POTTSVILLE — Medical and other business leaders in Schuylkill County agree that the community benefits from high-quality health care and that offerings in that field will be even better in the future.
Those leaders who met on Jan. 21 at The Republican-Herald in Pottsville for the 13th annual Economic Roundtable discussed health costs, the consequences of the Affordable Care Act, the impending opening of the Geisinger St. Luke’s Hospital Campus in West Brunswick Township just outside Orwigsburg and other issues facing businesses and citizens in the county.
Michael A. Joyce, publisher of The Republican-Herald, moderated the roundtable. Other participants included Robert S. Carl Jr., president and CEO of the Schuylkill Chamber of Commerce; Patrick M. Caulfield, executive director of the Schuylkill County Municipal Authority; Jessica Dean, executive vice president, benefits, Power Kunkle Benefits Consulting, Reading; Chris Dende, vice president, human resources, Ateeco Inc., Shenandoah; Gabe Kamarousky, president, Geisinger St. Luke’s Hospital Campus, Orwigsburg; Dr. Matthew McCambridge, senior vice president and chief quality and patient safety officer, Lehigh Valley Health Network; and John Powers Jr., chief executive officer, Ash/Tec Inc., Hegins.
The following is the text of the roundtable. It has been edited for clarity and content.
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JOYCE: This is the 13th Business Review Roundtable that The Republican-Herald has held in this format. I believe it is the 54th year in a row that we have been able to present the Business Review to our readers.
Health care reform is a very important topic, obviously to all of you, to the businesses and the residents in Schuylkill County.
We’re going to have three questions. We’re really looking for a discussion.
Do you believe the Affordable Care Act has failed? Why or why not?
DENDE: Actually, yes and no. It’s forced both as an employer, and for our employees, to become more consumers and act like more of a consumer. It forced us to start looking outside and we became self-insured, so that was something that was a positive.
We did avoid the insurance tax, but the onus is on us to ensure we have affordable enough health care. We had to go with more high-deductible plans. In my view, it forces everyone to become more of a consumer and to look at the landscape of what that created. It used to be you were in a health insurance plan and you were stuck with whatever your renewal was the next year. By going to the self-insured model, which made us look at ways in which we could stabilize our costs, and also become more engaged with our employees.
We had to instill things in our work culture, like wellness and preventive care and making sure our employees were taking it. We had to take a more active role in making sure our employees do the wellness. We bring a nurse on site, doing the biometric testing and being aware of some of the conditions that could be harmful long term. It does tax the employers who are forced to do that, but it also forces us to be consumers.
DEAN: I do believe that the Affordable Care Act did get people to start talking about health insurance, which was a good thing because the costs continue to rise. Do I think that it had an impact and it made health care more affordable? No, I do not. I don’t think that the cost of claims have come down.
Obviously, the cost of health insurance has not come down, so in that aspect, then I would say yes, that it has failed there. I believe that it was more of a health insurance reform more than a health care reform, because it made an impact and changes to health insurance and how we obtain insurance. I do believe that more people are covered by health care and health insurance now than they were previously, and that is a good thing, more people covered is obviously better, but I don’t think that it addressed the real problem, and that’s the rising cost of the health care itself.
McCAMBRIDGE: I would say after eight years ... that it’s finally starting to have both a positive impact on quality of care and also it’s finally starting to contain some costs. So last week, the CMS released a report showing that the percent of GDP was 17.9 percent spent, which is flat for the first time in an awful long time. A lot of us think that’s because of improved population health management for people getting primary care rather than using (emergency departments) as their primary care sites. It’s very interesting.
When the Affordable Care Act was put live back in 2010, $10 billion was put aside to create the Center for Medicare and Medicaid Innovation. That center has been trying to figure out how to do this well, to provide high-quality care and control costs at the same time.
They finally have fallen onto some programs, these alternative payment programs, that seem to be working. They went through accountable care organizations and now they seem to have settled on bundled payments. The hospitals will get 90 days of payment for a patient if you’re having a joint replacement, it starts on day one and that’s all the money you get. There’s a lot of literature to show that is actually containing costs.
The percentage of GDP spent is fairly flat. Schuylkill County is interesting when you look at it. It’s 146,000 people who live in SC, and 25,000 of them receive Medicaid. That’s 19.9 percent of the people in Schuylkill County receive Medicaid. It’s a little bit higher than state average at 18.2 percent and lower than national average. So it’s a good thing for certain segments of the population, particularly patients with Medicaid.
I’m an intensive care unit doctor. I’ve been doing it for 25 years. An example, in the past, let’s say you have a 58-year-old man with high blood pressure who loses his job, loses his health insurance. He can’t afford his blood pressure pills. In the past, what would happen to a patient like that is that they would come into the emergency room, they’d have a stroke. That would be hundreds of thousands of, if not more, in cost to society.
Having those patients covered now is good for that segment of the population. It’s also pretty good for hospitals because in the past if a patient like that would come to the hospital, there would essentially be no reimbursement.
It’s come a long way in the last eight years. After eight years, it’s getting to where it’s supposed to be. There’s a lot of room for improvement.
