Revisiting Health Care Reform Analysis: “Terrific possibilities” for Region Said Howard Dean

By Central Voice

“Terrific possibilities” is how Howard Dean described the region’s health care possibilities.

With hospital mergers in the public chatter, Central Voice revisits remarks made by former Vermont governor and presidential candidate Dean when he spoke Oct. 4, 2012 to guests of Alder Health Services.

Alder Health Services is a regional provider of family, primary health care services to underserved populations in Harrisburg and Lancaster, including the lgbt community. Alder Health also provides HIV services to an eight county region.

Howard Dean

Howard Dean

“South central Pennsylvania is a perfect location for some terrific possibilities,” Howard Dean said. His formal topic was “The Politics of Health: Healthcare Reform and How to Assure Quality Healthcare for All in the US”.

“For enterprising organizations like Alder Health Services there are terrific possibilities,” Dean said. He’s referring to potential public good that may derive from an Accountable Care Organization, a key provision in the new federal health care law that goes into full swing in 2014.

Dean’s mantra around ACOs is “vertical integration,” meaning the ways in which existing health care organizations forge new relationships in order to provide services that reduce both costs and disease and are thereby “accountable” to the public policy goal of affordable, wellness-based health care.

These new relationships are intended to reduce fragmentation and unnecessary testing, two expensive hallmarks of US medical care that drive health care costs sky high. In a recent annual report, the Kaiser Family Foundation notes that the US spends $7,538 a year on each American. That’s at least $2,535 more or 51% higher than Norway, the next largest per capita spender.

The rate of growth in US health care spending goes up faster than any other industrialized nation. Health care now accounts for 17.6% of Gross Domestic Product, expected to rise to 25% without a shift to health promotion and disease prevention rather than payment for procedures resulting from illness.

The cost reduction/health promotion model Dean describes rests on a radical shift in perspective.

“The trend you’ll see is payment for patients, not payment for procedures,” Dean explains. This means medical providers will be paid a set amount for a patient and then be expected to front-load wellness promotion in order to avoid illness.

He’s describing what others call the health care system’s strong “disincentive” in that payments are made for elaborate interventions with, for example, diabetes and heart disease, rather than routine ways to reduce the occurrence of such life-long medical conditions that are expensive over a patient’s lifetime, not to mention effects on patients’ quality of life.

The new incentive is that doctors and health care systems promote wellness for a fixed per-patient rate – called a capitated rate – and then keep dollars not spent on treating illness. In other words, payment systems will reflect the value of keeping people well rather than how much doctors and hospitals get paid to care for patients who become sick.

“Most hospitals and insurance companies think they understand wellness but they don’t. It’s all blather,” Dean says unequivocally.

Medical literature also portrays another shift easy to describe but difficult to achieve: doctors who treat the same patient must simply “talk” to each other. They must vertically integrate communication. In an aging population, a patient’s cardiologist may not speak with his orthopedic surgeon or oncologist. Meanwhile, chances are each doctor may be ordering expensive and duplicate tests eliminated by simply talking.

President Lyndon Johnson’s architect for pushing through Congress Medicare and Medicaid was Wilbur Cohen who warned about the “unintended consequences” of public policy. In the short run, Dean expects that small business will dump health care coverage as an unintended consequence of President Obama’s Affordable Healthcare Act.

“Small business will pay the fine, maybe give employees some money to cover them buying into a state exchange,” he predicts. A state exchange is an information exchange whereby individuals and businesses can research what products at what prices exist as options to employer-based coverage. “I don’t think it’s good public policy to separate health care coverage from our traditional employer-based system, but that looks like the future under AHA,” Dean laments.

Surprising to some observers, Dean opposed the controversial “individual mandate” that the US Supreme Court ruled is a tax and therefore allowable under the US Constitution. Contrary to political ads from all precincts of the political debate, the mandate is a cornerstone of presidential candidate Mitt Romney’s health care reform plan passed while he was governor of Massachusetts and President Obama’s Affordable Healthcare Act.

“The mandate only served to anger lots of people and it’s really, if you study Obama’s reforms, a negligible piece” of the picture. As passed, the mandate isn’t fiscally practical Dean says. “For example, one must buy in or pay a tax, and given there’s no ‘community rating’ that balances out what it costs across a large number of people a person with a pre-existing condition can be charged up to 300% of market rates,” he explains. “You need controls or the formula falls apart.”

Ahead 10 years, Dean sees our soon-to-be evolved health care system evolving into a single payer system.

“There’s no sense taking apart what was just passed by Congress,” he says. “Let’s make the best of it work.” Dean expects that once all the loose parts are shaken loose from President Obama’s Affordable Healthcare Act, the country and Congress may be ready to revisit health care reform.

Alder Health Services: 1.800.867.1550.

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