By David Hansen
When it comes to fixing the healthcare system, the saying “physician, heal thyself” should be extended to hospitals, insurers, employers, government, drug companies and
consumers.
All of us have played a role in making our healthcare system more expensive and less efficient than it should be, and it will take all of us to fix it.
By better understanding the many factors that contribute to excessive healthcare costs, we have the opportunity to develop and implement policies that can fix the problems in the system while keeping what is right about the American way of delivering healthcare.
Let’s put the various healthcare stakeholders in front of the mirror and see how we all must change to make quality healthcare more affordable.
Consumers have an important part to play. Preventable diseases are a major contributor to healthcare costs. The total bill for delivering healthcare in our country would decline precipitously if more Americans adopted healthy eating habits and exercised regularly.
Everyone who pays healthcare premiums or taxes is shouldering the burden of paying for the healthcare of those with preventable diseases caused by unhealthy lifestyles.
Employers also can be a leading force in reducing health costs. For years, employers have fallen into the trap of shedding and shifting healthcare costs. But many employers are finally recognizing that having a healthy workforce increases productivity and reduces turnover.
If every employer, regardless of its level of employee healthcare coverage, committed to promoting healthy living and creating incentives for employees to live healthier lifestyles, healthcare costs would moderate and even decline, simply because unhealthy people go to the doctor more often and for more costly services.
Insurers
I am not about to leave out my industry,health insurers. Insurers have developed extensive programs to mitigate costs by controlling provider and facility costs. As a result, insurers often place themselves at odds with doctors and hospitals.
Instead of playing a zero-sum game in which insurers cut fees and providers respond by charge variations, insurers should develop reimbursement strategies that facilitate cooperation, such as increasing reimbursements to higher-quality and higher-efficiency providers.
Insurers also must become more user-friendly and earn the trust of other stakeholders in the healthcare system. For example, explanation of benefits statements are too often encrusted with legalese and fail to explain why a benefit decision was made. Clarity about reimbursement practices and benefit levels would go a long way toward managing the expectations of both consumers and providers.
Doctors and hospitals also play a critical role in improving the efficiency and
affordability of our healthcare system. Many physicians, hospitals and other providers reject efforts by other stakeholders to develop and establish programs that evaluate their clinical performance and efficiency.
Yet among physicians, there often is disagreement about how healthcare should be delivered. Market-based reforms such as physician ratings and reward systems for quality and efficiency will, over time, lead to a system of best practices that will improve care and increase efficiency. But to implement these reforms, physicians and hospitals must collaborate more with insurers.
Drug companies could lower healthcare costs with one simple step: stop giving consumers misinformation about generics.
Faced with increasing employer policies that favor generics, drug companies spend millions in advertising trying to convince consumers that their brands are better.
In many instances, though, the generic is identical and costs 60% to 80% less. Yet drug company advertising influences consumers to view the generic as inferior and pressures employers to cover the higher-priced brand version.
Federal Government
The federal government, the largest payer of healthcare benefits in the country, has perhaps the largest role to play in fixing our healthcare problems. By capping or reducing provider and hospital reimbursements and reducing subsidies to the states in recent years, the government has engaged in cost shifting.
If a smaller, independent urban hospital derives 60% of its income from Medicare and Medicaid reimbursements and the fees are cut, the pressure to charge more to private payers grows for the hospital to survive. This pressure can set off a “life or death” struggle with private insurers over reimbursement levels.
The federal government should review the effect of its actions and take whatever steps necessary to ensure cost-shifting does not occur.
We all hold keys to open new doors to a better and more comprehensive healthcare delivery system. All stakeholders in the American healthcare system have the opportunity to contribute to real reform that leads to more affordable, high-quality healthcare for all Americans.
It requires that we all give a little more of ourselves so that everyone benefits, especially the 7 million uninsured Californians.
Hansen is Cypress-based chief executive of the Pacific region for UnitedHealth Group Inc.
