We must control the cost of health care

I’m new to posting on this site but appreciate the depth of thought here.  For now just thought I would share a column I wrote for boston.com about health care costs.  Clearly the federal reforms (assuming somehing passes) are not going to solve this issue, and the implications of rising health care costs are not subtle.  There are solutions we can start with on the state level, but thus far there has been much talk and less concrete action.

Thanks for reading, look forward to your feedback.

The article is originally published at: http://www.boston.com/yourtown…

Better Leadership Needed to Tackle Cost of Health Care

A recent Boston Globe headline read “Health costs to rise again: Insurers to boost rates about 10%. Shift of expenses to workers likely.”

This headline is both unsettling and a bit shocking, even though it was far from unexpected.

The reason this headline matters is that, despite all the rhetoric in our state about the need to control health care costs, the exact opposite is happening. Consider the following exercise: currently, the average cost of health insurance for a family of four in Massachusetts is about $14,000. If the cost of health insurance premiums continues to climb by 10% per year, by 2018 the cost of the same health insurance plan will be almost $35,000.

This number carries profound consequences for individuals and families, businesses, and our state. For individuals, the skyrocketing cost of health insurance means just as the headline inferred. An increasing amount of the cost of health insurance will be shifted to us – the workers, the families, and the individuals that depend on having access to an affordable plan. But $35,000 per year is simply not affordable. We would all be faced with the impossible choice of whether to purchase health insurance or pay necessary bills. Forget about luxury items, for many families this will mean choosing between paying for health care and putting food on the table. Wages are simply not rising fast enough to keep up with the cost of health care. In fact, from 2001 to 2009, the entire anticipated 25% rise in wages was devoured by the 25% rise in health care costs.

Businesses to a large extent have responded to the rise in health care costs by reducing wage increases and shifting a larger burden of the cost of health care onto the employee, through both higher monthly premiums and plans with higher co-pays and annual deductibles. Businesses, however, can’t shift the entire cost onto employees. The result is that our businesses – small, medium, and large – are losing their ability to compete in an ever more challenging global economy. Furthermore, because of the complexities inherent in just selecting a health plan, some experts have mused that U.S. businesses are morphing into health insurance companies whose secondary goal is running a profitable business. In countries where such a burden of health insurance coverage does not fall on the employer, this is not a concern.

Finally, for Massachusetts the implications of rising health care costs are equally profound. Currently, the cost of all state funded or subsidized health insurance (including Masshealth, Commonwealth Care, SCHIP, GIC, and others) combined accounts for nearly one-third of our annual state budget. That’s right, one-third. Even a small part of that is a huge sum of money we could be spending on education, infrastructure, public safety, and the myriad other state programs vital to our communities. Furthermore, for towns like Needham that depend heavily on property taxes for local aid, just imagine the possibilities for improving local aid and reducing the tax burden on families if such a large portion of our state budget didn’t go to paying for health care.

My point in illustrating the problems we face from the rising cost of health care is not to cause panic. Instead, I want to address the reality we face. It is vital that we first recognize and accept the magnitude of this problem, then work on fixing it. That, however, is where the real challenge begins. Fixing the health care cost problem is going to require us to make difficult choices, but it is imperative that we have a real and substantive conversation about those choices. We cannot let the conversation deteriorate into fear-driven statements about rationing care, socialism, and death panels. That is political fear-mongering that doesn’t solve any real problems.

While not a comprehensive list, here are three real solutions.

1. Hospitals in Massachusetts get paid based on their market power, not for providing quality, efficient care to their patients. As my own hospital’s CEO and forward thinker Paul Levy said in his blog: “when each hospital is paid for the results it achieves in patient care, rather than its market share, everybody wins. Ultimately, it is the only way to control the growth in health care costs because it stimulates the right kind of competition — competition measured by results and efficiency — among all providers.” I couldn’t agree more. Let’s stop paying some hospitals up to 30% more just based on their market power. That is a huge potential savings.

2. We can give every individual access to better, quality care by increasing the number of primary care physicians and supporting the establishment of “medical homes,” an integrated health care delivery model that would care for every aspect of an individual’s (and perhaps entire family’s) medical care throughout their life. This would require spending more up front, but the long term savings (not to mention huge benefits in quality of care provided) could be substantial.

3. We must reform our medical liability system. In our current tort system, only 2% of negligent injuries result in a malpractice claim, and only 17% of all malpractice claims actually involve any negligence. Furthermore, patients keep only about 30 cents of every dollar spent on the system. This dysfunctional system drives physicians to over-test, and it is estimated that we spend from $50 to $200 billion each year nationwide just for the cost of defensive medicine. There are a number of solutions to this dilemma, and my specific ideas for reforming the system can be found in a report I wrote while a fellow in the Massachusetts State Senate Committee on Health Care Financing. (http://www.senatormoore.com/issues/indepth/health/resources/2008/031108_RestoreVal.pdf)

The whole point here is, there are plenty of solutions out there, but change is coming way too slow. Better leadership is required if individuals, families, and our communities are going to weather the rest of this painful recession and have access to quality, affordable health care.