referred me for an X-ray, which I had at the local hospital: I walked in and waited about 10 minutes, with no charge, of course. The X-ray was e-mailed to a consultant radiologist and the results produced a day or two later--still no charge!
Another issue that Moore didn’t mention was taxation. Our higher-rate tax is 40 percent, and we have a national sales tax (Value Added Tax, or VAT) at 17.5 percent covering most items, apart from items like children’s clothes. The lower rate is 23 percent, but those on that rate also pay national insurance at 10 percent--a tax developed specifically to fund the health service. Oh, and don’t forget gasoline at $9 a gallon, with the U.K. virtually self-sufficient in North Sea Oil as well. This is in addition to significant taxation on a number of different areas. The French system is, I understand, even more taxed; however, whilst it remains a sensitive issue in the U.K., there is a general acceptance of this level of taxation (but not of the taxman himself, of course!).
The part where in France, the government does your laundry can also happen in the U.K. under the Sure Start Programme as with the Home Help Programme provided for older people by local authorities. I thought this was a bit misleading as I wouldn’t see it necessarily as a function of the health service; rather, it’s connected to the whole area of social services, so I am not sure how relevant it is here. The French example also didn’t cover the financing of the system, and our understanding is that the system is in major deficit. The Paris Exchange may allow us to ask that question to the head of the French Hospitals Association.
My conclusion about SiCKO is that Moore is trying to impose a European ideal on the U.S., which isn’t necessarily going to work. The way we in Europe (and Canada) think about society is arguably different to the U.S.A. Your stress is on the rights and freedoms of the individual, rather than in Europe, where the sense is that government needs to help people in a more direct way. There is a parallel with handguns here. I understand the U.S. citizen has at the heart of the Constitution the right to bear arms. In Europe, societies have collectively agreed that for the greater good of the whole community, individuals do not have a right to bear arms. Their rights are therefore subordinate to the whole community.
I am sorry to say that I felt just a little smug with all the gasps around the movie theatre. This was particularly the case as I waited later that day for my return flight, returning to my healthcare system with all of its benefits. It will be interesting to see whether Moore manages to have any effect at all on the healthcare industry, because you aren’t going to go down our route anytime soon, it seems to me.
It appears that employers in general, while increasingly adopting employee health management (EHM) as a strategy, tend toward reluctance when it comes to evaluating the returns they gain from their investments therein. A recent survey of 242 major U.S. companies found that 75% of them offered some kind of EHM program, with 88% of those offering general wellness programs, 70% offering risk condition or behavior reduction, and 52% offering chronic disease management (DM).
These employers were not reluctant about offering their employees incentives to participate. Two-thirds of those offering programs included incentives to entice participation, with higher rewards for completion of programs. Incentives for completing health risk assessment surveys or for wellness participation tended toward the low end, from $75 to $100. Rewards for risk reduction were a bit more generous, in the $200 - $250 range, while those for completing a DM program were as high as $600.
Because such incentives often add significantly to the cost of each EHM program, they threaten the ability to achieve a positive ROI in each investment. They address what survey respondents reported as the number one challenge in EHM, namely motivating employees to join and remain participants in specific programs. But since the second most important challenge mentioned was assessing the cost effectiveness of such programs, and another was justifying them to senior management, measuring results is clearly as important as gaining participation.
Despite this, 62% of responding companies had made no attempt to measure the ROI from their EHM investments. Of those that had, only 14% had succeeded in measuring it, while 8% had failed in the effort, and 16% were still waiting for results. Only one in seven would be able to report on the cost-effectiveness of their investments, and depending on such results, justify continuing investments. [K. Capps & J. Harkey “Employee Health & Productivity Management Programs: The Use of Incentives” IncentOne.com 2007]
There may be a natural reluctance to measure actual results, given the risks, once investments have been made. Those who championed the idea may fear being made to look foolish, lose promotion opportunities, increases in compensation or even their jobs. The firms may lose money, as well as the time it takes to develop a more successful EHM program. Sometimes not knowing is safer.
Despite the relative dearth of data, respondents to the survey were generally optimistic about the results they were getting. Only 8% indicated they expected less than a 1:1 or breakeven ROI ratio; 32% expected a breakeven result, while 63% expected better than that. Since EHM results often improve from early to later years when they are examined, there may be an unexpressed wish not to measure results too soon, lest they be lower than would produce satisfaction or delight among those who review the investments.
