Interesting Articles on Health Insurers and Health Reform

Thursday, January 31
By Bill Toland, Pittsburgh Post-Gazette
Insurer’s CEO Says Blues Deal Could Hurt Competition

Some big insurance companies in Pennsylvania are fighting for position, but what I found most interesting was the comments from James Buckley, President of the Delaware Valley Health Care Coalition, a multi-employer health purchaser. He said “he protested the lack of transparency among health insurers, saying true, healthy competition isn’t possible until the Legislature compels insurers and hospitals to be more open and accurate about the cost of procedures. The savings being touted in the IBC-Highmark wedding would be irrelevant if a transparency model is established, setting standardized hospital reimbursement rates. Instead of allowing the major health insurers to use their oligopoly power to receive preferential pricing and profits, health care providers should be able to charge reasonable prices to all health care customers.

I couldn’t have said it better.


DATA BRIEF
THE PRESIDENTIAL CANDIDATES’ HEALTH REFORM PLANS
Katherine K. Shea, Sara R. Collins, and Karen Davis
The Commonwealth Fund
January 2008
HEALTHCARE OPINION LEADERS’ VIEWS ON
THE PRESIDENTIAL CANDIDATES’ HEALTH REFORM PLANS

Typically I am pretty much a free market person, however I just don’t believe this has worked in healthcare. A majority of the public agree with the democratic position summarized below from the article.

Mixed Private–Public Proposals Favored
Most healthcare opinion leaders (61%) believe that the mixed private–public group insurance system reform proposals put forth by Democratic candidates are an effective approach to achieving universal healthcare coverage, with nearly two-thirds (65%) of academic leaders and half of business/insurance/other healthcare industry leaders voicing support for universal healthcare. Proposals relying on tax incentives for the individual market, however, are seen by the same experts as an ineffective method for achieving that goal, with 59% of respondents saying they were not effective. Twenty percent of polled business leaders (20%) think tax incentive-based reforms are more effective than do academic (4%) or healthcare delivery leaders (4%).

I was happy to see that most of my healthcare colleagues agreed with this position, at least in this poll.

Talk with you soon.

Stan

The Health of our ACH Colleagues and the Economic Health of the Alliance Community and Eastern Stark County

The Ohio Hospital Association challenged all of its members to promote wellness in our hospitals and encourage our communities to do so as well. Today we initiated our GET FIT campaign. It began with registration for those individuals who want to participate in our version of “The Biggest Loser.” We are organizing teams and have received a lot of help from Mt. Union College regarding the personal trainers. We will let you know how we do in May.

We keep hearing that we are transitioning to a service economy and in many school systems vocational programs are the first programs to be cut. Well, in Alliance we had to make some tough cuts regarding the school budget that impacted these programs. There are many more students graduating from Alliance High School who won’t attend college than those who will. Interestingly enough, in Alliance and many of the surrounding communities, local business owners are saying they need more skilled workers in the trades; they would be most interested in interns, and work-study students.

Well, we are very fortunate in Alliance to have a superintendent of schools with a vision of how best to match the needs of our business communities with those of our students. Dual credits could be offered that might inspire those who thought they could never enter college to do so. If most of the students graduating have hope of a good career path, then we could help local businesses grow; with more and better jobs, we could help stabilize the housing market, which needs all the help it could get right now.

Very shortly, local citizens will get the chance to vote on a school levy Issue 20, which is focused on achieving the vision described above. A healthy local economy and investing in our kids’ collective future is a great way to GET FIT Alliance.

Talk with you soon.
Stan

As promised, here’s some closure to my last Blog

After hearing from our candidates, I must say I was encouraged. Although I am personally not a fan of Dennis Kucinich’s all-public governmental approach to healthcare and the elimination of all for-profit healthcare entities, he spoke well and was much more likeable than I had expected.

Mitt Romney has already shown he can make change happen. Even if Massachusetts isn’t the perfect approach, you have to start somewhere. Of course, it would be nice to know in advance where we are going to end up before we begin our journey and Romney seems to at least have a plan. I was impressed because he was the only candidate that actually asked for my vote.

John McCain’s free market approach is one I usually prefer, but you need a level playing field in healthcare and in my opinion, we, like the government, need a lot more checks and balances.

John Edwards was certainly the most likeable of those present. His accent sounded more Cantonese than southern and his story about encouraging his daughter to attend Mt.Union College instead of Harvard University was perhaps one of the lighter moments of the day - and it was very well-received by the audience.

