Cat’s Cradle – Untangling the US Healthcare system

cats_cradle_article_by_mike_turpin_march_20081

Waiting For Dr Godot


If you think healthcare is expensive now, wait until it is for free.” – PJ O’Rourke

On the eve of sweeping health reform legislation, it is hard not to notice the glowing skyline in Washington as policymakers ignite their torches, grab their pitch forks and race as a mob toward for-profit stakeholders who many feel have created, perpetuated and benefited from our highly uneven, inflationary and inconsistent system of healthcare in America.

Over a quarter century, I have consulted with and led employers, consumers, hospitals, physician groups, attorneys, pharmacuetical manufacturers and insurers.  My personal epiphany prompting me to become more vocal about America’s need for systemic change did not spark in the middle of an inflammatory contract negotiation with a major hospital or flash during a heated employee meeting as we announced yet another deductible, co-pay and contribution increase.  My burning bush occurred on a gurney in the hallway of British National Health Service (NHS) hospital where I lay for 20 hours deathly ill with pneumococcal pneumonia.

After moving to London with my young family, we decided to opt for public care.  After all, I was curious to experience  the NHS and with three kids under eight, we were constantly under siege with myriad colds, earaches and symptomless fevers.  Best of all, it was free. Our neighborhood NHS family practice clinic was always crowded but convenient.  Other than the occasional drug co-pay, we never received a bill.  Yet, something was not quite right.  My doctor always looked as if wild dogs or the Inland Revenue Service was pursuing him.  I broke down during one examination and asked him how much he received from the National Trust for each patient to provide basic care.  ” Not nearly enough, Mr.  Turpin. Not nearly enough” He said absently while peering into my ear with a pen light.

In the bleak midwinter of our first English February, one of my kids came home with a nasty flu that raged through the house, flattening even my indefatigable wife who I considered indestructible.  I was travelling on the Continent and needed to return early to play Florence Nightingale to the family influenza ward.  As everyone slowly recovered, rising like Lazarus from the dead, I took ill and within one day, was coughing up blood and bedridden with a raging fever.  After a brief visit with my GP, he called an ambulance and I was taken to casualty (Emergency) in a local NHS hospital. I was admitted and deposited on a gurney in a hallway alcove as I waited to be transferred to a hospital room.  There was one problem.  There were no beds available.

The ER was utter chaos with sick elderly and acute care victims in every conceivable location.  The doctors were tireless and clearly dedicated but overwhelmed.  Through the haze of illness, I watched the trauma triage go on for hours.  My wife briefly appeared with the kids to visit.  

As she surveyed the floors strewn with bloody gauze and the frenetic ballet of emergency medicine, she mouthed to me with her little finger near her chin and thumb next to her head,” I will call you later ” and fled the hospital as if it was a haunted house. In my delirium, I could have sworn a giant staph germ escorted her to the door.  “Sorry you could not stay, love.  I am staphoccocolus bacterius.  Don’t worry he’s in good hands. Let’s do lunch.”

Doctors came and went in four-hour shifts.  My principal worry was the harried Casualty staff’s inability to remember that I had a Penicillin allergy.  I repeatedly mentioned my allergy to anyone who would make eye contact with me and twice awoke to catch a well-intentioned new doctor putting me on an amoxicillin drip.

In the early hours of the following morning, I was taken to a room that I shared with seven other of my new closest friends.  There was a poor woman dying of stomach cancer and an attempted suicide.   The bathroom smelled like Grand Central at 6pm and to my horror, there was no TV.  My pulmonologist appeared followed by graduates that shuttled behind him like ducklings crossing a Kent country road.  ” How is the pnuemo” he asked my Filipino nurse ” He is getting better, sir. Aren’t you?” she remarked looking at me. I wasn’t sure if this was a rhetorical question or a new affordability technique in stiff upper lip  British medicine called “self fulfilled prognosis”. 

I was suffering from pleurisy – the equivalent to a burning knife inserted in between your ribs each time you inhale.  I was also very unhappy.  I was in what felt like an overcrowded youth hostel and I wanted some bedside manner.  After all, damn it, I was American.  I wanted the head of pulmonology from the best London hospital to consult with me and give me his mobile and home phone number.  I raised my hand to ask the doctor a question and he flashed a perfunctory smile and said, “right”.  He turned and left the room.

I lay with an oxygen mask for a day drifting.  I awoke and saw the face of a colleague from the office.  It was as if he was a Red Cross worker checking on prisoner conditions per the Geneva Convention. He had lived in London as an ex-pat for five years and was appalled with my circumstances.  ” What are you doing down here? ” He whispered.  I gave him a pathetic look of incredulity and started blinking to him in Hanoi Hilton Morse code “ g-e-t  m-e  o-u-t  o-f  h-e-r-e”. 

He returned and was talking fast, “we have gotten you into private care and we have to transfer you.” He disappeared so quickly that I was uncertain if he had been a hallucination. I awoke again and was being moved.  I expected to be shuttled into an ambulance taken across London to Great Portland Street to a private hospital where most ex-pats delivered babies and accessed private care for routine and elective procedures. 

