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The Sabo Symposium: Understanding healthcare reform

By Betsey Norgard

On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act. It’s complex, difficult- to-understand legislation and is the product of an extremely contentious political process.

On October 15, at its fifth public policy forum, Augsburg’s Sabo Center for Citizenship and Learning hosted a forum to decode and discuss the challenges and opportunities this legislation presents for Minnesota and the nation—that is, how the current healthcare system will change. The symposium was moderated by retired U.S. Rep. Martin Sabo and presented speakers who are leaders in the healthcare field.

Donna Zimmerman, senior vice president of government and community relations at HealthPartners in Minneapolis, addressed the overall scope of the law and focused on the impact of provisions concerning changes to insurance coverage.

“It is a major task to think about how to explain this major piece of legacy legislation our Congress has passed,” Zimmerman said. “I’ll try to demystify this big bill, and focus on what’s important for us in Minnesota.”

Her presentation explained various provisions of the act that have already taken effect or are being phased in shortly; for example, extension of benefits to dependent children up to age 26, adding more preventive care without costsharing by consumers, and prohibition on insurance denial to children under age 19 for pre-existing conditions.

Dr. Sanne Magnan, commissioner of the Minnesota Department of Health, spoke about changes to health care itself and the interface with Vision Minnesota, Minnesota’s reform passed in 2008. Her message was that the federal reforms will not have as radical an effect in Minnesota as in some states because Minnesota’s quality and delivery of health care are already consistently higher than in many states.

She spoke about how Minnesota is coordinating with federal initiatives to influence how health reform is implemented, “so that we can build on the innovative strategies Minnesota has been doing as well as learn from other states who have been doing health reform.”

She compared provisions for reform in the new federal law with similar provisions in Vision Minnesota and showed how a number of them are already being implemented in this state.

Magnan also explained that much of the difficulty in enacting reform stems from how the current healthcare system was set up. The incentives and payments for health care are made to doctors and providers for treatment of illness, and not for promotion and maintenance of health. Payment is made for office visits, hospitalization, tests, procedures, and drugs, rather than for better management of chronic disease, prevention, and promotion of wellness.

Dr. Bruce Amundson ’60, president of Community Health Innovators, Inc. and assistant professor at the University of Washington School of Medicine, spoke about his longtime work to seek reform in the healthcare delivery system to provide everyone with easy access to a team of healthcare professionals who can provide comprehensive care at lower costs.

Amundson offered a vision of the optimal healthcare model (see next page) that focuses on a team approach to ongoing, primary care in clinics, which includes clinical care as well as services in other areas that affect health. These clinics or “medical homes” must then be part of, or connected to, a system that includes specialty-care and hospital and emergency services.

Sabo Center Public Policy Symposium 2010 Healthcare Reform:

What Will It Mean for You (and the Nation)?

October 15, 2010

Panel Participants:

DONNA ZIMMERMAN, Senior Vice President of Government and Community Relations, HealthPartners

DR. SANNE MAGNAN, Commissioner, Minnesota Department of Health

DR. BRUCE AMUNDSON ’60, President, Community Health Innovations, Inc., and Assistant Professor, University of Washington School of Medicine

MARTIN SABO ’59, Moderator; U.S. House of Representatives, 1978-2006

What is ideal healthcare delivery?

The recent health reform legislation primarily focuses on helping more people get health insurance and on addressing some insurance injustices. It does not systematically address delivery system reform—how you receive health care—but elements of the act do support ongoing reform efforts. To understand this, you must have a clearer picture of what clinical and healthcare leaders see as a “reformed delivery system” and what we have been working towards—for years.

Within the past few years a growing agreement has emerged on what an optimal delivery system should look like, both to be able to provide excellent and comprehensive care and to reduce costs. These are the key elements:

First, your health care must be anchored by primary care clinicians—physicians (family practice, general internal medicine, pediatricians), nurse practitioners, and physician assistants. This ensures that you have a personal ongoing relationship with a clinician who is the “general contractor” for your health issues and who is your trusted partner.

Second, you should be part of a clinic or system that provides a “medical home” with your primary clinician. Your medical home must serve as the first stop for ANY health issues that arise, short of critical emergencies.

