Power Breakfast panel debates health care reform

IBJ EXCLUSIVE: PANEL TRANSCRIPT & VIDEO HIGHLIGHTS

As health care legislation
continues to wend its way through Congress, Indianapolis-area industry leaders still harbor strong
opinions about the issue.

Five industry insiders discussed how to improve the health care system during
IBJ’s Power Breakfast Sept. 25 at the Westin Indianapolis. The following is an edited transcript of the free-wheeling
discussion, peppered with video highlights of the discussion (see following pages).

The panelists:

Dr.
Mercy Obeime, a family physician and medical director of the St. Francis Neighborhood Health Center at Garfield Park.

Dan Krajnovich, Indiana CEO of the Minnesota-based health insurer UnitedHealthcare.

Kyle DeFur, CEO of St. Vincent Indianapolis Hospital.

Dan Evans, CEO of the
Clarian Health hospital system.

Dr. Craig Brater, dean of the Indiana University School
of Medicine.

The discussion was moderated by IBJ reporter J.K. Wall:

As Congress
has been debating health care reform through the summer, perhaps one of the biggest
goals of the whole process is to cover the 46 million uninsured. What would be the impact of covering
the uninsured and what’s the best way to get there?

OBEIME:
I thought I would bring a patient with me to the room today. That way I could tell
you about their situation and we can all decide how to make life easier for this person
and to make things better for all of us. He’s a 57-year-old Caucasian man. He had worked very hard
in sales, and he decided to quit at the age of 57 because sales were low, he wasn’t making any money. He thought
he would quit and then start doing some things on his own.

Before he did that, he went online and got insurance
for him and his family for $500 a month—he, his wife and his son. Well, when his first bill was submitted and the insurance
company realized that he had multiple diagnoses, they promptly dropped him. They, however, did not reduce the premium for
the family.

So from this point on he struggled to try to get some medicine. He was trying to refill his prescriptions
by going to the emergency room. Well, he shows up in my office last year. I saw him on Sept. 2 of this year. He had had an
accident the day before, a motor vehicle accident. He got confused while he was driving. The police came and thought he was
drunk. Finally, when he was able to tell them that he was diabetic, and they gave him some glucose, he was feeling better.

My first question was, “Why did you not go to the emergency room?” “Well, I already owe too much
and I didn’t want to go. I figured you would take care of me today.” Well, I took care of him. I raised his medication.
More importantly, I spent a lot of time educating him about hypoglycemia and about what could have happened that made him
get in that accident.

It is poverty for any country, for any human being to deny access to another human being
for something as vital as health care because we are worried about how much it will cost. I believe that the most important
asset we have is our life. If we cannot invest in our life, what is the use of investing in anything else? If we think it
is too costly to take care of our fellow Americans, how can we justify doing all the other things that we’re doing across
the world?

KRAJNOVICH: I completely agree with Dr. Obeime. We must cover all Americans. The
health care system that we have today should be afforded to everybody. Certainly there are things that we can do with the
regulations out there, bringing more uniformity with regulations across the country so that we can offer access, eliminate
pre-existing condition clauses, not rate folks on their health status or gender. With those, then it’s easier to also
mandate coverage for everyone, providing either tax relief or funding for the low-income and moderate-income families that
would be caught in a situation like that.

EVANS: Well, thanks for putting the two “Dans”
in the wooden chairs. Well, first of all, everybody should know that both the House version that passed this summer and the
Baucus [bill] did not insure a hundred percent of Americans and insured zero percent of undocumented aliens. So even if the
bill that passed the House passes or the Baucus bill passes, it’s going to range between 91 and 94 percent of everybody
covered because we’ve got 5 or 6 percent that each of the hospitals and doctors’ offices deal with that are undocumented
or will fall through the cracks. So these bills are about how much it costs and not about insuring every American, regrettably.

Click
on numbers for next pages

What needs to be done to make sure we have enough providers, particularly at
the primary-care level, to serve all Americans?

BRATER:
It’s a [multifaceted] issue. I heard the comment that we need to build on what’s working.
As far as I can tell, nothing is working. The entire system is broken. The deficit of primary care is
just one small element of that, but it’s symptomatic of many of the issues that are involved here.

So why aren’t kids going into primary care? One reason is that today’s generation of students,
when you survey them and ask them what determines their choice of specialty, they list debt. Debt’s on the list, but
the No. 1 thing they list is lifestyle. So the perceived lifestyle of a primary care practice in a small community is such
that that scares a lot of kids away. I don’t have a ready answer to that.

