As health care continues to play a central role on the national stage, Utah’s industry leaders gathered to discuss local solutions. Though costs continue to rise, health care professionals see improvements and successful reform options ahead.
Modern solutions such as health savings accounts and pay for performance models could provide increased consumer accountability, while the experts agreed that a focus on preventative care is needed to keep the population healthy. The group also tackled tough issues such as paying for uninsured patients, overutilization of the system and ways to keep top talent practicing in Utah.
Mark Brown, SelectHealth; Norman Thurston, Utah Department of Health; Scott Barlow, Central Utah Clinic; Brent Williams, Dental Select; David Clark, Intermountain Healthcare; Greg Poulsen, Intermountain Healthcare; Earl Hurst, Humama; Richard Dahlkemper, Weber State University; Martin Lewis, Utah Business Magazine; Daryl Edmonds, Cigna Health Care; Mikelle Moore, Intermountain LDS Hospital; Joe Krella, Utah Hospitals and Health Systems Association; Jack Towsley, MountainStar; Ken Johnson, Weber State University; David Entwistle, University Hospitals & Clinics; Randall Olson, University of Utah; Kim Wirthlin, University Health Care; Jane Ann Craig, Total Dental Administrators; Kim Bateman, Health Insight; Andy Peiffer, Men’s Health Center
We’d like to give a special thank you to Joe Krella, president of the Utah Hospitals and Health Systems Association, for moderating the discussion and Holland & Hart for hosting the event.
What is really at the heart of health care reform?
POULSEN: The clear issue across the country is the rise in health care cost. In our state we have the lowest cost in the country, which is a nice place to begin from, but I don’t think that mitigates the fact that it’s an increasing component of businesses expense and individual consumers worry whether they will have access to health insurance a year from now, two years from now, five years from now.
MOORE: We are seeing an increase in people accessing the emergency department for care because they can’t get access elsewhere. And it’s becoming increasingly difficult to find follow-up care for them on an outpatient basis.
ENTWISTLE: What we are seeing at the University Hospital is those without health insurance are accessing the most costly ways of our system, and that’s through the emergency department. And it’s not just some of those acute services within the emergency room, but psychiatric services are a particular problem where there are not enough resources. So regardless of what direction health care reform takes, we need to address the access issues as well.
What is the state of Utah doing?
THURSTON: The Legislative Health System Reform Task Force is moving forward and the legislators are looking at ways to address the cost, access and quality issues. I don’t think that they have been able to reconcile which of those is the most important, so they are putting them all together and hoping for some solutions that will make significant improvements in all of those areas. At the core, access problems are related to cost, and cost problems are related to quality, and quality problems are related to access. It feeds on itself.
We have had significant interest from all sectors of the state: the health care industry, the community and the business sector. Everybody is interested in helping us find solutions.
WIRTHLIN: I think one of the most important things that has happened in the last couple of years is that we have a number of legislators who have been actively engaged in the process. With health care, the learning curve is steep. It takes time for people to really understand the various aspects and components, the way the system is set up, where the incentives are and disincentives are and how that plays in our overall health care system. So having legislators focus on this for the last couple of years has been really valuable.
But because it’s so complicated and because it’s going to take an investment of resources, I think the incremental approach that the legislature will likely take is the best way to go. And I do think we will see some movement early on. People have been meeting; have been looking at what the various entities can do to be involved in solutions. But as the legislative process goes, you get closer to the session starting and get down to saying, “Okay, now what are we really going to change?” that is where those difficult conversations start to happen. I think they are starting to happen now.
TOWSLEY: Health care is complex. Between the delivery side and the financing side there are a lot of pieces to the health care puzzle. In Utah, we are in a great spot. We have the lowest per capita expenses for health care insurance in the country. We have excellent quality, good delivery systems and a lot of access points. We still have the challenges, though, with the cost escalation and the impact on the employers and patients. It is really incumbent upon all of us in the industry and the legislature to look at what the potential solutions are and if those are going to move us forward, not necessarily to try something that could end up counteracting all the good things that we have done. It’s really a careful, step-by-step process to make sure that whatever we come up with is a step in the right direction and not a step backward.
The Utah Hospitals and Health Systems Association has put a lot of work into developing a plan for reform. Could you give us an overview of what that plan is?