CAULFIELD: I think it’s an extremely complicated topic. I don’t think it’s a yes or no question. I think you have to look at it compartmentally at each aspect of the act. Looking at the successes, in 2010, in its inception, it was estimated that there were 32 million people going to be additionally insured. I think the estimates now are somewhere around 20 million. The good news is that there are more people who are insured, the bad news is, I don’t think it met its goal. Some of the positives again, it established the 10 essential benefits were, at least there are minimum amounts of coverage regardless of what insurance you have. Some of those things include emergency service, hospitalization, maternity, rehab services. I think the studies are showing that there are more Americans that are not gaining the ability of that medical treatment because of affordability. I think the fact that there are more insured, that’s a positive. As far as the failures, I think, most notably, we still remain the highest health insurance and health costs in the world. I also believe we have the best, but I think we can all agree that something needs to change with that aspect. Some employers with the mandates have caused to think out of the box and you have to, from an affordability standpoint, regardless of whether you’re a public or a private. I think it hits all of us. It’s certainly not the goal of the act where employers are actually agreeing to pay the penalty in lieu of providing health care insurance. That’s not part of the goal. I think some of the failures are trying to instituting the penalties. I personally am just not in agreement with that, penalties for uninsured individuals. The primary reason they’re probably uninsured is that they can’t afford it, so now we’re going to try and chase that with a penalty. I think that’s looking at it in the wrong sense. Similarly, the Cadillac tax remains a significant controversial tax. To tax employers 40 percent as a penalty for offering better insurance, I think that rubs the general public the wrong way. These are typically middle-class Americans that have been paying into their insurance well before the act occurred and now they’re being taxed at a higher rate, which is going to drive up the deductibles and drive up amount of money out of their hard-earned dollars. I don’t think that goes very well with the general public where they feel they’re providing money to those that haven’t put in the time and effort and the investment to do that. I think health care and health insurance remain a significantly complex and confusing necessity. All of us in this room are primarily educated, and I know it’s not easy walking through a process. You can only imagine the elderly trying to muddle through the barrage of documents that come after you have something as simple as an office visit, so I think we need to really focus on making it more easily understandable to the general public, that’s for sure.
POWERS: It made it affordable for a certain sect of people who didn’t have insurance before, and that’s fantastic, to get people insured who never were for preventive care. What happened, though, in my opinion, is that Schuylkill County is full of working middle-class citizens and it’s full of small businesses, and that’s who got the squeeze. To bring all these people on board, now your premiums have gone up as an individual, as a business, your deductibles have skyrocketed. So now if you’re not eligible for the subsidies for the lower income, you’re in a position where you’re spending an exorbitant percentage of your take-home pay on health insurance, and in order to get a lower number there, you’re taking the risk and saying, well, I will take that $8,000 deductible, which would be catastrophic for most working families, to have to pay out $8,000 unexpected on top of a premium that’s already in the $5,000, $10,000, $15,000 range. So it makes it really tough that that group of individuals, hard-working families that have participated in the system forever, have always paid their health insurance and taken care of their families that way, to all of a sudden be hammered with huge costs that they never saw before under the guise of, well now, it’s affordable. I think it really hurts an area like ours with a lot of working families. I think there has to be a better way to spread the cost to pick up the lower income and uninsured than directly funneling it back to basically a tax on working families. That’s where we see the biggest problem. I believe that that side of it has been a catastrophic failure.
KAMAROUSKY: I agree in a lot of points you’ve all made. It was insurance reform. It got more people covered. In the state of Pennsylvania, in the years 2013 to 2016, we’ve seen a 42 percent decrease in the uninsured. It worked in that respect, but the costs and deductibles being passed on to the working-class families, that’s where the challenge is, $3,000 to $8,000 deductibles. What are people doing? What are families doing? They’re still relying on going to the emergency room or other places to help deal with those issues that they’re having .You see health care moving toward access, you see things like telemedicine, you see things like urgent cares and things like that popping up to help people manage those costs. That’s why it’s become a consumer-driven world, where people have choices and they look for that low-cost accessible option, or no care at all. So that’s what we see. People in the area, in this region particularly, are looking for that. You try to be in that sweet spot of offering services that are lower cost. But in the end, we’re still working to help those patients understand what those options are and help manage their health. From the employer respect, you see wellness programs, you see other things like that to try to help patients stay ahead of their health and not have a catastrophe because they haven’t been managing it for years. That’s what we see, and that’s where those high costs come back in.
