How Healthy is Healthcare in Hawaii? - Extended Version
Leading doctors and other experts discuss major trends and problems in Hawaii healthcare
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Bill Spencer (Hawaii Venture Capital Association): Welcome to the Hawaii Venture Capital Association/ThinkTech Hawaii Program on “How Healthy is Healthcare in Hawaii?” We hope to answer this question during today’s luncheon and I am happy to have you here.
There are many new faces, and that also pleases me greatly to see who came for this healthcare topic issue. I hope this is a good introduction to what Hawaii Venture Capital Association and ThinkTech do every month. We are devoted to bringing together Hawaii’s community and investors and entrepreneurs and service providers and people such as yourself to be able to engage in discussions and networking and really take advantage of this opportunity to get to know each other and know about the important issues such as healthcare.
I would also just like to take a moment to warmly thank our sponsors. We do have sponsors that support these activities and they include Hawaii Business Magazine, the Pacific New Media Center at University of Hawaii, and the accounting firm of KMH.
Jay Fidell (ThinkTech): In December, The New York Times reported that Donald Berwick, who recently left the federal government as the official in charge of Medicare and Medicaid, said that 20 percent to 30 percent of health spending is wasted in this country. It yields no benefits to patients and that some of the needless spending is the result of onerous, archaic regulations. If he was right in the changes he sought, Medicare and Medicaid might have saved $150 to $250 billion a year.
There is more to the story than that but one thing is clear – we are due for healthcare reform both under federal and also on the state level. A local story reported recently that Hawaii has experienced the worst shortage of injectable cancer drugs nationwide.
We have had the highest year-over-year decline – 44 percent in short supply. By comparison, the national decline is 26 percent. What is going on? This drop is having a disruptive effect on the treatment of cancer patients in Hawaii. One of our moderators, Hawaii State Senate Health Chairman Josh Green, indicated that the disparity was unconscionable and that he would ask the Attorney General to initiate an investigation of the matter. So, these things just pop up in the papers. They are harbingers for the country and for Hawaii. At the least, it certainly seems that we – federal and state – have not paid enough attention to keeping the healthcare structure healthy.
It used to work better in Hawaii. We were among the best in the country but that seems to be less than the case now. We know two hospitals are in bankruptcy. We know the neighbor islands are losing doctors. We know insurance rates are going up. We do not know how the healthcare act — Obamacare — will change things, or how long Medicare and Medicaid will last in their present form.
If we are not due for a transformation, then what is? Consider the sweep of changing times, demographics and economics, the recession that won’t end, fiscal crises that won’t go away, the softening of the middle class, the coming and especially the going of physicians, new technologies that are both remarkable and expensive, bureaucracy, overregulation, and the jury system in our free society, increasing complexity of insurance in general especially healthcare insurance, ever higher expectations of life expectancy and quality of life, actions of the Congress we have come to worry about, and what do you get? You get a healthcare system that has developed a bad, bad cold. Is it healthy? Is it as healthy as it was?
So, why should we care? You know, most people would limit their concern to how their healthcare insurance rates are doing. Most employers limit their concern to that and they are concerned also about what happens to them personally in the doctor’s office, but we need to go further. We all need to go further. We have to look at the system itself – the healthcare industry in our state. Can technology help? Can tort reform help? What should we do and who needs to do it? And what exactly will happen to us if we do nothing? How about a warm welcome for the moderator of the first panel, Ginny Pressler.
Ginny Pressler (Hawaii Pacific Health): Let me start by making a few comments related to the economic transformation of healthcare before we get into our panelists. I think all of those of you here today are familiar with the OACD. That is the 34-nation Organization for Economic Cooperation and Development. It just came out with their most recent study on the comparative data on quality and cost of healthcare in these 34 OACD nations and by every measure the United States pays more for its medical system, more dollars per person, a greater percentage of gross domestic products, and higher prices for doctors, hospitals and administrative costs, and drugs.
