Center for Studying Health System Change

DR. GINSBURG: I’d like to turn to the final stage of our meeting where we ask each of the responders to make just a few minutes of comments about what they see in the future, and they’re not limited to the presentation they commented on.

Jeff, do you want to start?

DR. GOLDSMITH: Well, you know, it seems to me that the real leverage point in changing this sort of World War I poison battlefield picture that you’ve gotten this morning about the state of health care markets lies with the consumer. And I think that there is manifest evidence of tremendous hunger on the part of consumers for better and more accessible information about their own health, a greater motivation perhaps than existed in the past and using that information to improve their own health, and a rising level of skepticism about whether professional judgment, institutional branding, any of those things really are going to make a difference for them.

It seems to me that if there’s a way out of this, it is by health plans and health systems innovating to provide consumers better information to enable them to make better choices. If broad networks and choice is sort of one of those rock-hard things about our health care system that people don’t want to see changed, but we also know it’s a knowledge business--there’s a tremendous amount of information, a tremendous amount of variability--it seems to me that leveraging the consumer’s desire to make better choices is one of the really important ways in which we can make this health system better.

This is something that I think we can be watching for in these markets.

DR. GINSBURG: Marsha?

MS. GOLD: I was struck listening to all the papers, which I thought were excellent, about the sort of mixed message that you get from the findings, which is the mixture of instability and persistence. I was sort of thinking about Brownian motion. There’s a lot happening, but then there’s a lot that isn’t changing at the same time, and I had two thoughts on that.

One, from the researcher side of me, is that we track pieces now when we look at the health system. We track docs, we track hospitals, but we don’t track the way they’re relating to one another in the national databases. And I know that’s something people have thought about it, but it’s really a problem when you’ve tried to get beneath the surface and see what really is changing about the infrastructure for delivering care.

Second--maybe it’s a projection--I think what we’re going to have is potentially, as you try and deal with some of the issues brought out from the floor today and people sense is a real fight. I mean, the solution or the approach to these issues is complicated, and I think there’s two things going on, the sort of fight between the old market versus planning and command and control. And markets, when you look at that, have both their advantages and their disadvantages, but they don’t necessarily pull the pieces together, and they don’t deal with some of the distributional issues. But the issue--I don’t think anyone in this country is ever going to go to a system that is going to just decide how all these issues are going to be resolved.

So I see a lot of tension between that, and one of the questions I have is whether on the public level it’s a continuing debate of market versus regulation, market versus regulation, or whether there’s some focus on what might be a potentially more effective way of talking about these issues in terms of whether it’s regulated utility models or all the rest as to where--how you put the public interest into the market in a way that’s consistent with wherever the value preferences in this country are to deal with some of those issues, because it seems that there’s a lot of things that are being lost in the cracks.

DR. GINSBURG: Ed?

DR. O’NEIL: Thanks, Paul.

I agree with Jeff that the consumer is likely to be the next big thing in health care in terms of choice and the integration, but of late, I have been thinking about a quote from Eric Hoffer, which goes something like: When one doesn’t know what one needs, one can never have enough--which strikes me as a good little aphorism from the American health care system. Not knowing what really makes us better or keeps us well, we want open access and unlimited access to drugs and all kinds of things.

So I suspect there will be a value for systems that can, in fact, deliver on consumer choice, on information, and on demonstrable quality within health care. And as soon as we have a financing system that doesn’t shield the individual consumer from all of those decisions and makes them accountable, at least in part, perhaps removes the ultimate financial liability of catastrophic health incidents, but makes them exposed to those costs, and I think that we’ll actually seek out either on the ’Net or from our primary care provider or from our neighborhood or from whomever we seek information, that kind of branded input to help us decide what we need.

I think the larger issue that has touched on most of the presentations today is the issue ultimately of what’s the large governing thing that we’re going to use to dominate health care. We tried professions. That didn’t seem to work. I agree we don’t have much taste for public solutions. The market has its downside. And when we turn to the fourth one most readily available to us, the community, we find a woefully inadequate infrastructure to even begin to think about those questions. And it seems to me that the recovery of the health commons at some face-to-face jurisdictional level is one of the great tasks for the next century.

DR. GINSBURG: Other reactions on the panel? Jon?

DR. CHRISTIANSON: Well, maybe a little different take on a consumer voice. I think the consumer voice has been heard remarkably loud over the past few years. I think prior to about four or five years ago, most consumers had options and the private sector had options in their health benefits, and they exercised their right to exit. And that’s how you heard that voice. Some people decided they wanted traditional plans and PPOs, and others stuck with managed care plans.

But what happened about five years ago is well documented by Steve Long over here and his colleagues, and that is, that choice was replaced, that in middle-size companies, indemnity or broad panel plans were replaced by managed care plans, and in large companies, the indemnity option was replaced by managed care.

So instead of having the option to exit to show their ability to exit and choose something else, now they only option left was voice, and we’ve heard the voice, and what you’ve seen is a remarkable change, I think, in the direction of the way the managed care system is going so that now we’re looking at broad panel plans, we’re looking at the largest private for-profit health insurers saying we’re not going to restrict access to specialists. We’re seeing at the state level and the federal level, I think, pieces of legislation that are responding to consumers.