I was pushed on to an elevator by a Jamaican orderly who said in heavy Brixton accent, ” dis is yah lucky day mate.” The only luck I could fathom at this point was getting a room that did not smell.  The elevator rose up just one floor and opened to a well-lit, beautifully decorated foyer where two eager nurses smiled and gathered around my gurney.  “Mr. Turpin, we are so sorry about your illness and time down there“. Down there?  Even the staff seemed to consider my two-day tour of duty in Casualty as tantamount to one of Dante’s levels of hell.

But it got better. The same aloof pulmonologist who a day early had treated me like a flank steak referring to me as the ‘pnuemo’, grinned and shook my hand.  Mr. Turpin, I am Dr. G. Let me help you to your room.” The Jekyll and Hyde switcheroo was not lost on me.  Apparently, Dr G hit from both sides of the plate – public and private.  Personality and bedside manner came with private care.  My private room had a clean bath, cable television and a phone where I could call and order food.  It was like the Ritz Carlton. 

The doctor sat on my bed and shared my X-rays and described in pedantic detail my serious brush with death.  It was as if he had all the time in the world.  “You are over the worst of it but the inflammation and scarring will last quite a while. Once you are released, you can see me Tuesday next privately or in three weeks through the NHS.”

I was released the next day and chose to see Dr G privately for all my follow up care.  I was in constant pain from the pleurisy and the reassuring ability to access my doctor when I needed to see him was worth the significant out of pocket expense.  I was paying for the fast pass privilege of his time and attention.  My bill for the entire episode of private care delivery was well over $2000. I saw no bill for my 48 hours in Casualty.

It was interesting to reflect later on my experience. On one hand, the NHS triaged my condition, treated meet and summarily moved me out quickly to convalesce at home. If value is outcomes divided by cost, the NHS produced the most value. 

Yet, when I introduced my own subjective expectations as a consumer – hospital conditions, bedside manner, access to specialists and information, all subjective intangibles that Americans insist are essential elements to the numerator of outcomes, one might give the NHS barely a passing grade. 

As we watch Congress debate in the weeks and months ahead the future of our healthcare system, I worry that not enough of the 180 million privately insured Americans understand the difference between outcomes and access. We cannot possibly understand the downstream effects of some of the changes that are being proposed to our system.  US healthcare is in need of a major overhaul but we need to attack the factors that are driving the cost of care higher. Malpractice, overtreatment, poor lifestyles, reimbursement policies of insurers, major differences in clinical quality of hospitals and doctors and an insatiable consumer demand for immediate and unimpeded access are bloating our system. If one were to judge our identity by our budget, the US is essentially the world’s largest insurer with its own army. 

Swinging the pendulum too far in the opposite direction with national oversight, artificial price controls,  the erosion of private insurance by expanding government sponsored plans to over 44 million uninsured without tackling the underlying causes for rising costs may be more than most Amercians can bear. 
We will in effect be trading a public/private cat’s cradle bureaucracy for a single payer with little effect on true cost drivers.  Anecdotally, we already have a glimpse into what government healthcare might look like with Medicare. Ironically, if you ask most seniors, they would tell you they love Medicare but fear socialized medicine. Go figure! 

Change is in the wind and we will all be required to modify our behavior.  However, we should join the discussion and engage our Congressional representatives in the debate.  If we are not vocal or vigilant, we may wake up one day on that gurney in a hospital wondering what the hell happened to our health care system.

Should H.R. Stand for Health Reform?

Should H.R. Stand for Health Reform?

By Michael Turpin

There is a story of Winston Churchill addressing an exhausted and beleaguered group of young RAF pilots during the height of the Battle of Britain.  As he surveyed the demoralized men who had logged so many combat hours and had witnessed friends die in battle against a superior Luftwaffe, he stood silent and allowed a heavy pregnant pause to fill the air.  Churchill turned to the pilots and posed just two questions:

“If not you, than who?  If not now, then when? “

The primary purchasers of healthcare for over 180 million Americans are human resource and benefits professionals. The job description for most HR and Benefit professionals is managing human capital.  These increasingly difficult jobs strive to achieve a harmonic convergence of employee attraction, retention and development that leads to growth in revenues and profit.  Yet, when faced with increasingly inflationary healthcare costs and fewer choices to mitigate them, employers are increasingly taking the path of least resistance – passing on rising costs to plan participants rather than confronting more deeply embedded drivers such as poor lifestyles, lack of consumerism and a reluctance of stakeholders to be held accountable.  It’s time we grab our national health crisis by the folds of its own fat and force fundamental change. It is going to ultimately fall to human resource, benefit and other business leaders to deliver some tough messages to stakeholders who have failed to solve this crisis.

As we follow the healthcare reform debate in Congress, the silence from many employers has been deafening. The genesis of true market-based reform can only occur at the level of the employer. HR and benefits leaders must exert a level of influence over the debate. As we enter this era of tough love and economic survival, it’s time for those who are most experienced to speak up.  HR and benefits managers should consider the following eight steps as a means of seizing the high ground in driving market reforms in healthcare.

