A: The paradigm shift we're seeing in health care is that it has always been based upon what I would half-jokingly call the Watergate Syndrome — in other words, if you want to know why certain things happened, you need to follow the money. The system has for a long time been incentivized to run tests, do hospital stays and surgical procedures, and the payment would follow. But there was no incentive to keep you well. The Affordable Care Act is set up in large part to keep you well and out of the hospital, to encourage healthier living. So now, how do you pay doctors and hospitals for outcomes? So the goal, the question, is — and this has not been explicitly stated by anyone — how do you provide the most efficient, effective care and how do you pay for those quality outcomes? It's complicated — in some areas, easy to do, in others more difficult.
Q: Explain.
A: So right now, I'm 44, I'm in good health and have no prior cardiac history. If I have a heart attack, let's say the average cost to treat me would be $25,000 — hypothetically for the conversation. The way the system works now, I would be admitted, get an EKG, other tests, angioplasty, a bypass if needed, and all those different parts of the system — the anesthetist, the cardiologist, the radiologist, the CAT scan technician — would all be paid separately. Sometimes that process is coordinated well, sometimes it's not. Now under the new system that is coming, the federal government will say that the average cost for a person my age with no previous history is $25,000 and so that that is what we will give you to treat him — $25,000, because that is what it ought to cost.
There are a number of terms for this. The formal term is Accountable Care Organizations, or ACO. It’s also known as Pay for Performance, P4P, or Value-Based Purchasing. The ACOs could be a hospital, a group of doctors, or an independent organization that works with hospitals and doctors. It’s not well-defined yet and they’re going through that process now. So let’s say a hospital will be paid $25,000 to treat my heart attack — they will have to pay all those parties we described before. And then when I get released, if I get readmitted for the same condition within 30 days, the hospital isn’t paid for re-treating me — because they didn’t do a good job, at least in theory.
So this is where the theory runs into the real world. Let’s say I got discharged with instructions to take my Lipitor and other medication, not eat red meat, exercise properly, go to my physical therapist — and let’s say I don’t do those things. I smoke, drink and get readmitted with more problems — now the hospital is on the hook. But let’s say I was first treated at Miami Valley but I get readmitted at Kettering. Does Kettering not get paid? Am I responsible for not following my doctor’s instructions? This whole arrangement will rest on patient compliance.
Q: How will we get to that?
A: The federal government, through the Center for Medicaid and Medicare Services, which is the payer of those services, is working with hospitals to create patient compliance guidelines — and hospitals are investing a lot in discharge and follow-up care. So now, when I get released, I'll be getting a call from the hospital, checking up on me to see if I'm taking my medications, home care, therapy as needed. The hospitals will be judged on their follow-up care, making sure they're helping patients make the right choices.
Q: Will this mean longer hospital stays, to cut down on readmission?
A: No. That's another paradigm shift. Hospitals were on the business model of getting butts in beds — to fill as many as possible. Now the hospital will be the state of last resort. This is key: The idea is to get people to get the right care at the right time in the right facility for the right cost. Now the system is set up so that people access health care generally in the most expensive, least effective way — emergency rooms. The new idea is to get people well and let them get treated without having to go to the hospital or the emergency rooms, which are the most expensive.
Q: And yet hospitals will be on the hook if you’re readmitted?
A: Yes, and so you'll be seeing hospitals partnering more with family physicians and general practitioners, to more closely follow up with patients.
Q: But family physicians are being discouraged these days from seeing you when you’ve been admitted to the hospital, with the hospital preferring you deal entirely with its own doctors, so-called hospitalists. Don’t these trends conflict?
A: Absolutely — and those are issues that are being worked out right now. Your doctor, who sees you more often, may see things the hospitalist wouldn't. But the hospital uses its doctors because it wants to make sure there is a standard operating procedure, protocols that can be followed and measured. And that has worked: Your chance of surviving a heart attack in Dayton is better than nearly any place in the state. That's because our hospitals have been working together on standard, agreed-upon procedures for over 15 years.
Q: Are hospitals here more ready because of that cooperation?
A: I wouldn't say anybody could have anticipated Obamacare, but I would say that the kind of data sharing and cooperation that the new law requires is kind of old hat for us. It puts us a step ahead. There are still a lot of challenges, though — for instance, with the change to electronic medical records. It's a big part of the new law, and some doctors are embracing it slowly, and there are lots of different systems out there. The federal government is creating incentives to make it happen faster.
Q: We’ve been talking about the impact on practitioners. What about patients?
A: Well, so much of the coverage and the attention paid to the ACA has been focusing on covering people, making sure they have health insurance, which is a laudable goal. But health care reform has become synonymous with getting people health care insurance — because it's an easy metric to measure. If I'm a politician, I can say: Look, we got health insurance for X million people, and that's great. But if you think we have a dysfunctional health care system, then just covering more people is not going to get you a better system. Another issue is access — again, making sure you get people the right care at the right time in the right facility.
Q: What’s the answer?
A: Well, the best thing is to create places where people can get the right care that isn't an emergency room, and where the care providers can be properly paid. Those places are FQHCs, or Federally Qualified Health Care centers, which are clinics that follow federal guidelines and so get enhanced reimbursement that's higher than Medicaid rates. There are also incentives for the number of patients they see. So for non-emergency conditions, if you show up at the ER, they'll work with you to go to an FQHC instead. Over time, you get better care and lower costs. We didn't have any of these centers in the Dayton area a few years ago, and we've worked together to correct that.
Q: Don’t people go to ERs because clinics aren’t open at the times they need?