When GlaxoSmithKline examined the savings in combined medical/hospital care, workers compensation and disability cost reductions over four years, for example, it found it took a while for the best results to occur. Average savings per participant were only $233 in the first year, for example, which might not even cover the costs of incentives, much less program costs as well. But they increased to $375 in the second year, then jumped to $944 in the third, before leveling off at $950 in the fourth. [G. Stave, et al. “Quantifiable Impact of the Contract for Health and Wellness” JOEM 45:2 2003 109-117]
If ROI evaluations are made too early, many EHM investments that will pay off handsomely, eventually, may never be continued past the first year of disappointment. On the other hand, respondents in the IncentOne survey were only talking about ROI in terms of reduced medical/hospital costs. Since indirect savings in reduced absences and turnover, as well as increased productivity, have been found to be from two to five times as great as medical/hospital cost savings alone, ROI evaluations that include these indirect savings would almost surely be far better than the modest expectations reported.
While it is a good thing that employers seem to be optimistic about EHM payoff, it would be far better if they were as confident in their ability to measure actual ROI, and over as broad a range of performance metrics as are likely to be affected. This is where HCOs might make a significant contribution to the development of EHM in the U.S. HCOs are major employers, often the largest single employer in many smaller communities, and among the major industry category in even large metropolitan areas. They have at least as much to gain from successful EHM as any other employer.
In fact, they probably have even more. U.S. firms worry about their competitive disadvantage in the global economy related to their medical/hospital care costs alone. Their disadvantage is only compounded by the indirect costs of employee sickness, and the lack of the positive effects good health can have on employee performance. HCOs generally operate in local markets, though suffer from chronic miserliness among payers of all kinds, including the growing amount of the cost burden being carried by un- and under-insured consumers.
HCOs have a strong motivation to master the measurement of the full range of economic effects that EHM can have on overall performance. For one thing, they are increasingly offered opportunities to increase their revenue by improving their performance. Since their overall performance primarily reflects their employees’ performance, any ROI they gain from EHM would be augmented by the direct revenue impacts of improved performance. And in order to manage employee performance, HCOs will surely have to measure it, so they may be in one of the stronger positions to adapt their P4P measurement systems to EHM uses.
It seems likely that both the difficulties and the costs of measurement are major reasons for employers reported above being so slow to measure their EHM results. By overcoming these barriers, HCOs may become local leaders in empowering employers to learn whether their investments work, which measurement techniques and EHM interventions work best. This could, in turn, put HCOs in a strong position to gain their own added revenue through becoming preferred EHM providers in their local markets, or even nationally.
Pamela Waymack, FHFMAManaging Director, Phoenix Services Michael Moore’s Healthcare Proposal
If you have not seen the movie SiCKO and are reading this post you need to get out and see it this week. Michael Moore’s latest documentary SiCKO has behind it an aggressive prescription for reforming the US healthcare system. Moore’s film brings the heathcare industries’ failings under his microscope. His diagnosis is predictable—the system must be overturned. But his remedies are scary in their simplicity.
The documentary is an indictment of the private health insurance industry and indirectly indicts the rest of the healthcare system as guilty of not providing affordable and accessible health care. At a time of national elections and precipitating concern for healthcare costs and access restrictions, all of us need to be paying attention to growing public concerns about healthcare. For the 44 million uninsured, Moore’s documentary may have created a voice equal to or stronger than the political action committees that often set our policy agenda. It crystallizes the near universal sentiment today that it is time in America that healthcare coverage not be limited to those that have a preexisting condition of luck—being lucky to have a job with insurance coverage or a spouse with coverage, being lucky enough not to have been sick and disqualified from coverage on a direct policy, being lucky enough to have the income to pay for a policy if you are offered one.
Moore is circulating petitions that endorse a “Prescriptions for Change”; his diagnosis is that if the US takes each of the following three magic pills the entire sector’s problems will be cured.
