JUL 13, 2012 11:02am ET

The United States of Denial

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Which is worse? The Republican determination to kill the Affordable Care Act or the Democrats’ insistence that health reform is now settled? Neither position serves this industry particularly well. By reducing the debate to the polemics they have, the parties are merely continuing to distract the voting public—who largely remain in a state of gleeful denial about the seriousness of the health and related financial issues facing the nation.

At the recent Health Care Financial Management Association conference (which ended the day before the Supreme Court upheld the health reform law), I heard multiple industry leaders sound a similar refrain: what the Supreme Court does or does not do is largely irrelevant. By that they meant, regardless of the legal status of the law, the industry must reduce the cost of care and do it soon. Industry leaders know they must reduce their own operating expenses and control the costs of their most expensive patients. And they know they must do a better job of coordinating care for them. They know they face diminished financial support from payers of all varieties, not only Medicare—for whom insolvency looms—and Medicaid, from which some states are starting to flee.

As a result, their focus is increasingly financial, as opposed to clinical or humanitarian. In many ways, it is demoralizing knowledge for an industry largely filled with people who chose health care over more financially focused career tracks, such as banking.

At HFMA, I spoke with a patient financial services manager from a small community hospital in Michigan. In the last two years, the hospital has witnessed a 40 percent increase in bad debt, as the economy plunged and health insurance benefits went in the same direction. It’s a common story, unfortunately, one often lost in the media. The hospital is adopting insurance verification software, which offers a measure of “propensity to pay” based on the patient’s profile. The idea is to line up likely charity cases with potential sources of support in advance, rather than going into a protracted collections effort later. I asked the manager if the patients she deals with have even the remotest understanding of the economic issues facing the industry, and she just shook her head.
 
But how could they? Consumers have long been divorced from health care economics. And when they hear elected officials reduce the industry to a cast of villains and heroes, they can only slip into further confusion. GOP hopeful Mitt Romney assailed the health reform law before the NAACP this past week, only to be greeted by a chorus of boos. Of course, the same message at a Tea Party rally would bring the opposite response.

The health care policy debate—which the nation desperately needs—is devolving to the legislative equivalent of professional wrestling. But dramatic scripts and foregone conclusions offer little comfort to those in the trenches of the industry.

Here’s a factoid from HFMA keynoter George Halvorson, CEO of Kaiser Permanente: “If just 40 percent fewer people became diabetic, half the job of saving the Medicare Trust Fund would be done,” he writes in his book Health Care Will Not Reform Itself. “Diabetics spend roughly 32 percent of the total cost of Medicare.” Now can you imagine either Romney or Obama making a pronouncement like that? Can you imagine any elected official seizing on this one delimited issue and making it the cornerstone of a health reform effort?
 
Not the way the two parties have designed their health care playbooks, with the Republicans fixated on repeal with no clear replacement in mind, and the Democrats smug in their “victory” with little inkling of how to resolve the runaway spending largely exacerbated by our ill-advised lifestyles. As Halvorson writes, “We need our leaders in all settings to recognize the value of physical activity, weight loss and healthy eating. We need to help people take personal accountability for their own health.”

During his HFMA presentation, Halvorson outlined the many ways in which Kaiser’s advanced I.T. infrastructure helps with preventive care. But he also devoted a large chunk of his talk exhorting the audience about the value of physical exercise, particularly walking. The computer can play a big role in cost reduction, he was saying. But we, as a nation, also need to get up from behind our monitors if we want to address rising health care costs.

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