Friday, September 19, 2008

Why health care industry is sick

From underfunded Medicaid to a payment system called "perverse" by Metro Health Hospital CEO Mike Faas, health care leaders today told Regional Policy Conference attendees what is making their industry sick.

In a session moderated by Michigan State University President Lou Anna Simon, Faas was joined by Spectrum Health President & CEO Rick Breon, Mercy Health Partners President & CEO Roger Spoelman and Van Andel Institute CEO David Van Andel.

Among the topics the hospital executives identified for those voting this afternoon on policy issues: Low payments from Medicaid that cost West Michigan hospitals hundreds of millions of dollars annually; term limits that boot legislators out of office just as they are beginning to understand health care issues; workforce development, such as recruitment and training; the shortages of nurses; and a system of payment that pays providers "to do something to people, not for them," as Faas put it.

The men -- including Breon, whose organization owns Priority Health, which is one of two dominant insurers in West Michigan -- said they recognize that business owners and their employees are nearing a breaking point of affordability for health insurance. Breon said he expects that many more people in the future will be sent out into the individual insurance market. He called for a thorough "vetting" of issues on any legislative reform in the insurance market. Priority Health vigorously opposed legislation proposed last year by Blue Cross Blue Shield of Michigan to reform the individual insurance market.

"There is no plan for changing health care, and that has to change," Breon added.

Opening the session was BCBSM President & CEO Daniel J. Loepp, whose nonprofit company was a major sponsor of West Michigan's first-ever policy conference.

Additional comments from this morning's session on The Business of Health Care and Life Sciences:

"This is a taxation you've not voted for which you are paying for," Breon said of the gap between Medicaid payments and the health care costs, which are passed on to employers via premium increases.

"One of the reasons we haven't had comprehensive reform in this state is term limits," Breon added.

"We need to do more coordination of all services so we can recruit and train the medical professionals this region needs," said Spoelman. Recruitment, particularly of specialists, was a major issue in the April merger of Hackley Hospital and Mercy General Health Partners that created Mercy Health Partners, owned by Trinity Health. "We do a good job of recruitment and training, but don't do a good job of retaining."

"Without moving to universal coverage, I'm not convinced health care is going to be able to reduce costs," Faas said.

Breon defended Spectrum Health's construction binge, and said the system may spend another $700 million over the next decade. "If you look at the actual amount of premium cost associated with all the building, it's 3 percent," he said. Faas, who presided over last year's move of Metro Health Hospital from Grand Rapids to a new $160 million facility in Wyoming, agreed that health care costs are far more connected to the personnel than the bricks and mortar.

"One of the things we haven't done is raid each other's nurses in a bidding war," said Faas. They noted that the biggest bottleneck in educating more nurses is providing enough qualified instructors.

"We can make changes in Medicaid and you don't have to add one dollar to the system," Breon said. "Just look at who is the most efficient, who makes it work and copy those things."

Elizabeth Slowik, reporter

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