Health Care Roundtable
Six top executives in Dane County’s health care community provide their insights on the future direction of health care, with or without the Affordable Care Act in place.
Our Expert Panel
President, St. Mary’s Hospital
Vice president of access, Agrace HospiceCare
CEO, Wisconsin Statewide Health Information Network
President-CEO, Meriter Health Services
CFO, Access Community Health Centers
Senior account executive, M3 Insurance
Late in 2012, the United States Supreme Court will decide the merits of the Patient Protection and Affordable Care Act’s (PPACA) individual mandate, which requires people to purchase health care. Some legal experts think it’s possible the entire law, not just that one piece, could be ruled unconstitutional (as does Wisconsin Gov. Scott Walker). In addition, the state of Wisconsin has suspended work on a statewide health care exchange pending the outcome of the case, and the Governor has turned down $37 million in federal dollars to help set up the exchanges, so there is some measure of uncertainty at the moment, leading to our first question for Roundtable panelists.
GLYNN PATRICK: What if the Supreme Court strikes down the law this year, or a Republican president repeals it next year by a waiver? Will your respective organizations still proceed as though the law is intact because of the way it’s driving efficiency and reinforcing the move away from pay-for-service to pay-for-quality?
BYRNE: There are certain things, regardless of what happens either from the legislative or regulatory or legal perspective, that we know we have to do. One, we have to be as efficient as possible and get more efficient. Number two, we have to work more closely with our physician partners and collaborate around the care of the patient to provide the best possible care and the most efficient care. And number three, pay for quality as opposed to paying for the more you do, the more you make. The train has left the station for our system, St. Mary’s, Dean, SSM Health Care Wisconsin. We believe the future is moving quickly to value versus volume.
We’ve actually worked very hard as a system to take cost out of the system, to move care to lower-cost settings to the outpatient setting where appropriate, which leads to higher patient satisfaction. If anybody here would prefer to spend the night in a hospital versus in their own bed, raise your hand. Nobody ever raises their hand. I ask that question a lot. So we know some of the basic things that we have to do that are going to be necessary regardless of what happens in the regulatory legal arenas.
WOODWARD: Part of your question is if a Republican becomes president. I don’t think you’re going to see a large-scale repeal of health care reform. You may see the legislation change, but keep in mind that a lot of what’s baked into the health care reform legislation is a tremendous amount of cost savings designed to reduce the deficit. So they’re going to have to come up with some other savings to achieve that, which is unlikely.
Secondly, because of the percentage of GDP that’s dedicated to health care, they’ve got a real problem. We’ve known that for years. That has to be fixed. So I think at a national level, some form of health care reform is going to proceed. Whether it’s what we know as PPACA or not remains to be seen.
Locally, every one of the institutions, all four of the hospitals, and many of our ancillary providers that you see around the table in the community have started rolling on preparation for health care reform. We’re reducing our cost. We’ve all implemented computerized provider entry. At Meriter, for example, we’re bringing up our independent physicians on electronic medical records, so that they’re equipped to manage under a different reimbursement system and having to collect data and report data differently. So I think the train has definitely left the station. I think that we are implementing the things that we believe are going to exist in five years, whether or not the legislation is.
So I think, you know, lowering cost, improving quality, managing more efficiently, caring for populations of patients, and changing models of care delivery are all going to be inherent in what we do going forward. I think we’re well on the way regardless of what happens at the Supreme Court.
BYRNE: I would just add some things to support some information and to support the fact that we’re on the right path. Some recent data we saw suggested that health insurance inflation from 2000-2012 in Madison was the 15th highest in the state. We were 131% in that 12-year period, Milwaukee was 193%, and Green Bay was 309%. The average cost across the state for health insurance was approximately $687 per month, which actually went down from $727 in 2010. So as a state, we actually had some decline. And Madison was, again, 12th highest, which is good. Lower is better, right? We were well below that even at $575 per month. Again, Milwaukee was $729 per month, so we’ve been working to try to bend the cost curve.
WOODWARD: There’s another question that we should ask ourselves when we think about what might happen nationally in November when the Supreme Court acts on health care reform. This reflects probably less on Wisconsin, but nationally the American Hospital Association committed a fairly extensive dollar figure in terms of reductions in overall cost of providing care. It was about $150 billion over a period of time under the presumption that health care reform legislation would lead to coverage of the majority of the population. If that piece goes away, a lot of the house of cards that that legislation’s built on could potentially fall apart. Now, Wisconsin’s different in that we cover the overwhelming majority; a little over 90% of the population of the state of Wisconsin is now covered under some form of health insurance. And that’s improving a little bit each year. Now, a lot of that has been shifting from self-pay to Medicaid, but it’s coverage nonetheless.
GLYNN PATRICK: Put on your respective business hats for a moment. Given what you now know about the rules and regulations associated with the new law, and as employers that offer health insurance to employees, what is the best way to proceed?
