With all the current interest in health care reform, I found this an excellent book to provide hope and background for those of us who favor health care reform under President Obama. Written by the current CEO of Kaiser Permanente, the book systematically provides areas where cost-savings can be achieved in an easy-to-read-and-follow format.
His first and, perhaps, most important suggestion, is, to me, a blockbuster. Per Halvorson, if we get everyone in our country insured, this, by itself, should reduce the average annual cost of health care insurance to a family of four by about $1,200. (The average cost to a family, he tells us, is now about $12,000 per year.) This cost reduction, if it could be sold to more folks in the current health care reform debate, could, of course, be a very strong argument in favor of the "public option." But Halvorson does not really tell us exactly where this savings would come from. He infers that it would be in the insurance company premium, itself. But the book is embarrassingly short on much of any criticism of insurance companies, their CEO salaries, their profits and administrative costs, etc. It is one of the flaws of the book, for sure. Perhaps the only flaw.
The strength of the book, again, is to give us hope that overall health care costs can, over time, be reduced and controlled. To get another $1,300 annual reduction, on top of the $1,200 above, he says "We need to reduce the costs of care by improving care." Among his suggestions for this are:
* Focus on the conditions that cost the most within the chronic conditions
* Reduce the number of doctors, now averaging 17, for patients with multiple chronic conditions
* Decrease the number of medication errors and post-operation infections
* Improve the "linkage" among doctors, especially the specialists, and, especially, when one patient has multiple specialists
* Reduce the payments to specialists, relative to those for primary care doctors
* Provide financial incentives for prevention of sickness and disease
* Build strategies for containing costs of age-related conditions via evidence-based methodology
As the CEO for Kaiser, Halvorson cites his organization as benefitting from its "vertical integration," which ensures that doctors with different specialties work effectively together. He also raves about Kaiser's Electronic Medical Records system, which is the result of a $4 billion data processing effort that "is probably the biggest single business systems project ever done in any industry anywhere in the world."
Halvorson thinks that we need universal care in our country. As part of his push for it, he tells us we need the "Double Mandate:" First, everyone must buy coverage, and, second, every private plan must sell coverage to anyone who applies. The question that leaps out at this point, of course, is why Kaiser does not immediately announce that it was complying with the second mandate? He goes on to tell us that "risk screening" is only implemented on about 5% of those who seek insurance, and that none of those are within employer-provided group plans. He says that the health care industry should be happy to welcome into existing insurance pools the 5% of folks now being denied individual insurance plans. O.K., Kaiser, how about starting this off first? Seems easy enough.
Also, Halverson at this point does not mention that all the other developed countries add another mandate, that of government oversight and control of the costs of drugs, procedures and services. Later, he calls for a National Commission on Health Care Costs, but he stops short from suggesting that it should have direct controls over the components of health care costs.
Near the end of the book, he tells us that "Premiums are always based on the average cost of care." I don't buy it. He obviously avoids any discussion about profits by insurance companies, including Kaiser, which apparently, as a not-for-profit, rakes in about $2 billion in a good year for its deferred earnings. And, later, he says, "we need to look at every category of spending - fees, hospital costs, drug costs, imaging costs, new technology costs, etc." Conspicuous by their absence are insurance company overhead costs, overblown CEO salaries - not necessarily at Kaiser -- and profits that go to shareholders or deferred earnings.
Says Halvorson, "Health care in America is comprised of hundreds of thousands of unrelated, unlinked, financially self-contained, self-focused, and self-optimizing business entities that are each set up to generate revenue and create financial success for themselves..." That sounds like an industry with opportunities to reduce costs and to, at the same time, improve its value to consumers.
Again, I recommend the book for those looking for more information on how the American health care industry can be reformed for the "public good."
