I came across a white paper produced by Dan Rickard a consultant at McGriff, Seibels and Williams, entitled “Throwing out the baby and the bath water.” Dan does an excellent job outlining the challenges that exist within the healthcare environment and how our current structure is not sustainable. Thanks Dan for producing a thought-provoking paper. Nice job.
Article: Throwing Out the Baby and the Bath Water
Last Thursday, NCN co-sponsored a luncheon featuring Dr. Ron Anderson, who heads the Parkland Hospital System in Dallas and John Goodman, PhD, President and CEO of the National Center for Policy Analysis. The discussion centered on the recently passed health reform law (PPACA) and how this legislation will impact the nation’s health care delivery system.
It was interesting to hear how similar their take was on where healthcare is headed. In particular both believe that:
- Emergency room traffic will increase;
- Access to care for seniors and the disabled will be so impaired, that they are at risk of becoming like Medicaid enrollees who are forced to seek care at community health centers and safety-net hospitals; and
- Unparalleled/unprecedented discretionary power is being given to one federal agency (Health and Human Services) to make decisions that will affect everyone.
NCN will continue to focus on ways to develop a rational and transparent payment system allowing affordability and sustainability for all.
Watch the embedded video above; it'll be worth your time. Will you comment and let me know your thoughts?
In the July issue of Managed Healthcare Executive there was an interview with Karen Davis, President of the Commonwealth Fund, a private foundation based in New York that supports research on improvements in healthcare. In this interview I was struck by her comments relating to payment innovations. She is quoted in this article “But the bigger issue is whether the public and private sector can work together on payment…Some states may be willing to use their convening skills to bring different parties together to identify a payment model that is more rational instead of having so many different ways of paying. It’s consuming so much in administrative costs.”
I wholeheartedly agree with her assessment. With the recent passage of PPACA all eyes are focused on providing access to 32 million uninsured/underinsured people. However, there has been no attention to developing a rational payment approach to support this added burden on states and individual employers. For years, we have operated on a payment methodology created by Medicare which today is broken, or a system based on contracts based on discounts in return for volume that is no longer advantageous to employers. What do we do? Our current system is not sustainable. Anyone in the business realizes this and we need to change this quickly.
A rational payment process is needed and will be central to the success of a sustainable healthcare system. Since 2001 we have worked on ways to bring rationality to an irrational payment world. The spotlight of the sustainability of healthcare will be squarely on this word “rational reimbursement.”
The cameras, press conferences, town hall meetings, picketing, etc. have come to a screeching halt since the health bill was signed into law. It has been moved aside in the 24-hour news cycle with outrage and disgust at the recent oil disaster in the gulf and overhauling financial institutions and the "to big to fail" mentality.
Healthcare reform is now left in the hands of staffers, special interest groups and a team of bureaucrats who have to now write the specific regulations and details around the spirit of the health reform bill. Leading the charge will be the Department of Health and Human Services (HHS). In response to the recent law being passed, HHS has established a new office charged with implementing the health insurance provision in the new law. On April 19th the Office of Consumer Information and Oversight became operational. This office is responsible for ensuring compliance with the new insurance market rules (which still have not been written). It will also be responsible for providing oversight and guidance for the state-based insurance exchanges and temporary high-risk pool programs. They will be using temporary staff drawn from the existing ranks of HHS employees but are aggressively hiring people to fill roles to achieve the goals before them. With this in mind, here are a few observations:
- Confusion and frustration will be a common theme with employers, payers and consumers. Employers will begin (if they have not already) reviewing their health plans for 2011 in the next few weeks and it is hard to know what to do when the specific timing of mandates and language around mandates are unknown.
- Consultants and brokers will be looked upon as experts and telling employers what to do. They have always been viewed this way but their role in the upcoming renewals will be different. They will have to present new and different approaches if they are going to maintain their relationships with their clients.
- We are at a tipping point. New ideas have to be presented and implemented. We all know healthcare costs will NOT come down. They will increase and increase substantially so employers will have to see "game changing" ideas if they want to maintain their coverage for their employees.
We live in interesting times and over the next few months we will see a growing sense of frustration. NCN is prepared to handle these trying times with proven innovative approaches that dramatically reduce the healthcare spend by replacing traditional methods of managed care (no longer effective) with a rational, transparent and defensible approach to healthcare payment.