American Healthcare: Worst value in the developed world? – Compilation Episode



welcome to the hospital finance podcast your go-to source for information and insights that can help you stay ahead of the challenges impacting healthcare finance and now the host of the hospital finance podcast Michael pass and not a hi this is Mike last night and welcome back to the hospital finance podcast today I'm joined by John Dalton John is a senior advisor emeritus here at Besler consulting and John is joining us to discuss a topic that he has delved in on entitled American healthcare worst value in the developed world this is part of a three-part series that was written in the Garden State focus and the subject of a lecture at the Philadelphia and New Jersey HFM a annual Institute in October 2016 and that lecture provoked quite a bit of debate and discussion about how and whether American healthcare can close the gap with the rest of the developed world and attain the Triple Aim of better care for our patients improved health in our communities and lower per capita costs of care Jon recently completed 13 years on the board of trustees of the st. Joseph's Healthcare System where he chaired the strategic planning committee he serves as honorary trustee at children's specialized hospital where he is a former board chair and most recently was named by the New Jersey Hospital Association as its 2017 hospital trustee of the year welcome to the show John nice to be back with you again Mike so as I mentioned this is the first part of a three-part series and we're going to start out by looking at the relevant data so John what first prompted your interest in this subject back in September 2008 I was part of an H FM a delegation to Russia there are 23 of us from the US and five from the UK so we spent four days meeting with our Russian colleagues comparing notes touring hospitals and clinics discussing delivery models and funding mechanisms among other things I walked in with a u.s. chip on my shoulder talking about US health quality indicators that the National Research Institute of Public Health and Moscow with a lot of pride in what I've seen us accomplish in US healthcare over the last 40 some-odd years to my surprise when push came to shove when we finished our four days the russians told us how much they admired i used to advance technology by our skilled clinicians and very well-equipped hospitals but they've expressed the preference for the national health systems cost efficient delivery of high-quality care so that really for me and the others in the delegation was kind of a little bit of a shock and that american paradox became an area of continued interest for me and what rekindled that interest to come back and revisit this topic in february 2016 there was an article in modern healthcare actually modern healthcare has a by-the-numbers column at the back of each issue but i was flipped through and look at and in that issue they showed data for 22 of the developed countries in the world including the US all members of the oecd organization of Economic Cooperation and Development what percentage of gross domestic product they were devoting to healthcare and for the first time I the table also showed by type of universal healthcare and the three different approaches so that retriggered my interest here in the u.s. we certainly have the best equipped hospitals and we've also got the most thoroughly trained physicians but somehow or other the those two don't mesh to produce high quality low cost health care and value for American consumers so I decided to take a deeper dive so let's talk about some of the data that you did look at I think one of the first things you do is is that you grouped the OECD countries so can you tell us that when you know what the outcome looked like when you grouped those countries by type of approach to universal health care and what you found when you did that sure basically when you look at universal health care there are three different approaches there are some subtle differences but one approach is called the two-tier approach and that's where the government provides or mandates catastrophic or minimum coverage for all but then allows supplemental voluntary insurance or fee-for-service care when the patient desires that includes five countries including France Israel and the Netherlands who take that approach the second approach is called the insurance mandate and that's where the government mandates that all citizens must purchase insurance with a private public or not-for-profit insurers there there were five countries in the table including Austria Germany and Switzerland the third approach is one that we hear a lot about in the US that's single-payer under single-payer the government provides insurance for all and pays all expenses except for co-pays or coinsurance and there are 11 countries listed in the table including Canada Italy Japan and the UK we had the data from the OECD I went further and also pulled data from the World Health Organization that's the authoritative source for key health indicators so among other things I pulled the data on life expectancy at birth infant mortality rates child mortality rates and adult mortality rates to see how all these countries stacked up and what I did is I first looked at arrayed them all on the table I stretched out the worksheet I made a worksheet that's kind of stretched out what Modern Healthcare had shown on the left I put the healthcare percentage of GDP the right I put life expectancy at birth the percentage GDP I had data from 2000 and 2013 for life expectancy I had data from 1990 and 2012 so different time periods but similar results and in looking at that unfortunately the United States was at the bottom of the alphabet and also at the bottom of the barrel in terms of the results so the next step I took was to aggregate the data by type of approach and use that those three types of approach and compare that to the US and those findings are kind of interesting John that's a disappointing result for the u.s. what did you tried to do next well as I mentioned I a grenade the data by type of approach to universal health care and then looked at the the key indicators so the first thing I looked at was the life expectancy at birth and percentage of GDP when I looked at that the United States from 2000 to 2013 in 2000 we were consuming twelve and a half percent of gross domestic product on health care and that had gone to sixteen point four percent by 2013 and our life