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Home / Washington Business - November/December 2007 / Health Care: Success, failure separated by 2 percent a year |
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Health Care: Success, failure separated by 2 percent a year |
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Written On: November/December 2007 |
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Written By: by Gubby Barlow, CEO, Premera Blue Cross |
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Gubby Barlow is CEO of Premera Blue Cross, recognized in 2007 by J.D. Power and Associates for delivering the highest member satisfaction in the western United States.
Health care advances during the past century are nothing short of miraculous. Americans born today will live an average of 78 years—three decades longer than children born a century ago.
Though we live longer, many elderly people suffer from chronic—and often preventable—conditions. Expensive interventions are fueling rising medical costs at a rate that will bankrupt our children. We have a moral imperative to change this situation for the sake of future generations. We can do it.
During the first half of the 20th century, the "Age of Public Health" enlisted soap, flu vaccines and penicillin to increase life spans an average of 20 years. In the past 50 years, the "Age of Big Medicine" added another 11 years to our lives, mainly through better management of heart disease. Unfortunately, we developed a false sense of security. We eat more, exercise less, and subject ourselves to much higher levels of stress. One-third of American adults have cardiovascular disease—a malady that consumes the largest share of America's health care dollar. The only good news is that 90 percent of initial heart attacks are preventable.
This isn't the road to better health. It’s the road to economic disaster.
In the 1970s, health care costs gobbled up about 8 percent of the nation's gross domestic product. Today, it's an astounding 16 percent, or $2 trillion—and doubling to $4 trillion by 2015.
In the short run, that's painful and negatively affects America's ability to compete in the global marketplace. In the long run, it's unsustainable.
The funding gap for Medicare is projected to be $74 trillion—five times larger than the looming Social Security funding gap. Medicare chews up 20 percent of the federal budget. At its current rate of growth, Medicare will take it all by the early 2040s, crippling our economy or requiring massive tax increases.
Ironically, we are being overwhelmed at just 2 percent per year. That's the difference between the 6-percent projected growth rate of national health care costs and the 4-percent projected growth of the U.S. economy. You and your employees are seeing health care costs rise even faster, due primarily to a "hidden tax" created by Medicare and Medicaid underpaying providers who, in turn, pass their costs to you. That must stop.
Still, the chasm between sustainability and failure is just 2 percent per year. That's where I find great hope. I believe we can create a better health care system without harming medical innovation and quality—and without overall spending cuts. The key is for each of us to take more responsibility for our own health and use our health care dollars more wisely.
Entering today's "Age of Accountability," we must set a clear, reasonable goal, and exercise the national will to get there.
We can and will find that 2 percent through healthier lifestyles, evidence-based medicine, and comparative effectiveness studies. Our medical care must be efficient as well as effective.
According to the Centers for Disease Control and Prevention, Americans spend three-quarters of their health care budget treating chronic conditions like heart disease and diabetes. Both are highly influenced by lifestyle. One study estimates one-quarter of medical costs are linked to lifestyle choices. Others say that's conservative.
At Premera, our "Know Your Numbers" campaign is mobilizing our employees to know and improve their own key health indicators like blood pressure, cholesterol, body mass index and blood sugar. My numbers are pretty good, but my doctor says improving them could lower my risk of dying within the next 10 years from 10 percent to about 3 percent.
You and your employees could do the same and have a direct impact on your company's health and productivity.
It's important to understand that more care is not necessarily better care. The amount of health care delivered varies widely from region to region across the United States, with no appreciable difference in lifespan or quality of life. Well-known research suggests we could save up to 30 percent of our health care tab by simply copying the most efficient regions.
Modern health care "best practices" might be even better if health care providers and insurers had the benefit of comparative effectiveness studies that make it possible to know and pay for what works best.
Remember, we don't need to capture all of these savings at once. All we need is 2 percent a year to keep the growth rate of health care spending and the overall economy in sync.
It's time to set a goal of getting our 2-percent's worth of prevention and savings each year. We should do it for ourselves. More important, we must do it for our children.
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