HEALY: The best way to proceed is to continue to do anything that can improve access and lower costs. And if we can do that, and if parts of the PPACA will continue to do that, then I think all of our clients who we advise are behind it. If it only adds to the administrative burden that the client has or that the employer group has, then it becomes something that you don’t really need to support.
GLYNN PATRICK: You mentioned access, and you mentioned lower costs. There’s a third elephant in the room that doesn’t always get included, and that is insurance portability – staying with one doctor of a system. Is that going to be at a cost where we cannot do it, when we talk about increasing access?
HEALY: That’s going to be a big part of it. Although, because of the way the systems are set up, you really can’t have a Physicians Plus provider and go to Dean and continue to see that provider, unless it’s a specialist in some cases. So that part of it is difficult just because the systems themselves, the way they’re set up, don’t really support that. Not that they don’t do the right things and provide the right level of access, it’s just that the system doesn’t allow you to have a doctor in one group and go to the other group, so I don’t know that that’s going to be possible.
WOODWARD: I don’t know that any of us knows the answer to it. But I think one of the reasons that the insurers and the physician groups’ hospitals have been somewhat closed is that the way to drive up savings is to keep business within. You can control it better. And as we’re moving to health care reform, being responsible for a population of patients and responsible for what their care is going to be like is critically important. You have less and less control the further out from your system that they go. But I do think one thing that’s going to have to be looked at by the insurers in the community is providing greater access, but it might come at more of a premium.
You might have the ability to go here or there, or to this doctor or that doctor out of plan, but you may end up paying more of a premium for it. To some extent, that exists today, but you might see that expand. That’s a tough issue, though, because as providers, we wrestle with how we lower the cost. And the less control we have over how that care is delivered, the less ability we have to control the cost.
KACHELSKI: One of the tough issues, and one of the reasons that systems want to keep patients within their system, is they don’t have information. They don’t have access to information about what might be going on outside their systems. And the issue of electronic health records interoperability is a key one. If providers in an ACL kind of model, or other kinds of payment reform models, are going to be responsible for quality of care, they’re going to be responsible for delivering value, and not just piecework. They’re going to need access to that information no matter where that patient has been.
In Dane County, we can imagine a situation in which a patient is going to spend most if not all their health care life within one system. Other parts of the state, that’s not as true. And I think the statistics Frank mentioned bear out why Dane County is doing better. They have better access to information. Part of health care reform is really allowing patients, not only to keep their own doctor if they want to, but to allow them to take their records with them wherever they go. So whoever’s going to see them, whoever’s going to make clinical decisions about them, has access to everything they need when they’re delivering care.
BYRNE: We believe that as things evolve, regardless of what happens in the regulatory and legal arenas, that the financial risk of providing the services will be shifted to the providers increasingly and under any future scenario. Now the good news for the Madison area is we have figured out how to do that. That’s one of the reasons, as Joe and Jim alluded to, the costs are lower.
But it’s difficult to manage risk that you don’t have control of with the patient not being, and the family not being, a part of the system of care. And that’s in your best interests. That’s one of the loopholes, or the flaws in the system, as currently proposed.
GLYNN PATRICK: Joanne, because they’re talking access, and that’s part of the name of your Access Community Health Care Centers, how do you weigh in on the question as to what is the best way to proceed?
HOLLAND: It’s really important that it’s an approach that takes into consideration the elements that influence cost and quality. And part of what we started this with was talking about if PPACA does go through, that’s over 50 million additional people that have an opportunity to participate in coverage, either through Medicaid or through the insurance exchanges. A lot of that, though, is going to come down to how this evolves because so much has started at the federal level, and yet insurance is ultimately regulated at the state level. Unfortunately, it’s also been a very partisan approach, and so much of what is really necessary is that it’s a cooperative approach that includes the governmental entities – federal and state.
GLYNN PATRICK It is one of the biggest payers.
HOLLAND: Absolutely. Over half of the dollars that are paid in the system come from government. It’s also the private insurers. And to Frank’s point, most places in the country aren’t set up the way that we are in this part of Wisconsin, and so there isn’t that much integration, whether it’s hospitals or providers or some of the other disparate elements that go into a system, and so to have a cohesive approach is part of what is really important.
And if we take it more to a local level, an important element that we can’t forget is that of the consumer. So much of what is happening at this point is that about 5% of the people are consuming an inordinate amount, closer to 50%, of the costs that are going into the system. This is where access is an important part of this, where we see disparities in terms of people who just are not getting the care that they need. The mortality rate for people who don’t have coverage compared to those who do is 10% to 14% higher. Things like that are really important to take into consideration in terms of how we develop systems.
Frankly, people having coverage is a good thing, but we still have to figure out how to pay for it. And that’s where getting into this more cohesive approach and thinking about quality has to be done because we have to have better outcomes.