Are there things that we can
do to try to make it less onerous to be practicing primary care? [Can we] change the perceptions of the kids that are being
attracted into medicine in the first place? Maybe we’re not admitting the right people to medical school. I think we
have to ask ourselves all of those questions.

If you go into primary care, you end up on average coming out of
medical school with $150,000 of debt. And practicing primary care is not remunerated sufficient for anybody to rationally
look at that debt and what they might make and say, “This is a wise decision.” It doesn’t make any financial
sense to do it.

So we have to address the screwed-up economics of how we reimburse for care and the things that
primary care physicians do. Everybody says it’s extremely important. Well, why aren’t we rewarding them for it?
So we need to just start from scratch and blow the whole thing up and begin from zero.

EVANS:
To Craig’s point, I have encouraged—and so has the school—the Indiana delegation to help young physicians
on the other end of their experience. That is, in forgiving or discharging their debt if they go in to certain fields. We
do it in other parts of society. We just went through Cash for Clunkers. Why wouldn’t we have a similar program to encourage
physicians to go into certain areas? The bills being kicked around are mute on the issue of medical education. So it looks
to me that even if we have health care reform, major parts of the system are going to remain, to quote Dr. Brater’s
technical term, “screwed up.” And we just need to brace ourselves for that.

OBEIME:
I am a family physician, and today I look back and I have no regrets that that’s what I did. I say this to remind everybody
that there are doctors out there who will practice medicine and be very happy with what they’re doing even if we’re
not paid for it. That does not mean, though, that we should not be respected and that we should not be compensated.

I know the system is broken, but we have the ability to look at what has been done everywhere else in the world. I
talked to a friend of mine a couple of days ago who is a general practitioner in Europe. We went to medical school together.
He did OB-GYN when he went to London. Then two years ago, he called me very excited that he finally got a position to practice
as a general practitioner. I said, “Why would you do that?” And then he explained to me that family practitioners
were more respected, they got paid more, they had a better lifestyle, and a lot of people’s goal was to work their way
to get to that position.

It wasn’t about how much money they get paid. It was the fact that they practiced
as a team. In this country we have physician assistants, we have nurse practitioners, we have dietitians, we have social workers,
and we have lifestyle modification specialists. If we all allowed the situation where we would work together as a team to
take care of patients, we would not need a doctor to see each patient all the time. It would drive down the cost, and it would
make the patients happier.

Patients who come to my office, I don’t think they’re happy because they
see me. They’re happy because they see my social worker, Brooke, who helps them figure out how to get their food, how
to get transportation, how to get medications when they cannot afford it.

Click on numbers
for next pages

 

President Obama stated two goals about health care reform: Reduce
costs and improve quality. What is the best way to achieve both of those
at the same time?

DEFUR: Well, I think one approach to that is
clearly pay-for-performance incentives. That’s a good way of simultaneously
improving quality and decreasing costs. Primary care access—really looking at
how we compensate primary care, how are we supporting them, how you get more people to go into primary care—is
a key piece because primary care can be very effective in early intervention and prevention and wellness.

There
are a lot of costs in the system today related to people not going to primary care but rather waiting until they become so
ill that they show up in the emergency department. If a patient shows up in the emergency department with full-blown pneumonia,
they may be hospitalized, put in an intensive care unit for two or three days, and then stepped down to a medical unit for
two or three days, and then discharged and have a bill of $20,000 or $30,000. If they had gone to a primary care physician
a couple [of] weeks ahead of that, they could have been treated with $4-a-day antibiotics.

One of the other things
is utilizing Lean Process Improvement Methodology, taken from the manufacturing industry, implementing what’s also referred
to as the Toyota Production Model. It really focuses on elimination of waste within our processes. As we know, variability
is the enemy of quality. We eliminate waste and hardwire the more efficient processes. You really do simultaneously increase
quality and decrease costs by getting waste out of the system because waste is extra steps in a process, it’s duplication.
And when you eliminate those additional steps, you eliminate possibility for error as well.

BRATER:
There’s no way you can really get meaningful cost out of the system unless you do something about over-utilization.
That’s a big elephant in the room.

You can nibble around the edges with all this pay-for-performance stuff.
That’s got all sorts of issues. Let’s say you have a pay-for-performance plan but your patient has low health
literacy, and so no matter what your efforts are, you have trouble getting them to adhere to a certain regimen. So your pay-for-performance
plan punishes you. Well, it turns out that the people with the lowest health literacy are probably the people who need your
services the most, so then you end up with yet another perverse reimbursement system. Some of this terminology sounds nice
on the surface, but if you drill down a little bit, there’s a lot more to it than that.

