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A Messy ‘Upstream’

Most recently, I received an unexpected email from a blog subscriber that stated the following:

We had bad news in the neighborhood. A 3,600 head hog confinement with a 1.2 million gallon “lagoon” is planning on going up [being built]. I’ve done my research and found numerous scientific studies from the University of Iowa – College of Public Health, Duke Medical School and many scholarly articles in medical journals outlining the increased health risk of those within the zone of influence.  My question is – do health insurance companies have (or have they) tried to get compensation for increased claims in the affected areas? For example a 30% increase in childhood asthma is one documented affect. (This can be a significant claim expense when factoring in the number of confinements and number of affected children).
Do you have any contacts that I could ask if it is even possible for health insurance companies to extract damages or if they have already tried or if it just isn’t possible under the law?

I have no specific answer to this inquiry. Yet, I found this to be a particularly interesting question, given the recent developments in Central Iowa. As most Iowans know, the Des Moines Water Works is suing three northwest Iowa counties that manage drainage districts with high nitrate concentrations. High levels of nitrates released upstream is threatening a key source of drinking water – the Raccoon River – for one-half million central Iowans downstream.

The Water Works Fact Sheet explains their perspective as an ongoing health problem for those of us living downstream. The Water Works says it is unfair that their customers are subjected to the health risks and costs of removing this harmful chemical from the drinking water. In short, why should those living downstream have to pay for the pollution occurring upstream?

The specifics of this lawsuit were recently covered by Iowa media, including the Des Moines Business Record (subscription required), who carefully balanced both sides of this important societal issue. As stated in the Business Record, “…(this lawsuit) is going to be as legally intriguing as it is important politically, economically, and environmentally.”

As lines are being drawn regarding who should be held accountable for our societal health issues (and costs), it does allow one to ponder other potential battles that could be brewing in the future, as articulated in the above email. What is common knowledge is that we will ALL eventually pay the cost, both healthwise and monetarily.

In 2013, we developed an infographic, Our Health Care River, that was intended to briefly describe two ‘chemicals’ impacting our health insurance costs downstream – ‘Unhealthy Lifestyles’ and a ‘Fragmented Delivery System.’ As with polluted water, we spend a great deal of time downstream agonizing over the pollution caused (e.g. higher health insurance premiums) from upstream ‘chemicals’ – with seemingly very little progress being made.

At some point, moving upstream to address the source of our problems will help determine just how ‘clean’ our water will be downstream. There are no easy solutions, for sure, but having public discussions, consistent dialogue and ultimately meaningful action(s), are long overdue.

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Fixing Core Issues ‘Upstream’ will help Reduce Healthcare Costs

HHRI 'Fragmented Delivery System' 2014I’m far from being a political junkie. In fact, watching sausage being made is more gratifying than watching the legislative process in Washington D.C. – especially when it comes to health policy issues.

In late July, I attended a healthcare symposium arranged by the Iowa Association of Health Underwriters. Jesse Patton and his team did a wonderful job of mixing local with prominent national presenters. One particular speaker, Grace-Marie Turner, president of the conservative-leaning Galen Institute, gave an informative presentation and followed up with this question to the audience: “What fresh ideas and a new vision might you have for lawmakers to consider regarding healthcare reform (presumably following the 2014 and 2016 elections)?”

Grace-Marie asked an interesting question, and this one got me thinking.

Regardless of our political leanings, we can all agree that the Affordable Care Act (ACA) is very complex and the long-term outcomes are uncertain. We can agree that the path we are on is unsustainable for many caustic reasons. We have little systematic health policies, just band-aid approaches that mask symptoms of gigantic problems undermining our economic (and physical) well-being.

In addition to covering more Americans, the ACA has attempted to address the ‘downstream’ activities of ‘Our Health Care River,’ basically determining who should pay and by how much. This discussion is extremely divisive because it becomes muddled by partisan philosophies so toxic that any potential progress is quickly thwarted. As a result, the common good of all U.S. citizens becomes a pawn within the political playground. We have been down this road countless times and it is extremely difficult to accomplish anything of great substance. It is so much easier to disagree than to agree. And, as a consequence, we all lose.

We have become so fixated on cost (and access) issues that we lose sight of the primary source of this cost — the healthcare we receive from those providing it.

Unfortunately, very little policy-making attention has been spent ‘upstream,’ which is the primary reason we are drowning in high healthcare costs (and insurance premiums) in the first place. Upstream problems should be a non-partisan issue. Because of this, we must agree on some fundamental issues that impact what we eventually pay downstream. So what are the core issues that will allow both political parties to find common ground and begin the change process? Here are a few…

We must:

  1. Have complete transparency in medical costs and outcomes.
  2. Address poor coordination of care among providers.
  3. Identify and fix the reasons why recommended care is alarmingly low.
  4. Remove the waste and inefficiency baked within our healthcare costs that we eventually pay “downstream.”  When you factor in the loss of productivity due to medical errors, this equates to at least a trillion dollars annually – at least 40 percent of all health costs!
  5. Develop and implement approaches to unmask and eliminate the medical mistakes that occur each year in our hospitals – which result in hundreds of thousands of needless deaths. In addition, 10-to-20 fold more are seriously harmed due to medical mistakes – in just our hospitals. Eradicating simple medical mistakes from our healthcare delivery system will provide safer care while eroding medical malpractice claims.
  6. Identify and resolve the misalignment of payment to healthcare providers. This has created perverse incentives that result in overtreatment, undertreatment, and other unintended consequences that we can no longer afford. We can all agree that fee-for-service payment measures must be replaced with sensible payment policies that promote incentives for performing the right care at all times.
  7. Address our unhealthy lifestyles which create additional pressure on an already dysfunctional healthcare ‘system.’ I know, this is easier said than done – but it is the truth. Developing a ‘social conscience’ about living healthier is a good start.
  8. Not allow lawmakers to be unduly influenced by lobbyists who compromise the well-being of our citizens. Washington (and state) lobbyists have perpetuated the ‘medical industrial complex’ that continues to eat up more of our gross domestic product.