TOWSLEY: It’s a pretty straightforward, broad plan to increase the insurance coverage for many people who are currently uninsured. It comes in a few parts. One is personal responsibility, that everyone needs to pay their fair share of the cost of the care that they are receiving. A second piece is to make sure that the coverage that is offered drives people in the right direction for the most cost-effective, highest quality care and that the payments received by providers also incent providers to deliver the care in the most cost-effective, focused way. And then alongside that, it also is to make certain that the insurance coverage itself is affordable.
HURST: Today 43 percent of Utah small business employers offer health insurance and 60 percent of all Utah employers offer insurance. You compare that to national trends, even though that sounds low, Utah is about 10 to 15 percent higher than other major states across the country. We do have great providers and great delivery systems, but we also have the youngest population in the country. We also have probably the third or fourth healthiest population in the country. We have the lowest percentage of smokers in the country. So just our demographics help make us a healthier state and that probably helps us consume less health care.
One interesting experience I had in introducing Humana to this marketplace is the prevalence of low deductible health plans. Consequently, the lower the deductible, the higher the premium. The higher the deductible, the lower the premium. So really, the cost of health care is based upon the decision by business owners as to what benefits they want to offer their employees. The cost of insurance equals the unit cost of the health care times the utilization of that health care.
What effect do high deductible plans have on hospitals and providers? How do they translate to bad debt and uncompensated care?
ENTWISTLE: The reality of that is at the end of the day we have to be able to meet our mission. And there are not only unfunded patients that come in, but there are also federal programs that don’t pay the cost of the care. And unfortunately, those costs get passed along to businesses in the form of higher premiums.
OLSON: The problem is something I’m seeing more and more often. For example, a colleague called from Montana with a patient in need. Here is somebody who has no insurance with a small skin cancer on his eyelid, something that easily could have been taken care of with a relatively simple procedure five years ago. He can’t afford it and just decides that he is going to live with this. So it’s five years later and now extremely complicated. And this poor person in Montana said, “What can I do? There’s nobody here to take care of it. We will need neurosurgery, ENT, ophthalmology.” And in spite of that, there’s a fair chance he will die. So that’s an example of a decision that I have to make, it seems, a couple times a week.
We will probably try to work out a way to take care of this. This means the University Health System is going to. And the providers will not charge anything for it, but just the raw cost I’m guessing is going to be $30,000 or $40,000. That would have been $700 or $800 if he had taken care of it primarily. And this is not getting better. It is getting worse.
How do value and quality fit into this equation?
BATEMAN: It’s true that we are fairly conservative in the way we utilize resources compared to national levels. However, one problem with that is we don’t have as much waste to squeeze out. With the savings we have here in Utah, where is the money going to come from in Utah to get access?
But there’s another side to the problem. Greg correctly said that cost is really the issue. It’s even an issue surrounding actions. Third-party payment, though it is very good as a social benefit, tends to distort some of the incentives on the provider’s side. There’s an enormous amount of waste, even in our system in Utah, by overutilization of the system. We pay for the services given, not necessarily for the content of the service. For example, if somebody comes in to my office and wants to take care of a headache, there’s no disincentive to me to order a CT scan for that headache. If I want to screen for colon cancer, it doesn’t make a difference to me whether I order a colonoscopy that costs $2,000 or a fecal occult blood test on a card that costs $5. And the fact that a third party payment is available tends to give both the health care system and the patient an incentive to go with the higher cost way of doing it. Some of the so-called quality that we talk about in our system is value and convenience and not necessarily content.
So the Chartered Value Exchange, which is a coalition of providers, purchasers, payers and the public, is seeking to get us to talk more about value than access or cost.
BARLOW: I think Kim identifies definitely an issue of the system. As we look at our group and some of the care variation you have among providers, it’s interesting to see the variation but it’s difficult to get to the reasons for that variation. The concern of inappropriate utilization has always been there and always will be there at some level. But as a large group, we have really never been able to get any kind of good, objective data that shows where that inappropriate utilization is taking place. I don’t disagree that it exists in the system. But the difficulty is really figuring out a way where you can provide a higher value care experience, but making sure that you are still responding to the unique needs of individuals and what their care situation may be.
There’s been a lot of talk about pay for performance. Are you willing to be paid for your outcomes versus the amount that you do?