GLOEDE: I’d like to add from the employer perspective that we’re taking a hard look at our employees and their relationship with their health care providers, and how we as an employer can really encourage positive, proactive health service access. We started a project two years called Healthy Goals, and we have incentives for staff who have their annual physical, and who have a health plan with goals for what they’d like to do to improve their health. And this last year, we had 100% of our insured employees participate in that, which is excellent. And in partnership with our health insurer, what we’ve seen is a 7% reduction in our market rate for our insurance. And all the money that we saved there, we can put back into the care of our patients and family, and improve outcomes on the patient side. It’s really critical that employers take some ownership, and that we help educate our staff that they’re in this, too. Health care is, I would say, a right for all of us. But it’s also an investment, personally, and we need to participate in our own care as well as in the outcomes in our communities.
HOLLAND: The behavioral element of that is critical, and while many of us are fortunate to get our insurance through our employer, that doesn’t necessarily mean that people know how the system works or necessarily know how much their individual choices are ultimately going to impact their overall health. So that’s an excellent story.
GLYNN PATRICK: I want to spend a little bit of time on the importance of electronic medical records, a platform for an exchange of information. What does it mean on a statewide level?
KACHELSKI: Wisconsin is, in many ways, ahead of the nation in terms of adoption of electronic medical records. Part of it has to do with the prominence of integrated delivery networks in Wisconsin. I talk to colleagues from around the country, and they can’t believe what our medical marketplace looks like here compared to what they’re used to. That gives Wisconsin a leg up in many, many different ways. That being said, not everybody’s on the same electronic medical record system. In many areas of the state, there are patients who sort of touch different systems or independent docks, and we really need a way for clinicians to access the total picture for a patient and have access to that information across systems.
As we move into these arrangements where providers are taking on more of the actual actuarial risk involved with patients, how are they going to do that without having access to that information, not only to look at a single patient and make sure they’re not duplicating something, or prescribing a medication that is contraindicated, but from more of a population-based standpoint? We’re going to see physicians, hospitals, and systems of care being responsible for populations, and so they’re going to need a way to see the big picture in terms of the patients for whom they’re responsible.
GLYNN PATRICK: Would there be changes in the HIPAA laws?
KACHELSKI: HIPAA already allows information to be shared for purposes of treatment, payment, and operations, which is really what we’re talking about here. So it’s not a situation where there’s sort of an extra level of HIPAA security needed when we’re talking about sharing electronic medical records. Sharing is sharing. But, yes, we have the possibility of making it a little more streamlined and less cumbersome for a patient. And we see research that suggests that patients expect that their caregivers will have access to that information when, in fact, that may not be the case. It’s certainly reasonable for them to expect that. We know that using the patient as the vehicle for sharing information from one place to another is not necessarily reliable.
GLYNN PATRICK: To your point, my Meriter doctor, just last week, could not see an appointment set up with my Dean provider, yet both have and utilize MyChart. The consumer thinks you’re already doing more than you are, and is open to that transparency. Yet the “closed” systems are not yet transparent. What is the disconnect?
KACHELSKI: In Dane County, we have a fair amount of sharing across the systems, and that’s good for patients.
GLYNN PATRICK: If employers are not enlightened as to how the systems are working together now, and if we’re going to be the advocates for good care, we have to understand systems.
GLOEDE: I can share, from a provider who does not use Epic, a different electronic medical record. We’re fortunate in this community that we have strong relationships with all of the health systems. And although we have different systems, we’ve been working this past year to obtain access to our partner’s Epic record. And it’s quite a process to build the relationships that are necessary to develop trust, and then to understand each other’s systems and then to create all of the safety measures you need to ensure HIPAA security so that the information is being transmitted to the right people in the right way with the patient’s permission.
I can tell you that this year with – Frank and Jim are in the room – both of their health systems have worked with us, and we have access to their Epic record. It expedites the referral process for a hospice patient. I’ll just give you a real-life example. In the past, if a Dean doctor called us and said, ‘I have a referral for you today,’ we would call a medical records person, would go find the paper chart, print the electronic medical record, and fax it to us.
Now we have access to the Epic chart. When we receive the referral, we can go online, access that patient’s chart, and immediately have the information about orders and treatments and advance directives and that type of thing, and turn around an admission within hours. And for a hospice patient and their family who may be struggling, that’s really important. But it comes at a cost to build the infrastructure to connect, so I see that there’s investment there, and we agree that in the best interests of the patient, being able to talk to each other wherever you are when you need something is important. The last thing you want is for someone to show up in the emergency room whose advance directives say, ‘I don’t want any of this type of treatment’ because there was a delay in accessing a piece of information that was available but that wasn’t linked up.