expectancy at birth had increased from 75 years in 1990 to 79 years in 2012 so increased at four years the other countries if you looked at all 21 of the countries life expectancy had increased from 76 points six years to 80 one point six years of five year increase so we were behind at the start and further behind at the end similarly on the percentage of gross domestic product the 21 countries average seven point nine percent in 2000 versus our 12.5% and they'll increased to nine point six percent in 2013 and looking at the three different approaches the single-payer countries had the best result though their healthcare percentage of gross domestic product averaged nine point two percent lowest of all the groups and their life expectancy at birth had increased eighty one point eight years same as the countries with two-tier system and ahead of both the u.s. and the countries with the insurance mandate approach so after that the next one I looked at was child mortality rates we placed a lot of emphasis on that we see a lot of press about child mortality and infant mortality on infant mortality rates in the US we are at seven point eight per thousand in 1990 and we moved to three point three person and 2012 which is a significant reduction so I kill that I was reading the online okay next I looked at infant and child mortality rates because those drew a lot of interest here in the US we see a lot of press about them and the u.s. was at infant mortality rates average nine point zero per thousand in 1990 and we dropped them by a third to six point zero two thousand and twenty twelve seems like good progress but we looked at the other 21 OECD countries they started out ahead of us at seven point eight per thousand and dropped to three point three four thousand also sixty percent reduction in infant and child mortality rates on the child mortality rate side we started out at eleven per thousand in 1990 and dropped its seven per thousand in 2012 which is a thirty-seven percent drop however the twenty-one OECD nations dropped from 9.5% 24.1% again almost a sixty percent drop so they were ahead of us at the outset and further ahead at the end of the day then looking at the three approaches insurance mandate single-payer and two-tier once again the single-payer countries had the lowest infant and child mortality rates in 2012 and had shown the largest percentage reduction looking at adult mortality rates for males in 1990 the u.s. was at 173 per thousand and dropped at 134 thousand by 2012 out of 25 percent drop the 21 OECD nations in the aggregate or at 141 point four per thousand in 1990 and I've dropped to eighty nine point nine percent in 2012 about a 36 percent reduction for females our female adult mortality rate was 91 per thousand in 1990 dropped the seventy-seven per thousand in 2012 for the OECD countries in the aggregate they started at seventy two point one and finished at forty nine percent when t twelve so we had a 50% drop in female no tality rate they had a thirty two percent drop in female mortality rate once again when looking at the three types of approach the single-payer countries in the aggregate had the lowest adult mortality rate male in 2012 at 80 6.8 and female 45.6 per thousand in 2012 so once again the single payer countries produced the best outcome John there's so much more to talk about I'm looking forward to you know I got ahead okay so John lots of statistics and information there what did you conclude from all of this several preliminary conclusions that needed a little further examination but clearly despite our massive expenditures the US healthcare system does not deliver a reasonable value for the money and the gap between us and the other OECD countries on key health indicators has been widening that's quite disturbing the surprising outcome to me was at the 11 countries with the single-payer systems consume the lowest percentage of GDP on healthcare and yet they achieve the best results on each of the four key health indicators that came as a shock to me the u.s. also like so ECD countries and studies by the World Health Organization and the Commonwealth Fund will talk a little bit more about those later well it's a little comforting but when we compare the u.s. with emerging market countries like Brazil Russia India China Mexico etc we do retain better results than them on the four key health indicators but that's not us exceptionalism so the conclusion is that American health care is the worst value in the developed world and it's going to take a huge paradigm shift to close the gap with the other countries on those key health indicators well we'll be looking forward to discussing that in part two of the series when we take a journey through France Germany and the United Kingdom John thanks do we screw it up again yeah John what did some of the other studies show I also looked at some other reports when I returned from Russia one that I had look that was published by the World Health Organization in 2000 and it was their first and only attempt to look at health systems throughout the entire world they ranked the health systems of in 191 member organizations based on five factors that include a financial contribution disability adjusted life expectancy speed of service protection of protection of privacy and quality of amenities in that study France ranked number one in the world followed by Italy the US only ranked number 37 we were behind Costa Rica and just the head of Slovenia Cuba and New Zealand however the methodology that the World Health Organization used in that study provokes so much criticism I guess from countries that were highly ranked that they have not updated the study or used that methodology since but it is the only one that I'm aware of that looks at the entire world in terms of health care systems another really good source for information on health policy and health throughout the world as the Commonwealth fund based here in the US I'm on their emailing list and for anyone interested in health policy it's a it's a good it's a good one to be on they periodically compare the US health care system with those of other developed countries so a more limited set you typically ten other countries in their 2014 update entitled mirror mirror on the wall how the US health care system compares internationally the u.s. is last or near last among the 11 nations studied in the report on the three dimensions of access efficiency and equity the United Kingdom ranks first followed closely by Switzerland