Diagnose and Treat
The greatest part of the consultant’s job is working with clients to diagnose and treat issues within the organization that are reducing performance. In this way, and aside from the obvious difference of working with organizations versus human beings, a consultant and a physician are very much alike. Now, hold this thought.
It’s big … really big.
The debate about health care reform goes on and on and on. Everyone has an opinion (or two, or three, or twenty). Say something – almost anything, and it is related to health care reform: business imperative, social imperative, competitive advantage, single payer, employer mandate, federal tax exemption, preventive care, catastrophic care, insurance payment reform and transparency, fraud and abuse, price transparency, electronic medical records, evidence based medicine, genetic testing… Did I leave your opinion out? I’m sure I did, I left mine out.
Rewind twenty years.
As newbie underwriters fresh out of school, the wizened underwriters who trained us used to talk about “the balloon”. The balloon was health care cost – and the fact is, if you squeeze one area of a balloon, it pops out somewhere else. The areas of the underwriter’s balloon that we squeezed were cost, access, and quality.
We could:
- reduce cost by limiting access.
- improve access by reducing quality.
- improve quality by increasing cost.
As employers came to us for their coverage needs, we could mix and match any way they wanted. But, as we all know, the balloon eventually became too large to manage, and like the ads for the new Pixar movie this summer, “UP”, the house of health care costs is now floating away from us.
Over time we have come to learn that the only way to reduce the “air” in the balloon is by improving individual and collective health. Somewhere between 50 and 80 percent of all of our health care costs are driven directly by modifiable behaviors. Too much food, too little exercise, and too many bad habits have gotten us where we are today (I speak from experience in all three).
Now what?
So back to the earliest comment, how do we diagnose and treat the issue? Does our health care system reduce our performance (individually, collectively)? Are the people in charge on the right track?
- Is it the role of the employer to make sure that its employees (like any other investment it makes) are operating at peak performance (mandatory HRA, Consumer Directed Health Plans, Wellness Programs, etc.)?
- Is it the role of the government to make sure that all citizens have access to health care coverage and quality treatment at an affordable cost (fee schedules, evidence based rationing, means testing)?
- Is it the role of the individual to manage their health and wellness, or to pay more if their choices result in higher utilization and costs of care?
What do you think?
It helps to think about objectives for health care from different perspectives.
Affordable, quality health care provided by the employer makes the employer attractive and enables employees to address health needs for themselves and their families. In the US, we seem to accept responsibility for what we use and gladly accept rewards for avoiding costs. Employers have obligations to communicate and make the objectives and plan design well understood so people can optimize their health and the costs. Employees must take responsibility for their own wellness; it cannot be imposed. Linking employer and employee interests helps ensure success. Providing all citizens with health care coverage is a concept that is hard to argue with. Unfortunately, winning in an elective office every two or six years does not automatically qualify people as experts on one of the most complex and challenging issues of our time. The probability that Congress will balance the interests of all of the parties in the right way, including who pays and how much – is most unlikely. There is an apparent rush, for political reasons, to find a solution and enact legislation within a few months. Rushing the solution will produce poor results. In addition, there is no worse time in our country’s history, except perhaps during the Depression, to create additional burdens for business through taxes or higher costs.
While I am not convinced that wellness plans that extend life expectancy do anything more than increase healthcare costs for later stages of life, I am convinced that government run universal health care is not an option we should be seeking (having lived with it in Canada – waiting lists anyone?).That said, I am all for workplace wellness plans that increase healthy behaviors and decrease the costs of healthcare for the pool of employees obtaining their health insurance through my employer. I am all for such short term gains in savings. I would also like to see my employer be able to choose insurance options that are not mandated by my state government, i.e. insurance issued out of other states. I also know that my family’s choices regarding medical care have been informed greatly by our participation in a high deductible plan with a health savings account. That leads me to believe that a course of action worth exploring would be a system that allows individuals and families to choose the level of coverage that they desire with the options that they like, just like we choose our houses, cars and flat screen televisions. Of course, this invites the need to establish some base line of coverage, possibly government mandated, that will not appear to be equal and therefore not palatable to our political class.
I forget – what was the question again?