I’m worried
that there’s too much tinkering around the edges. We have a system that rewards doing stuff instead of spending time
with patients. So it’s a completely broken business model. We are here for the IBJ, so if you want to talk
about the “business” of it, people are rewarded for doing more and more things. Well, that’s not always
in the best interest of the patient, so how are we going to get our arms around that? Pay-for-performance doesn’t do
it.

EVANS: If we pay for more stuff it doesn’t matter how efficient we get, we just do
more stuff more efficiently. If we’re doing stuff that shouldn’t be done in the first place, we’re all complicit
in that. What am I talking about? Futile care. Most health care expenditures are in the last few months of life. Many people
in this room, because of your ages, are dealing with elderly parents right now. Does Mom have a living well, yes or no? Does
every family member understand what it means, yes or no? Did you discuss it last Thanksgiving when you all were sitting at
the dinner table, yes or no? If you answered any of those questions as “no,” [then] when the moment comes, you’ll
become a maximum utilizer.

The tinkering around the edges that the Dean just talked about will not affect the
profound implications of that lack of preparation. That’s a psychosocial issue in this country. What happened in the
House bill where it mentioned $200 a primary care physician got paid for [end-of-life] counseling one time a year? One time
a year, a family could get counseled and the doc could get reimbursed on palliative and end-of-life care. And instantly that
was converted into a “death panel.” So that became the third rail. Wow, did those guys drop that one right away.

Anyway, the general assumption is that a third of critical care is futile, doesn’t make any difference, the
patient dies in two months anyway. Who decides in our culture who gets the care and who doesn’t? If you’re an
actuary from Mars and landed here and had a choice of a million dollars to spend on an 80-year-old or an 8-year-old, you know
what you’d do, right? We do not make that kind of a decision. We pay people for more stuff, so we have overutilization.
The hospital systems in Indianapolis do the best they can to be more and more efficient, but essentially they’re doing
the same stuff.

So the only way to cut health care costs, and it’s implied in many of the articles you
read, is eliminate innovation. Who is in favor of that? That’s one quick way—just get rid of innovation, no more
improvements in medical care. Or ration care. Who’s in favor of that? I believe I just heard a resounding nobody in
the room, which means status quo.

KRAJNOVICH: I couldn’t agree any more on the innovation
piece of that and also to Dr. Brater’s point, I think clearly he hit it right on the head—overutilization.
It’s something that we do believe that we need to get our arms [around]. A lot of that does start,
too, in the area of prevention and wellness—what we can do to take better care of ourselves, making
sure people understand how their health status impacts the cost of health care. Kyle, clearly, brought
up a very legitimate point in terms of the waste in the system. The American Medical Association estimates
that it costs $90 billion a year to process claims. We’re working with physicians and hospitals alike to take
advantage of swipe card technology, take advantage of real-time adjudication, because we do believe we can wipe out a substantial
amount of that waste in that system. So there are a lot of efficiencies that we can tap into.

Click
on numbers for next pages

What would it take for the fundamental financial incentives of the health care system
to change, to shift from paying doctors a fee for every service they perform to
paying them for spending time with patients and achieving good health outcomes?

KRAJNOVICH: Doctors should be paid and paid well. It is important to create the kind
of mechanisms so that doctors are [motivated] to perform at even higher levels.
Here locally the Indiana Health Information Exchange and Quality Health First [are]
working to create score cards to provide to physicians so that they understand how they’re
treating their patients, how they compare against their peer groups, so that they can continually treat their patients better
and better and understand how again they’re performing in the marketplace. The work that the Quality Health First and
IHIE do is fabulous work.

DEFUR: The alignment of incentives is important. It gets the hospitals
and the physicians and others on the same page, focusing not on how the reimbursement works necessarily but rather how are
we going to manage the care of this patient. With bundled payments you can create an incentive for really coming together
and taking away some of those barriers and, in all honesty, some conflicting incentives in terms of how care is delivered
today.

From St. Vincent’s perspective, we have been and are preparing for that kind of reimbursement change
in the market. There are some things that you have to have in place: the aligned incentives, you have to have an IT infrastructure,
electronic health record—that’s critically important to be able to manage in that kind of environment—and,
as earlier stated, the primary care access and early intervention for prevention and wellness is very, very important.

