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Healthcare – Time to Recognize and Confront the ‘Elephant in the Room’

Have you ever been involved with an obvious situation, either personally or professionally, that was largely ignored and going unaddressed? Perhaps a work scenario in which a manager who wields considerable organizational power was impacting the workplace culture in an extremely uncomfortable and unhealthy direction. Speaking up may cause one to lose his/her job or suffer long-term upward job mobility opportunities. Self-preservation is a natural powerful reaction when confronting a seemingly formidable opponent – we simply choose not to act at all.

The fear of speaking up is a metaphor for an ‘Elephant in the room.’

This is happening today in our healthcare delivery and payment environment. We frequently see or experience unacceptable situations that clearly require action to prevent it from happening in the future. As a reader of my blogs, you are keenly aware of the egregious nature of the medical establishment hiding their preventable medical error ‘indiscretions’ in the proverbial litterbox – covering up preventable mistakes that are not meant for public viewing. Yet, without being held accountable for their actions, the medical community will continue to repeat what should be un-repeatable.

The elephant exists in healthcare in a number of ways. Below are just a few prime examples.

Employers are Reluctant

Employers serve as the real payers of healthcare, yet oddly sit on the sidelines exhaustively complaining about the high cost of health insurance and how it adversely impacts their competitiveness in the markets they serve. Unfortunately, most employers are reluctant to bring up the inherent dysfunctional problems because hospitals and medical practices are considered to be ‘other’ large, recognizable community members that are off-limits to public correction. In fact, many business owners are board members at the local hospital, making it difficult to publicly speak up while serving in a ‘distinguished’ role. As real payers, employers can clearly climb into the driver’s seat to collectively initiate sorely-needed changes in how the healthcare establishment behaves. But to do so, they must firmly take hold of the steering wheel to begin the journey. Instead, the employers have historically farmed out this responsibility to the insurance companies.

Insurance Companies Lack Initiative

One can be equally mystified by insurance companies’ lack of initiative when it comes to medical errors. By default, these ‘third-party payers’ assume the purchasing role as an intermediary between the real payers and health providers. More often than not, employers assume that insurance companies are adequately vetting the quality-of-care their network providers are giving to their employees and family members. This is largely not happening. As a paid intermediary, insurers can play a vital role in determining whether their subscribers are receiving the best possible outcomes from the care being purchased through the insurers’ networks.

Because the medical community will not admit their playful litterbox games, an appropriate opportunity for safety-conscious insurers would be to randomly survey their members after they have been discharged from a hospital to learn about their experiences – specifically as it relates to preventable medical errors. Doing so could be a great branding opportunity for innovative, forward-thinking insurance carriers. Over time, when enough patient feedback has been collected and analyzed, insurers can then become a more engaged advocate for employers and their employees when vetting network providers. Why are insurers not performing this difficult but necessary work on behalf of their members? Great question. They should.

Medical Community Touts Economic Strength

The medical community, specifically hospitals, spend a good deal of our[1] money to help perpetuate their economic value in the communities they serve. Recently, the Iowa Hospital Association purchased airtime on at least one local television station to help educate Iowans about the “economic impact” hospitals have in Iowa, including:

  • Number of hospital workers employed in Iowa
  • Benefits hospitals provide to the communities
  • Number of additional jobs created by hospitals

Similar to a certain species of cicadas, which are insects that remain underground from 2-to-17 years before emerging to be seen and heard, the hospital community will annually reveal themselves to promote their substantial workforce and economic growth – but remain curiously silent on the indiscretions buried deep inside the litterbox. Apparently, this marketing scheme successfully elevates their status as the elephant in any room, whether it be in Iowa or some other state. This diversional tactic makes it difficult for others to honestly speak out about the associated problems the elephant causes within our communities. After all, who doesn’t want jobs? No one wants to be ridiculed as a ‘naysayer.’ Unfortunately, honesty may come at a great expense.

Joe Gardyasz of the Des Moines Business Record recently wrote an insightful piece (subscription required) about healthcare jobs in Iowa. Even though jobs in the healthcare sector have surpassed U.S. manufacturing and retail sectors for the first time in 2017, Iowa’s manufacturing sector – at least for now – still outpaces healthcare jobs in our state.

Why healthcare has become the most dominant sector in our country

Other than rising demographic trends of an older population requiring more healthcare services, the most plausible reason for more healthcare jobs is likely due to gross inefficiencies in an inordinately complex environment. As mentioned in my previous blog, “Healthcare Billing Process – The Cost of Doing Business,” non-healthcare industries might typically employ 100 full-time equivalents to collect payment for $1 billion in services, but healthcare employs 770 full-time equivalents per $1 billion of physician services. Keep in mind, healthcare is now a $3+ trillion-dollar industry – which primarily explains why healthcare jobs are soaring past other more-efficient sectors.

Put another way, if non-healthcare sectors wish to tout their economic dominance in their respective communities or state, they would need to become bloated with inefficiencies that would inflate costs, revenue and increase employment opportunities. Thankfully, largely due to powerful market forces that are embedded with price and quality transparencies, those sectors are forced to act efficiently by offering reasonably-priced products and services that are of the highest value. The healthcare industry, it seems, is oddly immune from having to play by these transparency rules. According to Warren Buffett, “Healthcare is the tapeworm of the American economy.”