BARLOW: We are. With some of our partners here, we have, for a couple years now, been asking for the opportunity to do some of those gain-sharing models in some way, shape or form. We think that we can, if we can align things better, create better value in the system. We are overwhelmed with the care demand. There’s the allegation that perhaps we want to do things to generate business. The reality is we are struggling to keep up with the demand that’s already there. So it’s not like we need more care delivery. We are very anxious to be able to sit down with whomever we can to figure it out. As a matter of fact, we are working very closely with Utah Valley Regional Medical Center and SelectHealth to find some finite specific cases that we can really track and try to identify waste amongst the entire delivery system in Utah.
WIRTHLIN: What might work for one physician and one patient doesn’t work exactly for another kind of situation. We’ve said that when we cover more people we are going to see an increase in utilization. And sometimes that is viewed as us encouraging something that shouldn’t happen. The truth of the matter is that we have a lot of people out there who don’t have access to care because they don’t have insurance. While they can go into the emergency room to get help for this episode or that episode, the emergency room doesn’t take care of them for chronic conditions. And we have these heartbreaking situations where because people don’t have insurance, their condition gets severe and they come in at a place where their life may not be able to be saved. What we then try to do to save their life will be extremely expensive. There is overutilization. But when we see increase in care for those who haven’t had it, it doesn’t mean that they are misusing the access that they now have.
OLSON: If we can allocate care and providers in a rational way, there’s not a shortage. But our present system has been fairly static in the provision of new doctors and certainly of residents and many specialists. I think we are facing a period where it is going to get harder and harder to find providers, particularly primary care people.
WIRTHLIN: It’s true that the Federal Government needs to do things to open up the ability for us to train more residents. But actually the state of Utah can do something right now with regard to physicians. The School of Medicine at the University of Utah has had a class of 100 students for as long as anybody can remember. And we are now in a place where we could expand that class by 30 percent. But it would require an investment of $10 million from the state. So we need to expand that pipeline on both sides. We need more medical students in, we need more residents educated. The state can step up and we can educate 30 more students a year as soon as that is funded. We have incredible applications. Last year we had 1,369 applicants for those 100 seats.
DAHLKEMPER: Are you saying $10 million per year?
WIRTHLIN: Ongoing money.
JOHNSON: We have done surveys since 2003 on other provider services, radiology techs, pharmacists, and in 2003 there were nearly a thousand openings in the hospitals for nurses. That number has gone down a bit, but there’s still a shortage. In Utah we produce about 650 nurses every year so we start off with a deficit. And part of that has to do again with the resources we have to teach those who are going out into the field; clinical spaces for them in practice, faculty members to support them. In Utah, we tend to pay our nursing faculty a little less than if they stay in the profession, and so there’s an incentive not to teach. So we continue to have challenges there. And our faculty, just like the nursing population, is aging. So we will have openings that we will have a tough time filling.
What kind of things are hospitals doing to attract health care professionals?
CLARK: In Utah County we have gone from roughly 3,500 employees to 4,300 just to keep up with the growth. We want to create an environment where employees feel valued and there’s more meaning in their work, so we spend a lot of time on the front end during employee orientation talking about six dimensions of care and bringing greater meaning to the workplace. We realize that we are not the highest payer in the state, but we are a competitive payer as far as salaries and benefits. We have a number of employees who love the fact that we provide first class child care at two of our three hospitals. They appreciate some of the employee recognition that takes place on a regular basis. Everybody on our administrative teams at all three of the hospitals does rounds on a regular basis.
We are trying to get even more innovative at recognizing costs; we are trying to do more with less. And everybody around this table is in that same position, I think.
ENTWISTLE: It is going to take an effort to grow our own. There’s a lot we have done to look at retention and a lot of that has worked. At the same time, we have to increase the pipeline. Certainly we have been working with our School of Nursing, at the same time, we have worked with corporations like Siemens to develop unique programs to train MRI technicians and CT technologists. And more importantly, at the University Hospital, we try to get the students to want to stay, and we create an experience for them while they are there. We, as employers, have to be cognizant of what we are doing to make sure that we are creating a good work environment but at the same time really doing things to develop students and provide training opportunities. These are professionals. They want to continue to learn and grow and develop.
