Healthcare Summit Re-Cap.
Hospitals, employers and patients are all continuing to struggle with the rising cost of health care, panelists agreed at the 2017 Healthcare Summit presented by Dayton Magazine.
“Over the last few years we’ve taken out $300 million in costs and we’re actually on track to take out another $92 million or $94 million in costs this year,” says Tom Duncan, senior vice president and chief financial officer of Premier Health.
“We are actively trying to re-create and reform our cost structure.”
Todd Anderson, executive vice president of finance and clinical integration for the Kettering Health Network, says his organization constantly seeks innovative ways to lower costs and maintain the best quality health care. “We spend a lot of time on that,” he says.
Because the Kettering Health Network continuously finds way to lower costs patients and the commercial insurance companies that cover their health-care needs receive the most cost-effective care, says Anderson. “And we pride ourselves in being high quality and the most cost effective,” he says. “We’re going to continue with that.”
As much as the area’s hospital systems cut costs, however, the financial pressure to lower costs for the consumers—the patients—is more difficult in Dayton, says Duncan. That’s because other larger cities in Ohio receive financial support from levies that support the hospitals in those cities, he says.
Cleveland’s MetroHealth health-care system receives $32 million annually to help cover the system’s cost of indigent care, Duncan says. “We don’t have a significant tax levy,” he says. “In Montgomery County we have $5 million to split between hospital systems, including Children’s (Hospital), so it’s not a significant amount of money.”
In addition, the federal government does not reimburse hospitals the full amount of medical care for Medicare and Medicaid patients, Duncan says. Medicaid reimburses about 50 to 65 percent of the hospital’s costs and Medicare reimburses the hospitals around 80 to 85 percent of its costs, he says. And that’s less reimbursement than other larger cities like Cleveland, Columbus and Cincinnati receive, says Duncan.
And because approximately three-fourths of the patients at both Premier Health and Kettering Health Network hospitals are on either Medicare or Medicaid insurance the difference in cost is shifted to patients who are employed and have medical insurance through their employers, Duncan says.
Anderson says every health system in the country is challenged with that gap in reimbursement for Medicare and Medicaid patients. “Both Premier and Kettering have a similar type mix of (Medicare and Medicaid) patients and we both struggle and are challenged with that cost gap,” he says.
The rising medical costs that are shifted to employer health plans is causing some employers to take steps that would have been unthinkable just a few years earlier, says panelist Mike Lakin, vice president of account management at Horan.
“It used to be years ago if you were an employer you never considered self insurance at all unless you had 500 people or 1,000 people,” says Lakin. Now employers as small as 50, 60 and 70 are looking at self-insurance because of the new taxes under the Affordable Care Act, he says. “That’s changed the market of how employers really focus on health insurance.”
But all of the panelists were unsure whether the current Republican-controlled Congress would be able to reign in health care costs if they repeal and replace the Affordable Care Act.
There was no bipartisan support of the Affordable Care Act or, so far, of the Republican’s health-care replacement plan, says Duncan. “I’m afraid when power shifts again everything is going to get blown up again and start all over,” he says.
“We just need to have certainty,” says Duncan. “I don’t know how we do it but just encourage legislators to cut it out. Work this out. Get it fixed.”
One issue that is fixed is the ability to better diagnose medical issues through the use of new technology, panelists agreed. Health Care Summit moderator Steve Martenet, president of Anthem Blue Cross and Blue Shield of Ohio, asked panelists if there was an expectation that the new technology would drive down health-care costs for consumers.
Some of that new technology may not drive down health-care costs on the front end initially, says Anderson. But new technology is allowing surgeons to perform minimally invasive surgery, including heart surgery, that is leading to more surgeries performed in an outpatient setting, better medical outcomes and a reduction in the amount of time a patient has to stay in the hospital, he says.
“I see … more and more technology being used in health care and that obviously leads to more minimally invasive (surgeries) and (a) shorter length of stay and higher outpatient utilization,” says Anderson.
And although technology, especially some new pharmaceutical drugs, may not drive down costs on the front end it’s keeping people alive for a long, sustainable life, says Lakin. However, “think of that self-insured employer that’s incurring a million dollar cost a year for one of their employees,” he says. “It’s troubling.”
What’s not troubling is that patients in Dayton are receiving excellent medical care, panelists agreed. “The quality of care you receive here in Dayton, Ohio, is the top of the line,” says Duncan. “It’s one of the best in Ohio.”
Anderson says, “The quality (of care) in Dayton and in our community is top notch. Everybody’s strives for that.”
What’s ironic is that it may be that the great, quality care is what’s actually driving up the cost of health care.
“We might have sounded a little bit like pessimists but the reason we’re actually talking about this (health-care cost) challenge is because we’re all living longer,” says Lakin. “Now people are in retirement longer than they worked. I think we as constituents and employers and health system officials we all play a role in that and I think that is the biggest positive.”
The 2017 Healthcare Summit presented by Dayton Magazine was sponsored by Anthem Blue Cross and Blue Shield, Airrosti Rehab Centers, Premier Health, Digestive Specialists, Inc., Superior Dental Care and Premier Health Fidelity Health Care, along with community partners Dayton Area Chamber of Commerce and the Greater Dayton Area Hospital Association.