Monday morning at the HIMSS Conference has been a study in contrasts. On the one hand arriving at the Ernest N. Morial Convention Center, one is reminded immediately upon entering the restrooms that it remains unsafe to drink the city’s water out of the drinking fountains (or sinks!), 24 hours after the city began to experience a water emergency—something that New Orleans sadly has experienced numerous times in the past couple of years.
On the other hand, it was fascinating, and encouraging, to see and listen to New Orleans Mayor Mitch Landrieu and Ochsner Health System president and CEO Warner Thomas, speak at the opening keynote session this morning. Neither man mentioned New Orleans’ ongoing infrastructure issues; instead, they were both focused on the future, and on actively moving towards that future.
Mayor Landrieu, like all mayors, had to begin his welcome to HIMSS attendees by boosting his city; that’s absolutely to be expected. What’s not necessarily to be expected is a mayor who, after an initially folksy greeting, turned around to speak quite fluently about the opportunities inherent in public-private healthcare collaborations, such as the one that the city of New Orleans is involved in with the Veterans Administration and the city’s academic medical centers, who are together building a state-of-the-art medical campus. Mayor Landrieu also spoke in optimistic, yet realistic, terms about the healthcare cost challenges facing New Orleans, Louisiana, and the nation.
Mayor Mitch Landrieu
“As we think about building a knowledge-based economy, one of the things we’ve been doing is investing in healthcare,” Mayor Landrieu noted, citing the public-private collaboration to build a new medical complex in New Orleans, as well as a successful effort that has created 103 primary care clinics all around the New Orleans metro area in the past few years, serving over 350,000 people.
“One of the things we decided post-Katrina was that we were not going to build the city back as she was,” Landrieu told HIMSS attendees, “but [instead] to move forward. And we decided that we were going to focus on common ground, and we knew that getting ahead of health issues, focusing on preventive care, was the way”: thus the system of primary care clinics, which, he noted, has decreased emergency room visits and improved primary and preventive care access and outcomes metro area-wide.
Then Ochsner’s Thomas came to the podium, and put forward very forcefully his view that healthcare leaders can either put their heads in the sand and become “depressed and pessimistic” when faced with the policy, reimbursement and industry challenges facing them in the coming years, or they can look to transform their industry in order to both survive and thrive—not to mention in order also to better serve their patients, communities, and country.
Perhaps the most impactful part of Thomas’s speech came when he compared the transformation of the airline industry in the past quarter-century to that being required of healthcare providers. The major airlines, he noted, under tremendous economic pressures, recreated themselves in multiple ways—or died.
For example, in 1995, the three biggest airlines at that time—United Airlines, American Airlines, and TWA—dominated the air passenger market, with 40 percent of passenger miles. There were 450 million passengers flying that year, and the cost per passenger mile was 13.4 cents per mile.
Well, we all know what happened to TWA…! Meanwhile, fast-forwarding to 2010, three airlines—United Airlines, Delta, and American Airlines—control 70 percent of the market, and were flying 700 million customers at a cost of 12.7 cents per mile; and, get this: the total number of airline employees across all airlines had decreased from 546,000 to 435,000 employees across the U.S., even as airlines were operating with fuel cost increases of 240 percent in 2010 over 1995 levels.
How did the airlines manage? As Thomas pointed out, they got hyper-efficient, and put some of the onus on passengers, particularly in the area of getting passengers to go online and book their own flights. They also, of course, filled up planes, slashed unprofitable or under-populated routes, and, as we all know, literally shifted from full meals to peanuts (or even less!) on passenger flights. But it worked, and the airline industry saved itself.
Thomas asserted that, given the healthcare demographic changes we all know are pushing our country towards a healthcare cost tsunami, there is simply no rational reason to believe that the cost, reimbursement, and operational pressures on healthcare providers will diminish at any time in the foreseeable future. Instead, it’s time for providers to step up and completely transform the healthcare industry, making patient care far more efficient, cost-effective, higher-quality, more transparent, and more accountable than ever.
Frankly, I found all this talk very refreshing. I think both Mayor Landrieu and CEO Thomas got all this exactly right: healthcare leaders have a stark choice right now. They can either rail, Lear-like, against the unceasing headwinds of the current policy, reimbursement, and operational environment, or they can accept the reality of the situation, and do what they must not only to survive, but also to better serve their patients and communities, while meeting the demands of healthcare purchasers and payers.