The U.S. spends anywhere from two to three times as much as the average for the other OACD countries. Total healthcare spending in the United States costs about $8,000 per person for healthcare and the next highest spender is Norway, which spends less than $5,500 per person per year. No matter how you measure it the United States in a major outlier from the rest of the OACD countries. So, what about quality? Well, when it comes to quality it is a mixed bag.
In the United States, we have the best five-year survival for breast cancer anywhere in the world and behind Japan we are the second when it comes to terms of colorectal cancer survival, yet when we look at other measures of quality we rank 27th out of 34 in life expectancy. We are 31st out of 34 in terms of premature mortality. We are 25th in the way of cardiovascular mortality. The U.S. has the second worst rate of adult diabetes behind Mexico and we have the highest rate of adult obesity at 34 percent of the United States adult population. Think about it.
On top of that, we have 50 million uninsured individuals in the United States today. Now, Hawaii has some of the best health statistics. You saw it in the paper today – the most recent study – ranking us as the fourth healthiest state in the nation. We also have one of the lowest healthcare insurance rates of uninsured of eight percent, and we have the second or third lowest healthcare premiums anywhere in the United States here in Hawaii. We have lots to be proud of.
Yet, Hawaii has huge ethnic and socioeconomic disparities when we start peeling away the onion and you do not just aggregate the statistics. We also have hospitals in bankruptcy. The future of healthcare must address the economic transformation of healthcare. We are seeing shifts to value-based purchasing meaning that both Medicare and other government payers as well as commercial payers are shifting from paying us for volume and instead beginning to pay us for the quality outcomes and not paying us when there are medical errors and when there are potentially preventable hospital admissions or potentially unnecessary tests. We are seeing major changes in the economics of healthcare.
Beth Giesting (Governor’s Office on Health Care): My word for the day is essential, in that healthcare is essential to each and every one of us as consumers and payers, but the cost of dragging down our economic flexibility and our future. We are not even getting very high quality care consistently. It is essential that we fix the system as soon as possible. Beyond why healthcare is important to us each individually, the part of our economy that healthcare is taking up is just unsustainable and growing out of control, and as Ginny mentioned very succinctly, the quality is not always there for us.
When we are looking at what we need to do about this, first we need to see how our healthcare system differs from other parts of the economy. Imagine any other part of the service sector that continues to grow while essentially ignoring its customers. The healthcare sector is largely created for the convenience and the benefit of providers, insurers, and the professionals in healthcare. There is almost no information available to consumers about cost and quality. Even when consumers get information from their insuring provider they may not know what to do with it or understand it. Certainly it is rather difficult for consumers to get the care that they need, the information that they need where and when they need it — so I would say consumer-driven healthcare is absolutely a mandate.
Now, another issue here – imagine any other major economic sector that does not use information technology improve its own business; that does not use information technology to share essential information with its partners.
A recent study shows that only about 10 percent of physicians across the country are using electronic health records in a really meaningful, fully capable way. If you do not have the use of electronic health records that is the basic building block, you are not going to be able exchange information. You are not going to be able to aggregate information and analyze it. You are not going to be able to improve your services and lower your costs if you do not really know where you are going. Imagine any other successful business that incentivizes pretty much all the wrong things. Our healthcare system pays extensively for specialty services, lots of procedures, and duplication in the system.
What it does not pay for is primary care, prevention. It does not pay for managing care so that you would maximize the benefit that you get from all of the services that are available. Those are some of the big issues that we need to take on. You may or may not know that the state purchases healthcare for more than half of the people who live in the state. Medicaid, EUTF (Hawaii Employees Union Health Care Trust Fund). We are the purchasers and it is time that we made sure that we got something for our money. I think it is fully appropriate for the state to take leadership working with the very intelligent people across our community. Regardless of what happens on the federal level with healthcare reform, we are going to change healthcare because we have to. It really is essential.
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