KACHELSKI: Where are the administrative costs, and where are the quality pitfalls in the system? A lot of it happens in these handoff situations, transitions from one venue of care to another. And that’s where portability or interoperability can really make a difference.
GLYNN PATRICK: Is that something that we can continue on, that you’re already doing things regardless of where the Legislature is? Are these things in Dane County we can work out to make them more seamless, and become the model for the state and the world?
BYRNE: Absolutely. As a physician, the first order I ever wrote in any chart of any patient I ever saw, whether it was in the ICU, the emergency room, or my office, was a request for the previous records. Period. That’s the road back to the future. That’s the safety link, as others have alluded to. We know we’re not perfect. We have to do some things, but there are some regulatory requirements about sharing amongst different organizations.
As Joe has indicated, the most dangerous time for you as a patient is during a handoff. I’m really thrilled to hear Denise talk about how the connection with Agrace Hospice is working because that’s why we’re doing it. And by the way, it’s a quality of care issue, it’s a safety issue, and it’s a cost issue. If you’re spending two additional days in the hospital because Agrace doesn’t have the records they need to decide whether to accept you as a hospice patient, there’s a financial cost to that, and then there’s a terrible emotional cost as well.
On the privacy aspect, I really want to add one thing, and that is electronic health records are far more secure than the paper medical record. The paper medical record, somebody signed it out from medical records, and then what happened before it got back? There was no way of knowing. We can tell with electronic health records who looked at it, what pages they looked at, how long they looked at the pages, and things of that nature.
WOODWARD: Another aspect of electronic medical records, which has been very prevalent in Dane County, is how the patient gets more involved in their medical record. We’re on Epic like Frank is and UW is. We have MyChart. So I’m a patient of my physician at Meriter, and I can send him a note. I can ask for information. I can compare my cholesterol values for the last three or four years. I can schedule an appointment. There’s a lot of things that I can do that more directly involve the patient, how care is being provided, and more importantly, create a different relationship with the physician.
It used to be you had to call the doctor’s office. You had to get an appointment. You maybe got the doctor on the phone, because they’re pretty busy. Today, there’s another mode of communication for the physicians, and younger physicians, in particular, are really gravitating towards the use of responding via e-mail and communicating with a younger generation of patients that we didn’t have five, 10 years ago. So it’s interesting to watch that evolve and that develop, which is a real big benefit that we’ll see more of over the next decade.
GLYNN PATRICK: We still do have somewhat closed systems, as we’ve mentioned, and I understand the reason for it. I think our reader understands that. But you can’t control costs if part of the service is being delivered elsewhere. We all talk about the importance of having a medical home and driving patients to a medical home, where that doctor would be the one, ideally, a family practice person, who can do many things for you, and it’s the lower cost point in the past, and we hope to build in incentives to go into that practice. My question is, if we’ve got closed systems and insurance rates are still dictating what system that is, if the client has a 12-year existing relationship with Dean and has a medical home, and then their company picks Group Health, that becomes almost impossible to maintain. And then they go to Meriter with Group Health and then are told the UW doctors might not honor this in a year. How do you know how to pick your doctor if that’s where the true cost savings is?
HEALY: Yes, and it’s the insurance component of it, and people want to have the lowest cost when they actually contribute toward the health plan. So, unfortunately, the system, the way it’s set up now, and I’m not sure how it could be legislated any other way, is that when you’re with a particular provider, and they give you a 12% increase let’s say, which is probably warranted based on your claims experience, you need to go to another system. You can’t have a patient-centered medical home within both systems. It’s just impossible to do. So while there still is portability, we’re talking about a completely different issue. I’m just not sure how you could have a patient-centered medical home with Meriter and with Dean. You couldn’t have one in both places. It’s just not possible to do.
WOODWARD: To some extent, what you’re describing is the benefits of a single-payer system. I don’t know that we’ll see that come to fruition in the United States for a lot of reasons, but single-payer, obviously, eliminates the need for transfer of care from one system to another. I don’t think that’s an inherent flaw, the situation you described, with how health care is progressing. I’ll be curious to see how it evolves and gets addressed over the next decade. I don’t know that I have the answer for it. I don’t know that any of us do. But it’s part of this whole concept of whether health care reform is going to be revolutionary or evolutionary. It’s very definitely going to be evolutionary. For every two feet, we’re going to move back a foot and realize we messed something up.
There’s an inherent flaw in the system, as we understand it today, just the way that health care traditionally been established, and how it’s traditionally worked. We’re talking about new models being created. So what it’ll look like in 10 years, I don’t know, but you’re raising the million-dollar question in many respects.
BYRNE: So let me be candid about this, and I don’t mean this to be a criticism or disrespectful, but what we have going on right now, both from the purchasers and in some senses from the providers of health care services to health insurance, is short-term thinking. In the short term, people are struggling to get through this year given the economy. And I’ll use an example from another state in my previous health system. We had one of our board members, the CEO of a company, say, ‘Look, I’m dropping your insurance company and going to this other one because I’m going to get an 11% decrease in the premium next year. I know that it’s a one-year deal. I know because the population of my employees is pretty unhealthy, but I need that to make my budget this year.’
