Health Care On Life Support

Wednesday, March 11, 2009


MESSAGE FROM YOUR PRESIDENT:

Health Care on Life Support: Challenges and Opportunities


By now, most of you have heard that every business in America is buckling under the increasing costs of healthcare expenses. Year after year, health care costs grow faster than the rest of the economy, straining families, businesses, and government budgets. The Center for Medicare and Medicaid Services reported this week that total health care spending rose 6.1 percent in 2007; slightly less than the growth of 6.7 percent in 2006. Even so, it continued to expand faster than the overall economy, which is contracting., reaching a total of $ 2.2 Trillion in 2007, or 16.2 percent of the gross domestic product (GDP). Americans will spend $2.4 trillion on health care in 2008, which is equal to $7,900 a person! Despite the record spending there are 46 million Americans (and growing) without health insurance. No industrialized nation in the world comes even close to the percentage of GDP America spends on healthcare. There is strong evidence that much of this spending does not contribute to better health. Americans spend twice as much per person as the average among other industrialized countries, and yet our life expectancy and infant mortality rates are below average. At least one-third of medical procedures have questionable benefits, according to the Rand Corporation. Based on a study of regional variation, Dartmouth researchers concluded that Medicare spending could be reduced by 29 percent without reducing effective care or affecting health outcomes. The finding suggests that the entire American health care system spends roughly $700 billion a year that does not improve health outcomes. On top of it, in Dade county alone billions of precious health care dollars disappear every year and wind up in the pockets of crooks and criminals. Many businesses also face unique challenges. They lack the negotiating clout needed to obtain favorable rates from insurance companies, and their inability to spread risk across a large group of employees means that the health problems of a single employee can drive premiums up to unaffordable levels. Without economies of scale, small businesses also face larger administrative costs for each worker covered. Small business owners and their employees account for an estimated 27 million of the 47 million Americans without health insurance. Some employers are dropping health insurance, while employment is growing more quickly in industries that are less likely to cover their workers. As a result, fewer and fewer Americans receive health coverage from work. The percentage of Americans covered by employers dropped from 62 percent in 2003 to 59 percent in 2008, the equivalent of 8 million people losing coverage. And for tens of millions of Americans ineligible for Medicare, Medicaid, or another public program, no viable alternative exists to employer-sponsored insurance. There are several issues that need to be fixed to address the health care cost explosion :
1) We must transform health care from a fragmented system into a coordinated and integrated delivery system utilizing information technology, thereby enabling healthcare professionals to measure cost, quality and outcome at the point-of-care.
2) Fundamental payment reforms that encourages doctors and hospitals to improve management of chronic diseases and adopt proven treatments. We have to shift from a volume-based to a value-based reimbursement system. This will reward doctors to spend time with their patients and to focus on the core value of patient care. Otherwise, we will use an entire generation of urgently needed primary care physicians.
3) Promote the application of business management principles in medical offices to help doctors to work smarter and NOT harder.
4) Emphasize the use of generic drugs that can provide equally or even more effective treatment at lower cost. Retail spending on prescription drugs rose only 4.9 percent in 2007, versus 8.6 percent growth in 2006, which is due to the increased use of generic drugs.


5) Stop the preferred funding for Medicare Advantage Plans leading to higher reimbursement and higher costs (115 percent of fee-for-service traditional Medicare). The only beneficiaries are commercial insurance companies which rake in higher profits per member and drain public coffers.

These are just a few ideas that should be assessed and evaluated. As doctors we should take a proactive position and start reshaping our practices. Many of us are stuck in the daily routine and are afraid to change. Organized medicine can and will play a greater role to leverage the risk and assist the individual doctors along the process of change. If we do not adjust to the changing market now, others will enforce painful solutions. Let’s be proactive and not reactive!