NH Health Care Town Hall Blog
Wednesday, March 3, 2010
New Hampshire Health Reform: “The Road Not Taken” or “Ambition must be made to counter ambition”
By Dick Cannon, Vice President of Finance and Administration, University of New Hampshire
Many will recognize the first title as the famous poem by New Hampshire’s own Robert Frost. While there are many interpretations of this poem, here I am presenting it as a paean to individualism and non-conformism. The second quote comes from James Madison, 4th President of the United States and author of much of the United States constitution. This quote stems from Madison’s observation that men and women are “not angels,” and there must be checks and balances so that one faction’s ambitions can be checked by the ambitions of another’s. Madison deemed this preferable to potential expediencies, such as taking away the liberties that give rise to factions or “by giving to every citizen the same passions, and the same interests.” These sentiments should resonate well with the ethos of New Hampshire.
But what does this have to do with health care in our state? Let’s start with Madison’s idea of ambition countering ambition. I write from the perspective of an employer who has faced near double digit increases in our medical care premiums year in and year out. We know that part of this increase is associated with costs shifted to employers who “ pay more” to health care providers so they can recoup what they argue are unreimbursed costs of providing care to Medicare beneficiaries, Medicaid beneficiaries, and the uninsured. There are, of course, many other cost drivers I am aware of within our population, including the general public’s appetite for new technology at any cost and for uninhibited access.
Health care providers’ “ambitions” reasonably include covering their costs and building in a viable margin, which is the same as all organizations need to do, including UNH; I understand that. Their ambitions presumably include much more, as well: responding to patients request for care ; providing quality care ; paying doctors, nurses, other health professionals, and administrative and support staff a fair market wage; having the best facilities; using the latest technology; paying for the complexities and extra administrative costs of reimbursement, just to name a few. I understand that, too, but with some qualifiers that help define an employers’ ambitions. As employers we want our employees to have access to the right care, at the right time, in the right place, at the right price. Our “ambition” is both high quality integrated health care and lower prices. We want medical care premiums that go up more like 3% per year in the next decade, not 8%-10%. Right now the rate of increase in this budget item contributes to crowding out other needed investments in providing a UNH education, and lessens our ability to give our students and their families lower tuition increases.
How might UNH and other employers express their ambition to health care providers on this issue? Here we turn to Frost by first considering two traveled paths that could be taken. One path emerges from the recognition that employers do not have market leverage like Medicare and Medicaid. Employers are not part of what the economists would call an oligopsony, a fancy term meaning that a few large buyers exert a great deal of control over the sellers and can effectively drive down prices. Employers could form a state wide purchasing cooperative to create the market discipline that is lacking now. Will they? Who will step up to lead this effort? Can the variety of employer situations (size, union, non union, public, private) be accommodated fast enough to create such an organization?
Another road traveled by other states and most other western democracies emerges from a belief among many economists that health care is a “market failure” and, therefore, must be regulated as a public utility. What would that entail? Rules, regulations, price controls, risk of misguided incentives, stifling innovation, unfairness, and unintended consequences on the negative side. On the plus side, this could lead to the possibility of budget control, an opportunity to rationalize the system and time to correct for market failures. The impulse to regulate health care is tempting and may be compelling if it is seen as the only option available to rein in premium increases. However, even this technique is not fool proof. If prices are frozen or regulated, health care volume can still increase, enabling individuals and institutions to reach their income or revenue goals, and thereby keeping total costs high. The list of problems with this solution is long, and the debate will be intense if this road is traveled. But, if one is an employer and this is the only practical way available to get at least some relief for our medical care budgets, can we reasonably be expected to oppose such an approach? Is this how we should interpret Madison‘s guidance to counteract ambition?
Or should we return to Frost’s non-conformism for guidance? It seems to me highly unlikely that anything passed in Washington is going to alter the landscape in New Hampshire dramatically in the short run. We should be the driver for our own health reforms. We are, as it were, at the point where “Two roads diverged in the wood, and I-I took the one less traveled by, and that made all the difference”. But what is the road not taken by others on which New Hampshire could choose to “travel by”? What is the “first in the nation” New Hampshire solution? Is there a New Hampshire “private option”? Given the complexities of the health care system, I can only sketch out an outline for creating such a path. It is easier to list the attributes and desired end states of a coordinated system of care than to detail a way to make it happen. That will take first, the commitment, and then the energy and imagination of those leaders who work in the system every day.
My dream is for a true private/public partnership to create a global budget that we can manage together in an environment in which care is delivered through a coordinated, predominantly private health care system to serve all residents of New Hampshire. Note that I said coordinated, not monolithic, not the same everywhere, not a single payer, not a public utility, but something newly invented. Why can’t all the major provider organizations, health plans, employers and payers come together for series of facilitated workshops to begin to design such a system? As it took shape, this effort would seek to accomplish the following :
First and foremost, establish a cooling off period to stabilize the growth in total cost. During the first five years, all health care providers, health plans, and payers would agree that 18% of state gross domestic product would be an upper limit on the size of the NH health budget. In other words, a period of relative stability for providers and assured relief for payers. Premiums and public budgets (Medicare and Medicaid) would be indexed to some agreed-upon reference point that matched the growth in the overall gross state product. Medicare and Medicaid demonstration projects and waivers would be required. I am sure there are many legal and anti- trust issues to tackle in order to implement this. A short term outcome would be a memorandum of understanding among all the health plans, providers, payers, and employers.
