Sunday, December 05, 1999
Project looks at value of care
Group: Health costs worth it?
BY TIM BONFIELD
The Cincinnati Enquirer
Health care costs have started soaring again in America, to the increasing concern of employers with tight profit margins and senior citizens on fixed incomes.
A new survey by the health care consultant Hewitt Associates reports that employers nationwide face an average 8 percent to 10 percent increase in health plan premiums for 2000, following a 7.8 percent average increase in 1999.
In Cincinnati, employers can expect to pay $4,275 per employee for health benefits in 2000. That's better than the projected national average of $4,853 per employee, but 10 percent higher than last year.
While such numbers show costs going up, how does society tell if the increased spending is worth the money? That's what a group called the Health Improvement Collaborative of Greater Cincinnati hopes to find out.
The collaborative, using a grant from Schering Plough Pharmaceuticals, has launched a two-year project focusing on diabetes care that sponsors hope will serve as a national demonstration project of a concept called “value-based partnering.”
Rather than focusing exclusively on costs, a value-focused debate about health care more accurately reflects the multiple interests of many groups, said Diane Pinakiewicz, senior director of the health care strategic leadership unit at Schering Plough.
Ms. Pinakiewicz and a panel of local health care leaders explained and debated the value-based partnering concept Nov. 5 at a meeting of Leadership Cincinnati, an annual class sponsored by the Greater Cincinnati Chamber of Commerce.
In a world of nothing-but-money thinking, doctors worry mostly about protecting their incomes. Employers focus exclusively on reducing their medical costs. Health plans do nothing but seek profit. And patients couldn't care less about the bill as long as they get better and somebody else pays.
In the real world, doctors worry plenty about income, but they worry more about providing excellent care, even to those who cannot afford to pay. Employers watch the bottom line, but they also see health benefits as a valuable way to keep employees loyal and productive.
Health plans have their obligations to Wall Street, yet play a useful role as analysts of practice patterns and promoters of better health care service. Meanwhile, patients still want to be cured, but not necessarily at any and all costs to themselves or to society.
Dr. Joe Hackworth — a well-known Cincinnati cardiologist — said cardiac care can be laced with cost-vs.-value questions.
In the past 15 years, the available treatments to control high blood pressure have expanded dramatically. Years ago, a person might have spent $10 a month on diuretics. Now, ACE inhibitors, beta antagonists and other drugs can run costs beyond $200 a month.
New clot-busting drugs help more people survive heart attacks than ever before. But such drugs can cost $2,000 a dose, Dr. Hackworth said.
A commercial health plan with a quarterly report to file with investors may gasp at paying such costs. But who calculates the long-term benefits to society of having healthier heart attack survivors? Who gets credit for reducing disability payments by returning people to productive work?
In medicine, new technology is expensive. With the baby boom generation getting older, demand for best services promises to grow. And that's OK, Dr. Hackworth said.
“What's wrong with the idea of medical spending rising to 16 percent of GNP by 2007? It's probably worth it,” he said.
Health reforms that focus on costs alone can leave many tough issues unaddressed, such as abortion, assisted suicide, human genetic manipulation, or how much high-tech care people want as they approach death.
But a value-based approach can raise these and other far-reaching questions.
What is the acceptable price for another day, another month, another decade of life? How much money should go to medicine compared with education, national defense, better roads, or other social priorities?
How much better is the latest pill or newest diagnostic machine than the treatments we already have? How much money should be spent fixing problems people bring upon themselves by leading unhealthy lifestyles?
Do we have too many hospitals? Are they in the right places? Who decides where they should be?
Should America stick with the private, managed-care driven health insurance system it has now, even though millions of people wind up without coverage? Or should the government provide coverage to every American, even if it costs more in taxes, eliminates some jobs or slows the pace of innovation?
Some employers see much more room for improved quality and cost control in medicine and say many changes can be made without heavy government intervention.
Like them or not, people can count on McDonald's hamburgers tasting the same almost anywhere in the world. In comparison, medicine remains a cottage industry, with consistency and quality varying widely within the United States, even within a single city.
“We cannot afford the variation we have in health care today,” said Rich Niemeyer, associate director of employee benefits at Procter & Gamble. “We have a lot of hospitals and a lot of physicians. But is our current structure the right one? This is a very, very tough question to deal with. It has not been addressed in this city. But we have to do it.”
Employers pay the biggest part of the health bill for people under 65, so they have a clear interest in the diabetes project. However, not all employers share the same point of view about health reform.
Much like the way benefits are offered to federal employees, Procter & Gamble offers a menu of health coverage choices to its employees. To get more extensive benefits, workers pay more. The approach pushes individuals to make health care value decisions that many people don't want to make, Mr. Niemeyer said.
Big employers and the federal government may be able to offer multiple choices, but many small employers say they are lucky to offer workers one choice of health plan. Even then, plans often change year-to-year as insurers sharply raise rates whenever a worker incurs a serious health bill.
“I don't like anything about this system,' said Elisabeth Hendy, an owner of Stern-Hendy Properties, a 125-employee company that manages and maintains apartment complexes. “We don't like giving our employees managed care, but we can afford managed care. Half our competitors don't provide any health insurance.”
It took a bout with cancer to illustrate the inequities of American health care to Chuck Scheper, president of the corporate group for American Annuity Group.
Mr. Scheper was diagnosed with non-Hodgkins lymphoma in 1992. Even though he had money, excellent benefits, a high level of expertise in health issues, plus access to information many consumers do not have, he said he still struggled to decide where to seek care.
After considerable research and discussion, he opted to travel to Boston for a bone-marrow transplant from doctors at the Dana Farber Institute.
But since then, he has found himself trying to raise $100,000 to help a close friend with a similar case of cancer to get the same level of care because a managed-care health plan refused to pay for a bone-marrow transplant. It was an eye-opening experience.
“I was fortunate,” Mr. Scheper said. “I was able to get expert information. I didn't have to worry about coverage or permission to leave town.”
Talking about the value of health care services is fine, as long as someone addresses the concerns of the uninsured, said Sister Barbara Busch, director of the Working In Neighborhoods senior action coalition.
“What about the folks who aren't insured?” Sister Busch said. “What about the large numbers of people who don't have access to information and couldn't possibly fly to some other city for care?”
The Health Improvement Collaborative includes people who represent many of the sometimes conflicting values in health care, said Lynn Olman, the collaborative's executive director.
Starting with diabetes care, the goal is to find areas of common ground among the many health-care interest groups, then act on them, Mrs. Olman said.
What aspects of diabetes care need the most improvement? Can interest groups form “partnerships” to carry out changes or launch new programs? Can the changes be measured?
Don't expect the collaborative to draft a single, massive program for diabetes care. Instead, many actions could occur at various times at various levels.
For example, negotiations between health plans and employers might shift from demanding discounts to measuring how well the benefit package improves employee health and satisfaction. Health care providers might join health insurers and others to increase promotion of healthy lifestyle changes.
While the collaborative has picked diabetes as its focus and has hired a program director, it is still forming a diabetes steering committee. Recommendations remain months away.
“We're just getting started,” Mrs. Olman said. “But this has a lot of potential.”
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