that's one worth looking at because the they do have a license table it looks like something out of Consumer Reports where dark blue is good light blue is bad and medium blue is in between and they'd list the countries are Austria Canada France Germany and Netherlands New Zealand Norway Sweden Switzerland the UK and the US and going from left to right at the right hand side of both the UK and the u.s. the UK typically in dark blue and the US in their medium blue so it's disturbing with per capita health care spending of only three thousand four hundred five dollars per person the UK ranked number one on nine out of the twelve factors that the Commonwealth Fund measured the u.s. ranked number four out of ranked last time four out of the twelve factors despite our spending of eighty five hundred and eight dollars per capita so that's a lot fifty-one hundred dollars more than the UK so clearly we are not getting value for the for the money the Commonwealth Fund conclusion was that the u.s. delivers quote high-cost care of mediocre quality noting that our per capita expenditures are thirty one hundred dollars higher than the average of the other ten developed countries in this study so we have a pretty steep mountain to climb to catch these folks and John we've we've gone ahead and collected some of the slides that you used in your presentation we'll have those available on our website for anyone that wants to dig into this information a little bit more and I'm very excited to looking forward to part two of this series will will take a journey through France Germany and the United Kingdom to explore their systems in more depth John thanks so much for spending some time with us today this is my cat Tsunade welcome back to the hospital finance podcast today I'm joined again by John Dalton John is a senior advisor emeritus here at vestment consulting who's joined us to discuss his topic American healthcare worst value in the developed world Jon recently completed 13 years on the board of trustees of the st. Joseph's Healthcare System where he chaired the strategic planning committee he serves as honorary trustee at children's specialized hospital where he is a former board chair and most recently was named by the New Jersey Hospital Association as its 2017 hospital trustee of the year welcome back John thank you Mike it's nice to be here again John in part one of the series we ended with the Commonwealth Fund conclusion that the u.s. delivers quote high-cost care of mediocre quality with per-capita expenditures of $3,100 higher than the average of the other ten developed countries in the study John which countries did you decide to examine more closely after looking at that data let's to start with the I wanted to get one country with each of the three approaches two-tier insurance mandate and single-payer and the choices became pretty obvious France does two-tier Germany insurance mandate and the United Kingdom single-payer so those are countries that most would agree are somewhat similar to us in terms of robust economies high immigrant populations a fair amount of diversity so those are the three I chose I also dusted off a book I had read after I came back from Russia in 2008 that provides a very good on the ground approach and look at those three countries as well as some others it was written by a journalist named TR Reid and it title is the healing of America a global quest for better cheaper and fairer health care for anyone interested in health care outside the US it's very readable and quite enjoyable so I would recommend it so I started by looking at key data from the three countries both the percentage of GDP change and the spending per capita and the the outcomes so France with its two-tier system in 2013 spent ten point nine percent of gross domestic product on health care 4111 dollars per capita Germany was at with the insurance mandate approach was at 11 percent of GDP basically a dead heat with France but spending forty four hundred ninety five dollars per capita more than France the United Kingdom with a single-payer approach was only eight and a half percent of gross domestic product compared to the eleven percent of the other two and only three thousand four hundred five dollars per capita spending the US and the other hand is at the top of the heap with sixteen point four percent of our gross domestic product that pack it's about one dollar every six going to health care and eighty five hundred eight dollars per capita so for family of four that's thirty four thousand dollars the outcomes the life expectancy infant mortality child mortality France was at eighty two years Germany eighty one UK eighty one and the United States at 79 in 2012 for the infant mortality rates we were higher than all three countries so I began by looking at each of the three countries so let's let's take each one and turn then John the French of the French John let's take each one in turn the French use a two-tier approach to providing health care how does their system work a Frances system is based on private doctors treating patients who buy health insurance to cover most of the cost it's purchased through work the employer and the workers split the cost and the monthly premium is withheld from the workers paycheck everyone must belong to an insurance fund so the government pays the premium for those who are unemployed in France patients are expected to pay at time of service so they pay upfront they then get reimbursed by their insurance fund for roughly 75 to 80 percent of the fee however they as a they can also buy supplemental insurance to cover the part of the rest of the cause in France doctors make house calls and they receive higher payment for doing so as I mentioned they they can buy supplemental health insurance to cover co-pays and non coverage services most Frenchmen do so all fourteen sickness insurance funds are not-for-profit entities the administrative costs are well below five percent thanks in part to their Karthik Patel the secret sauce for the French is that they've had full interoperability since 1998 so every French all Frenchman carry a carpet towel it's a credit card with a chip carrying your entire medical history if you lose one you've got to pay for pay for its replacement but basically when you go into a French hospital or doctor's office there is no medical records department it's all on the card feet down so another nice part of the French system is when a doctor submits a bill as a credential doctor the fund must pay