Rising Health Costs Drive Data Demands

May 30, 2002
Print
Text Size:
A A

GRAND RAPIDS — Employers will demand more accountability and value from health-care providers in the years ahead, as costs continue to escalate and those footing the bill seek to know more about what they get for their money.

That’s one of the trends looming over the health-care industry, which will have to adjust to increased customer demands at the same time it continues to cope with intense financial pressures and caring for an aging population.

As a result, health-care providers will have to change the way they deliver care and improve their processes, which in turn should produce the better outcomes and increased value that large employers are beginning to demand, said Robert Hoban, senior vice president of the Michigan Delivery Network, or MIDNET, a consortium of hospitals and other care providers.

The industry needs to move away from measuring quality based on patient lengths of stay and mortality rates, Hoban said. Care providers in particular need to move from a “sickness-based model” to a system that focuses on preventing disease and illness while emphasizing collaboration rather than competition between care providers, he said.

“In terms of measuring quality, we’re still in a state of infancy within the industry. We still have a long way to go,” Hoban said. “We need to have comparative data so we can see how well we’re performing. This will allow us to re-engineer and redesign how we deliver health care.”

Using an assortment of patient surveys and industry statistics and assessments, Hoban offered his view of health care’s future during the Alliance for Health’s monthly First Friday Forum held earlier this month.

Over the next decade, health-care providers and those who purchase care can expect to see costs continue to escalate rapidly. Health care was a $1.21 trillion industry in 1999. That grew to $1.31 trillion in 2000.

By 2010, the nation will spend an estimated $2.63 trillion on health care as the population ages and utilization grows, Hoban said.

That kind of growth in cost will bring increased pressures from health insurers and large employers to control or contain prices and improve the quality of care, generating greater value for their money. Employers in the last few years have seen double-digit increases in their health insurance premiums and can expect to see more of the same for the foreseeable future.

Escalating costs, combined with reports such as a 1998 Institute for Medicine claim that medical errors account for 98,000 deaths a year in the U.S., are already generating demands for new ways to measure quality, Hoban said.

“The large employers are serious about it and are looking for it. They’ll be leading the way more and more for quality reporting,” he said. “We’re going to have to change the way health care is delivered in this nation.”

The need for changes in the delivery system comes not only from employers but consumers. Satisfaction surveys have shown consumers increasingly unsatisfied with the service they receive from their health-care provider or hospital, although they do have faith in medical professionals to make the right decisions about their health and care.

Customer satisfaction, Hoban said, has become a “significant issue” that the industry needs to address.

“They’re saying, ‘we trust you to do the right thing, but we’re not satisfied with how you’re doing it,’” he said. “We clearly have a crisis in terms of consumer satisfaction within the industry.”

Part of what’s driving the dissatisfaction is a general feeling among many patients that they don’t have as much of a voice or control as they should in deciding their care. Patients can expect that to change in the future, as the industry moves to a more “customized, consumer-focused” system, Hoban said.

Patients can also expect to share more of the cost of health care. Employers have begun shifting the rising cost of insurance premiums to employees through higher deductibles and co-pays. That shift alone will force consumers to become more involved in deciding the course of their care, Hoban said.

“Over time, you will see consumers closer to that decision,” he said.

Hoban also expects health insurance to evolve over the next two or three decades to where health plans are more defined and people with healthy lifestyles are rewarded financially.

“You’re going to see consumers realize, ‘the cost of my choices are coming back to me now,’” Hoban said.

While he paints a rather dim picture of the industry’s future, Hoban is quick to offer one reassuring point: No other nation, in terms of clinical care, has it so good.

“There are problems within the system, but we still have the best health-care system in the world,” Hoban said.

Recent Articles by Mark Sanchez

Editor's Picks

Comments powered by Disqus