CARL: I think that if I had to answer the question directly, I would say it has not succeeded, it has failed. The reason I believe that is I think the number one goal was to make sure that we were going to cover all lives. That probably was utopic and clearly was not achieved, and while we moved more people into covered health-care plans, there is still a large portion that are not covered. While, as the physician has pointed out, the Medicaid has definitely gotten better, and those people are probably being treated better, that’s all obviously propped up on government money and obviously all of our backs as taxpayers, so you can basically say even in that bucket of people, we’re basically cost-shifting and just finding another way to deal with it. There have been some good things that have come out of it. Covered lives underachieved. Affordability I do not think is a real positive under the act. I think utilization has been positive. I think we’re all becoming more aware. The more we have to look at costs, the more we have to look at what’s inside the purchased health-care plan, we all become aware that we need to be shepherds of our own utilization and we need to be cost-conscious. I know for myself, my staff, and, I believe, speaking for most businesses, that awareness of kind of shopping health care, the fact that each hospital has a different cost structure, each pharmacy has a different cost structure, and you can make a decision personally that I’m going to go here versus here because the cost of an X-ray, the cost of a CAT scan, the cost of a prescription is different here than there. That’s good. That’s the way the world works. That’s what we’re used to doing as consumers. Before this, health care was being taken care of by a card. I walk in, it doesn’t really matter where I go. So health care was being treated for decades differently than any other consumed product, and that was not good. But I think the basic premise, the elements that this was propped up on, many of those elements have fallen short. I think the most positive thing I have seen that has come out of it is the utilization consciousness, some wellness participation where people understand now that the healthier you are, the less utilization. Utilization, I have choices of where to go. Also, we need to recognize, while it may not be directly related to this question, is that if our system was not based mainly on businesses providing, not health care, but risk mitigation, we as business do not provide health care for our employees, we mitigate their risk. We need to understand that’s exactly what we’re doing. We’re not purchasing anything. There was a time and a place decades ago where we were truly purchasing health-care plans for our employees, but that changed. Now, it’s a matter of pick the risk that you can afford to mitigate the risk for your employees, hoping that that health-care plan is an attractive add-on to employment with your particular job. The reason that businesses do it, even though they know they’re falling short, is that to not do it would put them at a severe competitive disadvantage. But just as we begin shopping for utilization, employees are definitely also aware and shopping for health-care plans, so they know the difference between business A, business B, business C, and how much risk they are able to mitigate, and therefore what the potential out-of-pocket is, and sometimes they make job decisions really based on that. So we’re kind of losing the battle. We’re not able to pay as much as we once did. We’re continuing to pay to the degree we can for competitiveness and, at the same time, we’re covering less and less health care. So if this was easy, probably back in the Bill and Hillary Clinton era of government, this would have been solved. I remember to this day when they made this their major agenda and Hillary was on the point. If it would have been easy, it would have been solved. We’re working on it for the better part of three decades. It’s obviously not easy. No one’s to blame necessarily for the failure. We clearly are not on a successful model.
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JOYCE: We move on to question two. The public does not want to give up pre-existing condition coverage, which is costly. So how do we get to reformed health care that is good for business and for the public?
CARL: This is probably the trickiest of all the questions. I would just say that if you believe that everybody needs to be insured, you’re going to come to the conclusion that pre-existing conditions need to be covered. The best-case scenario of pre-existing conditions is the young person that hasn’t aged and hasn’t had any kind of serious problems, although in the world we live in, even that’s difficult with our social habits, but at the end of the day, the younger person has a better chance of not having pre-existing conditions just by the aging process. We’re all going to have them. Of course, nobody wants those to be excluded because that would mean that your health-care coverage generally would become worthless. But pre-existing conditions means higher utilization, means, generally speaking, more procedures, more testing, more pharmaceuticals. So it drives up cost and there is just no way around that. The problem with saying that everybody’s pre-existing conditions should be covered is it’s a massive amount of cost that has to be cost-shifted or covered across the greater population. In other words, those people that have the higher problems are going to drive the higher expenses. They have to be helped to be subsidized by people that do not have those conditions, so it’s cost-spreading, cost-shifting any way you want to look at it. That becomes problematic because it’s going to drive up the basic element across the board. So to me, it’s a desire but it’s not in any kind of economics in the world usually a successful equation, because it’s just too much cost to shift and to spread across the population. It’s part of the reason why, quite frankly, we don’t have everybody under health care. It’s why we can’t cover everybody’s lives, because the base numbers are coming up too high to make that sensible because the pre-existing conditions are being spread across the population. As probably one of the most elderly people sitting at the table here, I’ve experienced in the last decade of my life definitely more health-care issues, so I appreciate when I have them, that I need to get them treated, and they’re costly. I would not want to be the person that walks into the hospital to be told that you can’t be treated because you’ve got this condition and your plan doesn’t cover it. That would be obviously difficult for anybody to accept. Everybody’s health care need and access to health care has to be addressed. There is just no question that all of these pre-existing conditions and how we treat these higher-level conditions have an affordability problem that I do not believe the business community can continue to mitigate even if it’s only mitigating the risk of it. It is definitely at the heart of the problem and the biggest thing that we’re going to need to tackle moving forward.
KAMAROUSKY: It’s definitely one of the most challenging questions here. It’s the silver bullet. Try to figure this one out. You have a complex patient. You have young healthy people helping to subsidize that population. That population is at risk. The insurance companies are trying to pull those groups so the young healthy folks help subsidize the older unhealthier folks. Trying to make that attractive is a challenge. To do the right thing, yes, you want to cover those folks that have a pre-existing condition so they could move between jobs. It’s a challenge. Those workers then are not able to move from employer to employer because there are different rules. On top of it, there’s high utilization and high costs that keep driving up the costs for those patients in your organizations. Back to the population health component that’s why we are seeing healthy programs, healthy you, wellness, to really stay ahead of it. It really comes down to managing the population health, from the youth to the mothers and babies, to the home health and to make sure that you’re taking care of yourself as a worker, as a family member, as a member of the community. I don’t think there is a silver bullet to this one. The right answer is, we want to cover it, but the problem is, the costs keep going up. That’s why we’re working toward creating more access and driving down the costs of health care. We can go on and on all day on this one.