the bill those miles the French system has full freedom of choice so if Gaston decides they eat drink and be merry it doesn't feel well the next morning he can go to any doctor that he chooses he can see any specialist at any time the National Health Ministry negotiates with doctors hospitals and drug companies and then dictates what providers can charge for treatment and what price will be prayed for prescriptions something like 77% of health expenditures are covered by these government-funded plans the remainder are the patient payments or payments from the private submental insurance plans that's the two-tier approach are there any downsides to the two-tier approach one of the major ones is the French physicians do earn far less than their US peers but they do enter their practice unburdened by student loan debt the government pays for their medical education there have been several attempts at healthcare reform to limit the freedom of choice but those who faced voter resistance and efforts to control payments to providers have resulted in some doctor strikes to preserve their incomes there's one major one in lyon in 2014 and although freedom of choice can be expensive the upside is that the French outlive Americans by three years while spending less than half per capita than we do on health care so let's move on to Germany then Germany has something called the insurance mandate approach can you talk to us about that yeah Germany came as somewhat of a shock to me because it's the oldest universal health system in the world and is implemented by Otto von Bismarck Bismarck as you recall was the iron chancellor who through Wars and whatnot United journey Germany into central Europe's industrial military power back in the 1800s so here's this militaristic dictator autocrat founding the first universal health care program now why did he do it it was one way of preserving a unified Germany he was the inventor of much of the modern welfare state and it was his leverage to make sure that he had working-class support for unifying the German Republic his sickness insurance law was enacted by the Reichstag in 1883 so it's already survived 433 years two world wars the partitioning of East and West Germany and the like it's amazing in Germany that medical insurance is mandatory everyone must have medical insurance the premiums are income based they average fifteen percent of income and they pay jointly by employers and by workers to payroll withholding German can choose from more than a hundred private insurance payment plans these call quicken Khasan they compete vigorously for business as not for-profit enterprises these funds exist to pay medical bills not to pay dividends to stockholders they must accept all applicants no pre-existing conditions and they must pay any claim that is submitted if I recognize the doctor or hospital so no denials the coverage does include guest workers legal or illegal and there's a governed by in for low-income and unemployed Germans as in France patients are free to choose any doctor or hospital most German hospitals are either municipal or charity operations but there are some for-profit chains the bulk of medical professionals are general practitioners working in their own private clinics the sickness funds negotiate with the doctors union to determine what procedures and treatments are covered in the national benefit package so there's an essential health benefits package for all Germans patients never see a bill so US Post Office but they are subject to a small copay Germany – its embarrassment was 10 years behind France and achieving interoperability but they implemented their digital health card in 2008 so again no medical records rooms as a result their administrative costs are much lower than in the US a little less than 5% of the spend even with more than hundred insurance plans competing vigorously for their subscribers John did you identify any downsides with the German approach as in France the complete freedom of a choice in a system with minimal waiting times and high quality cost a lot of money so the Germans are very concerned about their forty five 4451 per capita spend higher than France and the UK but a lot lower than us physicians do earn less than the US counterparts but they receive a free medical education and they are not burdened with student loan debt the government has been under a lot of pressure to moderate its cost increases so the current situation in Germany is that the government and the sickness funds are putting the squeeze on providers so let's move on to Britain and they had a sort of famous single-payer approach can you talk to us about how they got there Bretton was an interesting study they were late to the game in terms of implementing universal health care unlike France and Germany and they took a distinctly different approach the National Health Service was created by two polar opposites Lord William Beveridge a social reformer aristocrat who was raised in India tea plantation in Darjeeling and ineuron nigh Bevan a Welsh coal miner who was appointed in 1945 as Minister of Health by Labour Minister Clement Attlee as many will recall at the close of World War two the the within shortly thereafter the British dumped Winston Churchill who was their prime minister throughout the world and installed a Labour government under that government aptly appointed Devon as a health minister Beveridge had written report back in 1942 called social insurance and allied services it promised free health care to all with payment coming from general taxation not for medical fees or insurance companies so a totally different approach from France or Germany it was a morale booster because it was issued right around the time of London being bombed during the Blitz his plan would face strong opposition from British Medical Association and the health insurance programs until different what we see here in the US but in that methalated government Bevin was very clever he crafted a compromise that allowed general practitioners to remain as private operators and to allow insurers to market policies to customers who chose not to join the National Health Service so that's how they got universal health care so they're there in in the United Kingdom income and social security taxes are much higher than the u.s. in every income back bracket but they result in a system a health care system that delivers with minimal paperwork and no billing it's nationwide network of general practitioners are independent they're