Study Addresses Systemic
Health Care Cost Issues

February 26, 2007
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More than a decade before automotive manufacturers in Detroit began cutting back on paid health care benefits for employees, Grand Rapids Business Journal and business leaders in this community were actively engaged in a vigil as prices for health services and the insurance to cover those services escalated to what is now more than 12 percent of the GDP.

Important work has occurred in West Michigan, including creation of the model for health care and health care insurance for the uninsured, cooperative ventures between hospitals in providing price comparisons on Web sites, and using technology to devise ways to share patient information. Gov. Jennifer Granholm’s Michigan First Healthcare Plan has generally won accolades from providers and both political parties. But while the governor and members of the legislature have given considerable attention and debate to the availability of care, few have been able to negotiate the labyrinth of cost boosters.

The Robert Wood Johnson Foundation grant to the regional health care planning agency, the Alliance for Health, covering 12 counties in West Michigan, provides some opportunity to address the more systemic issues that continue to push prices. The grant will help pay for a system to measure quality, share best practices and improve communication about cost and quality performance for the entire West Michigan region. The system will track treatments in doctors’ offices, hospitals and other providers, measure those results against standards for quality of care, and make that information available to the public.

It is likely to have profound effect on care, quality of care, and therefore cost containment in this region. An example is found in the story on page 1, regarding a test by Priority Health in which the insurer was able to improve the use of medication among its asthma patients and then saw emergency room use rates drop dramatically.

The Alliance is one of the oldest organizations of its kind in the country, and one which provided the model for former President Ronald Reagan in establishing such groups around the country. The partnerships the Alliance has helped create in this region are indicative of this area, but considerable ambassadorial skills are essential in maintaining relationships with all competing providers, from hospitals to insurers. Surely the historic reputation of the Alliance assisted in getting the attention of the RW Johnson Foundation, but a tremendous amount of work was necessary by Alliance volunteers from the business, physician, hospital and insurance sectors to secure one of 12 grants distributed across the country. Indeed, the foundation reported that communities were selected based on site visits which confirmed that significant steps had already been taken toward the Foundation’s funding goal.

Tom Peterson, M.D., spearheaded and oversaw much of that work, including collaborative sessions with local hospitals, physicians and hospital information technology departments. Bob Smedes, a member of the Alliance Leadership Team and Metro Health executive, noted, “If you think about the banking industry and the bazillion transactions they handle every day … it’s been decades since I got an error on my checking account statement. Health care has to do something (similar).”

This is indeed welcome news in the business community. 

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