In a recent WIHI radio show titled “The Social Imperative to Demonstrate That Better Care Equals Lower Costs,” Donald Berwick, MD, former administrator for the Centers for Medicare & Medicaid Services, and Gerry Shea, assistant to the president for governmental affairs at the AFL-CIO, spoke on the climbing costs associated with today’s healthcare system. 

Berwick and Shea highlighted six things to know about the current state of America’s healthcare system. 

1. A sense of urgency is still prevalent. Throughout his career, said Berwick, he’s always felt a “clock ticking” around quality and patient safety issues. “A form of improvement is crucial,” he said. “It affects the reduction of suffering, but now, there is another equally urgent task, which is quality and is cost.” He added in any mature industry and leadership system, the cost of production itself goes hand-in-hand with quality. “Given where we are now with the economic crisis, it’s urgent healthcare costs be addressed as a primary goal,” he said. “I’ve never seen things seem so dire as now, and the risks are phenomenal. If we don’t [do something] soon, pretty bad things will happen in the system.”

2. The country can’t afford this “bill for healthcare.” Money is being taken from other important endeavors, said Shea, like schools, the arts, roads, and more. “If you work, it’s money out of your pocket,” he said. “We’ll have to reduce costs, and if we don’t do it through improvement and if we can’t do it through production in care, we’ll be taking things away from people.” Reduced benefits and shifting burdens onto “people who can’t pay,” are just a few of the foreseen consequences, he added. “What worries me the most is taking things away from the poor because those people in less circumstances have less political clout.”

3. The working class is being hit the hardest. The excessive inflation of healthcare costs, continued Shea, has been a concern for employers and those who purchase healthcare. “The striking thing to me is the situation has become worse in the last few years,” he said. “And I would drive the parallel in the private and public sector. We can’t afford, as a nation, to provide good healthcare—there’s no way to do the cost.” He referenced recent reports, which document premiums that have risen three times faster than work wages. The latest data, he said, is alarming. “The biggest issue on the rapid rise is the predominance of high-deductible health plans,” Shea added. “[They] came into existence 10 years ago…they grew slowly at first, but in the past five years, the number of [those] plans have doubled.”  These recent developments, Shea concluded, are “dramatic.” “I see a lot of reference in reporting in income inequality and the difficulties maintaining the middle-class standard of living,” he said. “There have been references that high health costs are part of it, but coming to the forefront, healthcare costs are a significant factor in causing that problem.”

Continued on the next page.