Further, your medical home should have:

  • An electronic health record to ensure immediate access to your history for all who treat you wherever they are located
  • More convenient access to your clinicians— same-day appointments, expanded hours, e-mail to your clinicians
  • Management of all referrals to specialists and other services you may need, ensuring coordination and avoiding duplication
  • Systematic management of common chronic diseases
  • Case management for people with complex and/or multiple health issues including monitoring of prescription drugs
  • Healthcare teams to expand clinical competency and

The emergence of primary care teams is one of the most important developments in recent years. I would describe the “optimal primary care team” as comprised of:

  • Primary care clinicians (physicians, nurse practitioners, physician assistants)
  • Mental health clinician
  • Social worker with family therapy skills
  • Nurse case manager for patients with complex conditions
  • Chronic disease care nurse
  • Patient educator
  • Pharmacist
  • Physical therapist or massage therapist

Research has shown that with this range of skills a clinic or medical home can competently handle 80% or more of the health problems that it receives. It can care for the whole person and meet total needs. This is a radical change, but examples of this model now exist across the country.

The third component is that every clinic or medical home must be part of an organized system of care that includes most specialty physicians, hospital and ER services, and other important services. If not within the same organization, at least there must be formal ties and relationships between the medical home and these other elements of a comprehensive healthcare system.

Because our human condition is complex, people are affected by physical issues, mental health problems, family dysfunction, substance abuse, environmental exposures— and often a combination or all of the above. Clinical care is, therefore, also very complex if it is going to be relevant to the person’s needs and holistic in its aims. The combination of knowledge and skills represented in the optimal team described above brings the healthcare delivery system closer in alignment with human needs, with the foundation being “relationship-based” (versus “diseaseoriented”) care.

The reform legislation recognizes the work by clinicians and leaders in defining what we seek as health reform goals. While it does not fundamentally change the current healthcare delivery system, it supports clinician- led reform by:

  • Recognizing the role of primary care clinicians and increasing financial support for training them
  • Providing bonus payments for care management of Medicare and Medicaid enrollees when needed
  • Providing financial incentives for establishing organized systems of care
  • Expanding wellness and preventive coverage in insurance plans
  • Funding research on the clinical effectiveness of various treatments
  • Creating a Center of Innovation

The legislation is not radical. It builds on our current private insurance and delivery systems. It may not be able to address cost issues, but it does represent a huge step toward ensuring universal insurance coverage and a more effective delivery system. It also must be seen as a move to narrow the gap between healthcare “haves” and “have nots.”

While there’s an immense amount of work ahead, it’s critical to understand that for clinicians and most healthcare leaders, there is no turning back. The whiff of something better, a humanizing system, is in the air and a national reform process is underway. I could not be more hopeful.

Dr. Bruce Amundson ’60 is president of Community Health Innovations, Inc. in Shoreline, Wash. 


Online exclusive: Reflections on Sabo Public Policy Forum: 2010 Healthcare Reform—What Does It Mean for You (and the Nation)?

By Khalid Adam ’12

“Medicine’s role is to entertain us while Nature takes it course”

—Voltaire

The quote from 18th-century French essayist Voltaire about the role of medicine in the continuum of life echoes the evolution of medicine’s role from one that was inherently pacifist to one that was rooted in dramatically extending both the length and quality of life with the use of technology and the scientific method. By the time French philosopher Voltaire wrote his famous quote, the pattern of human disease had changed little over the course of the previous 2,000 years, with doctors only offering hope and comfort for the ill.

In fact, according to British physician and columnist Dr. James Le Fanu’s monumental book, The Rise and Fall of Modern Medicine, the top-ten defining moments of modern medicine only happened over the course of the last 60 years or so with the discovery of penicillin in 1941. Before 1941 many great improvements were made in public health, allowing people to live longer and healthier. However, few of those changes had little to do with the practice of medicine. They had a lot to do with better housing and nutrition, safe water, and better hygiene, except for a few treatments like bone setting, insulin, and thyroid hormones. Usually patients got better on their own. Or in the case of Calvin Jr., they didn’t (Gratzer, 2006).

Many remember President Calvin Coolidge in 1924, then one of the most powerful men, crawling on all fours to catch a rabbit so his son could hold it while he was dying. This was after the 16-year-old son had one day developed a blister playing tennis without socks on the White House courts. “In his suffering, he was asking me to make him well,” remembered Coolidge; “I could not.” An administration of penicillin would have easily saved Calvin Jr.’s life, but penicillin hadn’t been discovered. It was discovered 17 years later after the fact; in fact, the majority of our most innovative and definitive medical discoveries were made in the last quarter century with the development of advanced antibiotics, steroids, lithium, and drugs that treated neurological disorders. It is for this reason and many others that the issue of health care is especially daunting to analyze and to set policy on because it seems to not follow long-held economic assumptions about supply and demand. Technological growth is so explosive that the CT scanner has been replaced by the MRI scanner, which is now being outdone by the PET scanner. Doctors are no longer as passive as they were; instead they were busy curing patients and using large sets of data to test whether one drug could have multiple uses (Gratzer 2006).