POWERS: When I look at this, I look at the traditional concept of what insurance is. We no longer really have a health insurance system. In that, you have a large group of people. There’s a risk profile taken of everyone. They’re taken on as a client and then there’s a premium assigned for that risk level. You see that in every other type of insurance out there. The higher risk pays a higher premium. The lower risk pays a lower premium. The system we’ve turned into is the subsidies of the healthy going toward the unhealthy or the pre-existing in order to get everyone covered kind of takes it away from that traditional insurance market and makes it more of just a health-care mandate for everyone. That’s where we’re really seeing people wanting to cover pre-existing conditions, but how do we manage that so it’s not coming directly out of the pockets of other people with a lower-risk profile, and not necessarily a pre-existing condition caused by the health habits of a consumer, but maybe it was. So now is the 20-year-old healthy kid paying more for the person who chose to live a less healthy lifestyle, maybe, and took that on? Where in the past you were able to charge an appropriate premium for that. I don’t think we would take that in any other sector of our insurance world. In the auto industry, we wouldn’t say those with 60 claims should pay the same rate as those who have been a safe driver for their entire life, but we’ll subsidize that. That’s just not the way insurance works, so I think that’s a problem. I do think long term, the fact that there is a bit of a mandate to have your health insurance will eventually slow the concern of the pre-existing condition, because there are less and less people who are coming into the system. So 83 or 84 percent are some type of government pay or self pay, and new with these conditions. They’ve been now in the system, so it becomes less of an issue naturally as the plan progresses, which is good. But I definitely do believe that there has to be a way to better assess the risk versus the cost of health insurance for people with certain conditions, unfortunately.
CAULFIELD: Agreeing with some of the comments before, I certainly don’t think this is an easy question to answer. I think as humanitarians and as humans, no one can sit here at the table, I don’t think, and not recognize that it is an issue and it is an issue that needs to be taken care of. Unfortunately, it’s estimated that it affects 50 million Americans; 17 million of those are estimated as children. When you speak of pre-existing conditions, there’s a myriad of complexity. Again, some of these are children that are born with no choices. They are born into these situations and born into debilitating diseases, and they need health care. However, conversely, you do have to recognize that many diseases are caused by lifestyle choices, smoking, obesity, alcohol and drug abuse, lack of exercise, and I think that’s the solvable component of that. I think ... we need to refocus it with wellness, preventative maintenance, thinking out of the box, using nurse advocacy, nurse navigation, telemedicine, different ways to be able to try and reduce those costs to still cover that shift. It could be looked at two different ways, but ultimately, I think it’s all going to come out of everyone’s pocket. So whether it be mandated under the act, as forcing to cover pre-existing conditions, or the alternative is that it’s taken out of the act, these people are still going to need health care, so if they’re uninsured and they end up at the (emergency room), they’re going to be treated, so then that comes back on Medicaid, or the hospital has to eat that on their bottom line, so inevitably, it’s all going to come back out of our pockets anyway. That’s my take.
McCAMBRIDGE: I agree with John and Pat. I think I would add that from a hospital’s perspective, there’s something very interesting happening in the hospital world. At Lehigh Valley Hospital Schuylkill, about 63 percent of the patients who are admitted there are Medicare patients, another 16 or 17 percent are Medicaid, and 2 1/2 or 3 percent are self-paying. So 83 or 84 percent altogether are some type of either government pay or self pay. What’s happening in the space is incredible over the last few years with respect to something called Medicare Advantage. That’s being provided by insurance companies so essentially, there’s a pass-through. There’s a per-member per-month payment through to (the insurance company). Then, a senior will sign up for Medicare Advantage. By 2025, it’s projected that 50 percent of seniors will be signing up for their care in that way, through Medicare Advantage. So interestingly, when you look at the insurance compan(ies) ... they’re actually making a profit on Medicare patients and Medicaid patients by working with providers and the patients to decrease utilizations. So all the preventable utilization admissions, re-admissions ... the insurance companies are quite good at that, working with us to try to reduce that. For sure, in America, the insurance companies are never going away. This Medicare for everybody, without the involvement of insurance companies, it’s not going to happen. It’s already happening in another way through Medicare Advantage. So what we may see going forward with the costly sector of the environment is something like extending Medicare Advantage down to 62, or 61, or 63, something like that, and then there’s a premium associated with that. Patients will be happy with that. Pre-existing conditions will be covered. The patients who are having more problems ... will be covered in that way. They’ll be staying. They’ll be paying a premium for that. I think we’ll be seeing in the future some kind of solution, a uniquely American solution, that involves the insurance companies. When you look at the insurance company profits on Medicare Advantage, they’re making like 5 or 6 percent, and they’re even making money on Medicaid, 2.2 to 5.5 percent. I think they’re kind of figuring this out, and you don’t hear them talking about pre-existing conditions a whole lot anymore. As a matter of fact, I think if you talk to the big five insurers, they’ll say, we’re figuring it out. I agree with everything everybody has said, but I think we’re going to see some changes going forward with utilization. One last thing I’ll say, America in general, we’re heavy utilizers; 5 percent of the world’s population, 80 percent of the opioid prescriptions. In England, there are six MRI machines per 1 million people, in America, there are 31. We’re heavy utilizers of everything. The insurance companies are quite good at helping us get that under control.