An organization would be created to oversee this process, perhaps a non-profit corporation with balanced membership to reflect all interests, with weighted voting where appropriate depending on the issue.
A set of health goals and system characteristics would be established with the expectation that they would be fully in place within ten years.
A virtual New Hampshire comprehensive health budget would be created immediately that would mimic, but not require, the pooling of all current funds -commercial premiums, Medicaid, Medicare, Self pay, public health budgets, i.e. all revenue sources.
A time line, budget mechanism, and set of actions would be established on how to build a shared infrastructure for a high quality system. The infrastructure would support population health principles and employ rigorous cost benefit analysis of capital projects. This might include, among other components, a health information exchange, a health information data warehouse to track improvements in the health of our population, a body of health experts to guide benefits design and measures of quality and outcome, guidelines for the adoption of new technology, a limited number of centers of excellence for highly specialized care, and a plan for training, recruiting and retaining health care personnel at all levels.
Shared services and administrative efficiencies would be put in place where duplication exists today.
Innovative ways would be developed to engage patients/consumers in taking more responsibility for their own health by building shared decision making as a core component of the system.
Benefit design would be examined and reshaped to support the best combination of the insurance principle with individual and family budgeting.
Pricing of health care services would be based on a rational system that acknowledges the investment in education and training of providers, supply and demand factors, the best thinking on process design for providing services, and the best way to provide incentives for high quality, high value outcomes.
Agreements would facilitate the formation of a set of integrated health systems to provide predictable full service coverage throughout the state.
As trusted methodologies are developed, and as a system of integrated delivery systems is completed, the health system would move in a stepwise fashion toward a payment mechanism to pay delivery systems a risk adjusted global payment for providing high quality/high value care. Reinsurance would be available to the integrated systems to cover the insurance risk above some level.
Finally, and most difficult, negotiating the flow of revenues to each member of the consortium during this period to achieve strategic goals.
I realize this is an extraordinarily complex undertaking, but consider life on the more traveled roads. We do have a choice. Let’s be that non-conformist state and find “the road not (yet) taken”.
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Dick Cannon is Vice President for Finance and Administration at the University of New Hampshire. Prior to joining UNH in 2006 he was a management consultant to higher education and academic medical centers. He as was Dean for Administration and a member of the teaching faculty at the Harvard School of Public Health for eleven years. In the 70’s and 80’s he served as Executive Vice President at Harvard Community Health Plan and the Health Insurance Plan of Greater New York. Before that he served as a group practice administrator and, at a Boston teaching hospital, helped develop a group practice, a patient advocacy program and consulted with affiliated community health centers.
Monday, February 22, 2010
Keeping My Child Out of the ER: The Importance of Accessible Data
By Amy Costello, Project Director, New Hampshire Institute for Health Policy and Practice
Last Thursday, after a scary afternoon of trying to manage my daughter’s asthma at home, we ended up in the Emergency Room. Elizabeth is 20 months old. She has had asthma-like symptoms with a cold so I was able to recognize that she was having difficulty breathing. I called our family physician. She was out of the office and the covering physicians were booked for the rest of the day. I made an appointment for Elizabeth for 9:15 the next morning, and crossed my fingers that the breathing would get easier instead of worse. At 6:00 that night, with Daddy out of town and Elizabeth retracting under her ribcage, I packed her, her older sister, and some Sippy cups into the car for a field trip to the Emergency Room (ER).
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Tuesday, February 16, 2010
Using Technology to Engage Patients in Their Health Care
By Denise Purington, BSN RN
Vice President Information Technology and Services, Chief Information Officer, Elliot Health System
With all the talk of health care reform, the use of electronic medical records, and empowering patients to get more involved in health care decisions, it seems appropriate to share what health care providers around the country are doing to get patients more involved. The question I am hearing most often is, “why can I do my banking online, pay my bills online, make an appointment to get the oil changed in my car online, but when it comes to accessing my health care providers, I still must depend on the telephone or a face to face visit?”
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Tuesday, February 9, 2010
Public Health: improving health, preventing disease, and reducing health care costs for all
By Kristina Diamond, Policy Director, New Hampshire Public Health Association
The mission of the New Hampshire Public Health Association (NHPHA) is to strengthen the public health system to more effectively protect and improve the health and safety of our population. Many people don’t realize that public health initiatives help improve health, prevent disease and reduce health care costs for all. Our current health care system isn’t working and we need to fix it. With the uncertainty now of whether national health reform will pass, we must take the opportunity to not only educate the public, but also NH policymakers on the importance of integrating prevention and wellness into all aspects of our lives.
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