1)    Advocate “loss control for healthcare” – Most smaller and mid-sized employers feel they have little leverage or control over their healthcare costs.  Ironically, these same individuals are active and aggressive in managing the costs of occupational health through workers compensation loss control programs.  If clinical industry benchmarking data indicates that 6% of a workforce is normally diabetic and your claim data suggests less than a 2% incidence of diabetes within your claims, you may want to focus on determining whether you have a higher rate of undiagnosed illness using health risk assessments and predictive modeling instead of blindly assuming that your loss experience is tracking more favorably than industry norms.  You must design value based plans that remove barriers to care and encourage prevention. It is time we develop strategies to drive non-occupational health management as a course of business.  Call it “wellness”, “productivity improvement” or “presenteeism” – it is all about improving the health of our employees and their families.  The days of fencing with finance over the return on investment of a healthy workforce must be replaced by a corporate commitment to improve workplace health.

2)    Have an opinion – Too many HR and benefit industry professionals do not express their opinions about what needs to change.  Get involved in industry associations.  A friend who runs a major employer coalition in a large US city confided to me how difficult it was to get HR and benefit professionals to participate in roundtable discussions with insurers, hospitals and other key stakeholders.  Call it apathy or a lack of bandwidth. The absence of employers (particularly hard hit mid-sized and smaller employers) voicing strong opinions about how the next iteration of healthcare should evolve in each market creates a void that may soon be filled by politicians and academics who have a less pragmatic understanding of the irreversible downstream consequences of radical reform.

3)    Insist that double digit trend increases are unacceptable – For insurers to continue to deliver core trends in excess of 8% and fully loaded trends well into double digits indicates that payers have not delivered on promises to offer lifestyle changing medical, disease management and claims management impacts. Insurance company underwriting and trend setting practices are an opaque alchemy.  Any vendor who purports to offer health plan management services should have their remuneration tied to managing your medical trend.  In the final analysis, trend drives cost.   If the best that the for profit and not for profit healthcare industry can offer is double digit increases, it deserves to be replaced by an alternative system.

4)    Force the C Suite to get help amplify your message– Senior management, finance and HR must work in partnership to assess risks, seek to eliminate and/or mitigate them, determine which risks should be retained through self insurance and which should be defrayed through risk transfer.  The days of treating insurance renewals like the purchase of a car – “If they get to 10%, tell them we will renew.  Otherwise, put it out to bid” – must be replaced with a more thoughtful year long discussion on claim cost drivers and ideas to mitigate near term and longer range claim costs.  Benefits are an investment, not a commodity.

5)    Understand cost shifting is not cost containment – Managing healthcare expenditures does not mean merely cost shifting increases to employees.  It means engaging and communicating with employees around cost drivers, lifestyle obligations and plan changes that are designed to improve health. Many employers opt for open access networks allowing employees the ability to bypass primary care in favor of more expensive specialty care self-referrals.  These paternalistic designs limit disruption but drive higher medical inflation which in turn, requires more cost shifting to employees. With new claims and episode of care data helping to designate providers who deliver higher quality and lower cost outcomes, we can design a new healthcare system around superior providers and higher quality outcomes.  We can focus on rewarding primary care providers for keeping people healthy instead of bankrupting our system around a legion of medical specialties that are exponentially growing to serve the needs of tomorrow’s chronically and catastrophically ill.

6)    Develop a plan – When was the last time your broker or consultant sat down with you during your budget cycle and helped develop your cost assumptions for the coming fiscal year?  Every 100bps of medical trend saved translates into dollars contributed to earnings, shareholder value or private equity owner returns.  HR and Benefits can been seen in a much more strategic light when a plan is developed and followed – particularly one that drives so much annual cost and increases disproportionately to all other corporate costs each year.

7)    Participate in provider negotiations – Insurers are often maligned for their business practices.  While health plans are clearly focused on shareholders and profits, they are critical partners to managing medical trend.  Most insurers privately confide their lack of confidence that employers will support them if they get into a major fee dispute with a large hospital system or medical group. Larger hospital systems are banking on the fact that employers will not tolerate the noise from employees resulting from the loss of a major healthcare system from their network.  This lack of solidarity forces the insurer to agree to pay larger fee increases in contract negotiations – leading to higher medical trends for the employer.

8)    Calculate broker value as outcomes divided by cost -.  There are 28,000 consultants, brokers, financial advisers and agents delivering advice on healthcare to employers across the US.  Like any industry, there is wide variability among intermediaries.  Many of these middlemen are reactive, focusing on annual plan marketing, issue resolution and administrative support services for HR. In the end, the calculus of determining service value should be outcomes divided by cost.  If you cannot measure outcomes (e.g. year over year trend mitigation, claims and vendor performance management) and you do not know what your broker or consultant charges, it is impossible to determine the value of services.

The greatest single asset we possess in American business is our workforce.  HR and benefits are the ombudsmen and advocates for these human resources and must use benefit plans as levers to drive productivity and process improvement.  Sounds like a big responsibility?  It is.  While HR and benefit leadership may seem thankless in these dark days of recession, rising medical costs, declining profits and layoffs, it can be a highly rewarding platform for those capable of elevating themselves to the role of business leader – helping ensure the personal health of employees, their families and ultimately their company.