Michael Moore’s healthcare proposal:
The unfortunate part of the documentary is in fact its strength, it reaches a simple solution for a complex problem. Moore’s documentary lays out three myths as facts that drive to his conclusion that the healthcare system needs to be turned over to the government. This post provides an alternative perspective to his commentary that can add realism to the ensuing public discussion that will shape our solutions nationally to the uninsured crisis.
SiCKO—The Myth That There Is a Magic Pill to Cure Health Care’s Cost Escalation
Health care has been a target sector for outside scrutiny for decades but Moore’s documentary may be the unwanted attention that catalyzes change. When I graduated from the University of Chicago’s business school in 1979, health care was approaching 9% of the Gross Domestic Product (GDP) and industry pundits could not envision it ever exceeding 12% of GDP. By 1990 it did just that; national healthcare expenditures represented 12.4% of GDP that year. And it has not stopped in the ensuring decade and a half. Today health care is a $2 trillion sector of the national economy, consuming over 16% of the Gross Domestic Product and there is no end in sight. The nation’s appetite for healthcare appears to be insatiable and the inflationary trend line in healthcare spending is far from stabilizing. Health care in the US and abroad is a rapidly growing sector of the economy that is diverting dollars from other causes. As economists would recognize, our healthcare cost trends both here and abroad represent an unsustainable trend. At some point, there is a limit (although we have not found it yet) to how many more resources any nation will divert to health care.
The 21st century’s healthcare dilemma will always require tradeoffs. There is more that can be done clinically than there are funds with which to pay for the care. There will always be limits to what can be done financially.
SiCKER—The Myth That Other Countries Have Solved the Healthcare Crisis
Mr. Moore’s research chose not to address how other countries manage with less healthcare expenditures. While their preventive care capabilities should leave us embarrassed as a nation, he chose to limit his review of access for high cost clinical capabilities. He did not ask how these other nations would address issues like bone marrow transplantation for the kidney cancer patient that was denied coverage due to its experimental nature. He did not explore access to more commonplace specialty service needs such as:
Part of what has allowed other countries to keep their healthcare costs lower than in the US is their willingness to engage in decisions about what treatments will not be available. In the US these cases are called denials; they are litigated or put into documentaries. In other countries denying services is accomplished by rationing care. Whether the rationing is implicit (through screening guidelines on age, weight…) or explicit (such as limited availability of technology such as MRIs or specialized services), these countries have addressed the need to rationalize health care’s continuing demand for more resources. They just say no.
Is America ready to explicitly or implicitly limit access to what are considered routine care today?
SiCKEST—The Myth That Government Can Do It Better
At the end of the film, the only thing more disheartening than Moore’s depiction of the flailing US healthcare system is the impression he leaves that his magic pills can cure our healthcare financing and delivery ills. Some of the same countries that Mr. Moore spotlighted as successes are looking to the American market based systems for ideas to address their own challenges to control costs. If government had all the answers as Mr. Moore presumes, most US county health systems would not be dismantling their preventive services in the community and changing policy on an almost daily basis to react to their own fiscal ills. Come to Cook County to see a government-run healthcare system that will only make you sick to your stomach given its historic and continued mismanagement.
SiCKO—A Call to Action
Yes it is time in America to address spiraling costs and decreasing access to healthcare services by those most at need. Based on my own observations from other countries healthcare systems over the past 25 years, there is no simple solution to the 21st century’s insatiable appetite for healthcare services. So let’s not believe there is a magic pill that Mr. Moore or anyone else can produce to cure what ails the US healthcare system. But in the end, SiCKO should serve as a wake-up call to all of us that it is time to start addressing the issues of cost and access before our healthcare system is dismantled by those that have the simple solution like Mr. Moore.
If we in the healthcare industry do not engage in active discussions and problem solving, we will find others dictating solutions. This may be the SiCKEST possible ending to the film—realizing that we could abdicate our role in shaping the future of healthcare delivery and financing in this country because we remain silent.
It is time we address the limited access that 44 million residents in the US experience every day. We must actively support universal coverage and assure that it solves the problems in our healthcare system instead of replacing them with new problems.
Start a dialogue among your friends, in your community and through your professional affiliations about the need for universal health insurance for all people in this country. All of us need to contribute to the discussions and bring a dose of reality to them assuring that assumptions and conclusins are realistic and that critical information is not omitted from the offers of magic pills and simple solutions. While there is no magic pill for our spiraling health care concerns, there is an incredible opportunity to improve our unhealthy system today.
