"The Ronan Report" provides insight about the activities at the Western Maryland Health System in Cumberland, Maryland, and about the changes taking place in healthcare today from a CEO's perspective.

Monday, November 19, 2012

Care Like You Have Never Seen It Before

As I mentioned in Friday's blog, I attended a two-day meeting last week outside of DC on the future of health care.  The one word to describe the meeting would be "WOW!"  As an industry, hospitals, health systems, physicians, other providers and, most importantly, patients are in for quite a change.  As I have blogged in the past, the cost of health care going forward is unsustainable.  Government can't continue to afford the $1.7 billion annual expense of health care.  To put that unsustainability in perspective, if eggs, milk and a bag of oranges had increased in price at the rate health care has since 1945, those eggs would be $55 a carton, the milk would be $48 a gallon and the oranges would be $134 for a bag of 12.

Health care consumers are going to see that they have choices; however, those choices will be similar to when you go to the veterinarian to have your dog or cat treated.  In this case, rarely is there a third party payor involved.  You have a choice for the type and extent of testing, whether or not you would like to have a surgical procedure and what type of supply or equipment that you would like used.  However, as is the case when  you take Fido to the vet, there will be a great deal of out-of-pocket expense for those choices.  For us, a third party payor, whether it's an employer who is self-insured, as is the case at WMHS, an insurance company, or a health care exchange or the state / federal government, will cover care to a certain level, but will not be able to cover all of the health care expenses incurred, especially the "Cadillac" of everything that we have come to expect without some level of sharing on the part of the recipient of the care. 

As hospitals in Maryland, more and more of our payments are now at risk based on the quality of that care; it's called Quality Based Reimbursement.  Hospitals in the other 49 states won't be impacted for at least another year.  We are now directly accountable, as we should be, for reducing infections, the mortality of our patients, reducing admissions and readmissions, the level of satisfaction of our patients, any preventable conditions, over utilization of services, tests and procedures, better and more comprehensive care of our high utilizers of our services to keep them out of the hospital and the list goes on.  Such approaches will reduce the cost of care eventually, but implementing those changes can be very costly initially, as was the case at WMHS last fiscal year.  Health care really is changing and WMHS is trying like hell to keep pace with those changes.  As an industry, health care leaders have to educate their various constituencies as to the changes that they are living with today and those planned for the near future.

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