DAHLKEMPER: As a state, we are in an excellent place to start in terms of reform. And one of the advantages is that we do have large numbers of highly qualified young people who want to go into health care. That’s not true everywhere. There are places that struggle to fill their classes. There are nursing programs in other parts of the country that don’t fill, whereas we can only accept less than half of the qualified applicants into our program. We have an opportunity that we could take better advantage of.
TOWSLEY: So it comes down to the pipeline. All of our hospitals do the best that we can to attract and retain talent and make sure that we have a workplace that makes sense for them to have a career. But as we educate our nurses and physicians, we are also up against other states that don’t have as much of a pipeline themselves, and so they are constantly trying to peel our talented folks outside of our state.
The cost of insurance premiums continues to be an issue. What are you doing to make insurance more affordable?
BROWN: I think one of the things everybody is working on is trying to come up with plan designs that help control cost and encourage individuals to take responsibility for what they are consuming in terms of health care costs. It’s trying to encourage people to participate in wellness programs, smoking cessation, healthy beginnings for pregnant moms, trying to partner with employer groups that have healthy work environments that encourage people to do the things that are going to help lower costs in the long run. And in the end, it comes down to dollars.
I hear a lot of talk about supply, and that is certainly going to increase access. But there’s also the potential that it increases cost. And in the end, we have to find a way to continue to reduce cost either through demand or the actual production of the goods that are sold through the health care market.
HURST: I think the consumer needs to become a much bigger part of the health care decision-making process. If you look at national statistics, the average employee will spend less than 12 minutes making their benefit decisions for their upcoming year.
If I don’t have to pay for it and if my employer pays for it, it’s much easier to make that decision. Employers and employees need to become much more engaged in the process of what insurance they want and how they want to educate their employees to consume health care.
How do you get consumers more involved in preventative care?
HURST: I think there should be financial incentives that go with that. I think there is education that goes with that. There are transparency tools that should be given to that employee. Nationally, only 57 percent of consumers actually expend a $500 deductible in today’s world. So does that mean that there are several million people that are over insured or are paying premiums perhaps that they don’t necessarily need to, or they could reduce their cost of health care if they became more engaged in that process?
EDMONDS: I don’t think the issue that we are facing is the cost of health care. I think the issue that we are facing today is disease. Disease is overwhelming our health care system. You take a look at the obesity rate in this country, Utah is one of the lowest, but it is not the lowest. And the effects of obesity are going to have downstream effects that will be multiples of what the cost is today. As physicians in this room, you know that the diet that Americans live on today is leading to more diabetes. When you take a look at children that are going to be born in 2010 and beyond, one of three will have diabetes before they are 50. Until we begin to address disease and have people take responsibility for their health care, we are missing the mark. From where I see it, successful health services companies in the future are going to be those that know how to provide the programs for the employee and to engage the employee to take responsibility for their own health care.
POULSEN Preventative care often is a very, very good investment, not only for the individual involved, but for society. An ounce of prevention there is going to be worth a pound of cure down the road. And we are probably going to help people, especially if we can provide the right incentives for the providers of care to say, “You really ought to lose some weight because your knee problems are associated with the weight that they are carrying around.” Or, “This heart disease that you are going to have a few years from now is associated with your eating patterns and your lack of exercise.” And the answer is not liposuction. The answer is a change of behavior.
Right now, we incentivize physicians very badly. They can make a lot more money doing liposuction than they can counseling, or the knee arthroscopy. On the other hand, probably as individuals, we ought to be paying more for those things. If we don’t take care of ourselves and we end up with things that we need, not to sustain life or mobility but that allow us to be more comfortable, that’s probably something I pay for, and most people in society do.
WILLIAMS: One area that we find that is growing is our Hispanic population. We did screening in 70 Title 1 schools, second and sixth grade children, and found that almost half of them have never seen a dentist in their entire life. Forty-four percent of them have unmet dental needs; 26 percent have moderate to severe dental needs. And 11 percent of them have severe dental disease to the point that it is abscessing or the decay is so bad they need to go to the emergency room.
This really goes hand in hand to increasing the cost of health care because unfortunately, the way these children are cared for is typically waiting until they abscess, and they end up in Primary Children’ Medical Center. Even though there is Medicaid, many of them are not enrolled. It is a barrier that starts with the parents, and there is no solution for it until the parents change. It really increases the cost of health care when you start sending your child into the emergency room for something that could have been prevented by a sealant or something as simple as that.
