Clarian and Insurers and Doctors and Insurance and Health Care Costs and Health Care Reform and St. Vincent and Health Insurance and Health Care Providers and Hospitals and Health Care & Insurance

VIDEOS: IBJ panelists examine needs, options for health-care reform

October 13, 2009

POWER BREAKFAST VIDEO #1 (of 5): Health care efficiency

On Sept. 25, the IBJ convened a panel of five of the city's leaders in health care and life sciences to examine the reasons behind and potential effects of health-care reform. Reporter J.K. Wall moderated the discussion, featuring:

Dr. Craig Brater, dean of the Indiana University School of Medicine

Dan F. Evans Jr., president and CEO of Clarian Health Partners

Kyle Defur, president of St. Vincent Indianapolis Hospital

Dan Krajnovich, CEO of UnitedHealthcare Indiana/Kentucky

Dr. Mercy Obeime, medical director of St. Francis Neighborhood Health Center at Garfield Park

(To view more videos, scroll to the bottom of the page)

J.K. WALL: Kyle DeFur, I want to ask you the next question. At the beginning of this whole process, President Obama said he had two goals with health care reform, reduce costs and improve quality. Those are big goals, but to do it at the same time, what needs to happen? What would you say is the best way to achieve both of those at the same time?

KYLE DEFUR: Well, I think one approach to that is clearly pay-for-performance kinds of incentives, I think that's a good way of looking at how we go about simultaneously improving quality and decreasing costs. As mentioned before, I think primary care access, as Dr. Brater said, really looking at how do we compensate primary care, how are we supporting them, how do you get more people to go into primary care is a key piece, because primary care can be very effective in early intervention and prevention and wellness and there's a lot of costs in the system today related to people not going to primary care but rather waiting until they become so ill that they show up in the emergency department. An example of that is if a patient shows up in the emergency department with full-blown pneumonia, they may be hospitalized, put in an intensive care unit for two or three days and then step down to a medical unit for two or three days and then discharged and have a bill of $20,000 or $30,000, when in fact if they had gone to a primary care physician a couple weeks ahead of that they could have been treated with $4 a day antibiotics, you know, so for just a couple hundred dollars for the physician visit and the antibiotics they could've been treated and kept healthy as opposed to entering into the most expensive place in the system, which is a hospital, and incurring $25,000 to $30,000 in expenses. So I think that's one of the ways, the concrete ways, that we look at reducing costs. One of the other things that it's safe to say Indianapolis has really jumped in with both feet on is utilizing Lean Process Improvement Methodology, taken from the manufacturing industry, and implementing what's also referred to as the Toyota Production Model, but it really focuses on elimination of waste within our processes. Staff are on these teams and they do the work. As we know, variability is the enemy of quality, and we eliminate waste and hardwire the more efficient processes. Again those are who are involved in the processes, the staff are on these teams and they develop them. I've also learned over the last few years in looking at Lean Process Improvement and implementation of it that you really do simultaneously increase quality and decrease costs by getting waste out of the system because waste is extra steps in a process, it's duplication, and when you eliminate those things, you eliminate those additional steps, you eliminate possibility for error as well, and so I think in improving quality improvement, focusing on using methodologies such as Lean Process Improvement is another way we can get cost out of the system as well as improve quality.

DR. CRAIG BRATER: There's no way you can really get meaningful cost out of the system unless you do something about overutilization. That's a big elephant in the room. You can nibble around the edges with all this pay-for-performance stuff, that's got all sorts of issues. One of the biggest determinants of whether or not an individual adheres to a regimen, come to the clinic, taking their medications, etcetera, is health literacy. So let's say you have a pay-for-performance plan but your patient has low health literacy and so no matter what your efforts are you have trouble getting them to adhere to a certain regimen, so your pay-for-performance plan punishes you. Well, it turns out that the people with the lowest health literacy are probably the people who need your services the most, so then you end up with yet another perverse reimbursement system. So some of this terminology sounds nice on the surface, but if you drill down a little bit there's a lot more to it than that. So, you know, I don't want to sound like a broken record, but No. 1, it's complicated, multifactorial. No. 2, there are serious, serious flaws, and I'm worried that there's too much tinkering around the edges, we're using a lot of buzz words. And lastly, what I started with is that one of the biggest elephants in the room is that we have a system that rewards doing stuff instead of spending time with patients, so it's a completely broken business model. We are here for the IBJ, so if you want to talk about the "business" of it, people are rewarded for doing more and more things. Well, that's not always in the best interest of the patient, so how are we going to get our arms around that? Pay-for-performance doesn't do it. (Applause.)