Not to be out done, Barack Obama showed a sense of humor as soon as he entered the room by asking the crowd, "Can you smell it in the air? Change is coming and much of it is good. Out with the bad odor of stagnant old time politics; in with the good. BO is for Barack Obama and I want to be leading the good changes that we need.”

Our audiences voted only on the merits of each of the candidates’ healthcare platforms.
Hilary and Obama combined for about 32 %( 16% each) of the vote. John McCain and Mitt received the most Republican interest with 23% and 18%, respectively.

My hope is that whoever is elected will implement the best ideas of all the candidates, in order to actually change the system -- even if those ideas came from former competitors.

Talk with you soon.
Stan

Presidential Candidates Address IHN Leadership Summit Conference

Canton, Ohio - Eight candidates seeking to be the next President of the United States were present to speak before the Independent Hospital Network Leadership Summit Conference in Canton on Friday, January 11.

Here’s a summary of the events from a roving reporter’s first-hand perspective.

Taking time out before heading off to the primary in Michigan, four of the leading Democratic and Republican Presidential hopefuls presented their Healthcare Reform Plans to delegates from the Independent Hospital Network.

Hillary Clinton opened, and clearly let her emotions of the campaign process show when she started talking about the strain of campaigning and then quickly regrouped to focus on a hardluck story about how our healthcare system failed a man whose life was destroyed by the current system. She said that what he had worked a lifetime to achieve, was ruined after he lost his job and then suffered a heart attack; both of which ultimately led to the loss of his life savings. Hillary said that because of our flawed health system, this man, yes, is still alive, but everything that he has worked for is all gone.. Hillary, like two of her fellow Democratic colleagues, is pushing both a private and public platform of change.

Rudy Giuliani, on the other hand, said he prefers a market place approach to fixing our nation’s health woes. In a lighter moment, he said he really had to question why our legislators seem to be spending more time worrying about sports and steroids than healthcare. He asked that we focus more on the health of the nation and a little less on the well-being of the Yankees.

I believe “Huck” was up next,(by the way, I failed to mention that none other than Chris Matthews from NBC’s Hardball was our MC). I must admit I liked Mike Huckabee’s remark that people need to be more responsible for their own health and that a consumer- driven model makes a lot of sense.

More to come from this reporter on today’s events, but that will have to wait until tomorrow…I have some scheduled meetings and our team is working on gathering consumer information… a story for another day.

At the end of today, however, we did take a straw vote-- just based on the Healthcare Reform issue. I will share those results in a future blog.

Talk to you soon.

Stan

December Praises…and Holiday Wishes

‘Twas the day before Christmas and . . . I was catching up on details.

No unusual calls, but some very nice correspondence received via e-mail, letter and voicemail messages. For instance, Angela K. wrote of past reluctance to seek therapy [due to hearing horror stories about such experiences] and her dread in attending therapy sessions. To her delight, she found that the stories were all wrong and that the therapists helped make her feel very comfortable and didn’t make her do anything she was unable or uncomfortable doing. Another caller described our ACH Therapy Colleagues as “friendly, courteous, and very team oriented” ... saying that they were all especially attentive to her specific needs. She said she has been other places and was particularly impressed with the attention paid to small, yet important details, (such as cleaning the exercise equipment) here at ACH.

Thank you, Maintenance, for another job well done. Security recently returned a wallet that was found by one of our Maintenance Colleagues. The wife of one of our patients thought she had dropped the wallet somewhere between her home and the hospital as she was rushing her husband to our ER. When he was admitted to his room, a member of the Security department was already there with the missing wallet and all of its contents were in tact, including several hundred dollars in cash. The patient and his wife wanted to let us know how much they appreciated our Colleagues; not only for their kindness, but for the care they give to all patients.

To all our great Colleagues, physicians, volunteers, Board leadership… here’s wishing everyone a very Merry Christmas and Happy New Year. It is indeed a pleasure and an honor to be part of the ACH family.

Stan

Health Care Reform, Our Community Hospital’s Not-for-Profit Status

After reading about many of the national Health Care Reform proposals being discussed, it seems the one thing that everyone agrees on is that our system is broken. My top three suggestions for areas to focus on are:

1. A single payment system. I believe one of the most efficient providers of care is Medicare, through which roughly 3% of the health premium dollars go toward administrative costs and the rest is allocated to direct care expenses. Compare that with monetary allocation process used by a majority of insurance providers, through which about 30% of healthcare dollars are used toward administrative/marketing costs and the complicated expense payment system. The Medicare system provides price transparency for consumers; trying to get the same information from your insurer, hospital or doctor on non-Medicare coverage and is nearly impossible. Potential savings: 27% of 1.1 trillion dollars. A good start.