CRAIG: The way that the dental plans are designed historically have been very graduated, with an emphasis on prevention and diagnosis. And we are focusing more and more on getting our patients into a more managed care scenario, because then getting the sealants on the teeth while the problem is very minor can really eliminate the need for major dental care. Emergencies happen when they have let the dental disease go. In a managed care scenario, we look at premiums. And the premiums are very much the same as they were 10 years ago. On our PPO or indemnity side, the premiums continue to escalate as they would probably in the medical arena.
Is enacting health care reform a federal or state responsibility?
DAHLKEMPER: We can say all we want about how complex this is, and clearly there is no one simple solution. But my strong bias is there has to be a starting point. There has to be a basic criterion that we can agree on that we bounce everything off of. And to me, that basic starting point for state reform or federal reform should say, “Does this enhance personal responsibility for health?” We have developed a culture in this country where doctors, employers and government are responsible for our health. How do we reverse it? Is it financial? I think people having financial responsibility is part of it, But people aren’t going to accept that unless we make this continuous long-term effort to change that culture.
Unfortunately, my fear nationally is that in order to get elected, the presidential candidates and the Congressional candidates feel that they have to promise health care for all. And I think what the public hears is “free health care for all.” It reinforces this culture that somebody else is responsible for my health, as opposed to saying, “I am responsible, and then if I get into a situation that I can’t handle it financially or clinically, there’s a safety net to shore me up.” I’m afraid that nationally we are moving further from that rather than closer to it.
THURSTON: I think the state should take the lead. Every state is so different. The federal government tends to implement one-size-fits-all solutions. If you look at Medicaid and Medicare, those programs are fairly standardized. There’s not much flexibility. And so what happens is states that are not loud voices end up getting harmed at the end of the day. I think Utah would definitely be disadvantaged by a federal solution. We are seeing a lot more creative thought in the state reform processes than we ever have seen in the federal system. So at this point the right answer is to have states develop their own solutions and then potentially learn from each other. We have learned a lot from Massachusetts, both what has and hasn’t worked, and we are looking at other states to see what is and isn’t going to work for them.
POULSEN: I think that’s right. The “however” is that there are clearly some key federal laws and policies that handcuff the states’ abilities to do some things. And the people around this table are very familiar with HIPAA, ERISA, EMTALA, federal tax code, all of which limit the states’ abilities to do some of the things that they might otherwise want to try. I think it is true that it really does require a federal approach where the states have some significant opportunities to uniquely craft something that works in their state but simultaneously work with the federal government to do the things that need to be done.
TOWSLEY: The federal framework can actually, in some cases, be helpful as we watch CMS developing the initial steps toward quality measurement. Establishing some of the ground rules that we use to measure ourselves makes great sense to do at a federal level. But the actual package of how you deliver and finance health care for the individuals that are not on Medicare and Medicaid really needs to be left to the states because the demographics, the economics, the delivery systems are so unique at each state. A state like Utah that is at the very favorable end of the scale could really get harmed by having a one-size-fits-all.
What kind of impact do undocumented patients have on the system?
OLSON: They are a problem on the system, and often don’t have finances. And that’s a growing problem. We have a policy in place. And unfortunately, we ration that. It is Utah uninsureds first, and then it’s regional uninsured next. And then it’s undocumenteds. If there’s money left over at the end of the month in the funds we set, the providers agree to do it for free and it is cost only. I see at least one coming through daily.
WIRTHLIN: In the emergency room, you don’t turn anyone away. And for undocumented patients there is no reimbursement. They cannot qualify for Medicaid. And so the challenge is we are getting undocumented people who are severely hurt and we provide the life saving care, but then they can be in our hospital for weeks and run up a bill of $500,000. Then they may need to go to rehab or to some sort of ongoing care outside of the hospital but we cannot get a long-term care facility to take them because there’s no reimbursement. Really, there is no recourse for hospital providers. There are no funds. So this just becomes money straight out of your bottom line.
POULSEN: That goes straight to the subsidy that the business community essentially pays through their premiums.
