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Roundtable discussion

Health care overhaul not ensuring cost savings, experts say

Providers still unclear on how to implement new laws

After months of intense scrutiny over President Barack Obama’s health care reform bill, you would think there is nothing in its hundreds of pages left unclear.

According to local health care leaders, you’d be wrong.

At a recent Daily Transcript roundtable, the leaders of local hospitals, insurance companies and other health care providers said that there is still a lot of confusion over how to implement the law, and just what it means for their patients and their costs. Most agreed that the changes -- predominantly to insurance -- won’t ensure cost savings the way changes to direct patient care could, and they are concerned about how many people will go on programs like Medicare.

One of the biggest questions that remains is around Accountable Care Organizations, or ACOs. These are a new type of payment and delivery system designed to tie health provider reimbursements to quality metrics. The hope is for a reduction in the cost of care for an assigned population of patients.

A group of coordinated health care providers form an ACO, and starting in 2012, ACOs can contract with Medicare. Steven Escoboza, president and chief executive officer of the Hospital Association of San Diego & Imperial Counties, said most of the changes, including ACOs, will likely start on commercial side before Medicare can be involved, because there are still so many unknowns.

“There are some (new regulations) that just don’t make sense,” said Larry Anderson, CEO of Tri-City Medical Center. “For instance, a physician can only belong to a single ACO, at least that’s how I read the legislation, but you’re not allowed to drive the patient location, so the patient can go anywhere. I’m not sure how that’s going to work.”

Anderson said Tri-City Medical Center plans to contract with the government to take Medicare, agreeing on a pool of patients, but if those patients go elsewhere, Tri-City could end up paying for them anyway.

The new legislation also calls for hospitals to track 65 different possible outcome indicators, for quality assurances, many of which hospitals aren’t yet equipped for.

“There’s more unresolved issues than there are resolved issues at this point,” Anderson said.

Not everyone is completely opposed to the new regulations. John Jenrette, CEO of Sharp Community Medical Group said that the ACO structure will likely force certain divisions within their own system to work together, breaking the “silo” mentality and getting a clearer view of the patient.

Others though, said they don’t think hospitals have to worry about ACOs as they’re currently configured, because they probably won’t survive implementation. Tom Gehring, chief executive officer and executive director of the San Diego County Medical Society, said that he doesn’t think the payment model as its configured can work.

Gehring said that the United States doesn’t so much need health care reform and health care financing reform, and he doesn’t think the current reforms accomplish that.

“There is no way in heck that we’re going to simultaneously increase access, improve quality, and reduce cost,” he said. “They are at the micro level able to do that, but not at the macro.”

Janine Sarti, general counsel at Palomar Pomerado Health, agreed. She said the ACOs don’t work for everyone, some hospitals or other providers simply won’t be able to set them up without drastically raising costs. She said she’d rather see ACOs as one option, not a “one-size-fits-all” solution.

However, Sarti said she hoped this might force some providers to come up with other solutions.

“If this is the push from the government to the health care providers to ensure that we continue to refine and hone our focus on quality, cost and access, I’m in,” she said. “But not exactly as it’s proposed by the feds.”

Christi Braun, a member of the law firm Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. based in Washington, D.C., said that for the politicians crafting these laws, telling patients what to do when it comes to their health is generally a non-starter, but that might be what needs to be done in order to really save costs.

“If you can’t change the patient’s patterns of receiving care, then there’s one major area of cost control that you can’t affect,” Braun said.

Jenrette said he didn’t think the government or health care providers necessarily had to control where patients go to keep costs down, but he would like to see more focus on things like preventative care, and end of life care. He’d like to see patients more engaged and active in their own care.

Several roundtable attendees agreed with that. They said that as more and more companies are offering programs to help employees get healthy, like offering healthy food in the cafeteria, gym memberships or exercise incentives, health insurance providers must acknowledge that and lower their rates. This would be a major incentive.

Anderson suggested employers should be at the table during any health care reform discussion, since they are such an important part of the payment plan for most people.

Sarti suggested that the country’s health care system is not broken, “just complex.” She wasn’t sure the new laws took everything into account – from the shortage of primary care physicians, to the lack of sufficient repayment on programs like California’s low income program Medi-Cal, to chronic diseases that could be prevented by changes in lifestyle.

Gehring agreed with this, but wondered if the United States was really ready for the “revolutionary” change that would need to occur. He said likely, the best result would come form a solution that nobody was totally happy with.

“The cost is multi-factorial, and the cost is reflective of our own behavior,” he said. “Patients, we see the TV ad for the disease of the month and say ‘Hey, I’ll take whatever that pill is, and by the way doctor, could I have that, never mind that its quadruple the cost.’ Doctors misbehave, hospitals try to keep their beds full, it’s everybody.”

“I would argue that we’re a little bit like the band on the stern of the Titanic, deciding whether we’re going to play Brahms or Vivaldi,” he added. “If we’re truly going to repair the system, we will need revolutionary change.”

Roundtable Participants

Larry Anderson, CEO, Tri-City Medical Center

Kimberly Bond, President, Mental Health Systems Inc.

Christi Braun, Member, Antitrust and Federal Regulation Section, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (sponsor)

Steven Escoboza, President & CEO, Hospital Association of San Diego & Imperial Counties

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

John Jenrette, CEO, Sharp Community Medical Group

Brendan Kremer, Administrative Director, UC San Diego Medical Center

Nick Macchione, Director, San Diego Health & Human Services Agency

Daria Niewenhous, Member, Health Law Section Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (sponsor)

Janine Sarti, General Counsel, Palomar Pomerado Health

Steve Scott, Vice President & General Manager, Anthem Blue Cross

Ted Steuer, Executive Director, Scripps Mercy Physicians Partners

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