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Roundtable discussion

Health care industry working to adapt to reforms


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Health care professionals agree that change is needed, but the Affordable Care Act presents concerns that may outweigh the benefits.

“What we’re facing here is that there is no silver bullet, there is no single answer. This is a complex, multi-factorial problem,” said Tom Gehring, executive director and CEO at the San Diego County Medical Society. “People are looking for the microwave button that says health care is fixed, and there’s no such thing.”

Professionals discussed the statute at a recent roundtable discussion hosted by The Daily Transcript and sponsored by BB&T – John Burnham Insurance, Anthem Blue Cross and Abnology.

“It’s incredible that we’re moving toward universal coverage. We all love that, no one is against that. It’s how we get there that we’re concerned about,” said Sherry Franklin, medical director at Pediatric Endocrinology of San Diego.

The expansion of Medicaid will put an insurance card in the hands of more adults, Franklin said, but the private sector can’t afford to absorb Medicaid. This could create a situation where the adults will go to a community clinic, and when they can’t get in, they’ll flood into the emergency rooms, Franklin said.

“The challenge from our perspective is, the demand is going to increase, but the supply is not,” said Paul Viviano, CEO of the University of California, San Diego Health System. “Or, at least not fast enough to care for the 32 million people roughly in the United States who don’t have health insurance today that will in the future. And so the delivery system is going to struggle in a lot of ways.”

With so many more people able to obtain insurance cards, the access to care is another concern, said Larry Anderson, CEO of Tri-City Medical Center. In North County, there’s an industry developing “concierge medicine,” which would allow people to pay $300 to $400 each month for immediate access to a doctor.

“We’re going to have a multi-tiered system where the wealthy, or relatively better off, can afford health care and they’ll pay more to get a concierge service. But the people in the bottom of the food chain and in the exchange, they’ll have trouble,” Anderson said.

Ted Steuer, executive director at Scripps Mercy Physician Partners, said increasing demand without increasing supply is inflationary.

“I think as we look at the supply situation, I’m very concerned about whether there will be access to physicians in the future because we’re increasing demand, and I think we’re shrinking supply,” Steuer said. “If we look at the number of physicians who are in their upper 50s or 60s, many of these are physicians who are seeing patients today who may be forced out of practice. Not forced out of practice from a regulatory point of view, but from an economic and lifestyle point of view. And so the supply issue we talked about could get even worse, and there are no plans to resolve it that I’m aware of.”

Franklin said her plan is to retire in about seven years.

“It’s getting to be too much. It’s constantly jumping from one thing to the next,” Franklin said. “I don’t think I’m alone and I’m not 50-something. It’s very sad. It’s getting to be too many hoops to jump through. It’s getting kind of ridiculous.”

Gehring said the “fundamental flaw” in the law is that people can buy the insurance at any time.

“It would be the same thing as if we gave people the ability to buy car insurance after the car wreck,” Gehring said. “The cost to not have insurance is less and sometimes significantly less than the cost to buy insurance.”

Pamela Legge, senior vice president of employee benefits at BB&T – John Burnham Insurance, said the first year penalty for not having the coverage is $95, whereas many pay hundreds of dollars each month for the coverage.

Franklin said she is also concerned with the “weak employer mandate,” which would make it easier in her practice to “dump everyone and do the exchange, and I don’t have to take a hit at all because I only have four employees.”

Timothy Durie, senior vice president of human resources for Newland RE Group, said his company provides health care as a recruiting and retention tool, but said it “makes more economic sense to drop our health care plan.”

There are many unknowns as the ground rules for the insurance exchanges are still being written, Viviano said.

The cost to employers to another concern, Anderson said. As an employer of about 2,400 people in North County, he said he will face an estimated $10 million in addition costs to insure his employees over the next six years, which represents an increase of about 70 percent over his current costs. Today, 400 of his employees elect to not have insurance, but starting on Jan. 1, 2014, Anderson said many of them will sign up because it’s of no cost to them.

