The Healthcare Industry Outlook Assembly was co-sponsored by MedCOSMETIC and Kansas City Cancer Center and hosted by Ingram’s.
As an opening salvo, Dr. Mirabile asked his colleagues what could realistically be done at the state or local level to reduce health costs and improve the quality of care.
John Hennessy, executive director of Kansas City Cancer Center and event co-sponsor, lamented the fact that legislative action has been short on reform and long on “slash and burn” adjustments, certificate of need (CON) legislation being a case in point. “The odds of a coordinated, well thought out [legislative] plan are pretty slim,” said Hennessy. As much as Americans might like the affordability of the socialized system, most of the socialized systems elsewhere have survived, according to Hennessy, “because there’s a private system hidden under or south of the border.”
“The more you push back on people to make decisions with their own money,” he concluded, “you’re going to see more consumerism, even if it’s lousy consumerism.”
Mirabile observed that the rise in patient deductibles was largely a way for insurance companies to survive. The problem for the providers, as he saw it, is that patients with large deductibles often refuse to pay the providers, even though the providers cannot refuse the service.
“I think there’s a lot of underinsurance out there,” said Hennessy, “but if you legislate greater quality insurance, no one will buy it anymore.”
“Everybody knows that the very last bill to get paid is the healthcare bill,” said Jim Denning, CEO of Discover Vision Centers. He saw one possible solution in a legislative mandate aimed at insurance companies, namely that they give the provider real-time access to their databases. This way they the provider would know in advance what patient allowances are. “It’s embarrassing to the industry,” said Denning, “when a patient can come in, get a service, leave and not pay for it.”
Mirabile wondered out loud why providers did not ask for a credit card up front to cover charges that the insurance company did not. “Why can’t we do that?” Mirabile asked rhetorically. “It’s not illegal.”
“We could legislate something,” said Denning, “where, if everybody had a high deductible, they must have those flexible spending ac-counts, and they must have a debit card attached to it.”
“The LASIK surgeons have been [charging up front] for a long time,” said Mark Allen, MD, a gastroenterologist and the son of KU’s infamous Coach Phog Allen. As he explained, thanks to free market competition, prices have dropped from $4,000 an eye down to as little as $1,500 an eye. “What reduces costs,” said Dr. Allen, “is when people compete.” Allen acknowledged that not all medical procedures allowed for shopping, perhaps not even most, but for those that do, competition can be a useful way to control costs and improve quality.
One other potential area for legislative reform, Steve Kunz, MD, of the Western Missouri Radiology Group argued, is malpractice. “I see it all time, every day when I’m practicing,” said Dr. Kunz, “the impact of the malpractice threat.” Kunz regretted that ER doctors were constantly forced to worry about “covering your tail.” Added Kunz, “That’s not medicine like I was taught, or probably anybody else that does it around the table, but that’s what it’s come to.” Kunz also noted that good outcome analysis would help everyone’s decision-making ability.
Jim Whitaker, MD, an orthopedic surgeon, saw the value in the recently passed Missouri tort reform legislation, especially as more and more carriers open to this market. “I think there is a psychological boost for the doctors,” said Dr. Whitaker. He thought it would limit the number of physicians thinking about leaving the state. “That is an example of local legislation that really helped.”
Refining Managed Care
John Hennessy of Kansas City Cancer Center discusses reimbursement and the importance of simplifying accounting practices.
Providers are not just contesting with their patients to get paid. They are also fighting the insurance companies to get reimbursed. Jim Mirabile asked his colleagues what refinements they would suggest in managed care to improve the delivery of healthcare.
“The incentive to have more personal responsibility is probably a good one and something that would help us,” said Jill Watson, representing both the Metropolitan Medical Society of Greater Kansas City and the Missouri Association of Ambu-latory Surgery Centers (ASCs). She too suggested that providers get access to the nature of the patient deductible. “I think the next generation of the high deductible plan is to give [providers] that kind of access,” she argued, “so that it can play out the way the vision was supposed to.”
Dan Durrie, MD, founder and head of Durrie Vision, affirmed that there is value to plans that give patients more responsibility. If they paid more up front with their own dollars, they are more likely to shop and negotiate better rates.
“I think that they will shop,” agreed Jim Whitaker. “If you have an elective operation, I think that they will do this. That’s not all that sophisticated or far-fetched.”
As a business owner, Durrie has an HSA (health savings account) plan for his own employees. He thought it prudent for other business owners to educate their employees in how HSA plans are supposed to work.
Whitaker thought the Industry Outlook forum a great opportunity for Ingram’s to educate the business community and the physician community about HSAs, which he believes have value given their inherent ability to promote wellness and individual accountability.
John Hennessy worked with HMOs for 10 years on the west coast. He no longer thinks that HMOs and like plans have the ability to control healthcare costs. “Part of the reason Medicare is cheap to do is that it’s simple,” said Hennessy. “You can tell what you’re going to get paid.” He argued for a comparable simplicity
on the private side. “There’s got to be a way we can emulate what other businesses have done with their transactions and get there.”
Hennessy thought that the California state public employee system provided a likely model. “What you wound up with was a very large population with a very discrete set of benefits,” he noted. “It was easy to deal with.”
Dr. Durrie observed that one of the potential models that came out of discussions through the Kansas City Life Sciences Initiative involved Cerner and Sprint. Given that ours is the only city in the country to have such a combination, the thought was to design a totally wired, unified healthcare system, the information in which would follow the patient wherever he or she went within the community. “It’s a long term plan,” said Durrie, “but if we have every patient in all of the Kansas City area going in, one card, one system, one medical record, we could lower our costs significantly.”
One obstacle to such an arrangement, as Steve Kunz observed, is HIPAA, the Health Insurance Portability and Accountability Act of 1996. “HIPAA is making it so you can’t get any information on anybody, even in your own office sometimes,” said Kunz. “I don’t think that’s the intent of HIPAA, but that’s the way everybody is interpreting it.”
“We are going to have to think out of the box,” said Durrie. The reason for the urgency, as he saw it, was the aging of the population, particularly the baby boom generation. “We’re going to come up with changes in the healthcare system. We’re going to have to do something.”
As Dr. Allen observed, necessity is almost always the mother of invention in the administration of healthcare. When doctors are told they will be put out of a given plan, Medicare most notably, they will make the adjustments they have to. “In the long term, it will be good to have everyone on EMR—electronic medical record—sharing data, getting information,” he added.