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Panel Detail:
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The Health Care Conundrum: Maintaining Quality, Controlling Costs and Promoting Innovation
Tuesday, April 1, 2003
2:45 PM - 4:00 PM


Concurrent Session

Bill Bracciodieta of Health Net, Inc., gives his views on the future of health care as Judith Bello of Pharmaceutical Research and Manufacturers of America (PhRMA), left, and Wendy Everett of the New England Healthcare Institute listen.

Speakers:

Judith Bello, Senior Adviser, Pharmaceutical Research and Manufacturers of America (PhRMA)

Bill Bracciodieta, Chief Medical Officer, Western Region, Health Net, Inc.

Wendy Everett, President, New England Healthcare Institute

Arnold Milstein, National Healthcare Thought Leader, Mercer Human Resource Consulting

Thomas Priselac, President & CEO, Cedars-Sinai Health System

Andy Slavitt, President and CEO, HealthAllies


Moderator:

Leslie Michelson, President and CEO, Cap CURE

Summary:

Panelists painted a pessimistic portrait of the current United States healthcare system. Following a brief introduction, panelist Ernie Milstein cited recent Dartmouth studies showing accumulating evidence that the higher levels of healthcare spending are causing higher levels of economic waste without increased healthcare benefits.

Moderator Leslie Michelson, added the following factoid: Physician error has been attributed to approximately 100,000 deaths per year. Predicting a grim future, Thomas Priselac commented that "the American healthcare system is headed towards where the American high school system is today."

The panel addressed both what has caused the formation of such a broken system and also what can be done to rectify the problem.

Healthcare expenditures are spiraling upward. It is projected that in the next decade, 17.2 percent of GDP will be spent on healthcare expenses, up from the current level of 14.3 percent. The increase comes primarily from two sources: changing demographics and the higher level of utilization that accompanies aging. According to Wendy Everett, President of New England Healthcare Institute, "In each decade after 30, we consume twice as much healthcare as in the previous decade."

It would be expected that such increases in expenditures result in increased care. However, there is little evidence that that is the case. According to the panelists, there has been an irrational under-investment in studying the medical and cost effectiveness of new treatments. Without performance sensitive consumers to motivate continuous reengineering by healthcare providers, there is little incentive to restrain spiraling costs. Without reform, there remains a possibility that medical breakthroughs will not be utilized or current cost effective practices will be replaced by cost inefficient, but new, practices. Milstein asserted, "We are on a path toward paying more for worsening quality, reliability and efficiency."

As doctors today often focus on treating acute symptoms while ignoring underlying causes, so does the general public miss out on that aspect that will most effect the future of healthcare - effective treatment. Wendy Everett compared the problem to a floating iceberg; only the tip can be viewed, while 90 percent of the iceberg remains concealed under the surface. And as history has shown, a missed iceberg can fell even the mightiest of ships. Representative of this problem is the misappropriation of monies. While studies have shown that behavior is responsible for approximately 50 percent of healthcare problems, be it smoking, exercise or diet, less than 10 percent of national health expenditures go to modifying behavior while 80 percent goes to treatment of acute problems.

Minimizing the cost of healthcare in America is not a new problem, from Nixon′s wage and price controls to modern managed care, various methods of cost containment have been proposed and implemented. Bill Bracciodieta joked that, "There are three key things to solve the problem we are facing, except no one knows what they are." Luckily for the future of American healthcare, the panel was able to propose some measures that could help reform the broken system.

First, there must be a reevaluation of medical practices, eliminating those that are shown to be cost ineffective. Second, in conjunction with greater transparency for the performance of treating doctors, consumers must be better educated as to their options for treatment. Third, the costs of the uninsured should be better accounted for and a basic level of insurance should be provided. Finally, incentives for the entire healthcare industry must be altered to better reflect consumers′ needs.

While the United States may be one of only two industrialized countries, the other being South Africa, not to have a basic nationwide health care insurance system, it is in the advantageous position of having the deepest pockets of any nation in history. The resources are available for policy makers to enact system wide changes to fix "the Health Care Conundrum."

Background Info:
The Economic Contributions of Health Care to New England
Milken Institute Review: Article - The Biotech Explosion
2002 Global Conference: Medical Research Policy: Cancer and Heart Disease

 


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