“We’ve calculated that if only 25 percent of those people elect to do so, our costs skyrocket. And I think that will be played out among a lot of large employers who are sitting comfortable today thinking, ‘We provide insurance; we pay for it for our own employees; the employees have health insurance, not to worry.’ But there’s a lot more in the Affordable Care Act than meets the eye,” Anderson said.

The cost to families may go up to unsustainable levels, said Gehring. He referenced a study by IBM, which found that in six or seven years, the bill for an average family of four to obtain health insurance would be about $28,000 per year, which is about one-third of a family’s GDP.

“I think what everybody needs to be very, very afraid of is in the short-term and medium-term, we’ll struggle to solve the problems,” Gehring said. “But in the long term, we’re talking about the health care economic cliff where a family is not going to say, ‘A third of my income for health insurance?’ Unsustainable.”

The top 50 nations spend about $6 trillion per year to provide health care to people, according to Howard Asher, chairman of the Abnology board of directors. The United States occupies about 5 percent of the world’s population and spends 56 percent of that total spent. The U.S. also scores about 33rd on average on the “metrics that matter,” which includes “everything from fairness to infant mortality and longevity,” Asher said.

“We’re the only nation of 50 that don’t automatically health insure our citizens. All the other 49 nations, for some reason, think it’s better to automatically insure a citizen at birth,” Asher said. “So when we look at the real metrics that matter relative to U.S. health and the cost of health and follow the dollar, understand where that spending is going, how does it get there and how do we get better bang for the buck, we have a lot of reform to do. And I think it’s far beyond what Obama attempted to do. I think it’s far beyond what our congressional people would like to do.”

But Franklin said the United States spends more money end of life care than other countries, and also invests in research and development in other countries.

“To just say blanketly that our health care system is not as good may not be taking into account that we save 24-weekers, which are preemies, and we put the majority of the health care dollar on the last six months of life, which I would bet the majority of these other countries don’t. If we subtracted that out, I still think we’d probably spend more, but I don’t think it’s as bad as it sounds,” Franklin said.

The roundtable participants said they formed committees to keep employees in the know and to stay connected in Washington, D.C. and in Sacramento, but Franklin said people sitting on the boards aren’t listening. Anderson added that the information coming out isn’t very clear.

“One good thing about not being told everything is we have an opportunity,” Franklin said. “We don’t have a choice. This is here. So, for example, with the ACOs (Accountable Care Organizations), I’m afraid it’s going to cost us more. However, it’s an opportunity for the people within the ACOs to create what they want to create.”

Steuer also said the demand for innovation will result from the challenges faced with the ACA.

“This country is a hot bed of innovation. We will figure it out, just not tomorrow afternoon,” Gehring said.

To prepare for the upcoming changes, Viviano said the UC San Diego Health System is investing in quality and safety and improving those facets because there are rewards for that. It is also expanding the primary care base and working with insurance companies to the extent that they will be part of the exchanges.

Anderson’s company formed a shared savings version of an ACO.

“Why did we do that? Actually, we don’t know, because we don’t know what’s coming,” Anderson said. “What we think is coming is a single-payer system and for us, we think we’ll be most prepared for that if we already have a well developed network of our doctors, so we can accept a single bundled payment and be responsible for distributing that among various providers.”

Roundtable Participants

Larry Anderson, CEO, Tri-City Medical Center

Howard Asher, Chairman, Board of Directors, Abnology (sponsor)

Timothy Durie, Senior Vice President of Human Resources, Newland Real Estate Group

Sherry Franklin, Medical Director, Pediatric Endocrinology of San Diego

Tom Gehring, Executive Director/CEO, San Diego County Medical Society

Arthur Gruen, CEO, EA Health Corporation

Pamela Legge, Senior Vice President, Employee Benefits,
BB&T-John Burnham Insurance (sponsor)

Ted Steuer, Executive Director, Scripps Mercy Physician Partners

Paul Viviano, CEO, University of California, San Diego Health System

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