Watching the Massachusetts Senatorial election results yesterday, started me thinking back to the Presidential campaign of not so long ago… back in the days when BOTH candidates campaigned on themes of CHANGE.Continue reading
Sometimes the best innovation can be as simple as doing the right thing.Continue reading
As a leader, one of the most damaging things that you can do in times of crisis is to do NOTHING. As I have been listening to and reading about the ongoing national healthcare debate, one question keeps running through my mind.
When are we going to stop talking about it …
and start doing something about it?
At one point in my career, from December of 2006 to December of 2008, I had the honor of serving as the CEO of ASBA, the Arizona Small Business Association, and on the Board of Trustees at NSBA, the National Small Business Association.
As the owner of a small business myself, I had seen the challenges faced by small business owners when it came to the accessibility and affordability of healthcare insurance. At the time, it was a personal issue I dealt with and not a major focus of my attention.
Then came my role at ASBA and a day when solving the healthcare problem, at least for small businesses in the State of Arizona, became MY problem. This video is a clip from a talk I gave on the topic of Healthcare when ASBA launched its solution for Arizona Small Businesses in 2008. It started like this…
Putting the health back into healthcare in the United States is not a simple problem. In fact it’s complexity is staggering. Here are just a few of it’s components – I know I will miss many more. Don’t pillory me for it. Instead I encourage you to add to the list in the comments section of this post. (For more information, click the links to articles in each description.)
Right or wrong, our current system is is supported as an insurance based system. Healthcare is paid for by Medicare/Medicaid (public insurance) or private insurance in most cases. For those without adequate coverage, the costs can be financially crippling and their unpaid bills get paid by everyone else in the form of higher premiums as explained in this article from Arizona State University’s Knowledge@WPCarey.
What should we do? Who should we help? What should we pay for? What should we not? The answers to these questions reach into much deeper ethical, moral, and legal discussions on highly volatile issues including aging, illegal immigration, abortion, euthanasia, stem cell research, and the quality and accessibility of care. An that’s just the tip of the iceberg! The study of BioEthics now even has it’s own Presidential Commission.
If you think this is all about health, think again. The healthcare crisis in the US is a major economic issue as illustrated in this article from Forbes on July 3, 2009. In this report from the Congressional Budget Office total spending on health care in the economy has doubled over the last 30 years to a current level of about 16% of GDP. CBO estimates that this percentage will double again over the next 25 years to 31% of GDP. Today, it is estimated that as much as 60% of personal bankruptcies in the US are tied to healthcare related issues. But if we do not get the costs, and the resultant Federal deficits under control the fall out could be the greatest financial mess the world has ever seen.
Solving the problem will need to address how to find new cost efficiencies in healthcare delivery, behavioral changes among the US population to reduce health risk factors, new protocols for treatment and cost management, and many many more issues.
We will also need to redesign our reimbursement systems. Today, the set payment schedules for Medicare and Medicaid are below the actual costs the doctors and hospitals incur. The short fall is then passed along to the costs charged to private insured and private payers – a practice called cost shifting. But as we have seen, even this has not been enough to keep many medical centers and hospitals financially healthy – see this July 7, 2008 article from the Washington Post for a good explanation of the problem and since this was written the problem has only gotten worse.
In recent years, we have looked to technology to solve other problems – it will work for healthcare too, right? Unfortunately not. While US healthcare, for those that can afford it, is some of the best in the world, each advancement has a price and contributes to the rising healthcare costs.
E-medical records, a popular topic earlier this year when major funding was allocated as part of the stimulus package by Congress will pay off over time, but not in the immediate future as it carries a high price for implementation. This presentation by Michael H. Zaroukian, MD, PhD, FACP of Michigan State University helps break it down.
Break throughs in Pharma and Biotech will help us improve quality of life, aid in early detection, and treatment of chronic diseases. (A major portion of today’s healthcare spend.) But, today’s legislation has little to do with funding support for these technologies at they level that will be required to really speed up the process.
State Sovereignty Issues
Many of the factors that are driving up the costs of the healthcare system are legislated on a state by state basis. Congress will have a problem making any real change here without overriding or preempting many state laws. These include the costs of defensive medicine and malpractice insurance costs that will continue to escalate until we reform our tort systems at the state level. In addition, mandates on a state by state level require that certain care or services be provided and covered. Each and every one of these items has a cost. Thus the cost of providing healthcare can fluctuate significantly from state to state.