DEAN: I think pre-existing condition sometimes gets confused when that term is thrown around. I’ve been in health insurance for over 20 years now, and on the group side, pre-existing conditions have not been an issue. In all companies, there were no pre-existing exclusions on the group health insurance for over 20 years. On the group side, it’s a non-issue. There are no pre-existing exclusions. Where it came into effect was on the individual. Prior to the Affordable Care Act, people would be denied coverage because of pre-existing conditions, or people would purchase an individual policy and get sick, and they would pull the policy on those individuals, and obviously, that’s a problem. It really was an issue on the individual coverage side. The fact that they put the exclusions in that you could have pre-existing conditions and still get coverage was a good thing in order to get more people insured. The problem is, how do you associate and mitigate that risk. It really comes into effect for people that don’t have coverage. If the insurance companies can’t put in a pre-existing condition clause, people who aren’t covered, all of a sudden they get sick, now they want to go purchase insurance. Obviously, for the health insurance companies, they’re not going to be able to afford to stay in business if that’s the case. Now that we’ve had the mandate, and people have continued to have coverage, that pre-existing notion is kind of going away. We’re not really running into that. We’re not seeing that because people have had to have coverage. As long as you’re going without coverage it’s really a non-issue. It’s when you drop coverage, and you’re not covered for an extended period of time, because even with the law, there’s a grace period as to how long you can come into a new policy. I also think we need to have some type of high-risk pool for those members who are extremely high risk. Why should an employer be required, why should they have some of these catastrophic cases on their coverage, why should it be the employer’s responsibility, or the insurance company’s responsibility? I think that’s where the government could step in to help. We have prescription drugs now that are skyrocketing. I recently had a situation where an employer had a dependent child on plan where the prescription was going to cost $700,000 for the year. An injection was $70,000 and they needed 10 over the course of the year. Who’s responsible for that? Should the employer be responsible to cover that? Obviously, for the insurance carrier, if you’re going to insure that, they’re going to increase the rates overall. How do we manage those types of situations? I think those are a little more pressing than the pre-existing conditions. We’re starting to see that go away. I think that’s more of the issue, what do we do for these high-risk patients and how do we treat them? Whose responsible? Is there a way the government can step in and help with some of those?
DENDE: I think that anyone who thinks of the future of our children anyone who has a congenital heart defect, anyone whose looking to get insurance, it’s not going away. Employers are going to want to always attract and have the ability to pay insurance. A solution is, I think, what we have when we have a catastrophic claim, if there is some kind of a program that when a type of catastrophic claim, or a high-risk claim, can help insurance when you hit, let’s say, a gap of the first $100,000, can there be a program where the government can come in and help us with offsetting that so it is not an egregious penalty onto that insurer or that insurer’s utilization. There’s a stopgap. Something like that, I think, can be beneficial to not have a catastrophic claim devastate your plan and not have a 50 percent increase based on one case. It does become an issue of employers being able to afford (it). The biggest growth in our company is not potatoes or cheese, it’s health care. It is the highest growing cost. We want to remain competitive. We want to have that competitive edge. But we also know we need some type of a system ... that can make and help companies become competitive, stay competitive, for creating jobs, and also be able to not be offset by people who have whatever is going to come their way. Diabetes is growing. We have so many health issues. How do we enable that to not be a penalty, or even, hopefully, never discriminatory, based on somebody’s health? I think there’s an opportunity. I think there’s a solution. It’s certainly not going to please everyone. We are eventually going to pay for it, even teachers. Think about how much teachers, in the public, most of them are being paid almost in full, with very little contribution that they have to pay for their insurance. That is not sustainable in this model, even in our own education system in the public sector. It is something that we have to have a better process to help offset the catastrophic claims.
POWERS: What I see in the property/casualty insurance market, there are ways to cover catastrophic incidents. In the unfortunate event of a terrorist attack, there is a fund set up that everyone has contributed to over the years, small amounts in their premium go toward it, and that would pay for exorbitant claims if needed. We have FEMA out there for natural disasters, government funding. But now I see those as, fortunately, rare occurrences when you look at it as compared to someone with a $1 million health-care bill. There are very many fewer hurricanes than there are people with million-dollar bills. Now, how do you set that up? How does it get funded? Of course, we don’t want Mrs. T’s paying out a million-dollar claim, but do we also want every other employer in the country putting in an extra hundred dollars here, an extra hundred dollars there, to cover that? I see that overall number as being just enormous. If $700,000 for that poor girl who needs that, how many girls need that every year? Are there 100,000 of them? Are there 100 of them? That number gets so big. It seems to be either, alright, everybody chip in the hat and we’ll pay for this as employers or covered people, or the government steps in and says they’ll take care of it, and we all know what that means: We’ve increased our tax liability to paying those claims. I agree 100 percent that catastrophic funding sounds great, especially for some of these issues you know with pre-existing. I just don’t see a model for that right now. Again, back to a fairness issue. We want to take care of everyone, but how do we do that properly. It seems like it always comes back to our checkbooks, regardless.
