Using Strong Carrots and Sticks To Drive Health Care That Works

Brian Klepper

Posted 5/09/13 on Medscape Connect’s Care & Cost Blog

ALP_H_BK_0010On a recent call with a large manufacturer, my company’s team expected to describe how we develop primary care medical homes that become platforms for managing comprehensive health care clinical and financial risk. But the team on the other end of the phone beat us to it. Their remarks – that health care cost is a multi-headed monster that requires a broad array of simultaneously executed approaches – were a breath of fresh air.

They wanted to avoid approaches that don’t work or are designed to accrue to a vendor’s disproportionate financial advantage, and focus instead on mechanisms that measurably improve health and reduce cost. Their conventional current clinic vendor wasn’t onboard, philosophically or in terms of capabilities, and so wasn’t getting results. They were looking for a replacement vendor that could help them drive more appropriate care, with clear rules for patients and providers.

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When Employers Get Serious About Managing Health Care Risk

Brian Klepper

Posted 4/07/13 on Medscape Connect’s Care & Cost Blog

ALP_H_BK_0010RostLast week I visited with Gary Rost, an unassumingly knowledgeable man and the Executive Director of the Savannah Business Group (SBG), arguably one of the most effective health care coalitions in the country. Their offices are only a couple hours away from my home on the Northeast Florida coast, so it was a quick trip up.

SBG was founded in 1982 as a way of mobilizing employer buying power for better care at lower cost. Its reach now extends beyond Savannah about an hour south, north into South Carolina and west from the coast. The vision described on its site is straightforward and easy for purchasers to appreciate:

“SBG endorses and adheres to the principles of value-based purchasing: performance measurement, transparency, public reporting, pay for performance, informed consumer choice and collective employer leadership.”

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Why Only Business Can Save America From Health Care

Brian Klepper

Posted 3/24/13 on Medscape Connect’s Care and Cost Blog

BK 711For a large and growing number of us with meager or no coverage, health care is the ultimate “gotcha.” Events conspire, we receive care and then are on the hook for a car- or house-sized bill. There are few alternatives except going without or going broke.

Steven Brill’s recent Time cover story clearly detailed the predatory health care pricing that has been ruinous for many rank-and-file Americans. In Brill’s report, a key mechanism, the hospital chargemaster, with pricing “devoid of any calculation related to cost,” facilitated US health care’s rise to become the nation’s largest and wealthiest industry. His recommendations, like Medicare for all with price controls, seem sensible and compelling.

But efforts to implement Brill’s ideas, on their own, would likely fail, just as many others have, because he does not fully acknowledge the deeper roots of health care’s power. He does not adequately follow the money, question how the industry came to operate a core social function in such a self-interested fashion or pursue why it has been so difficult to dislodge its abuses. For that, we need to turn our attention to a far more intractable and frightening problem: lobbying and the capture of regulation that dictates how American health care works.

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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.

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When Employers Collaborate To Manage Health Care Costs

Brian Klepper

Published 12/09/12 in the Eau Claire, WI Leader-Telegram

Note from Brian: This piece appeared last weekend in the Eau Claire, WI newspaper, and was written with the encouragement of employers in that community who, rightly, believe they’ve been raked over the coals on their health care costs.

This argument is mainly directed at other employers, as a way of explaining that there are alternatives. That said, the dynamics described here occur in almost every community in the country.

BK 711Even compared to national health care cost growth that has skyrocketed nearly 4 times as fast as general inflation for more than a decade, Wisconsin stands out and northwest Wisconsin stands out more. Eau Claire’s health care cost burden is a whopping 16 percent higher than the national average. This is pricing many individuals and employers out of the coverage market and sapping the region’s economic vitality and competitiveness.

As Robert Kraig meticulously details in Citizen Action’s Wisconsin Health Insurance Cost Rankings 2012, Eau Claire is Wisconsin’s second-highest cost health care market, with 2011 monthly premiums of $750.46, 9.1% higher than the state average of $687.68. (La Crosse is 1st, only a hair higher at $756.70.)

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Will the Bubble Burst?

Brian Klepper

Posted 8/19/12 on Medscape Connect’s Care and Cost Blog

My recent 3-hour outpatient prostate biopsy generated nearly $25,000 in charges. My health plan will probably settle for four to five thousand dollars – this is the real market value – but if we were uninsured we’d be on the hook for the whole thing. All in all, a minor diagnostic procedure – nothing cured or treated – for the cost of a pretty nice car.

The capricious insanity of health care pricing is delivered with straight faces by health care professionals and executives to flabbergasted patients and benefits managers. It is the by-product of a system utterly devoid for decades of transparency, accountability or market pressures.

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Why US Health Costs are Higher Than Anywhere Else in the World

Jane Sarasohn-Kahn

Health Populi

The price of physician services, proliferation of clinical technology and the cost of obesity are the key drivers of higher health spending in the U.S., according to The Commonwealth Fund‘s latest analysis in their Issues of International Health Policytitled, Explaining High Health Care Spending in the United States: An International Comparison of Supply, Utilization, Prices, and Quality, published in May 2012.

The U.S. devotes 17.4% of the national economy to health spending, amounting to about $8,000 per person. The UK devotes about 10%, Germany 11.6%, France, 11.8%, Australia 8.7%, and Japan, 8.5%.

On the physician pay front, primary care doctors in the U.S. earn about $186,000 a year, compared with Australian colleagues who bring in about $92K a year, French peers at $96K per annum, Canadian PCPs earning $125,000, Germans at $131K, and British earning $160K.

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