Crisis of Health Care - Maine

In 10 years, at the current rate of cost increases, by some estimates the average American family will be spending almost half of its income on healthcare.

The passing of higher health-care costs onto the public in the form of higher taxes, lower salary increases and higher prices is the principle reason the inflation-adjusted wages of the average American employed in the private sector have not increased over the past 30 years.

These two factors -- half of average income will be devoted to health-care costs within 10 years and stagnant wage increases over the past 30 years -- will inevitably produce a demand from the public for significant change.

Maine is one of the most expensive places in the United States and in the world to insure an employee, and that is a recipe for economic disaster. In Maine, we are going to flatten this health-care cost curve or it is going to flatten us and progressively marginalize Maine in a national and world economy.

Without significant change, I predict that in 10 years Maine will be America's Third World, an economic mud flat full of the old and the poor with an economy based in health care, government services and tourism and little else.

Who among you believes that if health-care costs continue to rise at their current rates in the near term that we will still have major corporations that choose to be based in Maine, that small businesses can continue to thrive or that our children will choose to live here? Most importantly, we know that unaffordable health care causes premature death and widespread misery.

We are going to fix our part of this problem or disaster awaits. What are we going to do to flatten costs in just the next five years? We cannot wait for the benefits of better population health that will arrive 10 years from now. Better disease management and improved population health will produce healthier Mainers, but those healthier people will all be moving elsewhere for jobs if we do not rein in near term costs of healthcare.

SHORT-TERM COST CONTROL

We are justifiably putting tremendous effort and resources into improving population health and chronic disease management, but we don't put nearly the same degree of effort into health-care cost containment. I challenge you to start looking at all new health-care initiatives through the prism of what effects those initiatives will have on overall health-care costs over the next five years. I am suggesting that we must begin to prioritize the initiatives with the greatest short-term cost benefit.

Short-term cost control cannot be achieved without a significant effort to reduce utilization of medical services that are of marginal value. That initiative must be paired with an exclusive focus on the rapid implementation of evidence-based treatments that have been shown to be cost effective and appropriate.

The work of Dr. John Wennberg has shown that, in general, the more health care we get, the less well we do, and as much as 40 percent of the health care we get produces little incremental health benefit.

Eastern Maine Medical Center has recently implemented a program that developed evidence-based guidelines for the transfusion of blood products. This program has reduced transfusions by more than 40 percent of units of blood a year, thereby saving the hospital almost $1 million annually in blood acquisition costs.

The estimated cost savings translate to more than $4 million annually to the hospital, payers and patients.

For most hospital patients, avoiding unnecessary transfusions reduces length of stay, the risk of serious infection, the risk of death in the hospital and the risk of death in the next five years.

The basic tenets of this program could be applied statewide to significantly reduce health-care costs while improving overall patient health.

We know that the use of aggressive medical therapy, the implementation of evidence-based protocols, the use of minimally invasive approaches to several common surgical procedures and the use of electronic medical records with computerized provider order entry all substantially reduce the risk of complications, hospital length of stay, lost time from work and overall costs.

We desperately need a health-care system in Maine that can rapidly implement these types of cost savings and to ask how these types of changes can be accomplished.

MAINE NEEDS FIVE-YEAR PLAN

What we can do over the next five years?

First, the larger health-care insurers such as Anthem, Cigna, Aetna and Harvard Pilgrim need to rapidly develop a payment system in which providers become responsible for keeping spending within a global budget for covered lives. This type of capitated reimbursement system is probably the only way that providers are going to get out of the game of chasing volume in order to survive, and get systematically into the game of controlling costs for the benefit of patients and hospitals alike.

First, the larger health-care insurers such as Anthem, Cigna, Aetna and Harvard Pilgrim need to rapidly develop a payment system in which providers become responsible for keeping spending within a global budget for covered lives. This type of capitated reimbursement system is probably the only way that providers are going to get out of the game of chasing volume in order to survive, and get systematically into the game of controlling costs for the benefit of patients and hospitals alike.

A significant change in the health-care reimbursement system is quite feasible when one considers the degree of consolidation and collaboration that already exists in Maine's health-care system that would facilitate this type of change. For example:

* Maine has a small number of major healthcare insurers.

* Half of the hospitals in Maine belong to the four largest health-care delivery systems.

* Employers representing almost half the employer-insured workers are part of the Maine Health Management Coalition, working to improve quality and control costs.

* Maine's hospitals are desperately looking for ways to control their own skyrocketing employee health-care costs and will not be able to find a model for doing so -- other than shifting costs to employees -- unless they also find a model that works for their customers.

In other words, you do not have to change a lot of leadership minds in Maine to achieve dramatic change.

Desperate people do desperate things, and if anything has changed in Maine in the last few years, it is that the desperation needle on the health-care cost meter has been driven into the red zone.

SERVICES OF MARGINAL VALUE

As a second step, I am suggesting that instead of trying to reduce demand for all health-care services, we focus instead on cutting the demand for services of marginal value.

Those services must be identified, providers and patients must be educated about them, and then we must collectively pursue elimination of those marginal services unless the patient wants to pay for them.

Similarly, improve the health-care process to facilitate the provision of truly necessary and valued care thereby avoiding a long and unnecessary process of substantiation for proven and efficacious medical procedures.

Third, we have to stop paying for unnecessary medical care.

We should publish the consensus guidelines for necessary care and then stop paying for things that do not meet the guidelines.

Not paying for this kind of care will impose a powerful disincentive to ordering unnecessary tests and procedures.

Finally, establishing mandatory non-payment for unnecessary care enables hospitals to institutionalize a practice of reducing costs, which will have the dual effect of improving overall patient health and improving hospital efficiency.

A necessary fourth step is to ensure that hospitals and doctors be provided malpractice protection from getting sued when they follow evidence-based practice because it often will result in not doing unnecessary testing or procedures.

The current system propagates a practice whereby not ordering a test leaves a provider in the position of exposure if the patient develops a problem the test might have found, even when there is evidence that on a population basis the test does not improve outcomes.

As a fifth step, it is crucial that patients be responsible for some sort of co-payment, scaled to ability to pay.

A patient who wants to order a test and has no incentive not to have the test is a potential adversary and may have no investment in discussion of alternatives.

Co-payment should be highest for care of marginal value, and there should be no co-payment for preventive care of greatest value.

SUPPORT FOR DOCTORS

Six, we need to support the decisions made by a physician in the examining room regarding the denial of unnecessary care and services. The burden of patient dissatisfaction with being told "no" must be shared outside the examination room.

If providers are not insulated from this potential source of patient dissatisfaction, providers will be reluctant to stand alone in denying patients.

As a seventh and most important final step, Maine must have an organizational home and structure to support and develop this initiative.

Because of their size, financial clout and level of employer involvement, the Maine Health Management Coalition and the Maine Quality Forum have the capability to develop and implement the standards for necessary care.

A huge reduction in health care of marginal value will certainly cause disruption in health-care organizations.

A great deal of the unnecessary care we would stop doing can be replaced by the necessary care we should be doing but are not, thereby freeing up resources for the growing health-care needs of our aging population.

This is extremely difficult work but I refuse to believe that we cannot get this done before Maine's economy burns to the waterline.

It is unacceptable that patients suffer for lack of appropriate care because we are wasting so much money on care we do not need.

If it is unacceptable to you as well, if we each find what's necessary to give up to get what we all want, none of what we need to do is impossible to achieve.

And remember, the gun is to our heads, and failure is not an option.

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