It reminds me of some of the developing countries I’ve visited on medical missions, and they have problems with deforestation. And I get the fact that you can’t tell people, ‘Please don’t cut down this tree to cook your food today or to heat your home today because future generations need it.’ They’re not in a position to worry about future generations. Some of our business owner colleagues and friends are not in a position to worry about five and 10 years from now. The economy has been very difficult, as we all know, these past few years, and they’re struggling to make it through. So I get that.
On the other hand, as a patient, the most important thing you need, with respect to health care, is a way into the system to get the services you need that isn’t a hospital emergency room at 11 p.m. Sunday. Not only is the expense greater there, but the quality of the services that you need for chronic illnesses and things of that nature is just not where it needs to be. The most disruptive thing to a family is having to change their primary care provider. So I look forward to a day when we figure this out because, unfortunately, it is happening all over this community now. And I am not criticizing the business owners who say, ‘Look, I’m sorry.’ And, believe me, they hear about it from their employees. The most important thing any of us do when we get our health insurance documents for the year is to make sure that our doctor’s in the plan. Fortunately, most of us won’t have to go into a hospital this year, but all of us should see our doctor, and that’s the thing that’s disruptive.
GLYNN PATRICK: This raises another issue. The trend has been toward businesses entering a collective to get a rate, and in some cases, hiring outside HR benefits just to shop insurance, because it is so confusing. So that has opened the door for QTI, as an example, to become a co-employer, because their number one function is securing the insurance for the year because companies don’t have people on staff who even understand how to bid for insurance. Individual business owners are less and less making the decision and are being told by the collective, who is responsible to all of them, the deal they brokered that year. I had two weeks’ warning this year that we could no longer see our doctors ‘in plan.’ I’m not happy about it. So the question is, how much autonomy have business managers given up just because we need to be in a ‘group’ to be able to afford insurance policies at all?
HEALY: What you’re talking about, actually, is a PEO, which is a form of a collective, and unfortunately that is not really the answer because what happens is that you still have the collective members of the group, and their health risk that dictates what happens to the cost of the insurance. In this case, the reason why it took so long is just the way the system was set up, and the amount of information we needed to share in order to get that ultimate final rate. And it happened, it took way too long, even though we started the process months prior to that.
GLYNN PATRICK Two weeks’ notice to change all of our appointments and our physicians is not acceptable for anyone.
HEALY: I know it was very bad, but that is only one way to try to control the costs. But, again, you’ve still got the overall higher utilization that creates higher rates, which means that may not necessarily be a two-week notice, but the idea that you may have to switch again at some time in the future is probably relatively likely.
GLYNN PATRICK Year to year.
GLOEDE: It’s a vicious cycle because you lose your relationship. Now you’ve got to try to get in, if you’ve got a serious or chronic illness, and some things might drop off on the side. So then you need access to urgent care or the emergency room. Now your risk goes up. And, now, here we are a year later and you’re negotiating the rates, and everybody’s sicker than they were a year ago. It is broken, for sure, and there isn’t an answer, unfortunately, right now. What we can try to do as a health community is maintain strong relationships and partnerships with EHR as a key piece of this, so that when you have to change in two weeks, and you go to Frank instead of Jim, he can at least get your medical records and get you back on track. There’s not going to be a magic pill for this piece.
HEALY: One of the big things is that a company like yours is doing the right thing by empowering the consumer. That is something that’s lost in the whole PPACA. There’s nothing that really says that we’re going to make the people that are unhealthy, and who choose to continue with their unhealthy behaviors, we’re not really willing to make them pay more.
KACHELSKI: The trend toward more of a community rate actually works against that, and so that’s a dilemma, too. There are winners and losers when you move to a community rate situation.
GLOEDE: And we did just that. If you didn’t have your physical, and you didn’t set your goals, you would not be eligible. You’d be eligible for the base plan and not the reduced deductible and the reduced co-pays, and that was an incentive for folks when it’s coming out of your pocket. In our culture, we got a little bit used to free health care, or I don’t have to pay or put in as much. Things are shifting, and it’s really important now that we demonstrate value.
When I make a choice of providers, will I be healthier if I go with this plan or with this plan, and help people to see the long-term benefit of choosing one provider over another? We’ve got to get that infrastructure in place, and I think the Affordable Care Act put some of those measures in place. I know there are some right now with hospital compare and home care compare. If someone’s looking for a hospice at this point, there’s no compare. There’s no way to know if the service they receive from one provider is equivalent or better than another.