Through our entrenched relationships (e.g. family, work, business and community), we are too often reticent about changing the status quo when it might possibly ‘threaten’ the comforts of doing nothing. Employers, insurance companies and the medical establishment are each capable of making the necessary changes, but at times, must be ‘nudged’ to do so. The late Stephen Hawking made a great point by writing, “I have noticed even people who claim everything is predestined, and that we can do nothing to change it, look before they cross the road.”

What IS the Elephant?

Regarding healthcare, if each of us fails to recognize, acknowledge and confront the elephant in the room, we too become complicit in this persistent, serious and increasingly costly and harmful problem. If we continue to sit on our hands and do nothing, we eventually enable the elephant to become even larger and more undisciplined.

So what is this elephant in our collective “healthcare room?” John Atkinson of Wrong Hands developed a ‘chartoon‘ about this metaphor, whether the elephant appears in healthcare or elsewhere.

Isn’t it time to begin “eating” this elephant one bite at a time? It starts by recognizing and acknowledging the elephant in the room, and then crossing that road to initiate necessary improvement.

To learn more, we invite you to subscribe to our blog.

[1] For the services they provide, hospitals are predominantly recipients of our tax dollars, government-related grants, philanthropic donations, insurance premiums and personal out-of-pocket payments.

Psst…Bezos, Dimon and Buffett: Let’s Lift the Veil on Medical Prices

This past week, we learned of a bombshell joint announcement from three significant U.S. business leaders on fixing our healthcare system: Jeff Bezos (Amazon), Jamie Dimon (JPMorgan Chase) and Warren Buffett (Berkshire Hathaway). These three individuals and organizations plan to form a new independent healthcare company for their 1.1 million employees in the U.S.  In the past, many other large business organizations have attempted to transform this healthcare system that is ripe for disruption and widely considered wasteful and inefficient. To date, however, such activity has met limited success. Conventional wisdom suggests these three behemoth companies do not have critical market power to make inroads on transforming an industry intent on gobbling up more of the U.S. economy.

So, what is different with this latest announcement? Based on this rather skinny declaration, we know very little and only time will tell.

We do know, however, this ‘new’ approach cannot happen soon enough. David Cutler, a Harvard health economist, calculated that administration accounts for nearly a quarter of the total healthcare cost in the U.S. – double the rate in the next bloated country. Karl Vick wrote quite succinctly in TIME magazine: “The U.S. healthcare system is the antithesis of Silicon Valley. Grossly inefficient and user-unfriendly, it may be the least transparent enterprise outside of the Kremlin – and just as awash in money.”

Is it possible this new coalition may propel other employers (and other payers) to band together and look for local alternatives to drive transparency in an industry that is notorious for obfuscation? The common word that is often used to change a particular industry is ‘disruption.’ Harvard professor Clayton Christensen started the Christensen Institute to address how industries can be changed (disrupted), usually through technological innovation.

The ‘pricing’ veil – A personal experience

This past December, after experiencing dizziness and double-vision, coupled with a slightly slower speech pattern, a family member was taken to an urgent care center in Mankato, MN. After undergoing a few initial tests, it was recommended the patient be transferred by ambulance to a hospital two miles away – presumably for more in-depth testing that was not available at the urgent care facility. Needless to say, this sudden turn of events was loaded with confusion over the cause of the medical problem and the impending worry.

As a patient or a family member of a patient, we seldom are prepared for what issues and challenges we face when seeking care due to a sudden medical ‘episode’ or ‘emergency.’ In fact, we typically fly by the seat of our pants when we enter the unknown world of healthcare. Even the well-intentioned medical staff are sometimes bewildered by the symptoms and possible causes of those symptoms.

Confusion reigns further when, in our case, the hospital’s electronic medical records don’t communicate with the tests previously performed at the urgent care center just 30 minutes earlier – even though both facilities are part of the same medical system! Because of this, identical tests (EKGs, blood work-up, etc.) were replicated at the hospital – unnecessary charges equating to additional costs for the payers – and increased revenue for the provider(s). I’m still working on that issue, by the way.

Thankfully, my brother and his wife were with us, which was both comforting and beneficial while attempting to discern the next course of action relating to tests and treatments. By default, we quickly assumed the role of being the ‘patient advocate’ – a daunting task.

Gratefully, the bank of medical tests found no cause for the aforementioned symptoms, although not knowing the cause remains a concern. As many of you know, the shock does not end when the patient is discharged following a litany of medical tests that occurred during a two-night stay. The second shock wave arrived a few weeks later in the form of an ambulance invoice in the snail mail and a host of ‘explanation of benefits’ found on our carrier’s website for all the other charges that occurred at the urgent care center and hospital.

