Quality, Coordinated Medical Care Supports Cost-Cutting Efforts

Business Insurance Print Version

April 18, 2014

There may be a silver lining to employers' move to high-deductible health plans: It is making medical providers more conscious of the need to control costs.

"For the patient's sake, we have to start thinking about costs," said Dr. Steven Shapiro, executive vice president and chief medical and scientific officer at the University of Pittsburgh Medical Center.

Dr. Shapiro said medical providers have to give the best quality of care while also being "conscious of the costs."

Increased patient questions about costs and the need to perform certain tests are a factor in increasing provider sensitivity to costs, he said.

"Patients are asking, 'Do I really need that MRI?' Like it or not, for the patient's sake, we have to start thinking about costs," Dr. Shapiro said.

Also at last week's 11th annual World Health Care Congress in National Harbor, MD, speakers noted the disconnect between spending and quality of healthcare.

"We spend 17% of (gross domestic product) on healthcare," by far the highest in the world, but many other countries have healthier populations, said John Clymer, executive director of the National Forum for Heart Disease and Stroke Prevention in Washington.

"There is a disconnect between spending and results," he said. "We are great at rescue care," but less so on the preventive side, Clymer said.

Another speaker cited the need to make it easier and faster for patients to contact their primary care physician when medical problems crop up.

If patients could more easily contact primary care physicians, many emergency room visits could be eliminated. "You could take a big chunk of costs out of the system," said Todd Hixon, a managing partner in Cambridge, MA, with New Atlantic Ventures, a venture capital firm that invests in technology businesses.

Oregon Gov. John Kitzhaber, who spoke at the conference that drew about 1,000 attendees, offered his own suggestions to hold down costs.

One simple but potentially huge cost-saving step, he said, is finding new but simple solutions, such as better coordination of care to reduce the likelihood of individuals ending up in the hospital.

One example he cited: An elderly woman with a heart problem lives by herself in an apartment that has no air conditioning. Typically when the heat soars, the woman might have to be rushed to the hospital to treat heat-related breathing problems, incurring thousands of dollars in medical bills. But had a healthcare case worker been assigned to monitor the woman's health and her living condition, the case worker could recommend that an inexpensive air conditioning unit be installed to keep the woman out of the hospital despite the heat wave, Gov. Kitzhaber said.

Under "the old system, we pay $50,000" for the woman's healthcare bills, but won't pay $250 for an air-conditioning unit, he said. With more coordination, $49,500 could be saved that in no way jeopardizes the woman's health, he said.

On the preventive care side, Gov. Kitzhaber suggested that medical school students be given more financial incentives to encourage them to become primary care physicians.

While there has been much speculation about how the health reform law is leading to higher health insurance rates, Gov. Kitzhaber said cost increases also were a big problem before the reform law was passed.

"People without health insurance went to the hospital. Everyone's rates went up," he said, referring to provider cost-shifting.

Still, demographics will put enormous pressure on cost-control efforts, said Janet Elkin, president and CEO of Supplemental Health Care in Dallas.

"Every day, an average of 8,000 people turn 65," and the 65-and-older population uses an average 40% more in healthcare services than younger people, Ms. Elkin said. "We have to do something to meet that demand."

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