There are several not-for-profit insurance models that operate on a breakeven philosophy, such as Aultcare in Canton, Ohio. This means that out of every healthcare premium dollar collected –except for administrative expenses—those monies, go toward the actual care provided. This translates into more money for the providers of care and lower costs to the healthcare consumers.

2. Hospitals and doctors focus on quality and service transparency. Assuming a single payment system, prices would clearly be defined. Insurers, whether governmental or private payers, would earn their customers through service, value and performance.

While we are working on #1(single payment system), all providers, doctors and insurers should be required to post their actual rates and payments. Under the present system, consumers who are paying about 13% of out-of-pocket expenses receive much better information through a car purchase than they do regarding their own health care. Quality and service indicators are easily understood and actual dealer costs and mark-ups are available on such website as consumer reports.com. Many insurance provider contracts prohibit the sharing of this information. But, consider this: Who shops for cars at list price? Currently these are the prices you see from providers on our healthcare websites -- list prices. Right now, there are only a few hospital systems that are advocating for publication of healthcare services provided.

3. Consumer accountability. The bottom line is, consumers need to be more directly involved with the purchasing of their own care and the financial consequences related to their actions. Consumers who don’t actively work on preventative health measures should be paying more of premium dollars for their coverage. Smokers should pay more than non smokers. Individuals who are proactive about managing chronic conditions should pay less of a premium than those who don’t. Hospital and other employers should continue to redefine our benefit package to encourage this.

Now that I have been able to vent, let me move on to some concerns I have as a local hospital administrator. Our not-for-profit status is being questioned by many: do we deserve it? Let me begin by stating the obvious, we do get a tax break of about $2 million dollars a year. As expensive as it may seem, there are several critical services that community hospitals provide that still don’t cover their expenses and lose a lot of money. At our hospital, maintaining our Emergency Department through physician coverage loses about $500,000 a year, while our OB department, on average, loses close to another $1 million a year.

Overall, how do we? As a not-for-profit we still need to make money to remain viable, but instead of sharing those profits with shareholders, we use them to pay for services that are not justified on a financial basis. Below is a copy of our Community benefit report for 2005 and 2006, which includes a summary for Ohio hospitals.


-- Stan

Impacting Healthcare Reform at the National and Local level

When I first started my blog I had good intentions of writing at least weekly if not more, I apologize for not keeping up. In the future, I will try and do better.

It has been a month since my last blog and certainly there has been much to write about. Before I dive into one of my favorite topics these days, Reform of our Health System, I'd like to mention that this was a very good week for me personally. I just returned to work after the wedding of my daughter Amy to Eric. While I was away, I had five phone messages from customers; four were compliments and the fifth was a very good suggestion on how we could improve services. I want to send Compliments to our Community Care and Rehabilitation Center, Imaging, Physical Therapy, and ER departments, each of which was mentioned favorably in the complimentary calls.

Now, onto the issue of Health System Reform. If you go to Forbes.com website and type “ Solutions: Health Care” into its search engine, you will see some great commentary from political leaders, professors, government employees , physicians and many others calling for reform of our national healthcare system. If we would just take some of their inspired, mutually-agreed upon suggestions and start implementing change, it would be wonderful. The payment system is archaic and cumbersome and the barriers to real price information are thwarted by it complexities and the confidentiality agreements between payers and providers.

At the local level, we are continuing with our efforts to collect meaningful price information from customers in the marketplace. We will reach out to service organizations and others to collect information from individual E.O.B.s(explanation of benefits). From this information, we hope to be able to explain to our marketplace that Alliance Community Hospital and the Independent Hospital Network (Aultman, Dunlap, Joel Pomeren and Union Hospitals) are one of the best consumer values for acquiring health services in the USA. Another advantage we hope to garner from compiling this information, is to determine whether or not we are being fairly compensated.

Internally, we will be studying the design of our health benefits package. We want to do more to foster accountability for changes in health habits of Colleagues. An example might be: Colleagues who smoke may pay more in the future for their health insurance. Our Pharmacy department is exploring a better way to manage chronic ailments and illnesses that are a major part of our colleague expense budget. In addition, we are examining better use of our internal data to be help shape better prescription drug purchases.

We will keep you informed about our progress in these areas. In my next blog, I hope to touch upon the issue of Community benefit and our not-for-profit status.

Stan