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High Healthcare Costs Continue to Provoke Finger Pointing



Judging by the bickering over who holds the cards when it comes to rising rates, providers and health insurers should share the blame along with John Q. Public, who doesn't take care of himself nearly as well as he should.



9 comments on "High Healthcare Costs Continue to Provoke Finger Pointing"
William Mandell (3/5/2011 at 4:02 PM)

Just would like to make the distinction in pricing is what the article is really about. What things cost can be much different. The actual cost of providing care is much different than what is paid. Medicare pays much less and sometimes healthplans pay much more.
Robert Trinka (2/14/2011 at 11:04 AM)

Healthcare is the only industry in which the people who design and deliver the product/service are not responsible for the cost of the product/service. Insurance companies are financing vehicles - physicians primarily, hospitals and other providers of services are accountable for the product/service's quality and cost. Insurers and other payers including the federal government resort to reimbursement limitations and contracts only because physicians and hospitals have shirked their fundamental duty. The challenge for the healthcare system is to produce products and services that their customers/patients can afford. Then we will see real competition, real productivity improvement and real cost reduction.
R Daniel King (2/13/2011 at 10:14 AM)

The federal government has for decades mandated that a [INVALID] 2 million patient/residents are daily subjected to (1) increased consumer education and awareness, (2) prevention and wellness programs and (3) consumer-controlled comprehensive health record that facilitates monitoring, measurement and management as suggested in a following comment. All these so-called silver bullets self-interest supposedly do not want in place for the general population has been carried on in skilled nursing facilties in every state. Yet because few SNFs are efficient, quality driven facilities most of these mandated efforts fail at various degrees increasing preventable hospitalizations, medications, death, and chronic problems. To assume what has failed under the second most federally regulated environment for a population of 2 million patient/residents under minute to minute monitoring can achieve a 30% savings for the total US population is a millennium away from reality. It is easier and quicker to change the health care deliverys system's culture than the hundred of thousands of cultural difference through out American cities and towns that can lead to medical problems. Not until the health care industry has the courage to realize the barrier to the most efficient delivery of quality, universal, integrated care is the status quo will win/win/win change ever take place.
Jerry Scherer (2/11/2011 at 11:30 AM)

Building on several comments and observations the answer to high healthcare costs is known and is privately acknowledged by providers, payers, and increasingly the public. The answer does not serve the self-interests of some key stakeholders and as such struggles for consideration. Acknowledged solutions that are needed and will productively reform the healthcare industry are: 1) Increased consumer health education and awareness. This will encourage engagement and accountability, an essential first. 2) Prevention and wellness services and programs. These programs have a proven track record for producing far greater value than traditional healthcare (treatment) alone. 3) Consumer-controlled comprehensive electronic health records that facilitate the monitoring, measurement, and management of health services. This service helps to assure that education, prevention, and treatment are effectively focused and administered. Together these activities have the potential to reduce the cost of healthcare 30% or more and provide other quality of life benefits. Their impact significantly improves quality and access as provider focus shifts to these competitive factors to sustain their business models. This approach requires major changes and does not necessarily promote the interests of government, providers, or payers. This potentially accounts for the reason these activities have not been included in proposed reform in a substantive way.
R Daniel King (2/10/2011 at 4:06 PM)

Government has for decades given the health care delivery system the incentives to fail because it pays. When Medicare was introduced individual hospital reimbursement was based on their costs reports and physicians were subjected to price controls a known inflate only it was private health insurers that had to pick up the costs through cost shifting. Hospital leadership quickly realized that discipline needed to assure accountability and efficiency in the patient care and financial processes was no longer necessary since the wasteful cost was easily factored into costs reports from which future reimbursement was based. Rather than hold individuals accountable, more FTEs were hired to compensate for sacred cows and the politically protected and bigger hospitals were built to accommodate the inefficiencies and new inefficiently run revenue streams to hopefully subsidize existing inefficiencies. Plus, poor quality became a revenue stream under fee-for-service. By the early 80s Medicare payments to hospitals were inflating at annual rates of 13%. Enter DRGs an effort to put hospitals under a form of price controls along with the existing price controls on physicians. Hospitals responded with cuts in nurses creating conditions for preventable medical errors which Medicare paid for with the savings from DRGs making errors a cash cow. Government price controls based on costs reports that included inefficiency costs plus rewards for preventable errors is the root cause of today's inefficient, quality challenged health care delivery system. These perverse incentives do not support excellence in leadership because no leader whose core is excellence would stay unless in those rare occasions like Intermountain Health where leadership leads an inspired staff through the organized chaos of government's perverse, anti-free market incentives. If the nation wants high quality, low costs health care then we need a reimbursement system that inspires health care leadership to be in the constant pursuit of excellence and preventable failure is never rewarded. In other words, let accountability rule not the present politically charged win/lose environment that no economy can support and ObamaCare only puts on government steroids.
Jim Dempster (2/10/2011 at 11:30 AM)