paid on a capitation basis so that produces a very strong incentive for them to practice preventive medicine for those who you were fans of Doc Martin the BBC's programme you pretty much know how gentle practitioner practices in the UK specifically in his case Portwenn Wales GPS make house calls they manage many conditions in their their offices across surgeries they manage many conditions there that would be handled by specialists in the u.s. so that's one key to their cost effective delivery about 60 percent of British physicians are general practitioners compared to only about 35 percent in the US and internal medicine and the light primary care the British general practitioners do enjoy income levels comparable to u.s. primary care physicians so they're on a par specialist that called consultants and they cannot see a patient without a referral from a general practitioner so unlike France and Germany the Brits do have a limited freedom of choice your GP tells you where to go British have a group called the National Institute for Health and Clinical Excellence its abbreviation nice and that's the organization that determines the range of medications the tests and procedures that are recovered that are covered similar to what Sarah Palin used to call death panels so John one of the things we hear about on this side of the Atlantic is long waits for non urgent care within the National Health Service what's the reality of that reality surprised me and again even traveling with the Brits in 2008 and following them thereafter we hear all kinds of anecdotes about problems with the National Health Service and the dreaded cues the evidence is somewhat different qe that basically there are waiting lists for non urgent or elective procedures things like hernia repair of varicose veins elective surgeries we have cues in the US but we don't want use they're also long waiting times here for those in the OECD's Report health at a glance at in 2015 it noted that the waiting times in the UK now are lower than in other OECD countries reporting such data so it's less of an issue than a lot of the anecdotal evidence that we hear one big downsides is that the consultants are in considerably less than their US peers as you're aware in the US there's a great disparity between incomes with the specialists and their primary care practitioners that's different in the UK the National Health Service has been subject is tight budget constraints so their concerns are that they have not been able to address high risk factors like smoking alcohol consumption and obese city that are above the OECD average but still better than what we have here in the US so despite negative perceptions of quote the National Health that Brits developed the best value for the money in the developed world and that's itself enough for a full-blooded Irishman to swallow so based on the data other countries may have to bow and say the Brits do it best based on some of the objective measures what other findings account for the ability of France Germany and the UK to produce a value well each of them take differing approaches but there are some common themes in all three countries most of the physicians are private general practitioners and have no student loan debt to carry all three countries have full interoperability and no denials those help keep administrative costs low in the US for example Medicare ninety-seven cents of every premium a dollar goes to services in those three countries at least 95 cents out of every premium dollar goes to services their real secret sauce though is a robust social services safety net in all three countries to deal with housing nutrition and environmental issues that's sort of what makes them go that led me to another good summer read earlier this summer it's called the American healthcare paradox why spending more is getting us less certain by Elizabeth Bradley and Lauren Taylor interesting book a little bit dry and technical but a lot of well researched statistics let's go back to the World Health Organization's definition of health the w-h-o defines health as a state of complete physical mental and social well-being so emphasis on social in their book they make a compelling case that when social services spending is taken into account the u.s. is not a high spender and what's in social services spending that's public and private spending on old-age pension and support for older adults survivors benefits disability in sickness cash benefits family supports employment programs and other social services that exclude health expenditures and what do they find the that had a very interesting exhibit showing several of the countries that we've been talking about and adding social services percentage of GDP to the health care percentage of GDP and it's kind of shocking when you look at the u.s. in total we're twenty five percent of GDP on combined Health and Social Services France on the other hand devotes a full one-third of its gross domestic product to the combined Health and Social Services spending twelve percent health 21 percent Social Services Germany the votes twenty nine percent of GDP to the to both 18 percent to social services 11 percent to health the UK is next after us with only 23 percent of gross domestic product again 15 percent on social services eight percent on health so here we are at 16 percent on health 9 percent of social service looking quite different but a moderate spender compared to France in Germany their research further found that countries that have high health care spending relative to social services spending like the US had significantly lower life expectancy and higher rates of infant mortality than did countries that favored social spending like France Germany and the UK so I could've avoided all of my research and just read their book and read they reached the same conclusion and the reality is that with health and social services spending already consuming 25 percent of our gross domestic product and the gridlock that we've experienced in Washington for almost forever it's very unlikely that the federal government except step-up Social Services spending so where is leadership on this issue going to come from in my opinion it's got to come from the leaders of not-for-profit hospitals and health systems in order to achieve the Triple Aim it's not going to come from government it's got to come from us that's going to be our burden and for those of us in the health care community it's not without risk because if we do this