June 7, 2013

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Healthcare Reform Panel

June 7, 2013

REIMANN: The large employer plans don’t have to cover essential health benefits. But in small employer and individual, how essential health benefits are defined is by a benchmark plan that the state selected. They designated PEHP’s Basic Plus Plan as the benchmark. So essentially a carrier needs to cover what is in the benchmark; there are some other rules about substituting services out that we can do, but essentially it creates a floor in a way that everybody has to at least cover what’s considered essential. A bare-bones kind of plan.

Now, plans can cover more than what is in the essential health benefit package. But one thing to note is if you cover in excess, the premium subsidies that are available for individuals in the individual exchange and the cost-sharing deductions—again both of those programs are subsidies that you qualified for based upon your income, and those dollars can only be used towards the essential health benefit portion of your plan—it impacts how far those subsidies will stretch.

MODERATOR: Dr. Mulvihill, what is the University of Utah doing on the provider side to try to bring healthcare costs down?

MULVIHILL: Cost reduction on the provider side is key. It is about the decisions we make about the care that is necessary to achieve the health status that we are shooting for.

From the population side, from our perspective, it’s going to revolve around identification of patients that are very high-cost patients because of underlying social or medical conditions. Many of the chronic medical illnesses can be approached in a different way. The available data suggests that maybe 5 percent of our population is going to account for about 50 percent of our costs. So it makes a lot of sense to have new innovative programs around the care and management of that 5 percent.      

Once people enter the system, then it’s about reduction of cost per unit of service, and holding that healthcare inflation rate in check. That means streamlining, becoming more efficient, and getting more engaged with our physicians, nurses and staff, and understanding the processes of care and trying to eliminate waste—so-called lean kinds of approaches.

MODERATOR: I was struck by a couple of things. One was alignment of payment and costs, and making sure that everybody cares about what things cost. Then you talked about making more disclosures to patients, particularly on quality issues with respect to the university. Do you see a limit on how much you would do on something like that?       

MULVIHILL: This issue of transparency is really a key issue. We have struggled within our organization around how to approach transparency. And we have evolved over time. Our initial forays into this were to be disclosing anonymously to our providers—so we would have a list of providers one through 20, and they would know that they are number seven. So they would be coded.

That was working for us, but as people got more comfortable with the notion that they had the respect of their peers and this wasn’t punitive in nature, we were able to achieve open disclosure within our organization around those kinds of cost and quality issues. The big leap we took last year was to begin to disclose things publicly, such as our patient satisfaction information. We think that should be the trend. We think every system ought to be considering how far along in this culture shift is the organization and how much of that kind of disclosure can they tolerate?

BELL: Has this transparency been effective at improving cost and quality?

MULVIHILL: I would say resoundingly yes. Our providers respond to feedback. Peer pressure is a key concept in terms of bringing people’s performance along. And once they see where they line up against their peers, there’s a natural instinct to do better.

Convincing people that they need to do better on cost is a little bit of a different conversation than doing better on quality. Everybody understands the quality argument. But we still have a little bit of a sell to the providers that cost also matters. Because they feel, sometimes, that their obligation is to the patient in front of them and not to society as a whole.

MODERATOR: One other concept was the idea of patient engagement, which involves giving more information to the patients.

MULVIHILL: From our perspective as providers, engagement of patients is key because of the issues around health behaviors that affect their costs and the outcome of the care that we provide. We have had quite a struggle within healthcare to both educate our patients and then motivate them to change things that we know could be beneficial in terms of their health status.

As we look at the big picture, we need a healthier population. Utah generally is a healthier population than the rest of the U.S. That’s one of our economic advantages in healthcare today. But we still have areas where we know we could do better if we get patients to do certain things. But it butts up against the idea of individual choice and autonomy. You saw recently the issue in New York, the controversy of raising the age of purchasing cigarettes from 18 to 21, and how the reaction to that is one around autonomy. “I should be able to decide for myself.”

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