Cat’s Cradle – Untangling the US Healthcare system

cats_cradle_article_by_mike_turpin_march_20081

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.

Chronic

2D structure of eszopiclone (Lunesta)
Image via Wikipedia

 

Chronic

 

You take the blue pill, the story ends.  You wake up in your bed and you believe whatever you want to believe.  You take the red pill, you stay in wonderland.  And, I show you how deep the rabbit hole goes.  ~ Lawrence Fishburne, The Matrix 

Thirty years ago, chronic conditions were attributed to a much smaller subset of society.  People who had anxious limbs were encouraged to cut down on chocolate and caffeine, get more exercise and perhaps drink more water.  Drivers who became apoplectic at the reckless maneuvers of other drivers were “hot heads.”  People who experienced the occasional down day were considered to be feeling “blue.”  Older men needed to use the bathroom more frequently and people in high stress jobs often found themselves reading books at night, unable to fall asleep.    

It’s taken years for me to realize that I grew up chronically ill.  I had a short attention span, wiggled like a worm on a hook and wheezed when I ran, especially if I hadn’t exercised for weeks.  My penchant to eat too many cookies, tell lies when confronted with a punishment, forget to do my homework, chase girls, suffer the occasional nightmare and routinely punch my little brother when he bugged me – were all chronic conditions that went undiagnosed for years.  I do not have the heart to tell my parents that the punishments they meted out were visited upon a hopelessly sick child.  Thanks to Mike Adams of Natural News and the pharmaceutical industry, I now understand that I suffered from restless leg syndrome, attention deficit disorder, exercise-induced asthma, low blood sugar, chronic denial, irrational attraction, recurring hallucinogenesis, and periodic anger.  It’s a miracle I made it through elementary school.

The medieval treatment for many of these non-progressive conditions involved a leather strap around 36” long, applied vigorously to the afflicted child’s gluteus maximus until the symptoms ceased.  Other therapies were administered with open hands or common household implements.  Supplemental cures included total quarantine or gardening and the sanitation therapy of cleaning latrines. 

Physicians today are generally appalled at these methods, as we now know each of these conditions can be resolved with a prescription drug.  We now understand that our DNA strands are virtual Rosetta stones, revealing myriad predispositions to illness.  As we further explore this final frontier of divine programming, we rapidly develop drug therapies to arrest these genetic troublemakers in their tracks.  You can now travel to Canyon Ranch and, for a small fortune, identify genetic markers that indicate how you might metabolically respond to certain diets or drug therapies.  You can answer such nagging questions as “Am I more likely to respond to a low-fat or a low-carb diet?” and “On which psychotropic drug am I less inclined to gain weight?”  It’s all very uplifting.

While it is exciting to watch the evolution of genetic therapies lead to a next generation of “designer” drugs, we are also descending into an era of increased self-diagnosis – and an expanded definition of what it means to be “chronically ill.”

I can’t watch television anymore without seeing a luminescent butterfly gently raining pixie dust on an entire city of sleep deprived type A personalities.  They awaken after a fresh Lunesta induced sleep, rested and ready to operate heavy machinery.  The Flomax commercial makes me have to go to the bathroom.  I am jealous of these fishing, biking, and rafting crazies who spray each other with water and have not used the rest room in four days.  Going to the bathroom never seemed so fun.  High cholesterol and acid reflux ads show people eating pizza, cookie dough and possibly dirt while dropping their LDL lower than a Marin County vegetarian.  And there are the ads dealing with, well, how should I say, erectile dysfunction.  Everyone looks really, really…really happy.  The men are mischievous and the women are playfully coy.  The mood music is playing when suddenly, 50 of your closest friends drop in.  But don’t worry; you will be on your game, potentially for the next 20 hours.

As we enter the 21st century, we must not let up.  We must push for new therapies.  Research is already underway for the following progressive conditions:

• Combat Disassociation Disorder – CDC affects millions.  It is characterized by a complete disregard for the fact that your nation is at war.  Symptoms include lack of concentration on issues relating to foreign policy, energy or deficit spending.  In extreme cases, a CDC sufferer may attempt Richard Nixon impersonations.

• Situational Narcolepsy Syndrome – The drug industry hopes to eradicate this crippling condition that impacts one in two adult males worldwide.  To quote an industry insider, “The market for an SNS cure is huge!”  The condition is characterized by men absorbing less than 50% of information conveyed to them by their spouse or significant other.  In clinical trials, a combination of drug therapy and super amplified hearing aids has shown remarkable success.  A typical SNS sufferer might hear, “Honey, I need you to…Stamford…Johnny and Timmy…don’t forget…5 p.m.”  After clinical trials, the same respondent was able to absorb the following: “Honey, I need you to get to Stamford by 4:30 to pick up Johnny and Timmy.  Be sure to tell Carol that Timmy does not need a ride to soccer and call Sarah and tell her to walk to Starbucks at 5 p.m.  I will pick her up there.”

• Vicarious Delusion Syndrome – The Fairfield County Athletic Association has recently contributed venture capital to JSU (Just Shut Up) Biosolutions, a biotech research lab focusing on therapies to treat individuals who attempt to live vicariously through the athletic careers of their children.  VDS is characterized by fits of anger and limited peripheral vision.  Hearing is often impaired and public outbursts may be followed by periods of profound social and personal alienation.  Clinical trials have shown the experimental drug Justagame to work on the most advanced cases of VDS – parents who hang out at the local fields even when they have no children playing. 

Thankfully, our friends in the biotech and pharma industries are hard at work to attack these and other illnesses.  Imagine a future of malleable teenagers, attentive spouses, cooperative coaches and civilized spectators.  Consider a life where you can sit through an entire episode of The Hills with your teenager without feeling nauseated. 

It’s just around the corner, and I can’t wait.  In the meantime, I will have to deal with anxiety, uncertainty, stress and anger the old fashioned way – through exercise, traditional medications and eating right.  Tomorrow can’t get here soon enough for me.  Actually, I’ve been told my constant preoccupation with the future is an undiagnosed case of Random Anticipatory Anxiety Syndrome; soon it, too, will be treated. 

Better living through modern chemistry. Thank heavens!