HOLLAND: Part of the challenge that we’ve got in this country, with 70 or 80 years of having an employer-based insurance system, is that it does come between the providers and the patients. We’re paying the price in terms of what you had just described, so it is a tradeoff in terms of, we’ve had the system in place, it’s been part of this fringe benefit package for all of these years, part of the compensation package, and we also want choice; we want it all. And if we don’t have a real good understanding as consumers about what it costs or about how systems work, it’s really difficult then to have a system that’s sustainable, and that’s part of the challenge we’re dealing with. We’ve heard, several times today, the word value. That is one of the important elements because it’s kind of the cousin of quality for us to move ahead in a productive way. As provider organizations, as consumers, we all have to be in this together to make better choices, to be more competitive.
The things that we’ve talked about in terms of how we can improve organizations like Access and all primary care providers, we should be getting certified as primary care medical homes. And that’s something that we’re on track to do. How can we do a better job of earning the privilege of working with people regardless of people’s insurance status?
We feel very privileged that we have the opportunity to have insurance contracts with most organizations, so it’s for that very reason of making sure that if someone is a patient of Access, they can always be. And that’s whether they lose coverage, their employer changes, or if the employer changes the insurance that they have. But it’s something that we feel very strongly about because otherwise the way that the system is structured right now, the employers’ choices ultimately can stand between the consumer and where they’re getting their care.
GLYNN PATRICK: I have a follow-up question for you, Joanne, because this goes to the heart of access to health care. Whatever the level that the Walker administration is looking at, cutting from the BadgerCare rolls means thousands of people will have to leave the program. What impact will that have on your ability to continue delivering services?
HOLLAND: It’s something that we as an organization have taken very seriously, and I’m sure all of the other health care providers have as well. We’ve enjoyed about 10 to 12 years of having a Medicaid program that is one of the best in the country in terms of covered services. Previously, we also had an administration that was very interested in leveraging that program in such a way to be able to maximize the number of people who are participating, and who have coverage. And we did see that. We got to a point of about 90% or more of the adults in Wisconsin had coverage. I think we got over 95% of the kids in the state have coverage as well, and that’s been very important. And if we think about this from a systemic standpoint, that’s been very helpful to make sure that there is more reimbursement in the system to be able to provide care for people and not as much of a burden in terms of charity care.
I’m concerned that what will happen with regard to some of these changes is that we’ll take a few steps back in that it’s kind of like an unfunded change. And so if people lose their coverage, that means that it’s a lower rate of reimbursement, whether it’s for Access or if it’s at the hospital or some other health care provider, and what it does then is just create less revenue that’s available to be able to care for people. And then, ultimately, there are other things that end up happening, too. I think we might’ve seen some data that health care expenditures in the country have gone down over the last few years. It is inferred that people aren’t presenting as much or aren’t demanding as much service, and that might mean people are getting preventive care. They’re not getting the care that can ultimately prevent some of the chronic conditions and the more expensive conditions that can develop over time.
And so it’s something that we’re very concerned about in the context of how can we make sure people are getting the care that they need, and that it’s the right care? In the short term, we’re concerned that, ultimately, there’s going to be more need that isn’t being addressed. I think it’s ultimately a call to action in this time of austerity in terms of how can we use our resources better? How can we do things that are going to ultimately help make sure that there isn’t more burden that’s placed on us, especially on the hospital institutions and the emergency departments? We really need to be able to work with and come outside of our four walls, work with our community partners to develop better systems to help make sure that we can figure out how to use our resources better to address some of the challenges that are before us.
BYRNE: One of the things that’s broken is the way we pay for health care. What we use is the Robin Hood method of financing, where we charge the people who can pay more to make up for the people who can’t pay. At St. Mary’s Hospital, our Charity Care went from just over $7 million in 2009 to just under $14 million in 2010. We haven’t closed the books on 2011 yet, but I know for sure that it went up from that number. As much as we’ve done, and we’ve talked about how we’ve attenuated those cost increases in the Madison market, it’s not enough. Businesses are struggling to meet their expenses and to stay competitive, and this has to stop. The less people that have coverage, and I’m agnostic as regards to the solution, but having people who don’t have coverage is a problem for the system. It’s a problem for everybody. The care of the uninsured adds about $1,017 to each family’s health insurance expenses in the course of a year, and we’re in a better place than most in this. Actually, we may be in the best place in the country in Wisconsin. The range of the percentage of our population that’s uninsured is as low as 2.6% in Massachusetts, which of course has universal coverage, to 27% in Texas. Wisconsin is actually a better place than Massachusetts because access is still a problem in Massachusetts due to the challenges and the way medical practice is structured there.
But the way we pay is broken. As Joanne has alluded to a couple of times, we spend 75% of our money on chronic diseases. This is why you need coverage because, unfortunately, we spend that 75% after people get sick, as opposed to keeping them from getting sick with their diabetes. We’ve known for years that close control and monitoring of diabetes leads to less amputations, blindness, and kidney failure. It’s the misaligned financial incentives that lead to these types of problems.