While improving employee health has been shown to improve employee, and thereby employers’ performance in a wide range of industries and countries, it is certainly not the only, and not necessarily the best way to do so. A recent study offers some insights into where health improvement stands in terms of its relative effects on how well employees perform.
While there has been a substantial accumulation of research on the effects of employee “unhealth” on productivity and performance dimensions, particularly on the quality and quantity of performance while at work (“presenteeism”), there has not been much in the way of comparative research. When compared to others that were gauged in terms of employees’ self-rated ability to perform at their best, “personal health problems” rated only sixth of seven factors in terms of its frequency of impairment effect.
When 1826 workers in a wide range of jobs from a wide range of industries reported on their performance impairment factors, “low motivation” was the most frequently identified factor, with 31% of workers reporting this factor “sometimes”, 12% “frequently” and 4% “all the time”. Next in frequency was “low morale among co-workers” with 26%, 10% and 5% reporting these same frequencies. “Personal health problems” was reported as only 18%, 5% and 2% in these frequency levels, totaling 25% compared to low motivation’s 48% total.
The other factors reported were:
[W. Lynch & H. Gardner “Employee Health Problems Are Not the Greatest Threat to Worker Productivity” Health as Human Capital Foundation May 20, 2007 (hhcf.blogspot.com)]
This is not to say that employee health is only the sixth most valuable factor for HCOs or other employers to address. For one thing, the survey asked only about the frequency of each factor, not how much each factor impaired performance when present. It could be that health has a more powerful impairment effect than its frequency would suggest.
For another, the real issue is not the extent to which a given factor affects employee performance alone that determines which deserves the most attention by HCOs. It is the extent to which available and implementable interventions will cost-effectively reduce the effects of each factor and deliver positive ROI for those organizations that employ them. Each HCO will have to identify the best solution for itself, vs. rely on the report’s findings.
On the other hand, the same survey revealed what seems clearly the major modifiable factor in promoting employee performance – the extent to which workers perceive that their organization’s success will be shared via meaningful rewards. It also indicated that the more benefits employees get, the less motivated they tend to be. Motivation scores were highest when employees received no benefits, and lowest when they received four or more. [W. Lynch, et al. “Brief 1: Human Capital Motivation and Productivity” Health as Human Capital Foundation May 2007 (www.hhcfoundation.org/hhcf/pdf/Brief1.pdf)]
Employees who most fully identify with their organization, who share the feeling that “my success is your success”, who believe that their investment in hard work and dedication is worthwhile, that meaningful rewards will result, will tend to be the most productive and valuable. When they feel that good performance is rewarded, and that progressively greater performance and value will yield progressively greater rewards, employees will tend to improve their performance continuously.
The fact that one employer achieved a 44% in productive output at the cost of only a 10% increase in compensation, in the first year of implementing a pay-for-performance system is a strong indication that financial rewards can make a big difference. [E. Lazar “Performance Pay and Productivity” American Economic Review 190:5 Dec 2000 1346-1361] On the other hand, the fact that another employer achieved a 35% improvement in productivity in the first year of an empowerment system where all employees could choose the time and place, as well as the amount of their efforts, with no added cost to the employer, is a strong indication that other rewards can work as well. [M. Conlin “Smashing the Clock” Business Week Dec 11, 2006 (www.businessweek.com)]
HCOs might well conduct surveys of their own workforces to determine the extent to which the general findings reported here reflect the attitudes and performance of their own employees. Whether or not employee health turns out to be a major or relatively minor factor, it is certainly a useful one to address. But by learning which factors can be modified most cost-effectively in terms of ROI, HCOs may discover a “solution” or at least an effective way to address many, if not most, of their operational problems.
Extended Business Office Perot Systems Extended Business Office solutions can help you achieve a high-performing revenue cycle through strategic collaboration with your team. 800-659-8883 revenue cycle solutions www.perotsystems.com/revenuecycle
Perot Systems Extended Business Office solutions can help you achieve a high-performing revenue cycle through strategic collaboration with your team.
800-659-8883
revenue cycle solutions
www.perotsystems.com/revenuecycle