WALL: Dan Evans, what do you think about this?

DAN F. EVANS JR.: Well, bootstrapping on what the Dean just said, and everybody in this room I think can relate to this and, of course, every health care professional up here can, if we pay for more stuff it doesn't matter how efficient we get, we just do more stuff more efficiently. If we're doing stuff that shouldn't be done in the first place we're all complicit in that, and what am I talking about? Futile care. Most health care expenditures are in the last few months of life. Many people in this room because of your ages are dealing with elderly parents right now. I know who you are, many of you are my friends. You call one of us dealing with really profound issues, "Does Mom have a living well, yes or no?" "Does every family member understand what it means, yes or no?" "Did you discuss it last Thanksgiving when you all were sitting at the dinner table, yes or no?" If you answered any of those questions as "no," when the moment comes you'll become a maximum utilizer, and the tinkering around the edges that the Dean just talked about will not affect the profound implications of that lack of preparation, and that's a psychosocial issue in this country. What happened in the House Bill where it mentioned—what was it, Kyle—200 bucks a primary care physician got paid for counseling one time a year? One time a year a family could get counseled and the doc could get reimbursed on palliative and end-of-life care, and instantly that was converted into a death panel, so that became the third rail. Wow! Did those guys drop that one right away? But you know what I'm talking about because you know whether or not you have a living will and medical power of attorney and you know whether or not your family, your siblings, your children understand what it means for you and this is deeply personal and that is part of the 50 percent that Dan was talking about. I don't know what part of it is for you, Dan, but it's got to be in double digits. Anyway, the general assumption is that a third of critical care is futile, doesn't make any difference, the patient dies in two months anyway. Who decides in our culture who gets the care and who doesn't? If you're an actuary from Mars and landed here and had a choice of a million dollars to spend on an 80-year-old or an eight-year-old, you know what you'd do, right? We do not make that kind of a decision. We pay people for more stuff, so we have overutilization. The hospital systems in Indianapolis do the best they can to be more and more efficient, but essentially they're doing the same stuff, so the only way to cut health care costs, and it's implied in many of the articles you read, is eliminate innovation, who is in favor of that? That's one quick way, just get rid of innovation, no more improvements in medical care. Or ration care, who's in favor of that? I believe I just heard a resounding nobody in the room, which means status quo.

DAN KRAJNOVICH: Well, I couldn't agree any more on the innovation piece of that and also to Dr. Brater's point, I think clearly he hit it right on the head, overutilization and it's something that we do believe that we need to get our arms around and I think a lot of that does start, too, in the area of prevention and wellness in what we can do to take better care of ourselves and some of the programs that we can institute across the country in terms of making sure people understand how their health status impacts the cost of health care. Kyle clearly, you know, brought up I think a very legitimate point in terms of the waste in the system. The American Medical Association estimates that it costs $90 billion a year to process claims and so there's a tremendous opportunity and we're working with physicians and hospitals alike to take advantage of swipe card technology, take advantage of real-time adjudication, because we do believe we can wipe out a substantial amount of that waste in that system, so there are a lot of efficiencies that we can tap into and using the innovation that Dan Evans alludes to.

WALL: But, Dan, you're the one representative of an insurance plan or payer on stage and I think what Dr. Brater was talking about was sort of the fundamental financial incentives in this system are, to use his technical term, screwed up. What would it take for those to change, for insurance companies, insurance plans to pay providers in a different way?

KRAJNOVICH: Well, you know, first, you know, I agree with Dr. Obeime in terms of doctors should be paid and paid well and I think it is important to create the kind of mechanisms so that doctors are incented to perform at even higher levels, and I do think there's an issue and a risk of us deteriorating the talent pool certainly in the area of primary care and other fields here depending on what does come out of the health care reform, but doctors absolutely should be paid and absolutely should be incented to perform. I think it's important some of the work that's being done here locally with the Indiana Health Information Exchange and Quality Health First and working to create score cards to provide to physicians so that they understand how they're treating their patients, how they compare against their peer groups so that they can continually treat their patients better and better and understand how again they're performing in the marketplace and the work that the Quality Health First and IHIE does is fabulous work.

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