BRATER: Well, I think what you’re referring to is if you imagined in contrast to what we’re
doing today is if you had a fully capitated model [where doctors are paid per patient, not per procedure] is basically what
we’re talking about if you take it to the extreme and that would affect all of us because all of our business models
are based on what we’re doing today, so we’d have to fundamentally change and we’re not prudent if we don’t
start thinking about that.

The way the medical school works is we cross-subsidize education and research with
revenues that we generate clinically. And in the current business model, we generate those revenues by doing stuff, just like
everybody else. So we have to think about if we went to a fully capitated model, then how would we have the resources to shift
over to education and research to do those things the way they need to be done in a quality way?

I would go so
far as to say, if it’s done in a fashion where academic health centers cannot cross-subsidize education and research,
then we’re going to have some big problems—not just at the IU School of Medicine but in academic medicine in general.
You’ll see some of these research engines grind to a stop. So you have to be really careful about it. Maybe I’m
not smart enough, but it’s very hard for me to see systems get away from rewarding for doing a lot of things. The simplest
way to have a compensation model or a reimbursement model that gets away from that, as far as I can tell, is really going
into the capitation end of the world. Parenthetically, you could get rid of a hell of a lot of administrative expenses if
you did that.

EVANS: The answer I think, dovetailing into what Craig and Kyle specifically said,
is we should be [motivated] to keep people out of the hospital. We shouldn’t be [encouraged] to treat people in the
hospital. Right now, the money all goes to acute critical care, it doesn’t go to the clinics. So to answer the question
that we’ve got to be paid to keep people out, not paid to keep people in, that is a paradigm shift. That means you’d
all have to agree to less choice. You’re the ones who call me and want to work around the primary care docs, right?
Right? I’ll bet I get 10 calls a week from somebody in this room trying to figure out a way to go see one of the subspecialists
at one of the IU Medical Group or Methodist Medical Group. Because that’s what you do when you’re frustrated,
right? You do a work-around.

Click on numbers for next pages

Over utilization is a real driver of health care costs. And
doctors themselves say they order many tests and perform many procedures to cover themselves against
patient lawsuits. How can we reform health care without tort reform?

EVANS: That’s a great question. In Indiana it’s a red herring.
Let me tell you why. Indiana has tort reform. There is a cap on damages in Indiana. It’s
a relatively low cap. There aren’t large punitive damage cases here, so a doc or an administrator
that empowers a doc to overutilize has nothing to do with tort reform in this state. It’s
a psychosocial issue. It’s back to what Craig said: Does the system [encourage] us to overutilize?
The answer is clearly yes. But blaming tort reform for that is an inappropriate blaming. We have to change
the incentives, not tinker around the edges, and that would be major tinkering, not really changing the
underlying issue.

BRATER: Close the law schools.

(Laughter)

EVANS: Now we would like to announce his retirement from IU. Nobody quote him saying that. OK,
the guys with their BlackBerries out, put them away right now.

(Laughter)

In this health care debate, why hasn’t the cost of care been discussed,
only the cost of health insurance? Should we be talking about
the cost of care more than the cost of health insurance?

DEFUR: If we want to come together with a system that truly is
reformed, that really is not just a financing mechanism but that’s going to make the most
sense for taking care of all of our citizens, the uninsured, as well as everyone else, we have to come
together, we all have to feel the pain in that. I think that the hospital systems have come together and have put $155 billion
as part of our contribution in this process.

EVANS: The essence of your question is how things are priced, as I understand it, not
what they cost. Price is different than cost. The price we all charge has one root cause in its variation—cost
shifting—and if health care reform doesn’t solve cost shifting, then the price will continue
to be de-linked from the cost and there will be frustration in groups like this. Most of you are commercially insured,
so the cost is shifted to you to pay for the shortfall [from Medicare, Medicaid and the uninsured]. So how do we get more
cost out of you? We raise your price. That’s the system. So if we had universal capitation and accountable health care
organizations, there wouldn’t be the incentive to shift the cost by overpricing to somebody else.

I have in my office a 1932 price brochure of Methodist Hospital that Ernst & Young gave me several
years ago. The last page says, “Those people who came before you paid for your health care. Please
sign this. It’s a quitclaim deed.” In other words, they were asking patients in the Great
Depression to give away their homes to get care. So as bad as we think it is now, it was worse.

We can improve it, but the only way we can improve it is by saying the truth. And the truth is the price
list is a cost-shifting scheme that you have asked for by telling your congressmen, “It’s all
right to under-reimburse for Medicare and Medicaid. It’s OK.” Well, then you leave us with no choice but to shift
the cost back to you. So that’s the hidden tax. That’s the hidden cost in your health premiums for this cost shifting,
it’s between $800 and $1,500 per year per family.