HEALY: Massachusetts also has the highest cost in the country. So if that’s an example – and I’m not saying it’s a bad example, it happens to be the lowest state as far as uninsured – but it also has the highest cost. So the problem is that anytime you take some of the people and add to the uninsured rolls, you basically hurt the hospital systems, which ultimately hurts the employer group because, as you say, their costs go up as a direct result of the fact that Meriter has to spend $20 million on reimbursed care. They have to get the money somewhere. There’s a limited pot of money that can be used for all these services, so it’s a very difficult thing. I’m not sure you can legislate it, although they’re trying with the upcoming PPACA legislation, but legislating it is tough.
GLYNN PATRICK: Why does it make sense to do the cuts? Why is the Governor doing this?
HEALY: I think it was mostly financial. He was trying to balance the budget. He was trying to find a way to reduce the costs for the overall state. Unfortunately, when you’re one of those 65,000 people, or even if you’re one of the 10% or 9% or whatever it is in the state of Wisconsin that doesn’t have insurance, it’s always bad. You could say it’s great that 90%, but if I’m one of the 10%, I don’t have care.
GLYNN PATRICK But the point being, we could bankrupt our hospitals to do it because these people still get sick. Where is the savings to the population if, by making the cuts, we’re stressing our hospitals?
HEALY: I don’t know that it exists.
HOLLAND: Part of the challenge is exactly what Frank had said earlier, which is a short-term focus. And, unfortunately, a lot of what ends up happening at the state government level and with local and municipal forms of government is that there are requirements to have a balanced budget, and it is very short-term focused. And there hasn’t necessarily been an impetus or a desire, and this includes taxpayers and citizens, to see government accumulate reserves or to be able to have those monies for a rainy day. But I think the whole conundrum of how do we pay for our health care system is what we’ve talked about, and we don’t have a solution to it. I would suggest that in the short term, it is problematic if more people don’t have coverage.
There are also some elements that are part of what Secretary Smith has been working on, which do have to do with some innovation of how can we care better for people who are consuming a lot of resources? Those are things that we should be working on. How do we use tools like electronic health records? How do we use that more effectively?
That, ultimately, is the golden goose around a quality program. How do you know what’s going on? Well, it’s going to be data-driven to be able to make those kinds of determinations. Not all of the changes that we’re seeing are necessarily bad, but I wish we could have a little bit more of a longitudinal perspective around some of these changes because it’s kind of like penny-wise, pound-foolish.
We might save money in the short term, but in the longer term, are we creating more expenditures, or are we placing that burden indirectly on other entities, whether its organizations like Access or hospitals or otherwise? How, ultimately, are people getting the care, and are we going to end up losing in terms of outcomes and the quality of people’s lives over time?
WOODWARD: My sense is what the state’s trying to do right now, going back to what John said, is dealing with the budget deficit, and they’re trying to get there the safest way with everybody kind of contributing a little bit here and there. The one thing I think that’s been good about the approach that the administration is using right now is they’ve made a promise that they would not negatively impact Medicaid reimbursement, and they’ve held true to that, and I think that’s a positive. That being said, just for the record, we are among the lowest states in the country in terms of the level of Medicaid reimbursement relative to cost, and we’ve seen the Medicaid ranks swell over the last few years. So that’s a good thing that it didn’t reduce it any further, because it’s already pretty abysmal.
As we think about the folks that are going to fall between the cracks here as Medicaid ranks are reduced and the burden is placed on other folks, exchanges could be a good alternative to help address the needs of that population.
A lot of health care reform is built on this concept of an exchange. Is that right? Is it a perfect solution, a silver bullet? Probably not. But it should be on the table, and maybe it should be trying to model something using the platform of an exchange that might help as they deal with the budget issues the state has.
GLYNN PATRICK And turning down $37 million.
HOLLAND: Just to add a little bit to some of the rationale in terms of what Secretary Smith had proposed, keep in mind that Wisconsin has had an income eligibility standard for people that participate in Medicaid and BadgerCare that’s higher than what most other states do, meaning more people can participate in the program. A lot of what was proposed at the federal level with the Centers for Medicare and Medicaid was actually bringing Wisconsin more into alignment with what would be required by PPACA in terms of 133% of the federal poverty line for all states to determine who participates in the program. We haven’t necessarily had the time to prepare, as a state, for what that means, and for not having the insurance exchange available. It does create this place where there are gaps, and that’s part of what makes this kind of a change difficult. It isn’t a coordinated effort with regard to what’s happening federally.
GLYNN PATRICK: Now we will give anyone who would like to make a few closing remarks the opportunity to do that.
