Increasing Value in Health Services
By: Greg Vigdor/WHF President & CEO
"Transforming Health Care". If we had $1,000 for every time a health provider, insurer, politician or government bureaucrat claimed that they were ‘Transforming Health Care’ - our national health cost crisis would be solved! Everyone and I mean everyone in the health care system makes that claim.
And that might be a good thing, because we are in desperate need of a transformation. In terms of value for dollars invested, our health care system is perhaps the most inefficient industry in world history. Strong words – yes. But it’s pretty hard to argue.
Other nations struggle to keep health care under control too, but we have taken that struggle to a whole new level. The last time the World Health Organization (WHO) ranked health systems across the globe, the U.S. finished 37th! That, despite spending far more per person than any other nation and more than twice that of most industrialized nations. Health care leaders in Washington state try to distinguish our state's performance from this national debacle by insisting we are an exception. Problem is – these leaders use selective Medicare hospital data to make their claim; more inclusive data relating to other services and populations shows Washington state is like most states that deliver poor value in health care.
But isn't it a good sign that these health care providers are firmly committed to "transformation"? Of course, but knowing that they are sipping the transformation ‘kool-aid’ isn’t enough to convince us that major change is around the corner. The Washington Health Foundation was a national pioneer in calling for "transformation." We have been talking about this issue since 2001, and we believe we are a pretty good judge of what it takes to actually "transform" the system.
What we asserted back then was that the health care system was completely out of whack. It was fragmented, ineffective, inefficient and exceptionally costly to all affected. We believed then, and continue to believe now, that the system should organize around the people it serves, rather than force people to organize around its failed structures and operational paradigms. We put together an aggressive "Transforming Health Care" program to pursue what this real change might look like and how we might get there, primarily by talking to real people about the problems they were experiencing. Ultimately, this effort led to our Healthiest State in the Nation Campaign and our attempt to show that a Health HoME can (and will!) empower people to take more control over their health and be the basis for a real solution to what ails us.
Providers, insurers and government were among those engaged in our Campaign. But most were only interested in the fun, healthy living initiatives that we offered. They showed less interest in the deeper systemic changes we were talking about; changes that might really transform the system for people who need care and ultimately pay the bills for it. So, why has the tune of those in the system changed now?
A good bet is that national health reform legislation has gotten them to wake up and smell the coffee that big change is coming with or without them. Those that believe reform is necessary are jumping at the opportunity to transform themselves. Those that don't are still feeling that they have to jump into the mix or they will fall behind their competitors. Also not to be overlooked is the reality that much of health care reform legislation is a multi-billion dollar bribe by governments to get those in the system on board. From money to develop electronic medical records (in what other industry has the government had to invest in the use of computers to improve their operations?), to incentive payments for accepting new provider payment models, to new funds for medical homes, accountable organizations or some other alphabet soup of allegedly new health care structures. Maybe one of the grant requirements to get at this money is to simply say you are transformingsomething.
If we are truly in the midst of real and big change, than the motivation it took to get here is immaterial. Whether transformation is the result of strongly held social beliefs, financial incentives or some combination – it wouldn’t matter. The important thing is that we are ‘transforming health.’
Unfortunately, I remain skeptical of how much real "transformation" those in the system, political or institutional, really want. Much of the transformation actions in health reform legislation are pilot programs and tests of payment approaches that have already been tested over the past 20 years. Rather than just taking what we know about these to scale to clearly set a course of transformation, the government is doling out incentive money in the hope that these will eventually translate to a big change. Worse – it’s happening without any accountability that this ‘change’ will actually happen. More on this another time.
Let's stick to the question of what insurers and providers are doing to transform. Even as they speak to transformation, and accept bags of incentive money to do health reform pilot programs, or even invest their own resources in "transformational" change initiatives, it seems clear that these are secondary strategies. Instead, what I see as the primary strategy is to become as "big" as they can through merging, acquiring, partnering and otherwise expanding. Controlling more market territory, growing their production span to more activities, and otherwise trying to become the biggest, baddest kid on the health care block.
If behavior rather than words is the judge of intent, it seems that the real transformation at play is to become as big as one can be in order to make sure that one can resist change rather than create it. It is not that hard to imagine a future where our choices are even more limited and controlled than they are today by the creation of a health care delivery system where only a handful of players remain. This is a distinct possibility despite the government’s belief that the transformation we are in is creating a thriving health delivery marketplace for us.
A recent study about health care costs communicates how out of touch those within the system are when it comes to health care delivery problems. In outlining the list of factors contributing to our cost crisis, no one points a finger at the notion that there are already just a handful of sellers within this marketplace. And seemingly fewer into the future. This is particularly troubling in the insurance industry where government regulations already make fresh competition difficult due to onerous reserve requirements and other regulatory barriers to entry. Meanwhile, the health care reform legislation purports to transform health care by investing even more money in these large entities, and then relying on competition among them, through government driven programs such as health care exchanges, to create public good.
I guess that would qualify as a transformation. More power to them if it works. Look – I’m not saying that the solution needs to be one that relies on creating a free market for health care services. But selectively ignoring the reality of how the system works, or providing some lip service to this fundamental problem, won't transform the system either. Nor will just allowing health care providers and insurers to declare that they are transforming the system while they are mostly aggregating markets and the means of production.
We believe that transformation calls for vision and belief in something more than market power, government-based smart design or voluntary action by the health care industry to changle on its own. And we continue to believe that the best bet in achieving transformation is to make the health care system more about people than itself. A great example of that can be seen in transformative innovations like our own Health HoME project. Our suite of Health HoME tools and resources enable people to take greater control of their health. And that is a great first step in truly transforming health. Another important step is to continue to develop and refine relationship support that helps people navigate the complexity and confusion of the health care system. We are doing that though our Personal Health Advocate Service. We also need a health care payment and delivery system that effectively and efficiently meets the needs of people, and doesn’t pigeon hole them into the canned solutions that institutions and bureaucracies prefer.
Are we crazy? Perhaps. But the Institute of Medicine recently came out with a report that supports our line of thinking. What they said was that the limited set of changes now being adopted within institutions will fail to meet the challenges and complexities of the health care problem. We agree. And have some ideas about how to do this. Join us.