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HEALTH QUESTION 6/14/99
What trend or trends do you see as having the greatest current and mid-term impact in the health-care arena?
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Business New Haven
6/14/99
By: BNH
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Bill Powanda, vice president of Griffin Hospital, Derby
The health-care field has been slow to respond to the surge of health-care consumerism sweeping the nation. Numerous reports document that consumer expectations are escalating at a time when economic pressures are forcing hospitals to reduce expenses and staff. As the gap widens, the erosion in consumer satisfaction and loyalty will continue.
Health-care consumers increasingly want information, education and opportunity that will help them be partners [with providers] in their care. They want more responsive care from their health-care providers. In this consumer-driven marketplace, longevity and success will be based upon the ability of a health care organization to focus on and respond to the needs of consumers. If providers do not respond, we're likely to see continued erosion in patient satisfaction and loyalty while patients increasingly turn to providers that adopt consumer-centric approaches to care.
Steve McPherson, vice president/chief financial officer, Saint Raphael Healthcare System, New Haven
One of the major trends in health care affecting hospitals nationwide is the 1997 federal Balanced Budget Act, which mandated $122 billion in spending reductions, including $116 million directly from Medicare. In addition, Ambulatory Patient Classifications (APC) will be introduced in early 2000. This new outpatient reimbursement system is expected to further reduce outpatient Medicare reimbursement.
These changes extensively impact Saint Raphael's, where 55 percent of patients are covered by traditional Medicare or Medicare managed-care plans. This, coupled with the growth of managed care, has forced hospitals to absorb the cost difference, through either reduced profits or cost deduction.
Saint Raphael's has traditionally operated with marginal profits, so the mid-term process is largely focused on cost reductions. These changes will require improvements in delivery costs up to ten percent.
Mary Underwood, director, Arden Courts ManorCare Health Services, Hamden
The possibility of state funding for persons in assisted-living facilities will have a major impact on our industry. Currently, the primary source of funding for assisted living is through private funds. With additional funds available, many more elderly in need will benefit from the services offered in an assisted-living facility and avoid premature nursing-home placement.
Alice Ferreira, director of public relations, Physicians Health Services, Shelton
Physicians Health Service, along with other health plans across the nation, are seeing a rapid and significant increase in pharmacy costs. In some areas of the country prescription drug costs now exceed physicians visit costs. Physicians Health Services, with its participating physicians and employer groups, is committed to maintaining quality health care to over half a million consumers in Connecticut. In order to continue to provide that level of care, we will need to better manage those costs so we can continue to provide a comprehensive and affordable pharmacy benefit to the consumer.
Al May, director, Anthem Blue Cross & Blue Shield of Connecticut, North Haven
The trend that is having the biggest impact on us right now is without a doubt rising prescription drug costs. Whereas just a few years ago such costs were going up ten percent annually, today, driven by primarily by unprecedented amounts of direct-to-consumer advertising, we are experiencing increases of 17 percent or more per year.
While higher prices are one contributor to this trend, the bigger contributor is increased demand, which is directly attributable to increased advertising by the drug companies. Compounding the problem are the huge number of new and expensive drugs being introduced to the marketplace, plus the fact that our population overall is getting older.
Managed-care companies such as ourselves are developing programs to combat this trend by encouraging the use of lower-cost but clinically-equivalent generic or even brand-name drugs whenever possible. Nevertheless, there is no doubt prescription drug costs will continue to be a major driver of overall health-care inflation for the foreseeable future.
Lesley Mills, president, Griswold Special Care, New Haven
One fact drives all the current trends in home health care: People are living longer. This affects retirees who often find their savings inadequate, the children who are likely to be caring for their parents as they themselves approach retirement, and employers who will soon be faced with 40 percent of the workforce caring for their parents and must cope with up to $3,000 per year per employee in lost and unproductive time.
Providers and payers are also affected. The federal government, having to spread its resources through Medicare, has already limited its responsibility to less than ten percent of the demand for long-term care. It pays only for skilled care, while most of the need is for assistance with activities of daily living. State governments, through Medicaid, ration by providing assistance only to those who are destitute.
Given the resulting pressure applied by government and private payers, providers of home-care services are forced to provide care more cost-effectively and must be prepared to deal with denying access to those in need. The results appear in the industry as mergers, on one hand, and burnout and disillusionment on the other.
But necessity is the mother of invention, and some of the changes are economically necessary if we as a society are to cope fairly with caring for our elderly. For example, Medicare has now moved away from the requirement that only RNs can supervise home care. Locally, a boon has been provided by the Connecticut Partnership for Long-Term Care, a joint state and private insurance program that creates an opportunity for those buying insurance to receive Medicaid help without first depleting all assets. In the private arena, the founders of Griswold Special Care have established the Special Care Foundation to provide free care to those who meet the qualifications.
The challenges presented by the graying of American will most likely be met with the same necessary deprivation, belt-tightening and innovation that carried it through the economic necessities of the world wars.
K.J. Lee, M.D., associate clinical professor at the Yale University School of Medicine and managing partner of Southern New England Ear, Nose, Throat & Facial Plastic Surgery Group, New Haven
Health-care delivery is undergoing an evolution. Tied to the benefits in health-care technology are the costs of developing and marketing it. Had the MRI scanner not been invented, for example, patients would not incur the expense of MRI scans. When MRI technological advances made earlier, painless diagnoses possible, patients demanded those tests even when not absolutely necessary. Under current payment systems, physicians may over-order MRI tests for several reasons as they have no incentive to scrutinize the cost-benefit of such tests.
Customer service is another aspect of the American health-care delivery system that merits scrutiny. Although we have high-quality health care in the U.S., usually it is not rendered with superior customer service. However, positive changes are occurring in the realm of quality, and we see attempts to foster improvement in rapid fashion.
Stephen Glick, president, Coordinated Financial Resources, administrators of the Chamber Insurance Trust, Orange
In 1999, the affordability of health care is becoming prohibitive for many people because of the rating methodology for small-business group insurance in Connecticut. We have great health care available to us, but one must be able to pay for it. In the foreseeable future I see products that are available today being modified in order to fit the pocketbook, rather than maintaining the high quality that is necessary and due the public.
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