GLOEDE: We would all agree that we have to do something different going forward, and that we can’t sustain higher costs. Working together as a community across continuums and getting people in the right place at the right time will really be critical as we try to move in a new direction and sustain for a changing demographic that will tax all of us. We need to hang together.
HOLLAND: And how can we work more effectively with our partners? And to really be shoulder to shoulder in figuring out how we can better leverage the resources that we all have is going to be really instrumental in being able to contain some of the costs and being able to generate a better quality and better care for people.
HEALY: If from the perspective of an advisor to employers, it [the PPACA] does improve access and lower costs, then I think everyone is going to look back and say it was a great thing, and it was a wonderful thing that we did. And it won’t be quite so short term because we’re talking about several years in the future. If it’s able to do those two things, which were the original reasons for PPACA, then I think everybody’s going to look back and say, great. We appreciate what you did, and we’re happy. If it doesn’t do that, and it just adds to the administrative burden and increases costs, I don’t think it’s going to be very well received.
KACHELSKI: I think I’ll pick up on a comment Jim made earlier about how we should think in terms of an evolution, not a revolution. For the last 100 years, we as a society and as a nation have sort of struggled with the concept of reforming health care. In part, some of those efforts have failed because they were a little too grandiose, honestly. We are a more wired society. As Jim said, even the doctors coming through medical school have that kind of orientation. Just like in other areas of the economy, information technology is very empowering to consumers in general, and certainly you can call a patient a consumer of health care. If we looked back four or 10 years from now, we would probably say, ‘Why didn’t we do that sooner? It makes so much sense.’
But I think we will, over the next several years, use information technology to improve care and reduce cost. Is it going to be a revolution? Probably not. There are so many other factors, including the distorting impact of government. They’re trying to direct everything, and nobody can direct everything. This is too big of an animal to corral, but the opportunities are there to use technology in a care setting that will improve quality and cost efficiency.
WOODWARD: I agree the bar for success for the public is going to be whether we are showing a trend toward lowering cost, improving outcomes, and improving accessibility of care. The bigger issue that is going to be out there, which we really didn’t touch on too much, is that to get to that point of lowering cost, improving outcomes, and improving access, there is going to be limitations on choice. As a society, we are not good at being given limited choices, and the only real way, based upon what I know, that we’re going to get at those things over time is still through the model of limiting choices.
You can do that in a positive way by getting patients engaged in care with a primary care physician much earlier in the process, rather than when they’re sick and in the ER. You can limit choices so that they don’t have to go to the hospital. You can treat them on an outpatient basis. You can get them into a wellness program. We haven’t yet really scratched the surface of what’s going to be expected of us as rank and file consumers of health care, that our choices are going to be limited whether we like that or not. If we believe that the federal government is going to save health care, then we all need to go to the nearest bar in town and celebrate because that’s not going to happen.
I do think the guidelines for health care reform should be established at the federal level, but I think a lot of the power needs to be vested in the states. When you have a state like Wisconsin that’s been a leader, Minnesota that’s been a leader historically in health care and delivery of health care, they’re going to figure out models that work for their populations. And I think that’s where a lot of the success is going to lie.
Getting back to the concept of evolution rather than revolution, we’re looking at mores that have to change over time, and programs are going to be tried and are going to fail, and then we’re going to go in a different direction. But it’s going to be a long, hard slog to get there. I firmly believe that we’re probably not going to see effective, true health care reform in my professional career. We’ll see a big improvement, but I don’t think we’re going to see what people are defining as the reality of health care reform. I hope I’m wrong, but I’m also a realist.
BYRNE: That said, these next few years are going to be very challenging and very difficult for all of us. We have businesses and business owners who have been struggling, and they’re coming through this economic downturn that’s been challenging for many. We have states that are struggling. What state doesn’t have a budget crisis? On average, 87% of state budgets is corrections, education, and health care. What are you going to cut?
We’re going to focus like a laser beam on value, on delivering value or improving the value we’re delivering, on eliminating waste. Too much care is as bad or worse as not enough care, and it’s dangerous, too – doing the right things and avoiding unnecessary things is important.
I don’t know what’s going to happen with choice and how this is going to evolve in the future. But when people are satisfied with the care they’re getting, they don’t think about choices, about going elsewhere. And our goal, as I’m sure Jim would tell you, is to provide a patient experience that’s so satisfying that people don’t need to think about going elsewhere.
And we’re going to do it in very challenging economic times. But if not us, who? I mean, think about it. Where would you rather be than here? Look at where we’re starting from compared with other communities where the providers are completely disintegrated, discoordinated, and the model of physician practice is two doctors in converted residence connected to nothing by nothing. We are starting from a better place, and my optimistic conclusion is let’s not screw it up. As Jerry Garcia said, ‘Somebody’s got to do something. It’s just pathetic that it has to be us, but it does have to be us.’ So let’s get it done.
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