Interesting questions in your post…Reminds me of some deep discussions an old college roommate and I had – which means this topic has been around awhile!It is going to require difficult – and presumably costly in one form or another – choices for all participants in the system (individuals, employers, providers, etc.). Consultants such as yourself and your colleagues will be in an interesting position going forward – businesses will need insight and practical strategies for living within the new guidelines. Citizens, meanwhile, will likely continue to make slow, unsteady progress in modifying behaviors that might help in reducing costs. A key challenge I see in modernizing the healthcare system is developing an incentive structure that promotes positive change over the long-term; a key ally going forward will be technology and the promise it holds in improved service delivery, medical record keeping, advances in health sciences and pharmaceuticals, patient satisfaction research, and improving the flow of health information to consumers leading to healthier lifestyles. Best of luck – I look forward to reading the posts from you and your followers…this is an interesting and useful thread…
Mr. Tillman, I applaud your comments on and commitment to comprehensive health care reform, and share your underlying belief that all Americans should have access to affordable health care coverage. Great thinkers like you are leading the way today in helping to improve our health care system. We all have a direct and real stake in the outcome of health reform efforts. Since 1999, employment-based health insurance premiums have increased 120 percent, compared to cumulative inflation of 44 percent and cumulative wage growth of 29 percent during the same period. If we fail to improve our health care system, rising health care costs will threaten the viability of U.S. businesses of all sizes and put job security, pay increases and other vital employee benefits at risk for millions of Americans. A strategy to control costs should be the foundation of any effort to improve the health care system. Controlling spiraling health care costs benefits every American seeking access to quality, affordable care. Fortunately, many of the proposals to control costs can also improve quality and value. Health IT is one example, but there are many others. Inspirational consultants such as yourself must continue to lead the way in driving for a higher quality, evidence-based health care system and finding solutions that foster continuous quality improvement. Any successful reform effort must build on the strengths of America’s system while ensuring there is a greater variety of affordable private health plan options in the marketplace for all. By making it easier to provide quality health coverage for all citizens, we can not only strengthen health security, we can strengthen our nation’s economic security. May God bless you as you continue your work to find solutions for this urgent national priority.
Tod, Excellent overview of the problem and good questions to your readers. There are lots of good answers, but no proof that any one of them is necessarily better than the others. Health reform is public policy alchemy, and fixing a system as big and complex as ours will require continuous policy tweaks. Does our political system have the capacity for that?My own view is that the biggest problem with health care today is US — you and me. We’re not trained to be wise shoppers of health care. We’re not held accountable for focusing on preventive care, healthy diets etc. When we show up at a doctor’s office or emergency room, we hand ourselves over to the experts and expect them to do whatever it takes to help us, costs be damned.In other words, we don’t behave like rational actors. Nor should we be expected to — if you’re sick or your child is sick, you don’t care about the price tag.So if we adopt a very free-market approach to health care reform, there’s a real question of whether or not American consumers will perform like smart shoppers. Likewise, the government running everything may lead to overuse of the system and, gulp, rationing.Maybe the way out of this is for the federal, state and local governments to work together on teaching Americans how to be smart about health care. We require so much of young people before they can graduate from high school or obtain a driver’s license. What if there was a “smart health” component to school? Or what if at age 21 you couldn’t drink alcohol until you proved that you had mastered the basics of managing your personal health care? Or what if renewing your driver’s license throughout your life came with a similar requirement.Expensive? Probably, but not as expensive as the road we’re on now with health care. It’s not a solution by itself, far from it. But getting Americans to behave like adults when it comes to managing their personal health care could take a big bite out of future health costs, freeing up money for Medicaid expansions, government-provided medical savings accounts etc.Thanks for kicking off this thought experiment.RW
Tod T., I like what you are saying. At my work we’ve embarked on a fairly radical insurance/health care program this year, and I’ve seen mixed results. As one of the other posters mentions, none of us are really trained to be choosy health care shoppers, but this program forces us to. For some folks it has been positive and for others, it is negative, but ultimately if you are healthy, you’re going to be in good shape in any case aren’t you?Your balloon analogy is a good one, but you should continue it not by saying it floats away but rather by saying it pops. When it gets too full of air, it cannot stand stress and pops at the slightest pressure. I think that’s what we’re seeing now.
Interesting questions. While thinking about potential health care reform solutions, it’s clear that there must be greater accountability by the individual. Without it, I really don’t see any long-lasting solution to the problem. If we are unable to incent health care recipients to change lifestyle behaviors, then the problems will simply continue. It all comes back to the “consumer” and how we live our lives. To that point, I don’t have a lot of faith unless there is a significant enough carrot or stick to affect change. Just think, it was a mere 7 months ago when fuel efficient cars were the rage and SUVs were a dying breed- understandable when when gas was $4/gal. When gas dropped back to $2/gal, SUVs once again became the #1 selling car category. Change only happens when there is either a big enough reward or big enough penalty. The American consumer is extremely fickle and without substantial cost savings to promote healthier living or higher premiums to penalize those that chose unhealthy living, I don’t believe much will change and costs will continue to soar. Of course the next question would be how do we monitor who is living healthy vs who is not.
Hey, great responses from all. We appreciate the opinions and ideas. If you have any ideas for other posts, let us know and I’ll see what we can do.Tod