The invoice for a two-mile ambulance joyride was only $1,887.79, while the urgent care facility chimed in at about $5,744.* The hospital invoice for tests and a two-night stay represented the price of a brand spanking new mid-level automobile – $24,579.40. All told, the total charges were $32,211.19, while the carrier applied their ‘network savings’ of $2,779.35.

In their recent article, “Why the U.S. Spends So Much More Than Other Nations on Health Care,” authors Austin Frakt and Aaron Carroll make the case, using a recent study in JAMA along with other research, that higher prices are the real culprit, more so than higher utilization of services by Americans when compared to residents of other countries. Yes, despite the increase in population size and the aging of U.S. citizens, health spending greatly outpaced the spending found in other countries, even after adjusting for other factors. Ashish Jha, a physician with the Harvard T.H. Chan School of Public Health is quoted in the Frakt/Carroll piece saying, “The U.S. just isn’t that different from other developed countries in how much healthcare we use. It is very different in how much we pay for it.

Why is this ‘pricing’ problem happening in the U.S., you might ask? Much of this has to do with fundamental limitations of competition in the American healthcare system. This veil of secrecy has little to no accountability on how prices are determined. Bezos, Dimon and Buffett are looking to blow up this highly-guarded industry standard. The rest of us can no longer afford to play the role of ‘innocent bystanders.’

After discussing the dearth of sensibility in healthcare pricing with a friend who works in the insurance industry, he sent me the following comical YouTube clip that cleverly attempts to address the medical price conundrum.

My recent family experience was yet another reminder that no matter our professional background, seldom are we prepared to confront the shock and confusion of the healthcare we receive…and the bills that result from that care.

The status quo in healthcare must be blown up. If existing players and stakeholders resist being part of real solutions, then the eventual sea change will sweep them into a new reality that may be difficult to survive.

As ‘real’ payers of healthcare, maybe employers can become the change they wish to see in the healthcare industry. After all, sometimes business interests can align with those of humans.

But only time will tell.

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*Some billing discrepancies remain while attempting to discern a number of charges found on Mayo’s list billing with what was paid by my insurance carrier.  The list-billing from Mayo, I’m convinced, was clearly not meant to be a consumer-friendly document.

Iowa Employer Benefits Study© – An Annual Tradition to take a 1-year Sabbatical

All of us have established traditions in our lives, whether it be family or friend-related holiday plans, vacation travels to a favorite destination, attending or watching sporting events, and so on. Yet, due to circumstances beyond our control, such as time constraints, finances, death and adverse health problems, traditions are made to be altered, or possibly discontinued. After performing the annual Iowa Employer Benefits Study© for the past 18 years, I have decided to give the survey a ‘rest’ for one year. Believe me, this was not an easy decision. But after a great deal of personal and professional reflection, it is the right decision. My ‘tradition’ has now officially been altered.

In today’s world of perpetual political turmoil, healthcare – more specifically – health insurance, has become a political football. Hasty decisions are being made to benefit political promises, usually at the expense of pursuing sound policy practices. What has occurred in our nation’s capital in 2017 is akin to watching a surgeon perform knee surgery with a butter knife. The process has been extremely agonizing to witness and I find myself wincing as this grotesque process evolves.

Now more than ever, it is important to monitor employer-sponsored health insurance costs and components. After all, health insurance costs continue to outpace the Consumer Price Index (CPI) every year. Rising insurance costs have triggered a host of other health plan changes – forcing employers to offer the most competitive health insurance package that they can. I certainly don’t take this fact lightly.

But another fact is very important to me – the ‘value’ of care received. I firmly believe it should ALSO be on the radar screen for employers, their employees and the general public. Similar to how politician’s view our healthcare ‘system,’ employers appear to be mesmerized, rightfully so, by the insurance cost problems. Recently, Warren Buffett described medical costs as “the tapeworm of American economic competitiveness.”

This cost concern, however, tends to suck the necessary oxygen out of the room, crowding out badly-needed, laser-like attention and focus on key cost drivers that impact costs in the first place. This is ‘downstream’ thinking, the actions we take about fixing the symptoms of problems rather than concentrating on the issues that actually CAUSE the cost ‘pollution’ we find so objectionable. Being distracted with downstream symptoms has lulled us into believing that we simply need to fix the “insurance problem” and the ‘upstream’ pollution will miraculously go away. Inflated health costs are actually more harmful to us because we refuse to look beyond the insurance component to help address the cost conundrum.

This serves as the backdrop on why I decided to place the Iowa Employer Benefits Study© on a one-year sabbatical. It’s time to move ‘upstream‘ and disregard the naysayers who believe the status quo is much too difficult to confront. It is just too easy and expedient to continue the work downstream – making the appearance that something is being done to confront the cost issue. But if ‘optics’ matter, I’m in the wrong business.

In the next few weeks, I will reveal research I’ve wanted to conduct for the last number of years, but did not have the opportunity to pursue – until now. This work will be found under my companion organization, Heartland Health Research Institute. If you haven’t signed up to receive my HHRI posts, you may do so here.

Poet Robert Frost famously wrote, “Two roads diverged in a wood, and I – I took the one less traveled by, and that has made all the difference.”

This road may be lonely, but well worth the effort.

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