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State of the State Conference 2003

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Panel Detail:
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Health Care: Caring for Californians in the 21st Century

8:40 AM - 9:40 AM


General Session

Thaine Allison, Jr., focuses his comments on the high cost of labor in the health-care industry. Listening is Wendy Everett.

Speakers:

Thaine Allison, Jr., Health Economist, TH Allison & Associates

Wendy Everett, President, New England Healthcare Institute

Joseph Panetta, President and CEO, BIOCOM

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

Christopher Wing, President, Health Net of California


Moderator:

Gregory Simon, President, Center for Accelerating Medical Solutions

Summary:

If there is one thing panelists could agree on, it's that there are plenty of challenges facing today's health-care system — but no easy answers.

In fact, the term "system" may not apply at all to America's giant — and growing — health-care structure. As Wendy Everett said, there is no actual health-care system, but rather a loosely connected cooperative of various types of health-care providers that are highly regulated but lack a policy framework. Thomas Priselac agreed, stating that today's medical system infrastructure is crumbling in the absence of meaningful policy.

His support for a market-driven system sparked comments from other panelists about why that could not happen under present conditions, including: the high rate of inefficiency in the system, the number of intermediaries between consumers and providers, the amount of waste in the industry — as high as 30 percent — and the slowness of the health-care industry to adopt technology and move to a paperless administration.

Chris Wing suggested that a serious issue is the mentality of entitlement that exists among consumers.

"Economic incentives work," he said. "They are powerful and we've failed to employ them." Everett agreed, adding that the cost shift has had an effect on utilization.

From there, the discussion turned to the purpose of the health care system — was it to fix our health-related problems or prevent them in the first place?

Wing said that people who engage in unhealthy lifestyles should pay more for health care. Priselac was quick to point out that not all health problems were preventable. Many, he stated, are genetic or environmentally induced.

Joe Panetta suggested that the investment in drug therapy, though high, would ultimately reduce health-care costs by keeping people out of hospitals and preventing surgery. He also suggested that consumers need greater access to prescription drugs on an over-the -counter basis.

Thaine Allison focused his comments on making labor more efficient. Labor represents 50 to 60 percent of health-care costs, he said.

Panelists agreed that there was no movement toward a nationalized health care system. The reasons, several said, is that Americans don't care that 44 million people are uninsured. Allison said that until that number reaches at least 65 million, nothing will change. But that could happen in the not-too-distant future, when baby boomers retire and find their health-care benefits terminated by their former employers. That's a powerful group, and that is when we will see change, Everett and Allison concurred.

A poll of the audience at the end of the session revealed that almost 50 percent would favor cost-sharing for health care if it were combined with teaching consumers to make informed decisions about available benefits and programs.

 


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