Click on numbers for next pages

Legislation in Congress tries to exclude illegal immigrants
from receiving public subsidies for health insurance. Is that the right policy or would covering
illegal immigrants actually save money in the long run?

OBEIME: I’m going to be in trouble any way I answer this question. When
we talk about illegal immigrants, sometimes I think that people do not hear the
“illegal,” they just hear “immigrants,” and that’s
why sometimes there’s a lot of frustration. If a patient
shows up at Wishard and has active TB or the H1N1 flu, can we in our right minds say that we
will not treat this patient? And if we did not, how would we get rid of this patient regardless of where the patient came
from? I don’t know which airline you could tell that, “This patient has one of these two conditions, we don’t
want to treat this patient in this country, put this patient in your plane and fly them somewhere.” I don’t see
how that would fly, OK?

But having said that, I think that if we had it written in bold that America takes care of illegal immigrants,
we are setting ourselves up for trouble. I think we should not announce that we’re going to do
that; otherwise we might have an influx. But at the same time I don’t see how we cannot treat people if our lives are
in danger.

BRATER: We’re paying for this care, anyway. To think we’re not paying for
that care is naïve. So if a patient shows up in the emergency room, wherever, hopefully they’re going to be
taken care of. I mean, I certainly don’t want to be part of a society that would turn a sick person away from an emergency
room. So we’re paying for this, anyway. But then the way we’re doing it is that the care is occurring in the most
expensive venues, in the emergency room. It makes more sense to have a system that will make sure that there is a way to provide
health care to people who need it and do it in the most cost-effective way. And that’s not in the emergency room. So
I think it needs to be addressed. I realize it’s highly politically charged. But another way for me to look at it is
that I think it would be morally reprehensible for us to even comprehend a system where we turn people away at the door who
need health care.

Click on numbers for next pages

The work of Jack Wennberg and the Dartmouth Atlas for Health Care shows
that utilization and consumption tends to expand to fill the available capacity of the health facilities.
What can our community do to ensure that capacity is held to a level that does not
exceed that which is necessary?

EVANS: The Dartmouth Atlas,
which you can, when you get back to your offices, Google it, and you can pull up St. Vincent’s
86th Street or Methodist downtown or Riley and it will tell you the intensity of care at that hospital measured by how many
resources are used ranked against every other hospital. Needless to say, the big hospitals are high on that intensity scale,
the smaller hospitals are low. The downtown hospitals are very high because of the specialty and acute care given downtown.

So you can change the intensity of care by eliminating service lines. Or what I think we should do—and I think
most of the panelists would agree—is emphasizing prevention and keeping people out of the critical care hospitals. Then
the Dartmouth Atlas would change overnight. Overnight.

Don’t forget, insurance reform means young, healthy
people pay more and older people who have high blood pressure or high lipids or something like that pay less. That’s
the reform that has to occur. And that’s why our politicians keep running into stone walls. Because at the end of the
day somebody has to pay more to either take care of the uninsured or to recognize the actuarial risk has to be paid by those
that are less risky for those that are more risky.

DEFUR: Regardless of whatever form health
care reform takes, it is going to involve getting cost out of the system. And I believe the best approach to that is, where
is waste in our system, how do we get that waste out, how do we get that cost out, how do we make sure that we’re not
overextending, that we’re not spending unnecessary resources in growing or expanding services that aren’t needed?
That’s the accountability that we all [need to] have.

OBEIME: Look at the five of us sitting
here; I think without politicians hanging over us, I think we will come up with a great idea. More importantly, I think that
if something is going to happen, it will take each and every one of us in this room, it will take everyone acting reasonably
to do that. Education is going to be what the drive has to be.

One of my biggest worries in the last few years
as I’ve taken care of people at the end of life is the degree of fear Americans have of death. And that’s amazing
to me considering that this is a pretty religious and spiritual nation. All of us know two things that are true and that will
happen: We’re born and we’re going to die. Unfortunately, I see that we are taking a position that says, “If
you are an American, because we have all this technology, you will not die.” And that really bothers me because when
I have a 95-year-old man in my room or in the ICU, who the family members are talking about—“Well, we’re
not ready for this, they can’t die, they can’t die.”—I’m thinking, “You say you are Christian,
the Bible says ‘three score and ten,’ which I think is 70. He’s 95. He had 25 years extra.”•

Click
on numbers for previous pages