OHA speakers say transform health before it gets cut

KPMG’s Mark Britnell at the OHA HealthAchieve

Speakers at this week’s Ontario Hospital Association HealthAchieve say it’s important to transform health care, not cut it.

Don Berwick, former Administrator for U.S. Medicare and Medicaid Services, told the OHA conference the U.S. presently spends 17.6 per cent of its economy (GDP) on health care and is headed for 24 per cent, or almost one dollar out of every four spent south of the border.

In a later session in the afternoon, the UK’s Mark Britnell, Chairman and Partner of KPMG’s Global Practice, spoke about advanced economies being “increasingly burdened” by rising health care costs, a situation “exacerbated by the fiscal crisis.”

Britnell called economist and banker Don Drummond’s report on how to get Ontario’s house in order one of the best he’s read, even though many of Drummond’s projections have already proven to be wrong.

Neither Berwick or Britnell ever mentioned that for three consecutive years now Canada’s health care spending has dropped not only as a share of GDP, but also as a percentage of provincial spending. Britnell still shows charts claiming that Canada’s health care costs are going to rise by a staggering 2 per cent of GDP.

Britnell says the Hare is faster than the fox because for the Hare it’s a matter of life and death, to the fox it’s just lunch. The suggestion is health care is the Hare and has to act quickly if they don’t want governments to take more regressive action, or as Berwick says, “cutting wins if improvement doesn’t.”

Both Berwick and Britnell have similar agendas for how to bend the cost curve that is already well and truly bent here in Canada.

Berwick says the situation in the U.S. is compounded by a loss of dialogue as the country becomes more polarized.

He says the efforts of Obamacare were about making health care a human right as well as making the system more sustainable, including building rules to make private insurance companies behave.

Berwick says his “comfort zone” is quality improvement, and when he took on the role of administrating the $800 billion U.S. Medicare/Medicaid system, that’s where he chose to focus.

The first law of improvement is that every system is perfectly designed to achieve the results it gets, he said.

The point of decision is the first step of moving towards improvement. The second step is deciding how, he adds.

“Waste in health care is a thief,” says Berwick, noting money spent unnecessarily on health care means it cannot be spent on other uses – a variant on the now well-worn health care is eating everybody else’s lunch argument.

Speaking in polished aphorisms, the former U.S. administrator says coverage is the key to improvement in the U.S., and improvement key to coverage.

Berwick is a big fan of team based care, noting the Nuka system in Anchorage, Alaska has been successful in significantly reducing urgent care and ER admissions, noting their focus is on delivering health, not just treating disease.

He also highlighted the trend towards more self-care, such as Swedish patients conducting their own hemodialysis, reducing costs by 50 per cent.

Berwick says there are six categories of waste: overtreatment, failure to coordinate care, failure in care delivery, excess administrative costs, excess prices, fraud and abuse. In the U.S. that amounts to between 21-47 per cent of all health care costs, and warns that while Ontario would not be that high, it would still be more than most believe.

Both speakers noted that to get to the lower cost future it does take money to facilitate that change, a lesson that Ontario could take from these presentations.

While Britnell spoke about the importance of scale – including the ineffectiveness of primary care being delivered in a 19th century small business model – Berwick felt leadership had to come from those who deliver front line care.

“We who give care have to change care,” Berwick told the audience.

Both speakers said “gleaming new hospitals” were not the answer – this message delivered to an audience where two-thirds of Ontario hospitals are undertaking major bricks and mortar projects from new additions to complete rebuilds.

“The workforce is your best asset,” Berwick said. “Value walks on two legs,” echoed Britnell.

Both also felt that transparency was one of the keys to health care reform.

Britnell suggests transparency in drug pricing has completely changed the pharmaceutical world as “payers” – both public and private – have been much more demanding. The result is that big pharma profits have shrunk from an average of seven and eight per cent per year to two per cent.

Britnell noted the difference in attitude by CEOs globally regarding system sustainability and sustainability of their own health care enterprise. While most considered their own operations to be sustainable with minor change, most overwhelmingly believed the system as a whole was not sustainable without major change.

“Change should happen, but it shouldn’t start with us,” Britnell says of prevailing attitudes among CEOs. As a result, change never happens.

Britnell specifically noted the Drummond report’s focus on a small percentage of the population taking up a significant percentage of health care costs. He notes that one per cent of the population uses 30 per cent of health care costs, five per cent use up 50 per cent of costs, and that 10 per cent use up 80 per cent of health care spending. Focussing on this user group could produce significant savings and enhance quality of care.

He further notes that in most countries 17-20 per cent of patients in hospital don’t need to be there – or what Ontario defines as alternate level of care patients.

Britnell says the options around health care are limited. “Slamming on the brakes” doesn’t work, he says. You end up destroying value, not creating it.

Yet Berwick applauds Ontario’s decision to freeze base hospital funding while allocating four per cent on home care.

If a freeze is not slamming on the brakes, what is?

The OHA HealthAchieve continues Tuesday and Wednesday at the Metro Toronto Convention Centre.