Does this sound impossible to you?  Perhaps, but maybe not. For heaven’s sake, we put a man on the moon 45 years ago – and we did it by using technology from the 1960’s! We just need to have the political will, and frankly, a backbone to confront the brutal facts.

There are many other core issues that might be considered, but the above list is a good beginning on finding common ground. By addressing these issues, the cost to our system will drop markedly, making the political decisions downstream more manageable, and consequently, more favorable for agreement from both sides of the aisle. In fairness, the ACA attempts to address a few of these initiatives upstream, but most health experts agree that such programs will most likely have marginal consequences to the real problems occurring upstream.

Because our spotty health outcomes do not discriminate between classes of people within our country, policymakers must ‘think more like a patient’ and engage their efforts into reforming the core topics above. After all, policymakers are patients too. Carefully-derived factual data can guide and persuade policymakers to address these core issues. But it may take a “patient-like” mentality to properly motivate elected officials to do the right thing for all citizens.

If we continue our past practices in healthcare ‘policy’, we will replicate what baseball-great Yogi Berra was credited for saying: “It’s like deja-vu, all over again.” Our nation can no longer afford to continue down this dangerous road.

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Voices on Hospitals: Cost Transparency and Keeping Cost Reasonable

HHRI 'Downstream' 2014In early 2013, I developed an infographic to help ‘mask the complexity’ of our complicated healthcare ‘system.’ The infographic portrays an overview of ‘Our Health Care River’ that illustrates how upstream activity can adversely impact what happens downstream.

We all know the health insurance premiums we pay are nothing more than a derivative of healthcare costs plus administration fees. Employers have spent enormous energy, time and money, downstream trying to ‘fix’ the symptoms of major pollutants found upstream, as depicted in ‘Our Health Care River.’ Major ‘chemicals’ found upstream include a ‘Fragmented Delivery System‘ and ‘Unhealthy Lifestyles.’

Year-after-year, employers tweak their health plans to keep them affordable. They do this by increasing deductibles, out-of-pocket maximums, office and Rx copayments, employee contributions, limiting provider networks, etc. However, we can only do so much downstream because combating just the symptoms of the core problem will only prolong the annual frustrations that we all will continue to face.

Below are the final two performance indicators on hospitals as perceived by employers: ‘Cost Transparency’ and ‘Keeping Cost Reasonable.’

Indicator #11: Cost Transparency

How can patients and payers discern the ‘value of care’ delivered when cost is not commonly known at the time the procedure is being delivered? For ‘value’ to be accurately determined, providers must measure costs at the medical condition level, which requires a true understanding of all the resources used in the patient’s care.

By having this information, the cost of providing care to a patient per episode-of-care can be compared to the outcomes achieved for that particular condition. It must begin with understanding the true cost of care. The transparency of this cost to the public is crucial.

Statewide, Iowa employers rated hospitals a score of 5.8 on a 10-point scale. In other words, employers gave hospitals an un-weighted ‘D+’ on cost transparency. When segmented into five regions using size-weighted scores, three regions ‘fail’ while the southwest region (5.1 score) was a whisker away from failing. Only the northwest region was safely graded above failing, grading in at a ‘mid-D.’

Regional - Cost Transparency Map-Master

 

Indicator #12: Keeping Cost Reasonable

Our 12th indicator – ‘Keeping Cost Reasonable’ – is a cousin to ‘Cost Transparency.’ This indicator is extremely frustrating to Iowa employers and earned the lowest grade when compared to the other 11 performance indicators. Increasing value requires either improving the outcomes without raising costs or lowering costs without compromising outcomes. From our past 15 years of research, Iowa employers have seen health insurance premiums increase by 171 percent for single coverage and 158 percent for family – clearly an unsustainable pace.

Statewide, Iowa hospitals received an abysmal score of 5.1, or a grade of ‘D-minus’ for their efforts on keeping costs reasonable. When segmented into five regions using size-weighted scores, four regions ‘fail’ while only the northwest region received a ‘mid-D’ grade. Polk County hospitals received an extremely low score of 3.4, based on 144 employers within that county.

Regional - Keeping Cost Reasonable Map-Master

 

Within their respective communities, employers must lead the discussion about healthcare ‘value’ – for one major reason: they own the problem. The path that we are all on is unsustainable AND unacceptable. Unilaterally, providers are unable to develop ‘solutions’ to the cost problem. Employers must be part of the solution by moving upstream to help find approaches to prevent the harmful ‘chemicals’ from polluting ‘Our Health Care River.’

To learn more, we invite you to download our free white paper: ‘Voices for Value: Iowa Employer Perceptions of the Iowa Healthcare Provider Community.’ This document provides a comprehensive overview on our current status and establishes a baseline in which to measure future changes made in Iowa’s healthcare system.

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