TOWSLEY: It’s a perfect example of where all layers of federal rules are coming into play. We are required to take the patient into our E.R. You have the immigration laws that only the federal government can establish. You have Medicaid rules that establish eligibility. And unfortunately it’s impacting us at a state level, and we have no choice but to shift the cost to the employers in the state who are paying for care. And I can tell you that the headaches that we face in our hospitals that are in other parts of the country are significantly worse. And so it really calls upon the federal government to step up and resolve some part of those issues that are creating the problem.
Is that an issue in private practice?
BARLOW: It is. And continuity also becomes a challenge. We often treat serious diseases and don’t have follow-up appointments kept. So the ability to maintain a care model that is effective is compromised.
JOHNSON: One of the successful players is the Community Health Centers. They are busy, but they do a great job. Midtown Clinic in Ogden is doing a great job, and growing their business.
CLARK: These community partnerships that have been established in many parts of the state are working successfully. We don’t have the types of problems, as far as the magnitude or the scope, as Texas or Arizona or California, but it is getting worse every single year. In Utah County, for example, we have a community partnership with United Way, the LDS Church, Intermountain Health Care, several physicians from Central Utah Clinic, a lot of semi-retired physicians and three or four retired doctors who come into this voluntary care clinic. It is open Tuesday and Thursday. We see an average of 52 patients a night; 80 percent of them don’t speak any English or it is very limited. It’s helped to offload some of the cases that really don’t need to be in our emergency departments.
The bad news is that the growth in charity care and bad debt is increasing at an unsustainable rate. There’s really no end in sight, because we have been viewed as a friendly state by many of those who are immigrating.
What role does information technology play in all this? Does it enhance the quality of care? Does it reduce costs?
BATEMAN: We are getting close to being able to link electronic data among various providers so that if a provider sees a patient for whom that provider has no record, it will be possible to link up electronically and get information immediately. We are maybe a year away from that sort of thing. The bad news is that it’s a tool. It can be used to reduce costs or cause more costs. So these ideas of proper incentives really end up being the core of where we have to go. And as we create tools, the tools will take us whatever direction that the incentives demand.
MOORE: I think as we use technology to better link our systems and understand those access points, we are finding we can help people who are uninsured or underinsured. As they access us multiple times through the emergency department or other services, we get to know them and are able to help them access other community programs.
POULSEN: I think that Central Utah Clinic and others have been leaders in our state in terms of using information technology to actually improve value. There’s been a number of pushes nationwide to get people to simply adopt an electronic medical record, or something else. I think those are likely to have bad outcomes.
You need to have incentives that then say, “In order to do this effectively, I can do it better with information technology.” If you do it for the right reasons, you are going to get great outcomes. If you do it because somebody either buys it for you or encourages you to do it, the outcomes are less likely to be beneficial.
BARLOW: I think IT has actually been an aid to professional retention and helped with the difficulty of physicians trying to assimilate all these data sets from different places together to make some care decisions. I know unequivocally in our organization, we have had physicians that have stayed in practice longer because they feel the hassle factors of medicine have gone down. It just has made medicine better in the eyes of the physicians.
EDMONDS: From the perspective of data, we just need the information to work with. We have partnered with Dr. Dee Edington from the University of Michigan, who has for 25 years looked at claim data, health risk assessment data, and can determine who are going to be the large claimants three years out. So if we are talking about personal responsibility and we can provide people with the information, employers, to say, “You’ve got some time bombs ticking,” and if we begin to work with those people, three out of four conditions generally are reversible or preventable. And if that’s the case, then how do we help people take that responsibility to avoid that large claim? If we can use the information today to predict the future with a high degree of certainty, we need to begin to use that.
WIRTHLIN: It’s also a way to align incentives. If you have the information that would say to someone, “You’ve got a problem and we are incentivizing you to take care of it now,” it goes to the essential benefit plan that Greg was talking about. We are going to make it easier to get care, and take responsibility because we have the information that tells us what is happening. You can provide the continuity of care better and you can incentivize the providers in the right way, as well as individuals.
HURST: It’s the concept of personal responsibility. As a Humana employee, I take a health risk assessment, and I provide a full health history of conditions or diseases I know have been in my family. I have to report my height and my weight, my past medical history. So these predictive modeling tools do become extremely valuable. At the same time, I pay less for my health care because I’m a nonsmoker and because I decided to enroll in a wellness program at Humana. I also pay less for my premium because now I’m accountable for doing something about my personal health. So we add the information and technology and align the incentives and perhaps that’s part of the solution.