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Tuesday, October 20, 2009
It’s time to rationalize our health care system in New Hampshire!
Paul Spiess
Co-Chair, Citizens Health Initiative
During my three year tenure at the Citizens Health Initiative, I have had an opportunity to immerse myself in the minutiae of health care cost and finance. As a retired banker and former legislator, I bring a somewhat distanced and dispassionate view to the issue of health reform. I must also confess to a fair amount of compassion for financial pain that businesses and individuals have endured over the past ten years as they have struggled to keep up with costs that are growing at a rate that is well above the increase in gross state product (GSP) or personal income.
From my perspective, the health care industry is like a freight train on the tracks, heading towards signals flashing red, but without brakes. There is a collision coming and there is little that can be done to avoid a lot of pain and damage. I am not interested in assessing specific blame for this calamity. Suffice it to say that everyone in the industry—insurers, hospitals, drug manufacturers, physicians, and even patients—share a fair amount of blame. The health care system that we have today is the one we built over the past fifty years, and it functions like a Rube Goldberg contraption. Getting out of this mess will require vision, leadership, perseverance and pain.
Let’s just take one look at the health care system we have in New Hampshire today. We have a total population in the state of approximately 1.3 million residents, which is really no bigger than a moderately-sized metropolitan population. The cities of San Antonio, Dallas and San Diego all have comparable populations.
Geography aside, we must examine the corporate and physical structure that has been developed to serve the population. Starting at the top, we have twenty six non-profit hospitals and two for-profit hospitals. Additionally, there are six specialty hospitals spread throughout the state. We have fifteen community health centers and ten mental health centers (serving an aggregate population of approximately 150,000 people). All of these entities operate independently or in loose affiliations. To this core structure, we must add our private physician practices, our VNAs, home health agencies, independent rehabilitation services, hospice, pharmacies, labs and radiology centers.
Returning to our comparable metropolitan areas, San Antonio has five general hospitals and one specialty hospital. Dallas has six general and two specialty hospitals. And San Diego has four general and one specialty hospital.
According to the Department of Health and Human Services, there are more than four thousand separate contracts to provide Medicaid and general welfare services to our residents. To say the current system is redundant and a tad inefficient might be the understatement of the year.
We must have a public conversation about “right-sizing” the health care system.
Here is my global view from 40,000 feet: we should have no more than five or six integrated health care systems to service the state. These facilities might be geographically organized around Hanover, the North Country, the Lakes region, Manchester/Concord, Nashua and the Seacoast. These six health care systems would support one general hospital each, with acute chronic, and specialty care services, as well as several emergent care centers in geographically dispersed areas. Local physician offices, home health agencies, VNAs and rehabilitation services would be loosely or directly affiliated with these magnet hospitals, which in return would develop and support integrated electronic medical records (EMR) and health information exchange (HIE) services. Our community health centers and mental health centers should be consolidated operationally and managerially into one cohesive operating system, to be managed by a public board of overseers, who represent regional service areas, and are directly supported by the federal government through Medicaid and State DHHS grants.
What would be lost and what could be gained by an organized consolidation of our health care system? First, we would lose a lot of local board members and the strong input and influence of local communities. For many smaller communities, there would be a loss of control over valued services and direct geographic access to a wide range of services. There would undoubtedly be some loss of employment as duplicative administrative services would be consolidated. Big is not always better, and people understandably like to know their health care providers.
The upside to a consolidated and “right-sized” system are the two core values of our health care system—cost and quality. The cost savings from a revamped and streamlined health care system could be as much as 15% of our aggregate health care expenditures. That would be in the vicinity of $1.5 billion per year. This would reduce the unreasonable and unsustainable burden placed upon our private insurance system.
The contracting and reimbursement system could be significantly simplified at all phases of the provider system, saving an additional 5% of expenditures. There would be a significant reduction in the time and personnel required to manage our public support systems. Technology could be more effectively implemented and coordinated to result in lowering capital costs, reducing medical errors, improving communication among providers, and between providers and patients. The resourcing and utilization of high-cost, specialty care and equipment could be better managed and monitored. Resources could be freed for better integration of public health and medical care. Hospitals could focus more attention on the health of the communities they serve, rather than competing for market share within or outside their current catchment areas.
In short, size and scale does matter and can have positive economic impacts if properly organized and coordinated. So why not define the system we want (rather than the outdated system we have) and then go about the business of developing a plan to get there?
Tags: business, Citizens Health Initiative, federal government, health care cost, Health Reform, leadership, Paull Spiess, perseverance, public conversation, vision