Developing a Coordinated, Considered Response to Predatory Health Care

Brian Klepper

Posted 9/21/14 on the NBCH Newsletter Blog

ALP_H_BK_0010In today’s New York Times, Elizabeth Rosenthal describes the growing and egregious over-treatment and overpricing practices by physicians and health systems, abetted by health plans.

The excesses detailed in this article are at the core of our national health care quality and cost crisis. The best solutions are collaborative, considered actions by group purchasers, potentially the most empowered of health care’s stakeholders.

When predatory anecdotes like these come to light, the benefits managers – or better yet, the CFOs – of local employers, unions and governmental agencies should immediately call the health plan and demand that the health systems, physicians and other providers involved be removed from the provider panel. (Small communities held hostage by a few dominant health care players are a separate topic that I’ll address soon.)

As Tom Emerick, former VP Human Resources at Walmart has stated repeatedly, health care will not improve until purchasers demand different behaviors from health care vendors, focusing business on organizations that facilitate high quality care at reasonable cost, and publicly avoiding those that do not.

This is a serious issue that demands a coordinated response. It is at the top of NBCH’s agenda. Join with us on this.

Brian Klepper is the CEO of the National Business Coalition on Health.

Would A Single Payer System Be Good For America?

Brian Klepper

ALP_H_BK_0010berwick_donOn Vox, the vivacious new topical news site, staffed in part by former writers at the Washington Post Wonk Blog, Sarah Kliff writes how Donald Berwick, MD, the recent former Administrator of the Centers for Medicare and Medicaid Services and the Founder of the prestigious Institute for Healthcare Improvement, has concluded that a single payer health system would answer many of the US’ health care woes. Dr. Berwick is running for Governor of Massachusetts and this is an important plank of his platform. Of course, it is easy to show that single payer systems in other developed nations provide comparable or better quality care at about half the cost that we do in the US.

All else being equal, I might be inclined to agree with Dr. Berwick’s assessment. But the US is special in two ways that make a single payer system unlikely to produce anything but even higher health care costs than we already have.

Continue reading “Would A Single Payer System Be Good For America?”

DOTmed – An Interview with Brian Klepper

Loren Bonner , DOTmed News Online Editor

August 15, 2013

ALP_H_BK_0010DMN: After Steven Brill’s blockbuster article in Time Magazine came out a few months ago, it feels like everyone is interested to know the real scoop on hospital pricing and what’s driving up the cost of health care. I think you have some opinions on this. Can you share your thoughts?

BK: Egregious hospital unit pricing is certainly one driver, but the truth is that over the last several decades, every health care sector has devised ways to extract money from the rest of us that they’re not legitimately entitled to. I’ve written extensively about the Specialty Society Relative Value Scale Update Committee (or RUC), the secretive AMA committee that has jiggered the relative value scheme that Medicare, Medicaid and most commercial payment systems are based on, driving up cost. 

In my day job, I see health systems buying stakes in Pharmacy Benefit Management (PBM) firms, jacking up the generic pricing to their own members by 200% or more then telling their members that they’re managing their cost. Physicians are doing unnecessary procedures on patients, which not only costs a great deal but puts those patients at risk of physical harm. Primary care reimbursement has been driven down by Medicare and the commercial plans, which decreases visit time and increases the rate of specialty referrals and in turn produces much more costly care unnecessarily. Health plans push “choice” in networks, but having the right to go to a lousy doctor or hospital does nobody any favors, except by driving the cost up for less effective and efficient care. I could provide many, many more examples.

Continue reading “DOTmed – An Interview with Brian Klepper”

A Broader Approach To Managing Health Care Risk

Brian Klepper

Posted 2/15/13 on Medscape Connect’s Care & Cost Blog

BK 711Health care’s purchasers crave certainty. But complexity – and therefore uncertainty – rules. Assurances are hard to come by.

The most common question asked by prospective clients of my onsite clinic/medical management firm is how much less their employee health benefits will cost if they deploy our services. They often expect that we’ll review their claims history and nail down what their health care will cost once we’re involved. Looking in the rear view mirror can inform the future, but it isn’t foolproof.

The Complexity of Health Care Risk

The challenge here is that so many different mechanisms contribute to the need for care, the ways care is accessed, the ways care is delivered, and the ways it is priced. Even mechanisms that, in isolation, are strong, often are inadequate in the context of larger cost drivers.

Continue reading “A Broader Approach To Managing Health Care Risk”

Them, Not Us

Brian Klepper

Posted 1/7/13 on Medscape Connect’s Care and Cost Blog

“How many businesses do you know that want to cut their revenue in half? That’s why the healthcare system won’t change the healthcare system.”

Rick Scott, Governor of Florida
Former CEO, Hospital Corporation of America
Quoted by Vinod Khosla at the Rock Health Innovation Summit in August (video here)

BK 711ahip-logoThe Washington Post recently reported that health plan lobbyists, charts at the ready, are working to convince legislators that unreasonable health care costs are everyone else’s fault. Karen Ignagni, the Executive Director of America’s Health Insurance Plans (AHIP) declared: “If you’re going to have a debate and discussion about what’s driving health care costs, you have to get under the hood.”

Her first argument is that many practices of doctors, hospitals, drug, device and health information technology firms make health care cost more than it needs to be. This is well-documented and true. But her second, that health plans are different than the rest of the industry, and that they do not negatively influence care or cost, is pure marketing.

Continue reading “Them, Not Us”

Irresistible Forces

Brian Klepper

Posted 10/28/12 on Medscape Connect’s Care & Cost Blog

At our first meeting years ago, Tom Emerick, Walmart’s then VP of Global Benefits, told me,

“No industry can grow indefinitely at a multiple of general inflation. It will eventually become so expensive that purchasers will simply abandon it.”

Continue reading “Irresistible Forces”

Medicare Spending Time Bomb

Tom Emerick

Posted 1/23/12 on Cracking Health Costs

A huge amount of attention is focused on the national debt, and it should be.  The real train wreck in the pipeline is Medicare and Medicaid spending.

According to CBO projections, “Total spending on health care would rise from 16 percent of gross domestic product (GDP) in 2007 to 25 percent in 2025, 37 percent in 2050, and 49 percent in 2082.”  Click here for full report.  One problem with CBO estimates is they are notoriously optimistic, with actual costs coming in sometimes as much as eight times higher than CBO projections.

Sometime between 2025 and 2050, America’s going to…. Oh well, I’ll let you complete the sentence.

To quote Alan S. Blinder from a WSJ editorial on this topic, “So no, America, we don’t have a generalized overspending problem for the long run. We have a humongous health-care problem.”

Our children and grandchildren will resent our generation, perhaps bitterly, if we let this stand. In time historians will puzzle over why we knew this was coming but failed to act.