A: Yes, sometimes, and one of the ways this has to work is that the FQHCs will have expanded hours for patient convenience. So, if you still want to go to the ER and pay more, fine — but the hope is that this is where we'll get people to go. Say, if somebody has diabetes and no access to a family doctor, and then it goes unchecked and they wind up at the ER, the ER just treats the symptoms, not the underlying cause. That is why access to health care is so critically important, but hasn't been so much addressed by the ACA. Insurance is just part of the equation. Again, just having coverage doesn't mean you have access.
Q: What’s the answer for that?
A: Increase the access to doctors and family physicians. One pressure on that is that generally, the least-paid physicians are general practice MDs. On a state level, we're looking at ideas, like incentivizing medical students to stay in Ohio to practice and take Medicaid patients for X number of years — if we help pay for their medical school.
Q: It seems there is a lot to be worked out yet.
A: I'd equate it to a basketball game which you have to play but you don't know all the rules yet. With all the delays in implementing the law, we're asking doctors, hospitals and other providers to treat people without knowing the rules. Forty percent of the rules of the ACA aren't implemented yet. It creates a lot of uncertainty. We'd rather say, just give us the rules, and we'll figure it out. But there's a lot of politics behind it.
Q: Is this the biggest paradigm shift in the medical industry in while?
A: Yes, it's the biggest since the creation of Medicaid and Medicare. It's seismic — and not just for the industry. So much of the economy is affected by health care. Half of Ohioans get insurance through their employers, and companies are trying to figure out the costs and how to pay for it. Some are giving their workers a stipend and saying they can shop the exchanges and find the plan that best works for them.
Q: What does the average person need to do?
A: Take more responsibility for their health care and spend at least as much time on researching their options as they would on deciding which car or refrigerator they'd buy. Or on fantasy football. Those decisions used to be made for them by their employers. Most people have no idea how expensive coverage actually is, or what it costs their employer. I know of no other industry where people who access the system and use so many of its services have no idea how much it actually costs. People will have to take responsibility now.
Q: What about all the politics?
A: This thing is huge. It's complicated. It's not like we'll throw a switch on Oct. 1 and have it all figured out. It'll be a work in progress. But you know, I don't know any politician, doctor or patient who thinks the current system is great, and that nothing should've been done. Everybody agrees some sort of change was needed. But if you're against the ACA, then it behooves you to suggest some alternative plan. What would that be? There really hasn't been one. That's where politics come into play. We need change, but what is that change?
Q: So everyone is limbo.
A: Yes, and that uncertainty adds to the tension. But I think the greatest disservice has been the focus on coverage, because it has distracted from all these other issues. But it was the easiest thing to focus on. And it's funny, too, that a lot of people argue that health care needs to be a free market; but in its current form, it's the least free-market entity we have. On an average day, 74 percent of the patients in our hospitals are on Medicare/Medicaid. And most of the hospitals are just getting paid 75 to 90 percent of the cost, since the government dictates the cost of health care. So the rest who have insurance also are paying the cost of treating all those people. That's not a free market.
Q: Why are prices so high in the U.S.?
A: We do a poor job in our country of negotiating prices for drugs and services. And a lot of the world's medical and pharmaceutical development happens here, so a lot of the research and development costs are passed along to customers here. And there are odd things, too. For instance, Medicare can't negotiate drug prices, by law, because the pharma industry is so powerful. But the VA can negotiate, so the same drug at the VA may be 200 percent cheaper than under a Medicare plan.
Q: That’s crazy.
A: Nobody is saying this is a rational or good economic model. But it's been tinkered with for so long, and not in a coordinated fashion. Also, costs are high because so many baby boomers are on Medicare/Medicaid, which doesn't pay doctors what they actually cost, so insurance costs elsewhere go up to cover that. Another underlying question with ACA is how to bend that cost curve, because it can't keep going up and up. For a long time, the government's answer was to just cut reimbursement costs, which just kicked the can down the road.
Q: Do you hope that when the ACA is actually in effect, this will be better?
A: Yes. At least you'll know how it's working and how to deal with it. There's just so much fear of the unknown right now. But the real positive has been more discussion on health care than ever before. I've done 42 town hall meetings in the last year. Now, everyone looks at the debate through the prism of how it will affect them personally, and that's a tough way to do public policy. But this is very personal for people. For instance, the other big issue with Medicare costs is that 5 percent of users die every year, and 25 percent of all expenditures are spent on them — for end-of-life care.
The whole “death panels” discussion probably cost taxpayers more than anything else, because it’s taken the whole discussion of end-of-life care off the table. We could save so much in the health care system if we had an intelligent system of living wills and people explaining to their loved ones what they want at the end of their lives.
Q: Do you think we will see more of those discussions?
A: Yes, and we'll see hospitals working with you to keep you more healthy with faster, more complete follow-up. Our society has been conditioned that if we don't feel well, we just get a shot or something to make it better, so I can go back to doing what I was doing before. That will change.
Q: It sounds like you think something had to happen with the system — if not Obamacare, then something.
A: Yes. It was unsustainable. People have been thinking about this for a long time, and trying to figure it out. But the common denominator is that nobody thinks the current system is working; if you agree on that, you can have intelligent policy discussions. But if you're not in favor of the Affordable Care Act, then put forward an alternative plan. But just saying, I'm against it, it's a government takeover? That tells me you don't understand how the current system really works. Politics has bastardized the conversation, and poisoned the well. Like everything else, the law has pros and cons — but we need to get back into common step to get the system to work better and more efficiently. That should be our goal. The status quo was not an option.
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