right in patient emissions and Edie visits are going to decline because sacrificed them for the greater good of our communities so it's a lot of risk with a little reward but that's how I see us getting there John that's quite a challenge I'm looking forward to exploring what elements we might be able to apply to the u.s. to begin narrowing the gap with the other OECD countries and equally important attaining the Triple Aim so we will discuss that in part three of this series we're looking forward to having you back for that John thanks so much you're welcome Mike see you soon hi this is Mike passing on teh and welcome back to the hospital finance podcast today I'm joined by John Dalton John is a senior adviser emeritus here at Besser consulting who is back to discuss part three of his series American healthcare worst value in the developed world Jon recently completed 13 years on the board of trustees of the st. Joseph's Healthcare System where he chaired the strategic planning committee he served as honorary trustee at children's specialized hospital where he is a former board chair and most recently was named by the New Jersey Hospital Association as its 2017 hospital trustee of the Year welcome back John thank you Mike nice to be here John in part two of the series we looked at data from France Germany and the United Kingdom which provided us with some clues about how their approaches produce better quality health care at lower cost than the u.s. let's start out which of their approaches produces the best results and are there lessons we can glean from all three yes as you know from the earlier part of the series France uses the two-tier system as an approach to universal health care Germany the insurance mandate sort of what we have in the Affordable Care Act and the UK is a single-payer system we looked at all of the data about their approaches we found that the single-payer countries produce the best results and whether you love him or hate him the senator for Vermont was right single-payer produces the best results and among the single-payer countries the Brits do it best single-payer is not likely to happen here in the US because it's highly reliant on taxation for funding but interestingly we already have two single-payer systems here in the US that's both the Veterans Administration and in the Indian Health Service those are single payer systems now their outcomes available that will produce better out other options available that will produce better outcomes and help start to help us close the gap with the organization of Economic Cooperation in developing countries I think so there's some elements that we can apply from France and the united kingdom to help us achieve the Triple Aim okay there are a lot of lessons that we can learn from our colleagues in the United Kingdom France and Germany but first let's also look at some of the issues we've already tackled and how they compare to what France Germany UK do you heard earlier about the frustration in France and Germany with unlimited freedom of choice well unfortunately ever since the HMO movement started the 1980s we Americans have had to learn how to live with limited freedom of choice and narrow networks so that's one issue that they have that we've already tackled the common elements we already have many of Americans who receive health care coverage through their employer just as in France and in Germany the American the Affordable Care Act did include an insurance mandate as in the Germans do but it was a watered down one so one of the key issues facing us now is that only 28% of the 18 to 34 year old demographic actually are in the risk pool so that's one of the reasons why there's been instability with the insurance exchanges we already have an essential health benefits package mandated through the Affordable Care Act that includes doctors services inpatient and outpatient hospital care prescription drug coverage pregnancy and childbirth mental health and rehabilitation services so we already have that in common with France Germany and the UK what could we learn or adapt from those three countries well I put together a list of seven starters that I think are worth debating and hopefully will be part of the ongoing debate as something replaces the Affordable Care Act one as a country we need to move even more aggressively to get to full interoperability to reduce the administrative costs the French got there in 1998 the Germans in 2008 we could emulate the French approach of a mandated core benefits package and allow the opportunity to purchase supplemental insurance for expanded coverage that's an approach that I think would work well in America or look at Germany's employer-based insurance mandate and couple that with competition among not-for-profit insurers for BAE coverage we can either copy france's patient payment a time a service approach as someone who spent his career in the revenue cycle that's appealing to me or germany's patient co-payment approach one of the other from all three countries we need to maintain primary care providers as private practitioners i think that's part of the reason for their success unfortunately the u.s. we have a only 35% of our primary care providers sixty-five percent or specialists it's the reverse in those countries we need to provide incentives for medical students to select primary care for example forgiveness of student loan debt over 15 to 20 years to correct that current imbalance we've already on our way to doing that there are several programs Texas Tech University has one at their medical school that making sure that medical students who select primary care will have the student loan debt repaid but finally in the seventh one is the toughest one we need to encourage our not-for-profit health care leaders to engage more closely with social services providers in the communities that they serve John your seven starters are thought-provoking I think well worth debating how do you think they'll be received inside the beltway well that's when things start to get tangled up in competing interests and conflicting priorities and the K Street lobbyists hitting congressmen and Senators we've seen a lot of that through the course of this year as you know then in July the Department of Justice filed suit to block the proposed the anthem Cigna and Aetna Humana mergers contending that quote they would leave the multi trillion health insurance industry in the hands of three mammoth insurance companies well Edna is you know responded with