DEAN: I think what we are starting to see is more collaboration between the insurance companies and the provider. Where years before, it was just strong negotiations, they’re actually collaborating to deliver better quality at a lower cost. The prescription issue, that’s a whole other field.
McCAMBRIDGE: Just a few years ago, it was primarily fee for service. The models that are happening more and more, there’s some type of shared risk with the costs an utilizations. It’s really the main measures. When patients get admitted to hospitals, that’s the number one cost, so typically there are arrangements that are more and more prevalent where there’s some type of risk arrangement. That works pretty well.
JOYCE: Let’s get to question 3. What has to happen for the reform to occur?
McCAMBRIDGE: When the law was passed all those years ago, it was an awful 60-40 split. The Democrats had 60 percent of the Senate seats and the Republicans had 40. These are all Mitt Romney’s ideas, going back to 2006 in Massachusetts. Interestingly, they ran against each other. When Barack Obama won, he basically took all the great ideas. They got it through, and it was very partisan. The problem with that is typically, when they pass a law, the government, they tweak it a zillion times behind the scenes. None of that has happened because it was so contentious to begin with. Nobody is interested in tweaking it or fixing it. I think the main question still needs to be answered in America. It’s what we’ve been talking about here. We have a general idea. Should all Americans get some kind of coverage, and what that looks like? I don’t think we can reform anything until we answer that basic moral question that they’ve answered in other countries. Once we’ve answer that question, whether this is here to stay, then we can in a collective way work on that model, so we can talk about things like catastrophic funding lowering the age for Medicare Advantage, what does a premium look like for a 55-year-old man who has hypertension and has lost his job, through Medicare Advantage. We can’t even get there because it’s so contentious. We can’t even get there. We still haven’t answered the primary question. More people are leaning toward, it’s OK for everybody to have coverage. It still has to be sorted out. We’re not going to see true reform until the primary question is answered.
DEAN: I absolutely agree with that, and some tough decisions need to be made in that case as well. Does that dependent child get that $700,000 prescription drug. Until someone’s willing to say yes or no and make those decisions, I think it’s going to be tough to get.
McCAMBRIDGE: Or, yes but that girl goes onto Medicaid.
DEAN: Correct. I think seeing the health insurers and the providers collaborate and make changes is movement in the right direction. I think we need to see more transparency as consumers. Our costs and out-of-pocket expenses continue to increase. I think consumers need to know. They need to know what the cost is of that MRI, How do I find out what the cost is of that MRI? The carriers do have some tools available, but they’re only as good as the data that’s put in, so they need better tools to be able to determine where is the best place for me to go for care. How do I find that out so I can do some pro-active shopping? Obviously, if you’re going in for emergency heart bypass surgery, you’re not going to shop around for the best value, but when we’re going for routine care, when we are having elective procedures done, how do we find out what the cost is? Again, I have higher out-of-pocket expenses and deductibles. Everyone’s facing that. How do we shop for that coverage? Same with our prescription drugs. What’s the best way to purchase our prescription drugs? Where do we go? The prices vary from pharmacy to pharmacy. For years, members have paid co-pays. They have no idea that it’s a different cost if we go to Rite-Aid, Walmart or the pharmacy at the grocery store. So where do we find out that information and how do we become better consumers? Until we’re better consumers, the costs are going to continue to escalate. Again, population management. The insurers and the providers as well are doing a better job of population management, finding people who are potentially high risks and getting to them before they’re a high risk, making sure that they’re getting their care that they need ahead of time. Unfortunately, you would think your health is number one, but not everyone is doing their part, so we are seeing the health insurers, the providers step in to try and get to people before they become these high-risk catastrophic situations. So I think we’re headed in the right direction. There are a lot of smart people talking about it. The Affordable Care Act got people to the table to start talking about it, health insurers, providers, consumers. So I think we’re headed on the right direction.
McCAMBRIDGE: One of the things about the Affordable Care Act is that they created this thing call meaningful use. St. Luke’s and Lehigh Valley and all of these major massive networks around the country, we were basically mandated to put in electronic medical records. The electronic medical record has allowed us the ability like we’ve never seen before to identify the high utilizers and then to put in place nurse navigation and those types of things. That’s one of the positive things that’s happened out of the Affordable Care Act is the electronic medical record. There are a lot of issues with physician burnout related to the record and those types of things, but overall, it’s been good for patients.
KAMAROUSKY; It’s allowed the visibility into the data pool to be able to have those conversations with payers and form that partnership. You can focus on that population that’s overutilizing, or the provider that’s overutilizing in his work as a partner, to drive those costs down. A lot of times, by not having that, they will go see one physician on one corner and have one test, and they’ll go see another one because they didn’t like the result. This is what happens in reality, they’ll go to another physician, and the same test will be ordered again, and the payer will end up on the hook for both of them. The patient will just keep going around and around. That continues to drive up costs, and so that utilization and transparency in the systems have allowed both health care providers and systems to partner up with payers and work to share that risk and work with those patients.
CARL: My final comment on that would be that we’ve come a long way. You guys from two different hospitals being on the same system is an example of a lot of progress. We still have a long way to go. We will be very well served. I know in life the universal nature of anything is very difficult. There still are a lot of health-care providers who are not linked in and that utilization will even get better the more we bring under the same umbrella so that it’s easy, it’s fast, it’s common. I think a government-subsidized program where they’re putting money into the system should have as one of its very premises ... a universal-type information system. That’s the only way we’re going to get to see the big picture. There are a lot more people going that way. People don’t want to be told what to do in that regard, but it would definitely be an advantage if you could see wherever this patient was, everything that this patient did. We’re better, we’re not great yet.