Personal Responsibility Issues
If you have noticed, so far, the focus has been heavily on what ‘they’ have to do to fix the problem. But there is another major issue that can not be overlooked – and that is our own personal behaviors. It has been said that the US has a sick care system, not a health care system. But the shift from sick care to a health focus is not in the government’s hands, it’s in ours. It has been estimated that regular check ups can play a major role in early detection of chronic disease and that early detection leads to major cost savings – not to mention longer lives. Yet at the same time, a large majority of those of us who have a wellness plan as part of our health insurance don’t even use it. Health in the US population did not get a great score on it’s report card in 2008 as you can read in this article from Time.
And running through it all is the issue of uncertainty. None of us know what is going to happen at this point. Businesses are putting off health insurance decisions and states are in a quandary as to what they should be doing – if they could even pay for it.
Hospitals, doctors, and insurance companies alike are delaying the launch of new programs that could help make a difference because they have yet to learn the new rules of the game. Basically, progress has stopped!
The Ugly Truth
No one piece of Federal legislation will have the magic prescription to solve this problem. And for all the shouting, the final bill that will be voted on by the House and the Senate does not even exist yet. Then and if they can get it through Congress this session, it will be an ongoing process for years to structure all the regulations, set up systems, start a never ending process of revisions, and have any lasting effect.
No matter what we do or how the system changes, some will benefit more than others. Some people will pay more, and some will pay less. New systems will emerge, and others will fail.
But we will never have any improvements if we do not take the first step. And If we fail to make improvements, our healthcare structure will ultimately fail. We already know that the foundation is seriously damaged.
To wrap things up, there is an old fable about a man who claimed he could eat an elephant. When other’s scoffed that it was impossible to do so, he simply shared his strategy…
You do it one bite at a time.
Well today, putting the health back into healthcare is our elephant – and it is well past time we took that first bite.
Thanks for stopping by. Stay Tuned…
As President Obama continues to lobby the American people and Congress on Healthcare Reform, talk of change and what it means to average Americans travels from the board rooms of global corporations to the kitchen tables of homes across the country.
In quite a number of discussions, this quote sums up the feelings of many people I have talked to. “Spare me the details – I just want to know what Healthcare Reform will mean to me.” If this is how you feel, than this short video from CNN Money might help answer the question. CNN Money video
One of the major components of the President’s plan is to require almost everyone to have some form of health insurance – tackling the current social and economic burden of a population of approximately 47 million Americans who are uninsured. This will add approximately 47 million Americans into the existing insurance pools of either government provided insurance, employer provided insurance or private insurance. You can find the current breakdown by coverage class in my related post earlier this week.
That being they case, I thought it might be helpful to look at where our insurance dollars go. To do that, I referenced the bi- annual report on that information from the same industry report that was referenced by the Senate. In January of 2008, Price Waterhouse Coopers published research on health insurance costs as commissioned by America’s Health Insurance Plans. This link takes you to the full report. The Factors Fueling Rising Healthcare Costs 2008
The graphic above shows the break out of the pool of dollars that make up the employer and private health insurance spend. Looking at the graphic, 13cents of each dollar goes to corporate profits, administration and sales and marketing support. The other 87 cents goes towards the basics of helping us stay healthy, diagnosing illness or other medical conditions, and treatment.
So if we are going to lower healthcare cost, realistically, the focus will fall predominately in the area shaded in aqua – that 87%. It is in these areas where we have the greatest opportunity to use American innovation to improve the healthcare process. Information technology enhancements in the area of medical records management can help us reduce duplicate tests and better manage patient care. New biotech diagnostics currently in development will allow us to detect and diagnose diseases earlier – thus greatly reducing the total cost of treatment by addressing small problems before they become big ones. But technology and process improvement alone will never be the answer.
We, the people, will also need to make some changes in our behaviors if we are ever to really get things under control. Here are a few things each of us can do to put the health back into healthcare:
- Get a check up. 85% of Americans, who have health insurance, do not get an annual check up. Yet studies by Medicare and Medicaid have shown that if we detect and diagnose chronic disease early we can avoid as much as 90% of the costs of treatment. And, chronic disease represents almost 70 percent of the medical services spend.
- Take a walk. It is estimated that approximately 31% of Americans are either clinically overweight or obese. This condition has been directly correlated to a wide range of chronic conditions including Diabetes, Heart Disease, Stroke, Hypertension, some types of Cancer, Sleep Apnea, Osteoarthritis, and Gallbladder Disease.
