Robert Reich may be short in stature, but he's not above poking fun at himself, or the healthcare industry.
"The economy wore me down," said the diminutive former Clinton administration labor secretary, who now is professor of public policy at the University of California, Berkeley. "Eighteen months ago I was six-foot-two."
In one of the two keynote speeches at the American Hospital Association's annual Leadership Summit in San Francisco, Reich told the crowd of about 1,000 senior healthcare leaders that the economy's recovery will come soon, but it'll be shallow, and he's not ruling out a further dip later on, simply because the American consumer is tapped out.
"I wish I could be more positive," he said. "The banking crisis is not over. Rallies peter out because they're not based on fundamentals." He said the dominant view that the economy is recovering leaves out the fact that 70% of the economy is the consumer, and consumer spending isn't coming back anytime soon.
So regardless of whether a healthcare reform bill gets done this year or not, healthcare's in for a long period of likely declining reimbursements, so Reich told leaders to prepare to seek cost reduction through a program of cost reduction.
As healthcare spending by individuals goes up, consumers are burdened to a greater extent, he said. Healthcare eats into the pocketbooks to a greater extent than ever before. Now it's 16% of the GDP; 20 years ago it was 8%.
He predicts further stimulus will be needed, going so far as to predict that in 2010, as midterm elections approach, legislators fearful of losing will push through a tax holiday on the first $15,000 of personal income, giving a short-term boost to the economy. But don't expect that to help healthcare much.
Pressures to restrain healthcare costs and to improve quality are only going to increase, regardless of the way healthcare reform is enacted, he said.
"Families just won't be able to afford it." Capitation, even if it's called something else, is likely.
"Here's a piece of good news to leave you with," he said, concluding the speech. "You are all in a position of leadership in your industry. The easiest time to make fundamental reform is when times are bad and pressures are building," he said. "Past success is an enemy of change, and these tough times fortify you as a change agent. You are now authorized."
Notes:
Three hospitals were honored for leadership and innovation in quality, safety and commitment to patient care. The AHA-McKesson Quest for Quality Prize was awarded to Bronson Methodist Hospital in Kalamazoo, MI; Beth Israel Deaconess Medical Center in Boston was honored as a finalist. Duke University Health System in Durham, NC, received the Citation of Merit.
Jeffrey Selberg, President and CEO of Exempla Healthcare in Denver, moderated a panel of representatives of the winning hospitals and health systems. All three systems have made huge strides in quality in the past few years. One of the most interesting questions in the session came from Selberg, when he asked the three representatives if they'd ever had a moment when they wondered if the quality drive was "worth it."
Frank Sardone, president and CEO of Bronson Methodist: "We made the difficult decision to try to move the medical staff from being a political entity to being solely focused on patient care." There were times when that was a difficult journey, he said.
Kenneth Sands, MD, Senior Vice President, Department of Healthcare Quality, Beth Israel Medical Center, Boston: "We had a wrong-site surgery a couple of years ago. It was a big learning lesson. The rest of the organization needed to hear about it. We communicated it broadly throughout the organization. The decision to do so took about five minutes. Five years ago, the decision also would have taken five minutes, but the decision would have been a completely different.
Kevin Sowers, interim CEO and COO of Duke University Hospital: "We had a transplant mistake. We were challenged as leaders to find different safety issues we weren't aware of. We decided to share the mistake with front-line staff. Legal and risk management didn't want to, for good reasons. That was when I wondered if it was worth it. That difficulty is all worth it now, but it was a challenge at the beginning."