DENDE: Just to cascade on that, one of the wins was just identifying this opioid (crisis). I think it really calls out the pharmaceutical industry as well. These prices on the prescriptions, the providers and the insurance companies have done a good job. I think that’s a win out of this new act. We’ve gotten reasonable and customary charges. There’s a ways to go to get everyone universal with that. Your costs can go out of control, but I don’t think the pharmaceutical industry is there. I think there’s got to be reform. I just got eye drops the other day, they were like $250. It was just absurd. That’s one area I think I would use that good work we’ve done with the providers with reasonable and customary (charges). The other part in focusing reform is incentivizing people, companies, government for wellness. I mean it for the preventive care in making your cholesterol checks. The preventive, a lot of policies they do not charge you and I think those are good incentives to continue to really incentivize the wellness aspect of your policies. That’s one of the biggest pushes we do with our employees. We have some free benefits, take them, take the preventive care. It’s a shift in the whole mind-set of your wellness, your health. Inevitably, in the long term, it will help both the individual and companies, or anyone who’s paying this price, to be pro-active, and if there’s a way to incentivize people, companies, governments to do that more and more in our future, I think that’s going to be a big part of it, especially with the growth of diabetes, obesity, opioids, all those kinds of things. I think those are going to be huge to making that more of a long-term strategy in our approach.
POWERS: The way I look at it from a macro perspective is that there basically are a fixed number of payers, the citizens of the United States in one way or the other, and there’s a total cost, and we have to pay that. So, all this reform is, well, who’s going to pay what, who’s paying this portion, who’s paying this? If you don’t take down that top-line number, or increase the number of people putting into it, you’re not going anywhere. So if you’re not managing the cost at the top level, and figuring out how that will be shared, whether it’s equally or by risk profile, we’ve failed. So when we look at costs, we have five times to six times more MRI machines that someone in London would have. I know a lot of that is we have maybe hypochondriacs or people who like to be tested, but I guarantee more of it is doctors really covering themselves, saying, you’re getting the MRI. I think maybe that doctor in London says, look, you’re fine, wait six months. Over here, with the tort system we have, we’re in a position where nobody wants to tell someone who really was a victim of negligence that they can’t seek recourse from a hospital or a doctor. Of course, that’s just the American way. If there was negligence involved, you should be compensated, but the way we are now, I think we really are in a system where there is so much covering yourself over and over and over again that it’s leading to this massive duplication of costs. Until we get that under control, whether the hospital system does it, but really it’s the tort reform, it’s the legal system, are we going to allow that to happen. Otherwise, costs will keep skyrocketing and that’s just the way it is. Then, we just have to figure out who pays. So I think on the reform side, there’s no possible way that we can’t work at lowering the cost aspect as opposed to worrying about how it’s paid for.
KAMAROUSKY; It’s really a roadblock.
POWERS: I’m sure of that. I can’t imagine.
KAMAROUSKY: It causes a lot of issues. Defensive medicine comes into play. A patient with an issue can have the trial go in another zip code that can rule in their favor. It really challenges the system and we need to fix that.
CAULFIELD: I like to look at it at the 30,000-foot level. Ever the optimist, I think we have to take a step back sometime and look at the successes we’ve had. Anybody can Google the life-expectancy charts. In 1900, it was, for a male in the United States, 46 years old. By 1950, it went to 65. By 2000, it’s up to 76 and now, some show that we’re over 80 years old life expectancy. That is certainly attributable to our advances in medicine. I’m still a firm believer that we live in the greatest country in the world. We have the greatest physicians, the greatest universities and teaching universities that are able to garner that and continue to educate our own to be able to have success in the health-care field. Back down to the boots-on-the-ground level, which is where we consider ourselves ... I’m excited to see the out-of-the-box mentality. I’m excited to see recognition of today’s millennials, where everything is instantaneous, and everything is electronic. Just the advances in telemedicine, where instead of having to go and schedule a visit, you’re pulling up your iPad and Skyping a doctor for a lower cost and bring that down. Not that we’re trying to put anyone out of business, of course, but that’s at least a choice and an alternative. Some of the things that most people don’t know about, I think education is a huge key here, and education to your employers especially. The Blues (Blue Cross and Blue Shield) have the health stores now, where they’re offering Yoga, meditation and appointments to help and programs where you can actually visit the store and meet with a health coach. You can work with a diet plan, you can work on weight loss. These things exist, but I think it’s our job as employers to make sure that our employees know that they exist. Again, back to the preventative, I think we’ve come such a long way on that with wellness with our providers, there’s grant funding and there are grant dollars out there. We chance off Fit Bits at our annual meeting, and they’re paid for by a grant that supplied by our health-care provider. There’s grant funding available. We can use that to provide a lunch after we have a hike with our folks on a weekend. Come on out, we’ll take a hike and take advantage of some of the beautiful resources of Schuylkill County, and lunch is on us and it will be a healthy lunch. That’s not going to solve the problems of the United States health care reform, but I think we’ve got to start somewhere, and we’ve got to recognize that we can all make a difference. Where I am more versed in is our involvement in our consortium and our self-insurance policy. Transparency is our model. We see where every dollar goes. You see where your premiums are going. You see where your re-insurance is going. You see where your co-insurance is going. Most importantly, you see what your administrative fees are to your provider. I think that’s the elephant in the room. Pick a number on what the estimates are as a nation on what that percentage profit is versus health-care costs. Some of the private providers, I think that’s well up over 30, pushing 40 percent. I think that transparency is an arguable point but it’s also an attackable point that I think we can all look at and sharpen up as part of the fix.
