Hospital battle rooted in larger war on high health-care costs

By Michael Pramenko

Look a bit closer and you will find that there is more to the story about our local health-care system than just two hospitals at “war.” The “battle” between two hospitals is rooted in a larger war on high health-care costs. There is a call for greater value in health care, and this will require new collaborative efforts and new partnerships.

With or without the Affordable Care Act, there is plenty of room for improvement in the American health-care system. A recent Commonwealth Fund study found that the U.S. spends $8,508 per capita for health care. That’s well more than the 10 other industrialized nations that were measured. Yet, the U.S. ranked last in outcomes among this group. The study points out that the U.K. spends $3,405 per person and moved up to first place in “outcome indicators.”

And no matter what ends up being federal law, the most important elements of health reform will always occur right at home.

In the last 10 years, following the release of a now-famous study from Dartmouth on Medicare costs per region, Grand Junction became famous for its efficient use of state and federal dollars within the Medicaid and Medicare systems. President Obama highlighted our community’s health system back in 2009 after articles in The New Yorker and The New York Times described the unique collaboration on health care in Mesa County. Tom Brokaw and T.R. Reid highlighted our community in separate documentaries on national television.

It’s old news.

The successes of the past were based on a fee-for-service payment model. The more the health systems and providers do, the more they get paid. New payment models are coming, and they will demand a greater level of quality from the health system. The new models will incentivize value over volume. Reimbursement for care will depend more on the value of care instead of the volume of care where value is defined as quality/cost.

Plus, this will all occur with a new level of transparency on cost unrivaled in American health care.

The momentum for these new payment models is building. Private insurance companies state governments, and the federal government are all planning on making a transition in this arena. And, the Affordable Care Act has multiple provisions that encourage communities to design new ways of paying for health-care services beyond the fee for service model.

Businesses, nationally and right here at home, are demanding changes, as well. Who can blame them? Health-care costs are an albatross around the necks of American business.

With these new realities in mind, Primary Care Partners and St. Mary’s Hospital recently announced a potential new collaboration intended to improve care and help control health care costs. Five months ago, when the conversation between the two organizations was just beginning, we agreed that any new partnership should also benefit the community.

More specifically, we agreed on the “Triple Aim”: improved quality of care, improved population health and a reduced per-capita cost of care.

Most people think of mergers and acquisitions when it comes to business partnerships. This is not a business merger or an acquisition. Primary Care Partners and St. Mary’s Hospital plan on remaining separate entities. But an efficient and high-quality health system simply must optimize communication. At the same time, a greater emphasis must be placed on what is called “population health.” This term refers to the prevention and care of chronic disease and to building a healthier community.

Health reform truly does begin at home. And with the spirit of collaboration that has been embedded in the Mesa County health care system for 40 years, new efforts to help write the next chapter must be considered. These efforts include identifying other potential partners.

From a collaboration standpoint, it will require triple the effort to triple the health-care aim for Mesa County. Sure, two local hospitals are not getting along, but the real war going on pertains to how we pay for health care in America and the war on the “fee for service” payment model.

Michael J. Pramenko M.D. is the executive director of Primary Care Partners. He serves on the Club 20 Health Care Reform Committee and is a past president of the Colorado Medical Society.


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