Don't let politics obscure important health care reform

Clarity of purpose in these chaotic political times is critical.

It's hard to understand what is going on in Washington with a new report coming out daily regarding who is willing to compromise what. We need to stay really focused now on  the facts and what is most important in health reform legislation.

Fact #1: We spend close to 2.5 trillion dollars on health care in the U.S. This number is increasing at a rate of 6-8 % per year.

Fact #2: Depending on which congressional committee's bill you want to choose, proposed legislation increases this spending by 800 billion to 1.6 trillion dollars per year.

Fact #3: The proposed way to pay for the increase is through increased taxes and reduced reimbursement to providers.

Does this sound good so far? Wait.

Fact #4: There is no significant plan to reduce the continued increase in the cost.

We now have an approximately 3.5 trillion dollar entitlement that will be increasing at a rate of 6-8 % per year. This is simply not going to work. What should we do? Let's look at some more facts.

Fact #5: 80% of health care costs are generated by the care delivery system. 7% by health plan administration.

The point being we are not going to get cost savings out of the health plan to pay for coverage it is only going to come out of the delivery system. We must begin to eliminate waste from the delivery system if we have any chance of managing the cost. 

Fact #6: Approximately 300 million medication errors will be delivered in the American Health Care System this year.

Many other mistakes lead to high cost in health care. Examples include infections after surgery, patient falls, pressure ulcers and many others. We've known for years that we were injuring and killing many patients per year. In fact estimates for injuries are as high as 15 million/yr.

Fact #7: There are a core set of early adopters of the principles of manufacturing quality called "lean" which are showing dramatic reductions in these defects and in the costs of delivering care.

This group of organizations has created the Health Care Value Leaders Network www.healthcarevalueleaders.org They are committed to transforming their organizations to the safest and most reliable in the industry and they are proving that it's possible to do so.

Fact #8: ThedaCare in Appleton WI, one of the 16 organizations has reduced the cost of inpatient care by 25% and improved quality on their med surg unit to near 100% reliability. Isolated Coronary Bypass surgery mortality rates have dropped from over 4% in 2001 to 1.4% in 2008 and 0% so far for 2009. Gundersen Lutheran in LaCrosse WI, takes care of Medicare enrollees for half the cost of the average in the nation with top quality scores www.dartmouthatlas.org All of the health care value leaders network organizations are showing similar dramatic results.

What's happening at these organizations and a few others is a commitment to improve themselves using a methodology that is understandable and is proven. This methodology has not been widely accepted in the industry which is one reason why costs keep going up and quality doesn't improve.These organizations are committed to documenting and sharing this proven methodology on behalf of all the patients in America. In the Gundersen and ThedaCare cases alone if all health systems could achieve these results there would be more than a trillion dollars of savings in the next 10 years with hundreds of thousands of lives saved. 

This Center and The Lean Enterprise Institute have formed a partnership to facilitate many networks of hospitals and doctors who want to learn this methodology and improve. Visit www.healthcarevalueleaders.org  web site to sign up to become one of the learners of the proven methodology for reducing defects and improving patient outcomes. 

In summary, with the political wrangling going on we must not lose site of the fact that we need essential payment reform which supports the innovation described above and we need all health care organizations to focus on learning how to remove waste, about a trillion dollars worth.  

John S. Toussaint

John S. Toussaint, MD
President and CEO, ThedaCare Center for Healthcare Value
(920) 659-7500

Posted August 7, 2009 | 3 Comments

Comments:

Kathy Qualheim at 2:49pm on August 10, 2009
It helps to see the actual numbers all together regarding cost in both dollars and human cost in errors.
Given the current mob scenes on the news of the town hall meetings, how do we get the public to slow down and think? For that matter, how do we get our congress to slow down and think?
Jim McCormick at 4:21pm on August 10, 2009
2.5 trillion per year for health care in America, that's a lot of money! Incredible when you consider that 47 million people in this country aren't insured.

I like the idea of looking a metrics and determining where we can reduce costs but implementation seems to be the real problem. How do you create an incentive for an industry with very little competition?

The reason that single payer systems are working for countries like Canada is that everyone is in the same health care system. In the United States we have government subsidized systems like TriCare, Medicare, Medicaid, government subsidies of emergency medical services for the uninsured, and of course the special system that provides exceptional health care for the highly valued elected representatives. Then we have the private insurance offerings for individuals, small businesses and large businesses. With so many systems (most carefully crafted through legislation to avoid competition) it becomes virtually impossible to address the health care system. It’s not a system, it’s a collection of offerings carefully crafted to push care for poor and middle class Americans on to government programs.

It's simply immoral that we don't provide health care for all citizens in the United States.

Perhaps the concept of cost containment needs to take a secondary position? Can it ever be addressed by a system based on people's ability to pay and the denial of claims to improve profitability?

The government option may not be as suitable an answer as a single payer system but it is an attempt to provide a safety net for the middle class and competition for private insurance. More important, in light of the current political climate, it appears to be attainable.

One reason we feel compelled by the government option is largely based on the disparity between the administration cost of Medicare and private insurance providers. While experts waiver about what these costs really are (3-5% for Medicare and up to 20% for private insurance companies) we can all agree that reducing the 2.5 trillion by 375 billion a year would be very nice. Nice that is for everyone except the insurance companies.

Another reason requires a quick look at what other nations are doing. The United States health care system is ranked 37th in care quality of industrialized nations by the World Health Organization but we pay at least 50% more per person for our health care. It makes one feel that doing anything will improve the situation while maintaining the current system is both morally reprehensible and fiscally irresponsible.
John Toussaint at 12:19pm on August 19, 2009
Sorry for the late response I had to take a break from this mess and go to Door County for a week!

Kathy,

I agree that congress is pushing too fast on a complex subject and by doing so are missing the point that we need to remove waste from the system through different incentives and delivery of care redesign.

Jim,

You have thrown a lot of ideas out there. I do think we need serious cost improvement but with 80% of the cost being in care delivery we have to start there. Most of what we do in care delivery is unnecessary and waste in the eyes of the customer. We need to remove that waste as care delivers which reduces cost, we also find that improves quality.

As for the insurance system if we implement another Medicare like plan with the poor incentives we will not get to competition at the level of the provider. Without competition costs will continue to rise and the new entitlement will simply lead to higher taxes and lower reimbursement for providers.

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