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September 25, 2009

Healthcare changes on the horizon. A conversation with Professor Linda Green

Professor Linda Green speaks about healthcare and touches upon some of the changes proposed by the current presidential administration.

Professor Linda Green speaks about healthcare and touches upon some of the changes proposed by the current presidential administration:

What do you think about the socialized healthcare system that's being proposed by the current White House?

First of all, to use the word or phrase 'socialized healthcare' is already locked with political bias. No one in the administration is using that terminology. The plan is simply to offer a public insurance option in competition with the private insurance policies that are already out there. It's not a single payer system. It's not a proposal to create a government-run system, as exists in other countries like Canada or the UK. It's not that at all and it's not clear that it's actually going to get passed.

Challenges of the proposed healthcare reform:

The primary feature of what they propose is to create a system in which virtually everyone has insurance. The primary challenge in that is making available the physicians needed to deal with increase in demand that will result from more people having insurance.

Research tells us that when people have insurance they're more likely to seek healthcare and in fact, a lot of the uninsured don't get appropriate healthcare because they don't want to pay for it or can't afford to pay for it out of pocket. And what's happened in Massachusetts where they already have several years of a system in which almost everybody is insured is they now have a crisis in primary care coverage. There aren't enough primary care physicians to deal with everyone in the state that can now afford to seek care. That goes for other parts of the healthcare system. A lot of our hospitals are already pretty much overloaded working at close to 100 occupancy level in the middle of the day, and if more people are going to be hospitalized as a result of having insurance -- which is likely to happen -- again it's going to overwhelm their capacity and make the already bad problem of emergency department overcrowding and ambulance aversion a lot worse.

Potential positives:

There isn't enough research to say whether preventive care can hold down costs in the long run, because preventive care itself can mean a lot of things. For instance, there are many things that fall under preventive care -- like screenings -- and there's actually a lot of discussion and controversy now about lots of screenings done that really have no benefit but are very costly, and can create a lot of anxiety on the part of the people having them, leading to unnecessary procedures. But of course, there certainly are people who could benefit from early intervention, particularly people with chronic diseases. We're having an epidemic in this country of diabetes. If you can control people's habits, their medications, behavior and nutrition early-on, you can prevent a lot of hospitalizations and adverse outcomes and even possibly premature death. That's a big issue these days. There's a lot of discussion around what's called disease management, which is about closely monitoring and advising people who have chronic diseases like diabetes, asthma, chronic pulmonary disease and heart disease. Keeping people healthy will likely cause the system a lot less money. So again, there are certainly benefits, but it's also not clear what the costs are associated with this kind of preventive care.

Models the plan can emulate:

A few models have been discussed in Congress when looking for ways to help control costs and increase quality of care. Those are the so-called closed integrated systems, like the Mayo Clinic, but more so Kaiser Permanente Health Care, Veterans Health Administration, Intermountain Healthcare, and Geisinger Health System. These are all systems with electronic medical records that follow patients wherever they go. Care is provided in a team approach so that there are no handoffs from one physician to another, which can gear incomplete information or redundant testing being done, or the complete medical history of a patient being misunderstood.

Many of the errors, poor quality and excessive costs in the system are the result of fragmentation. People go from doctor-to-doctor, hospital-to-hospital, and there is virtually no coordination. Therefore, patients don't get the proper follow up. These integrated systems have a track record of doing a whole lot better in both creating quality care and holding costs down. And that's what everybody would like to get to. The question is, how do you create incentives to have hospitals and doctors form these kinds of networks. It's not clear the government can really do much to promote that.

Why MBA skills are imperative in this arena:

Understanding finances, accounting and management and operations are all vital in making healthcare systems more efficient and effective. But what's even more important in the complex world of healthcare is understanding all the constituents involved and how they interact.

Because any particular decision has to be done in light of the system's constraints, what are the obstacles to making change, and those are very much dependent on understanding who's paying for the healthcare services and products, how they pay, what are the financial incentives, how do physicians behave and react and how do they adopt or not adopt certain technology, understanding the hospital system and how they work, understanding the role of government. This is an extraordinarily regulated area and if you don't understand the state and federal issues around what can be done and can't be done. Of course, the government is the major payer through Medicare and Medicaid, you really have to understand all of those pieces to understand what's possible, and what kinds of new models can be adopted and which ones are likely to run into trouble and what are the obstacles you need to deal with. That is really the gist of the course I teach: understanding the whole world of healthcare, the major players, their interactions, the major trends, obstacles to improvement, and the opportunities that are afforded by information technology. Information technology is one the biggest forces now behind change and improvement in the healthcare system. President Obama understands that, and that's why it's part of his economic stimulus program. They put money into creating more databases for evidence based medicine, and promoting electronic medical records. There are already a lot of things happening that are totally changing the way healthcare is delivered and understanding that is extremely important now.

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