Let's take another look at this mess we are in. This news article and discussion focus on price, who has market leverage and how premiums reflect these areas. We will never change our system until we focus on utilization. Providers who are uncertain about their future, concerned about lawsuits or asked (forced) to participate in a win-lose method of healthcare delivery will increase their services as much as possible. On the other side, the average citizen does not have a clue about how to manage thier health, the importance of exercize and how to be a consumer. We see an advertisement and we ask our doctor to provide the product who obliges becuase they want to please the patient. The system is broken for many more reasons and needs to be transformed. How? Look at the TV show The Biggest Loser and anyone who has ever been successful in life to see what it takes to have good health. The starting point is education so we understand the importance of how to eat right and exercize, how to manage stress and be a smart consumer while taking responsbility for our health. The other key ingredient is inspiration so we have a reason to act on the information that we now understand. Focusing on "quality improvement" or "provider accountability" will never achieve the results we can achieve when people understand, are motivated and have ownership of their health. 75% of all healthcare costs are lifestyle related and 80% of care is self-care. So how do we move to this type of system? One word: accountabilty. We must hold providers and patients accountable for health...after we provide both parties with efficient tools that help them understand what to do, how to do it and provide financial incentives (and disincentives) to achieve success. Those who choose not to participate will just pay more for their care. Everyone needs skin in the game to help motivate us in the right direction.
bluetooth (2/10/2011 at 9:49 AM)

Really, Jeff? Is it really that difficult to get? The good doctor Holly nails this. Regardless of health plan competition or lack thereof, it's the HIGH COST OF CARE AND THE DISCONNECT OF JOHN Q PUBLIC TO IT. Pretty simple. The tough part is how to LOWER the cost of care and how to use market forces to help JQP start caring about what it costs.
Todd (2/10/2011 at 9:13 AM)

Good comments Dr. Holly. The president appealed to the popular misconception that insurance companies and the premiums they charge are the crux of the problem. It is a shame to see him prey on the ignorance of so many. Their goal is to put the insurance companies out of business since the federal government can run an insurance product that is NOT Actuarially sound. Then the federal government can ration care to control cost. When people start wondering why the government health insurance program does not cover everything they expect it would, whenever they want it, perhaps the public will better understand an insurance company and employer's predicament.
James L. Holly, MD (2/9/2011 at 1:38 PM)

Republicans and Democrats Both Have it Wrong Let's summarize what this writer thinks about the current healthcare debate. First, both Republicans and Democrats have it wrong. Republicans blame lawyers and particularly trial lawyers for the escalating cost of healthcare. That is a political judgment, not a rational one. Doctors, who have felt victimized by frivolous lawsuits and who have paid escalating malpractice premiums, were delighted to accept this explanation of healthcare cost because it distracted everyone's attention from the subtle but dramatic changes which were taking place in how healthcare was being delivered and with how provider and patients responded to one another. Defensive medicine became a popular explanation for healthcare costs; but, was it? Democrats, wanting to change healthcare, needed a straw man in order to motivate people to support radical change in healthcare. Not wanting to fail as others had, the President chose to demonize the insurance companies. The problem is that while he chose an unpopular and easy target, he chose a target that has little to do directly with the rising cost of healthcare. Republicans, not analytical or thoughtful enough, failed to point this out to the President and to the American people. To blame insurance companies for increasing healthcare cost is like blaming the police for increasing crime rates. Police can indirectly allow an increase in crime but they do not cause crime or crime rate increases. Insurance companies' premium rates reflect the rising cost and utilization of healthcare; they did not directly produce the increased cost. Indirectly, by the nature of their industry, they unwittingly contributed to the cost of care by insulating policy holders from the shock of the true cost of their care. They tried to address this with deductibles, co-pays and prior authorizations, but these steps only made them look greedier and greedier. Managed care was supposed to address the trajectory of healthcare costs but also actually only aggravated the problem. Why? Read on. What was not obvious to the President, the Democrats or the Republicans, is that controlling insurance premium rates will do NOTHING to control the cost of healthcare. In fact, a number of the elements of the healthcare reform bill will only further aggravate the escalating cost of healthcare; ultimately requiring the government to "take over" insurance companies which cannot print money, or spend more than they make as the government can. Insurance companies did not create entrepreneurship in medicine; Medicare did. Insurance companies did not create expensive technology in medicine; progress did. Insurance company rates do not create the expensive of healthcare; those rates only response to the cost. This author believes that there have been and that there are excesses in the health insurance industry, but the limiting of the growth of insurance premium rates will do absolutely nothing to reduce or control the cost of healthcare. Neither tort reform nor insurance regulations will solve the problem of healthcare cost.