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At the World Health Care Congress, a Search for Transformational Triggers in U.S. Healthcare

May 1, 2017
by Mark Hagland
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On the opening morning of the World Health Care Congress, a look at incentives towards transformational change in U. S. healthcare

While industry leaders agree that transformational change needs to take place in U.S. healthcare, exactly which elements of the healthcare system need to be fixed and how they can be successfully fixed, were questions in high relief on Monday morning at the Marriott Wardman Park Hotel in Washington, D.C., as the annual World Health Care Congress kicked off with its opening keynote session, “Policy and Market Forces Impacting Health Care,” on Monday morning, May 1.

Ceci Connolly, president and CEO of the Washington, D.C.-based Alliance of Community Health Plans, led a very robust discussion of the incentives in U.S. healthcare and how they can be modified to improve patient outcomes and community health, lower costs, and transform the system, to everyone’s benefit. She was joined on the panel by Robert Pearl, M.D., executive director and CEO of the Oakland, Calif.-based Permanente Medical Group, co-CEO of the Permanente Federation, and the author of the just-published book Mistreated: Why We Think We’re Getting Good Health Care—And Why We’re Usually Wrong; Chet Burrell, president and CEO of the Baltimore-based CareFirst BlueCross BlueShield; Charles Sorenson, M.D., emeritus president and CEO of the Salt Lake City-based Intermountain Healthcare, and founding director of the Intermountain Healthcare Leadership Institute; and Paul Grundy, M.D., chief medical officer and director, healthcare transformation, at the Armonk, N.Y.-based IBM.

“So, we’ve got a very crazy situation here in Washington,” Connolly said, referencing the ongoing drama over whether the Affordable Care Act might be repealed and replaced, or modified in some way or another. But, she pointed out, the percentage of insured Americans who receive their health insurance through the ACA-established health insurance exchanges is between 4 and 6 percent of the total insureds, whereas, she noted, the vast majority of Americans still receive insurance either through employer-sponsored insurance, or through the Medicare and Medicaid programs. Focusing the discussion on private health plan-paid healthcare, she asked each of her panelists, “What do you see in the private sector that’s working and that’s not working?”


panelists (l. to r.) Connolly, Pearl, Burrell, Grundy, and Sorenson at the WHCC on Monday

“Let me start with the reality that our American healthcare system is simply broken,” Kaiser Permanente’s Pearl began. “We spend 50 percent more than any other [national healthcare] system, yet our outcomes are half. The American healthcare system is broken—it’s fragmented—it’s a nineteenth-century industry; it’s paid on a piecemeal basis, with 20th-century technology. I wrote the book to help suggest solutions,” he said.

“In the book,” Pearl said, “I talk about the fact that what’s broken isn’t the doctors or the insurance industry per se; it’s simply the context. And context shapes perception, which changes behavior. Think back to the Stanford Prison Experiment. One half become the jailers and one half the jailees. Within 48 hours, the jailers saw the jailees as being dangerous criminals; they started to impose debasing treatments. The jailees saw the jailers as imposing wardens. It makes no sense, but It changes behavior. And we have to understand this as we’re trying to change the delivery system,” he said. “If you integrate care, horizontally among physicians and vertically among the pieces of the continuum of care, all of a sudden, the physicians start to coordinate and collaborate, and you get the results you need. As soon as you capitate, all of a sudden, prevention, and early care become more significant, and you can see the care gaps. So it is not about what we think, but how we see. And if you can change perceptions, you can change behavior.”

“Chet, from the perspective of a health plan?” Connolly asked. “I would build on what Robbie said,” Burrell responded. “We cover northern Virginia, D.C., and Maryland. And we see the health systems developing into a system of oligopolies, usually under an academic medical center. And that congealing has resulted in care that is increasingly focused on academic medical centers. And federal healthcare policy has been hospital system-centric. And that’s increased cost, usually with 250-300 percent higher costs than in community-based care.” The solution, he said, is for health plans to work in conjunction with primary care physicians to force changes to patient utilization of medical specialists and hospitals.

We have not found it to be true that ACOs [accountable care organizations] have created more community-centered care.” Instead, he asserted, hospitals have only consolidated their power and continued to increase costs to the overall healthcare system. Instead, in working to bring down utilization costs and improve care delivery, he said, “We thought, who are the most important players in the system? Primary care physicians, not because they do everything, but because they make the most value-laden decisions in the system—when to refer, and to whom. We were looking for independent primaries in the system who were free to shop the specialists. The result has been a profound effect, when the primaries become the buyers. They become fussy about what happens. They’re not locked into systems. The difference between the big-system costs and community-based costs, are something between 22 and 27 percent in this market,” he said. “And I’ll be glad to talk about how we structured incentives. I agree with Robbie that if you change the context, you change what you do. And we cover 1.7 million people in this market.”

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