the corporate equivalent of a hissy fit eliminating its Affordable Care Act coverage in 11 states claiming that they had four and thirty million dollars in losses since January 2014 so you get that force on the other hand I'd say card from folks like bernie tyson CEO of 61 billion dollar Kaiser Permanente and not-for-profit provider he's sticking with the exchanges long term and here's his quote I view it through the lens of my mission it obligates us to figure it out not to get out he further noted that the market is unstable given adverse selection and underpricing by some plans to capture market share and end quote over time it's going to work itself out this is not rocket science unquote so Tyson Tyson seems to have a pretty clear view of how this can be made to work then we have Big Pharma there's been a lot of press over the last year about drug pricing the EpiPen has been around since 1977 but my land Pharmaceuticals acquired the auto injector in 2007 when they were selling for $57 each EpiPens now cost more than 600 bucks for a 2-pack and people who suffer from an anaphylactic as does one of my granddaughters need to keep them handy at all times during pharmaceutical Martin shkreli the most hated man in America brought daraprim in 2015 they raised the price from $13.50 a pill to $750 a pill now Dow creams the only cure for toxoplasmosis that's a disease that strikes people whose immune systems are suppressed or compromised examples would be AIDS patients and cancer patients then there's Valeant Pharmaceuticals canadian-based although very active in the United States they boosted the price of the diabetes club diabetes drug Glu Metsa by about 800 percent in 2015 they also acquired character in 2011 that's used for cancer skin conditions that rose by 1700 percent in six years to our government's credit all three CEOs have been held before Congress for the for congressional flogging but still the drug prices escalating at an unbelievable rate here in the US and something's got to be done about it so John looking at seven starters and and some of the elements you've just discussed where do you think Democrats and Republicans inside the beltway can come together as we know we had a very divisive presidential election with clear clearly polar opposites in terms of health policy we had Secretary Clinton espousing expand and embrace the Affordable Care Act and president Trump advocating let's repeal and replace it with something terrific looking at the two platforms post-election I looked in the see where there might be some common ground what are non-starters well clearly when you look at secretary Clinton's platform she was advocating universal quality affordable health care for everyone in America which would include undocumented aliens clearly that's a non-starter she wanted to allow families to buy health insurance on the health exchanges regardless of their immigration status clearly a non-starter her platform will also talk about defending access to reproductive health care and doubling funding for community health centers probably non-starters on the Republican platform number one priority was to completely repeal Obamacare and replace it some of the other issues raised there were to allow sales health insurance across state lines that's been in Republican platforms for a number of years but has a very lukewarm response from the big five insurance carriers so that's not likely to happen also talked about allowing individuals to deduct health insurance premium payments from their tax returns and using health savings accounts and to accumulate unused portion and as part of the individuals of state and requiring price transparency from all providers ideas worth debating looking at both platforms there are some areas of common concern president Trump's the Republican platform talk about removing barriers to entry into free markets for drug providers that offer safe reliable and cheaper products and believe me I'd much rather buy my crystal from Canada than have to pay for 300 bucks for a 90 day supply here in the US on the Democratic platform there were three items that dealt with drug costs one was to bring down the out-of-pocket costs reduce the cost of prescription drugs and protect consumers from unjustified prescription drug price increases so I think one area for the battle inside the beltway will be to identify Big Pharma as a common enemy and attack that it's a very that would be a very popular that would be very popular with president Trump's voting base secretary Clinton's the Democratic platform also talked about expanding access to rural Americans who often have difficulty finding quality affordable health care and as we know critical access hospitals struggle consistently well that should be very appealing to the president's voting base that's something that I think both Democrats and Republicans can agree on tackling in terms of the health health savings account issue and the health insurance premium payments deductibility there is an attempt to for comprehensive reform of the tax code so those probably will roll into the the debate I fought personally I find those interesting and intriguing worth debating but my question on those is how they will play out for those folks who are employed at wal-mart and McDonald's we've seen the experience with folks opting into 401ks and now we have a whole generation heading for retirement with inadequate retirement savings I fear that the same kind of problem would affect them on those two proposals but we'll have to see how it goes even if on January 21st the Affordable Care Act is repealed with a two-year replacement period I think when we get down into the weeds there are so many pieces of it that are necessary in any health reform legislation that will bogged down in some process in both the house and the Senate yeah well know a lot more confederal your March we just learned today that doctor Tom Price Reaper Republican represented from Georgia has been will be nominated as the next HHS secretary he's an orthopedic surgeon if some of those proposals including include allowing folks to opt out of Medicare and Medicaid for tax credits but where will he be in terms of things like comfort center choice the comprehensive joint replacement program and the like when we look at the Affordable Care Act we've already heard that the provision that allows kids to stay on their parents policy until age 26 will will stay and that we will continue to have guaranteed issuance no pre-existing