- Ask questions and talk to your doctor. Whether in your annual exam or during treatment, take an active part in the healthcare discussion. Ask your doctor what you can do to be proactive about managing your health and your healthcare spend. Very often a few extra minutes can leave you with good information, ideas, and in the case of treatment sometimes more cost effective alternatives.
- Understand what your healthcare plan has to offer. If you have a bad health habit you want to break, many plans offer free services to help you. Pull out that booklet they send you once a year and look. You might be surprised at the resources you are paying for that you have never used.
President Obama may or may not get everything he wants out of Congress this year in the way of health care reform. And even if he does, the some of the changes will take years. But we can each start our own healthcare recovery plan today – if we choose to.
Thanks for stopping by. Stay Tuned…
In the United States, we have two “perfect problems”: our Healthcare system and our Taxation system. What makes these problems perfect is their absolute complexity and an almost universal agreement that a problem exists.
The focus of this article is on healthcare. I’ll leave taxation for another day – even though eventually our country will not be able to truly address one without the other.
Up until December of 2006, I did not think a lot about healthcare. It was something I had, something I paid for, and with the exception of annual check ups for my family, something that I rarely had to use. I knew it was a problem, but it was not necessarily mine. That changed December 21, 2006 when I became the CEO of the Arizona Small Business Association, and had to answer to and speak on behalf of our 3,000 business members and through them over 200,000 employees.
The more I researched, surveyed, and listened; the bigger the problem became. And I was just looking at one state, and within that, only one subset of the population, small business owners and their employees. Yet both in our state and on a nationwide basis estimates from both the Federal government and independent agencies estimated that of the 45 million people plus who lacked health insurance, approximately 60% of them either owned or worked in a small business. The constantly rising cost of health care was a burden these businesses were struggling to battle. Others were starting to give up hope that anything could be done.
LOOKING AT THE NUMBERS: HEALTH INSURANCE COVERAGE IN THE UNITED STATES
But as we all know, there have been some pretty significant economic factors since 2007 that probably shift these numbers upward in the areas of both government provided program and the uninsured due to the significant change in the unemployment rate (4.7% in June of 2007 vs. 9.7% in June 2009) and the continuing economic pressures on businesses of every size.
With a problem this large, it’s hard to have any impact. Especially when it’s also highly complex and politically charged. At the state level we had various mandates, imposed and proposed, that were continually driving the costs up. A state provided program for small business had serious limitations and flaws not to to mention a serious deficit that threatened its sustainability. The whole thing was a mess.
I had learned a long time ago that it is almost impossible to tackle a really big complex problem – but that if you break it into little ones and tackle them one at a time, you can make headway. So that is what we did.
First we framed the problem with a set of goals. Our conditions for success were the following:
- It had to be available to any business of any size (even groups of 1) without limitation.
- It had to cover the entire state AND provide coverage for employees out of state.
- It had to provide the same level of quality care and service that was available to employees in a Fortune 500 company.
- Coverage had to be guaranteed issue with no pre-existing conditions limitations as long as there had been prior qualified coverage and pricing and eligibility would NOT be determined by health status of the employees.
- It had to be reasonably affordable and competitive.
The next step was to look at what resources we had to work with and to identify potential partners. We reached out to corporate partners, legislators, the Governor’s office, and national organizations to see what was available, what we could work with or what we could change. Through a combination of negotiations, partnerships, and collaborations, we were able to design a plan that met all five of our defined goals and launched it 10 months after we started the process. To see the full details of the program, visit the ASBA website.
Now, this program did not solve the national problem, but it did provide a solution/option for the community we served across the state of Arizona. AND, it did so without a single taxpayer dollar. Best of all, from 2007 to 2009 the gross increase in premium was a total of THREE percent while at the same time the program benefits were enhanced – not reduced.
So my question is this. Perhaps, while they battle in Washington tackle the perfect problem of Healthcare Reform – and fight over every sacred cow. Maybe, just maybe, individuals like you and me, in our little corners of the country can build viable solutions by breaking the problem down to smaller more manageable chunks and tackling them one at a time. That way WE can solve the problem and THEY can keep on talking.
Thanks for stopping by. Stay Tuned…
P.S. While I no longer serve as the CEO of the Arizona Small Business Association, my time there taught me something very important. There is very little that can not be accomplished by American small business with a little hard work. collaboration, and ingenuity. If we focus on the challenge, frame it properly and get down to work the results can be pretty incredible.