CARL: A lot of what we talked about today starts from the premise that we’ve got to do the best job possible matching utilization with the payment system. That’s kind of the rub. We have people that are paying and never utilizing and we have people that are being subsidized in payment and overutilizing. The equilibrium in the system is kind of out of whack. If I had an opportunity ... we spend so much time arguing about crazy things in government, but if we could take a step back to before the Bill and Hillary Clinton time and say, if I was president and health care needed to be reformed, what would I do, the first thing that I would do is get the best and brightest people in a room and work on this almost with a blank sheet of paper. What we’re now starting to do is trying to tweak models that don’t work and we try to heave on top of it adjustments that still fall short, and if the root cause of the problem is still there, and all we’re doing is tweaking it around the fringe, starting from scratch is way more difficult and way more time consuming, but I think it will lead to a better result. Root-cause correction is much better than quick fixes and we always by the nature of our society want to do everything fast and dirty. The other thing is ... in almost everything in life, government are not the people that should be addressing this issue. While they may need to ultimately vote on it, and I get that, especially if government is going to fund it, most of them have little to no expertise. I understand there are physicians in Congress, I understand that there are lawyers in Congress, lots of them, too many of them, but at the end of the day, we need people that understand the system. We have a lot of those represented here today. There are a lot of smart people that understand this. If you take political bias out of it, and say we’re working to improve the health care system, and that first part, taking political bias out, is always going to be a challenge, we’re worse than we ever were with that. Government should be approving it, if there are elected officials that have to approve funding, but they shouldn’t be designing it. Just going back to the very premise, let’s pass this and then we’ll read it. We know that’s the big joke, but it’s sadly the big joke, it’s sadly kind of a lot of what happened. A document that was way too big, and even with 18 staff members on some congressional staffs, nobody read it. Nobody understood it, nobody knew what any of it meant. And so now, is that what that means, is that what it means to the physician standing that’s at the bedside, that these are the requirements that we have to meet? I think another overarching problem that is way bigger than health care, and we’ve alluded to it, is, do we believe that we need to be an entitlement society? It’s not just health care that we’re talking entitlement on . Eighty to 90 percent of government expenditure is now entitlement programs. Is entitlement really the model that we’re going to continue to base America on? Does that mean that it has to be that way also for health care because we’ve made a decision that we should just be entitled in general? Is it OK for healthy well-bodied individuals in our society to not work and still receive entitlements because they knew how to beat the system, which is all sucking money out of the system into people and avenues that should not be receiving it? At the end of the day, health care is all about putting need and demand with the supply. If we do it well, we take care of sick people. If we do it poorly, we waste money. It’s easy to say it’s difficult to fix, but we have to make some of these tough choices. You can’t have all of these people sitting out there, 20 percent Medicaid. They’re not all necessarily needing Medicaid, but they’re on it because we haven’t cleaned up the system that changes that. I’m not saying people that have no way to get health care or any other entitlement program should be told you can’t get it, but I am in favor of everybody contributing to society in some meaningful way and being rewarded so that their production in society relates to things they need, want and desire, one of which is health care. I think we need to answer that question. We seem to be posturing, moving to a more socialistic, government-pay, everybody-get, and I don’t think that’s going to work for health care, and, quite frankly, I don’t think it’s going to work for any entitlement program.
KAMAROUSKY; Our next meeting’s in Harrisburg. To Bob’s comments on access, and the supply and demand, I think what you’re going to see in the meantime, the world’s moving along here, employers are challenged with costs and we’re trying to manage populations in the middle. I think what you’re going to see is health care investing in primary care and access to drive costs down. Lower costs, higher quality are initiatives that are really on top of mind for all health care institutions, especially in this region. We’re going to see that. I think you’re also going to see some innovators come in and disrupt the market. We see a lot of work in Google happening right now, and some other things that are going to disrupt us, and government may not solve it. It may end up coming in from other avenues. Who knows? I think in the meantime what we’re going to see is investment into the access component of primary care, population health, trying to get ahead of it and educate people so they know how to manage themselves and not be a catastrophe case later in life. Until then, we solve all these other issues, we’re going to see a lot of focus on data to help drive us to that. We will also see some advance partnerships, regionally and throughout the country. I know Geisinger actually has a partnership with Walmart where they fly joint cases and spine cases to Danville. It helps the employer manage the costs. You’re going to see more higher-level partnerships. Patients won’t have a choice because they know the outcomes are based on the data.
JOYCE: I want to really thank you guys. It’s been very educational for me. I do appreciate your time. This will be part of The Republican Herald Business Review, which comes out on the final Friday in February. Thank you again.