conditions there are other provisions that I think as that debate goes forward will wind up being carried forward as part of whatever reform takes place I don't think anybody wants to go back to the days when insurance carriers could spend more than 85 more than 15 cents out of every dollar on administrative expenses now that we know that France Germany and the UK spend less than five cents that are every dollar on administrative expenses the 31 states that have benefited from Medicaid expansion already are making noises that they want to retain that it's worked well in their states many of them have Republican governors as we do here in New Jersey and we know that Governor Christie is in favor of continuing the Medicaid expansion so those areas that will be debated we're certainly not going to revoked the patient protection provisions that have already improved quality with significant reductions in both central line-associated bloodstream infections and surgical site infections over the last several years so I think a lot of what is contained down in the weeds is going to be retained hopefully what come issues out of this will something that includes all all American citizens at a reasonable cost so there's gonna be continued I have battles inside the beltway for some time to come on the nuances of health care policy but John what can those of us involved in not-for-profit health care do to advance the seven starters that you mentioned engaging more closely with social services providers in the communities that they serve well the good news is a lot of that work already has been there's an article in the May 2016 issue of Health Affairs that talked about variation and health outcomes and it did a deeper dive into the role of spending on social services public health and healthcare and looked actually looked at the first decade of the 21st century 2000 to 2009 and even in that period it found that states that have a higher ratio of social to health spending had significantly better subsequent health outcomes for adult obesity asthma mentally unhealthy days days with activity limitations and mortality rates for lung cancer a.m. eyes and type 2 diabetes the article also pointed out that many of the states with those higher ratios were in the West while those with less healthy spending patterns were in the south so western part of the u.s. is already ahead of the curve on that in reviewing seventy-four research studies the article reported that three types of services are particularly meaningful supportive housing nutritional support that's includes Meals on Wheels and WIC supplemental nutritional services and certain case management and outreach programs and they concluded and I quote broadening the debate beyond what should be spent on healthcare to include what should be invested in health not only in healthcare but also in social services and public health is warranted end quote here in our area we've already started organizations like the math Sinai Health System New York Presbyterian have already have major initiatives going forward on population health and community involvement a couple calls from dr. Kenneth Davis who's CEO of Mount Sinai illustrate both the success and the problem here's dr. Davis quote if a patient attributed to us has diabetes and we keep that person out of the hospital we are rewarded in a population health model but if we invest in preventing community residents from ever getting diabetes in the first place were paid nothing extra even under the most advanced population health models there is no way to get paid for improving the long term health status of the community nonetheless Smithsonian is going forward with some of these initiatives and is that risk for doing so dr. Steve Corwin CEO of new york presbyterian they have a major initiative going forward in Washington Heights on population health for about 20,000 folks in that population as well as throughout the healthcare system here's dr. Cohen quote if you visit the home of an asthmatic child and you remove mold and allergens from that home it dramatically reduces that child's likelihood of coming into the emergency room and cool so I tend to be a cockeyed optimist even though I've been advocating for a universal here for almost 40 years now and still far from achieving it I think that the not-for-profit leadership of our major health systems are going to continue to move us forward at an appropriate pace to achieve that Triple Aim it means we have to go beyond our comfort zones we already in health care to excel at diagnosing treating and curing the patients who receive care in our hospitals but improving the health of the population in our service areas does require us to reach out into the community services social services safety net in order to foster better health habits among consumers something over which providers have little or no control currently I take our from examples like the geisinger Health System in Danville Pennsylvania who've been into population health very deeply for a number of years part of their success there's a tribute of the fact that they own a health plan they have a very large multi-specialty physician practice and the health care system so they've got the three pieces working together but even there they will tell you that it took several years to be able to change consumer behavior and the key to that in many instances was placing nurses in doctors offices nurses fund not by the health system but by the health plan there are there many many other examples out there like Geisinger that we need to emulate I believe that hospitals that succeed in providing better care while fostering healthy behaviors in the communities they serve will lower the capita costs of care and produce better outcomes on the key health indicators and begin to help us close the gap with the rest of the developed world thanks Mike well John the Triple Aim is certainly an objective worth striving for and helping to reduce the gap between the US and the rest of the world when it comes to quality of health care so thanks for enlightening us and providing this most thought-provoking series you're quite welcome Mike this concludes today's episode of the hospital finance podcast for show notes and additional resources to help you protect and enhance revenue at your hospital visit best lucam forward slash podcasts the hospital finance podcast is a production of Besler smart about revenue tenacious about results

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