Summary
As the debate on national healthcare reform becomes white hot, the biggest question remains how to pay for it. The notion of taxing employee health benefits and/or limiting itemized deductions for higher income taxpayers will surely alienate both unions and well-heeled Republicans, respectively. However, the most politically promising route is to be able to identify ways of decreasing the excess costs of the healthcare system, without compromising its quality, to find sufficient funds to cover the costs of providing insurance to nearly 50 million Americans.
Analysis
President Obama has become enamored with the Dartmouth Atlas and its demonstration of the dramatic differences in per capita Medicare spending in different geographic areas around the country. For decades, beginning with the work of John Wennberg, M.D., M.P.H. in the 1970s, Dartmouth has documented and mapped wide variations in the cost and types of care, concluding that more spending has not resulted in better health. Although some of the cost variations may be attributable to the obvious differences in large metropolitan area pricing between a place like Green Bay and Miami, what really drives the excess Medicare costs in places like the latter is the increased utilization rates especially of high priced drugs and tests.
America spends about twice as much on healthcare per capita as the rest of the OECD nations do (with generally mediocre results on most measures of health status). So, getting the rest of the country to emulate the healthcare practices of places like Green Bay represents a very promising area for cost reduction without compromising quality (and perhaps enhancing it based on these studies), while not having to resort to politically unpopular tax increases (or at least not so much) in order to cover the uninsured.
One of the drivers of quality improvement and cost reduction in Green Bay is the Wisconsin Collaborative for Healthcare Quality, which publishes statewide performance results. By feeding back patient care results to physicians, there has been a steady improvement in quality in such important areas as diabetes care and cancer screening.
In addition, in Green Bay, healthcare providers are partnering with employers to attack the root causes of high healthcare costs. Investments in primary care, free health assessments and other preventive methods are also paying off.
Companies that may be poised to benefit from what may well turn out to me a national movement toward population health analysis include:
1. Premier, Inc.
2. IBM;
3. Accenture;
4. CSC; and
5. Hewlett Packard.
