Becker's Hospital Review

48 Leadership & Management S uperficially, the problem is clear. U.S. healthcare costs are too high, higher than that of other foreign industrialized nations and rising too rapidly. And while it may be appealing to blithely conclude that this is the fault of over- paid doctors, overpriced medications, overly expensive new technology, costly hospitals or greedy insurance companies, those superficial conclusions cause us to miss the mark and offer little in terms of a path to solving the problem. We only need to apply lean thinking and the "5 whys" behind the root-cause analysis methodology we commonly use in hospitals to understand how de- ficient these superficial explanations are in accounting for the challenges the U.S. faces with healthcare costs. Numerous studies published in the Journal of the American Medical Associa- tion and in Health Affairs have examined the causes of death in the U.S. What they find is that, rounding for convenience, 40 percent of deaths are re- lated to individual behavior: tobacco use, alcohol use, illicit drug use, obesity, sexually transmitted diseases, suicide, violence, and accidents. Another 30 percent are due to a genetic predisposition, 20 percent are related to environmental/public health issues and only 10 percent are related to illnesses and injuries within the purview of our traditional healthcare delivery system. In comparing U.S. healthcare outcomes with those of other industrialized countries, reports from the Commonwealth Fund, Institute of Medicine and others have found that Americans die at a younger age than people in almost all other high-income countries. Americans consume more calories per person, have higher rates of drug abuse, are less likely to use seat belts, are involved in more traffic accidents involving alcohol and are more likely to use firearms in acts of violence than the citizens of other industrialized nations. Our behaviors mean we have more obesity, injuries, homicides, adolescent pregnancies, sexually transmitted diseases, cases of HIV and AIDS and drug- related deaths compared with these other countries. Our healthcare crisis is a complicated, multifactorial problem involving health- care inequality, socioeconomic factors, cultural norms, inadequate education, issues involving access to care and poor health behaviors. And this is why doc- tors, pharmaceutical companies, device and technology developers, hospitals and insurance companies will be unable to solve this problem alone. It is also the reason that Congress' approach to controlling healthcare spend- ing by making continuous cuts in reimbursements to hospitals and physi- cians is not going to address the problem, and arguably makes it worse, espe- cially if the traditional U.S. healthcare delivery system accounts for only 10 percent of the total costs. The traditional focus of healthcare, treating patients, will never bring health- care costs under control. And since healthcare behaviors begin as early as childhood, waiting to treat people until they become patients as a way to control healthcare costs is like trying to put out a forest fire with a fire ex- tinguisher. This, then, is the backdrop to the emergent discussion of population health management. And when we dive a bit deeper into that 10 percent of total healthcare costs, we can begin to understand where we as healthcare provid- ers must focus our efforts to contribute to any possible reduction in U.S. healthcare spending. I want to look at costs in three large buckets, because I think it helps to ex- plain why our traditional approach to healthcare will not reduce these ex- cessive, and in some cases wasteful, costs, and offer why I think population health management just might. Bucket 1: For the most part, we are addressing illness and inju- ries and not health. Participants in the traditional U.S. healthcare delivery system see patients. We see them in our offices, imaging centers, surgery centers, hospitals and post-acute care settings. We don't get involved with people who are not yet patients because fee- for-service reimbursement doesn't pay us to do that. And because fami- lies, schools, employers, providers and other organizations either are not promoting health, wellness and fitness of these children and families or are unable to sufficiently meet this need, we have a large population of people who are not ill or injured yet but who have developed health be- haviors that are putting them at high risk of becoming patients in the future. It is at that point that there is a reimbursement system that makes it possible for us to become involved in their care, long after those health behaviors have been established. In a 15-minute office or hospital visit, somehow we are to deal with a behav- ior that has become a coping mechanism, a social norm, a habit or an addic- tion. And for all the efforts hospitals are making to avoid readmissions, the funnel of prospective patients is becoming larger and larger. Take just one health behavior in just one area that St. Luke's Health System serves — 22.1 percent of third-graders in that community are obese. We all know the increased health risks and costs associated with obesity, but how can the traditional healthcare delivery system address this problem until these children become patients? Bucket 2: Low-value/no-value services. It has been estimated by the Institute of Medicine and others that 30 percent of healthcare spending in the U.S. is for low-value or even no-value services. Some believe that the true number approaches 50 percent. Regardless, it is spending we cannot afford, in any way. Many of those services are procedures that may end up hurting patients, and some of these tests or procedures, that should not have been done in the first place, may lead to ad- ditional testing, procedures, morbidity and even mortality. These services currently are often rewarded under the fee-for-service reim- bursement system, in an environment in which fear of liability for having missed something is pervasive. I am proud of the many organizations that have come forward to join the Choosing Wisely Campaign in an effort to address this problem. Bucket 3: The high cost, inefficiency and increased morbidity and mortality associated with lack of care coordination. Even the healthcare spending for traditional healthcare services is not uni- form. For one of the populations St. Luke's Health System manages, 1 percent The Problem to be Solved By David C. Pate, MD, JD, President and CEO, St. Luke's Health System SAVE THE DATE! Becker's Hospital Review Annual Meeting May 7-9, 2015 • Swissôtel - Chicago, Illinois 153 Great Health System Executives Speaking 119 Sessions - 212 Speakers To learn more visit www.BeckersHospitalReview.com To register, visit www.regonline.com/hospitalreview6thannualmeeting

• Cover