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.
4. We need to bring the same commitment to lowering costs than we do to improving quality. In the past, said Shea, people working in the system didn’t understand the enormity of the quality problems that existed. “But that led to internal conversations among stakeholders saying, ‘we can do better than this,’ and we set about doing better,” he said. Now, you can’t go anywhere in the country where professionals aren’t working hard to improve quality, said Shea, and that same type of focus needs to be shifted onto lowering costs. “Even though it’s difficult with complex environmental factors, like the aging population,” he said. “We have to think about what the patient can afford and the care—that’s going to put us on the right track.” Shea referenced a common example of transparency, which he thinks could translate into healthcare. “You can imagine the sign in front of hospital construction zones saying the number of days without injuries,” he said. “We could have those signs about healthcare costs; simple things like that would help stop people and think about things differently.”
5. Goals need to be set and increased focused needs to be put on costs. Based on Berwick’s experiences, the healthcare workforce looks at the trends associated with costs and feels just as helpless as the rest of the population. “They don’t know what to do,” he said. “They’re meshed into a system that just forges ahead; it has great new IT that adds tremendous leverage but is also a system that has vast amounts of over treatments and administrative burdens they can’t control.” If the workforce were to get “on top” of these trends with the help of leadership and focus energies on reducing costs, he continued, it would help the industry have more discipline in terms of goals. “We don’t improve without an aim,” Berwick said. “We need to aim here and decide whether this is okay to go on or to stop it—this needs to be lead from the top.”
6. The solution to healthcare overspending will come in time. Throughout the conversation, Berwick referenced the impending “cliff” the industry will be looking over if things don’t begin to change soon. “I fear we’re facing employers withdrawing more than financing healthcare, and either the government does it or individuals pay more, unless we can pretty quickly have a good number of examples of where purchasers and providers work together to hold costs flat,” he said. He emphasized the importance of small changes and working toward lowering costs over time. “We can’t solely solve the healthcare cost crisis in short order, but we can give people hope there’s a solution down the road,” he said.
Follow Michelle McNickle on Twitter, @Michelle_writes