The current trajectory for the cost of health care is unsustainable. The average annual premium for family health care coverage is already $13,375 and at the present rate of growth will be over $31,000 ten years from now. It’s not only busting family budgets, it’s causing serious disruption to the cost structures of American business. Unfortunately, no one has a silver bullet solution to the health care cost crisis in America. But there are a few things that can help and we need to start somewhere.
St. Mary’s is a top notch, Baldrige Award winning provider of health care in the Madison area. President Frank Byrne periodically hosts a breakfast with area business leaders to discuss health care challenges. I was honored to attend a couple weeks ago. It was very informative with a lively discussion. Wisconsin’s health care is rated #1 and clearly, St. Mary’s is a big part of the reason.Here are a couple things health care providers can do that might help in the battle to get costs under control. (Strategies and statistics cited are mine and not meant to speak on behalf of nor represent St. Mary’s):
Design and Optimize Clinical Pathways – Analysis indicates a disproportionate percentage of the costs (~70%) are driven by a small minority of individuals (~10%) that are experiencing acute, complex, and/or catastrophic health situations. A “clinical pathway” is a best practice approach to treating these various situations. To be effective, providers need information systems (like those provided by Epic) that provide physicians immediate access to medical records and best practices. Following a best practice approach increases the quality of care for patients and reduces costs associated with unnecessary diagnostics and treatment.
Design and Optimize Managed Care for Chronic Conditions – Another large portion of the costs in health care (~20%) are from a small number of people (~15%) with chronic conditions like diabetes. A robust design for quality managed care improves the quality of life for those individuals, reduces the occurrence of visits for acute or catastrophic progression, and consequently lowers overall costs.
Design and Align Incentives – One of the biggest issues driving health care costs is the misalignment or disconnects in incentives (i.e., motivations). The problem is best seen not only in the natural tension that exists between quality and cost, but also in examining the “primary motivation” of individuals, providers, physicians, insurers, business and government. Some businesses are leading the way to drive realignment of these incentives and are dramatically lowering their insurance premiums. Business can and should drive these cost improvements since they are picking up the biggest portion of the tab.
I’ve always had high appreciation for St. Mary’s. My youngest daughter was born there and recently, so was my new granddaughter. Frank Byrne and St. Mary’s continues to impress by designing their business model and employing strategies that make them a leader in health care. Businesses can drive these and other strategies to improve quality and lower costs. Some small and mid-size businesses are doing it and experiencing dramatic decreases in costs. Like I’ve already said, there’s no silver bullet. But let’s start somewhere.