Conventional economic thought has it that there should be an inverse relationship between rapid technological strides and the total costs associated with health care, but the economic data shows otherwise. When economist Milton Friedman compared health care spending with the other sectors of the economy, he wrote:

The change in the role of medical care in the U.S economy is truly breathtaking … in 1946, seven times as much was spent on food, beverages, smoking, and tobacco as on medical care; in 1996, more was spent on medical care than on food and beverages. In 1946, twice was spent on transportation as on medical care; in 1996, one-and-a-half times as much was spent on medical care as on transportation (Friedman, 2001).

So just why has healthcare spending gone so much out of control consuming nearly a sixth of GDP spending in 2008? The answers to this question are different according to whom you ask. Liberals say it’s the health insurance companies’ greed and the government’s inability to take a more concerted effort at containing costs and in regulating the employer market for health insurance. Meanwhile, conservatives argue that it’s too much regulation that is driving healthcare spending out of control, citing the growing budgets of government welfare programs like Medicare and Medicaid as the main culprits. They also cite over use of healthcare resources as the main problem, making the problem of health care a ‘volume-control issue’. However, in spite of these differing viewpoints, a few observations are unarguably universal:

  • The science of health care has advanced rapidly over the course of the last 60 years, and this has an effect on prices of medical inputs.
  • Increased health costs that outpace the growth in GDP have adverse effects on the economic outcomes on industries with large percentage of workers with ESI (Employer-Sponsored Insurance); this results in the loss of output and by de facto, the loss of jobs in those industries.
  • The current trend in the growth of per capita GDP spent on health care is unsustainable in the long term.

Health spending in the United States has increased dramatically over the course of the past 50 years, from $27.5 billion in 1960 to $912.6 billion in 1993, and to a mind-boggling $2.4 trillion dollars in 2008 (Centers for Medicaid and Medicare, 2008). Using data from the Organization for Economic Co-operation and Development Percentage for U.S GDP spent on health care, it seems to be rising at an almost exponential rate (OECD, 2009). In 2017, it’s expected to reach all-time high of $4.3 trillion or 19.5% of the GDP and the effect of this spending on the economy is largely unclear. But the following fact rings a mostly lucid tune for health policy wonks. That the American healthcare system of health delivery is like a state-of the art fire department (circuitously referring to the explosive growth in innovation indirectly attributable to relatively a strong and a pro-inventor U.S Patent Office) functioning on an archaic transportation grid.

However some arguments from well-respected researchers have gained some credence. They call for a more sensible approach to the re-structuring of the delivery system into organized networks of providers. Their approach incorporates:

  • A comprehensive recalibration of FFS (Fee for Service) system, instituting outcomes-based performance system.
  • Creating episode-based payment to encourage cooperation among hospitals, physicians, and other care providers (Mechanic and Altman, 2009).

Policy recommendations that echo system-inefficiencies reform, like the one outlined by Mechanic and Altman for payment systems, are critical for creation of a system that equips consumers, governmental entities, and industry alike with perfect information (relatively of course) to make the most economic choices. Even so, an understanding of the information available to consumers is imperative in order to better understand the health choices they make. We expect the consumers of health care to be fully informed about prices, quantities, and the relationships of medical care and other inputs to levels of health. In reality consumers often have no clue, even about the mortality rates of hospitals in their networks. It seems there is less information in the public realm (consumers of health outputs) about the current health care system than there is about the satisfaction rates of hotel beds. It would only seem logical (believing choices about health care necessitate greater concern) that consumers make the most economic choice. This phenomenon is something that is not new throughout the health economy. In fact the markets for healthcare services and that for insurance are marked by significant degrees of asymmetric information and agency (the former encompasses situations where buyers and sellers have different levels of information while the later deals with situations where the lack of information, buyers, and sellers rely on each other to help make decisions) (Folland, Goodman and Stano, 1997). These phenomena, including the presence of Lemon’s Principles behavior in the market for health services, reverberate the commonly-held belief that American health care is incredibly all encompassing and complex. The risk for repercussions of any health reform can prove to be disastrous for incoming administrations. Since 1962 alone, seven presidents and ten congresses have considered the issue of national health insurance, but reform remained forever imminent (Eastaugh, 2001). Currently, 43 to 46 million Americans or 16 to 16.4% of the population have no health insurance with a growing number weary about losing their plans because of the potential for discovery of so-called “pre-existing conditions” (U.S. Congress, 2000). The working poor have no political power, and special interest groups like the insurance industry are against any change to the status quo. This fact remains harrowingly true.

 Read more about the author of this reflection, Kay Adam, on Inside Augsburg 


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