Medical Device Daily Washington Editor
WASHINGTON — Though the impetus toward healthcare reform is ongoing, it is not clear which of the stampedes will win out in the effort to constrain the ever-expanding U.S. healthcare budget.
While much of the current debate is embedded in the current political dialogue — and likely to reach some sort of cacophony in the already blossoming U.S. presidential debates — the primary answer may be found in better, more targeted care, especially care of those with a handful of catastrophic diseases.
That at least was the emphasis of George Halvorson, CEO and chairman of Kaiser Foundation Health Plan (Oakland, California), in his presentation on the first day of the Fourth Annual World Health Care Congress, held here.
Halvorson said that "the overwhelming focus on the current debate is on the issue of financing," but he suggested that a superior focus should be on the day-to-day practice of medical care.
"We need to understand who is spending the healthcare dollars," Halvorson said, noting that 75% of the nation's healthcare tab goes toward treatment of a small number of chronic diseases: diabetes mellitus, asthma, congestive heart failure, coronary artery disease and depression. And he called the need to focus on this disease short list as "an extremely important piece of information."
Diabetes, Halvorson said, devours almost one-third of the Medicare budget, adding that it is "the fastest growing disease in America." Patients get the current standard of care for this disease only about 8% of the time.
"We need to move the 8% to 80%, which will transform the cost" of this disease, he said.
Halvorson said that preventive care and behavioral changes could drop the incidence of diabetes in half and, partly as a consequence, might also cut the number of kidney failures by half.
Halvorson cited the experience of the Pima tribe, which has been the focus of a textbook study of how behaviors and lifestyle patterns impact health.
The Pima tribe inhabits an area that straddles the border between the U.S. and Mexico, and the members who live in the U.S. are more likely to be sedentary in their work than their cousins across the border. Most Pimas living in Mexico still till the land and have not had access to some of the more damaging fats and sugars that are so prevalent in the modern American diet.
Hence, among those Pimas living in Mexico, less than 10% are diabetic at age 65; on the U.S. side, the ratio jumps to 50%.
"We know what needs to be done, we just need to do it," Halvorson said.
Despite the media attention, the cost of cancer care is much lower, amounting to only 5% of total U.S. healthcare expenditures. Thus, the five diseases targeted by Halvorson's analysis "are the real opportunity" to trim the bill.
The reform agenda should consist of a focus on these five conditions, and another agenda item should be for "linkages between our caregivers," he said.
"The nephrologist doesn't talk to the cardiologist . . . and neither of them talks to" other specialists or the primary care provider, Halvorson said. "It's a horrible situation that we should find unacceptable."
Halvorson's list of diseases that are soaking up a majority of healthcare costs resembles only slightly the five conditions — acute myocardial infarction, heart failure, coronary artery bypass graft, pneumonia, and hip and knee replacement — that are part of the pay-for-performance pilot project financed by the Centers for Medicare and Medicaid Services, which tracks the impact of improved care standards on acute myocaridal infarction, heart failure, coronary artery bypass graft, pneumonia, and hip and knee replacement. However, the P4P pilot is a hospital-based program, and most treatments of depression and diabetes take place in doctors' offices rather than in hospitals.
Halvorson also lent his voice to the chorus that wants to see less paper and more bits and bytes in modern U.S. medical practice. "Paper medical records absolutely cannot do the job," he said.
The gold standard is the electronic medical record, "but not everyone can get to an EMR," he said. The personal health record (PHR) is the second-best data source, available from all payers who have gone down the digital road to any extent, he said.
Such "semi-electronic medical records" contain diagnostic data and, when tied to disease registries, will guide doctors to best care standards, he said.
About 1% of patients drive about one-third of the cost of healthcare, and about half the population — the healthier half — accounts for only about 3% of the cost, according to Halvorson. Consequently, he said that healthcare systems do not need to pull together an electronic system that includes each and every one of 300 million Americans.
As for the inputs into human health, Halvorson said: "We need to eliminate transfats," a reference to trans-fatty acids.
Moving from his emphasis on improved standards of care as the main pathway for reducing healthcare costs, he also addressed the payment side of the healthcare equation toward the end of his presentation. "We also need universal coverage to save lives and transform healthcare," he said.
"You can get to universal coverage without the Canadian system," Halvorson said, but he argued reductions in administrative costs will not be the principle source of such savings.
He presented figures indicating that administrative costs account for about 2.6% of the cost of care in Canada vs. 7.4% in the U.S., but overall healthcare cost in the U.S. is more than $6,000 per patient, roughly twice as much as the figure in Canada.
Care costs account for 90% of the difference, not administration, Halvorson said.
That analysis differs sharply from oft-stated projections that up to 30% or more of the healthcare bill in the U.S. is the result of waste, much of that resulting from unnecessary administrative activity, redundancy and the paper management of healthcare processes.