Healthcare Costs and Quality:
Our Options Today
William D. Petasnick
President and CEO, Froedtert Hospital
As I talk to people around our community, their concerns about the rising cost of healthcare are clear. Healthcare costs strain employers and threaten our competitiveness in this global economy. People are looking – some desperately – for credible information on healthcare costs and quality and for ways to become smarter purchasers of health care.
Our health system is a great paradox. On one hand, it is unparalleled in the world, offering medical advances and public health improvements that have dramatically increased life expectancy and quality. The evidence of these advancements abounds, and is often chronicled in these pages. On the other hand, costs are skyrocketing. There is troubling evidence that some of the money spent is wasted. A recent study by Dartmouth researchers argues that close to a third of the $1.6 trillion spent on healthcare failed to improve patient health — or actually made matters worse.
The case for action is clear; the appropriate solution is unclear. If we are to control healthcare costs, we need to understand what we can and cannot change. The list of things we cannot control is relatively short – luck, genes, demographic factors, and external forces like terrorism and natural disasters. We can control (or significantly influence) everything else.
The key question we must ask as we evaluate options: Can we get the acceptance needed to support change? During the 1990s, managed care was successfully used to control rising healthcare costs. In other nations, including Canada, systems ration care. Neither solution has earned adequate acceptance to be viable in America. Managed care controlled costs, but limited choice. And, the Canadian health system is plagued by long waiting times for care that would be unacceptable to most Americans.
There are options – managing the “total cost of care” and wellness programming – that I believe can build the acceptance needed to succeed. We can better control costs if we focus on the “total cost of care,” rather than the unit price. Total cost refers to the cost of treating an episode of illness, and includes a simultaneous focus on utilization and unit price. You can only lower the total cost of care by delivering the right care, at the right time, in the right place, at the right price.
We also know costs associated with unhealthy lifestyles are enormous. It is ironic that in this day of high-tech, complex, costly medical procedures and treatments, simple, inexpensive options are key. These simple options include increasing physical activity, controlling weight, quitting smoking and reducing stress. Simple changes have a huge impact on quality of life and the cost of healthcare.
Neither option is a cure-all for the system. I believe we must commit to a vision of what America’s health system should be. In my view, it must emphasize wellness and primary care, provide universal access for basic healthcare needs, offer coordinated care, provide consumer friendly information about quality and price, and demand better stewardship of our limited resources.
In the absence of a single, national solution, we must remain committed to achieving this vision of improving quality and reducing cost in increments. We are and we will.
Source: Froedtert Today
Date: July 2004