So I think the consumer voice is being heard and the industry has changed as a result of it. Then I will also say that I don’t think in the future managed care organizations are going away because they serve a very unique and important political purpose; that is, it’s almost impossible to conceive of how you’re going to have a health care system that can control costs, give broad access, and improve quality all at once. And I think at least somebody in the public sector has recognized that’s the case and that the optimal strategy for politicians, at least, is to delegate that responsibility to private organizations and then respond to interest group complaints about the way it’s being done on a complaint-by-compliant basis where you can look like the hero if you’re Senator Whozits and get a piece of legislation passed to constrain this or that, but never really undertaking in a public sector any serious debate over what we want the health care system to look like.

DR. GOLDSMITH: That’s sort of a scary thing. I mean, it’s like what we did with the Shiite Muslims in Iraq. You know, rise up and smite Saddam and we’ll be right in there behind you with our fire power. And then they go and rise up and Saddam crushes them, and, you know, we never showed up with the fire power. I think it’s pretty funny that you can delegate responsibility to people and then stand back, like governments and employers have, and just watch the messenger boy be shot to pieces. It’s really been--

DR. CHRISTIANSON: It’s a good strategy.

DR. GOLDSMITH: Oh, it’s a great strategy.

[Laughter.]

DR. GOLDSMITH: It’s shifting blame.

You know, if they can’t attract more capital--and I can tell you right now, health care is sort of redlined by the capital markets. I mean, if we were concerned about the influence of hot money on this health care system, believe me, except for those heart hospitals--actually, they’re private. They’re not even publicly traded. KKR took them private a year or two ago. New capital isn’t flowing into this field. I mean, maybe that’s good. I don’t know. But, you know, the venture firms are basically shutting down their health services. You know, unless you can give somebody a Palm Pilot, they’re not really interested in funding a start-up in this field.

So, you know, I’m a little bit worried that, you know, in this cycle of reaction and recrimination, health care really has an odor now. It’s an odor of burning flesh, and people don’t want to put new money into it.

DR. GINSBURG: You know, Jeff, I wonder if maybe some of the limited capital could be a blessing to health care given what capital has done in the past few years.

[Laughter.]

DR. GOLDSMITH: Could be.

DR. GINSBURG: I was recalling hearing from you at a conference a few years ago saying that, well, health care is not really that capital-intensive a business; a lot of this capital that’s being raised is being used to buy someone else’s assets.

DR. GOLDSMITH: Well, what happened with all those PPMs was a massive transfer of wealth from investors to the founders of these groups, who walked away with billions of dollars. And the ones that really blew it were the ones that took it in stock and weren’t able to sell the stock before the companies crashed.

So I think it’s not an entirely unmixed blessing here, that maybe the hot money has fled, but I think that capital does help innovation, and we do need innovation in this field. And if access to capital is a limitation on the ability of people to innovate or of new people to come in with a different idea, I think that’s not entirely good.

DR. CHRISTIANSON: But the capital, you know, I think that will enter health care is in the sort of activities that you mentioned earlier. It’s going to come in through the information technology development.

DR. GOLDSMITH: Through IT.

DR. CHRISTIANSON: So I think there is going to be an enormous amount of capital indirectly enter into the health care system and affect delivery.

DR. GINSBURG: Cara?

MS. LESSER: And that links to the point I was going to make, actually, about the fact that there is such a demand for knowledge in the health care system, and that’s obviously driven in large part by consumer interest. But I think that there’s a great deal of opportunity there for providers to partner with consumers in some way or to think about other ways that their interests are aligned.

I think much of the backlash, you know, is driven by consumers’ dissatisfaction with constrained choice, but there is also a great deal of provider--interest group politics behind that backlash, and those two pieces I think really point to some of the commonalities of interests between providers and consumers. And when we talk about providers thinking about ways to develop brand-name identification and market themselves directly to consumers, I think if there’s a way for providers to directly give consumers objective information about the quality of the services that they’re providing and the range of options that are out there, that would take enormous steps toward helping to bring consumers into being full partners in the health care system in that way.

DR. O’NEIL: But that assumes a world that I don’t think I’ve ever seen exist. That means that the providers will have to be self-critical and publish the data.

DR. GOLDSMITH: Well, you see--

DR. O’NEIL: And it also means that the consumer will have to have some financial responsibility. The providers benefit by having the whipping boy the health plans.

DR. GOLDSMITH: But, you know, I think--you asked where the hundreds of millions of dollars in venture money are going. They’re going to gather the information. And, you know, you have the option, like with some of the people that don’t want to be NCQA certified of not being surveyed and all the rest of it.

But, I mean, I think it is going to behoove provider organizations to figure out how to kill fewer of their patients. And eventually the variation in patient risk is going to be public knowledge. You know, why is it that we as consumers can’t get access to the national practitioner data bank information? We can’t. As I understand it, we are statutorily enjoined from getting access to it. But look who’s in there. You know, was Dr. Swango in the national practitioner data bank, that infamous doctor that eventually was caught? I mean, we need this information.

MS. GOLD: I have a question, though. I mean, what’s realistic to assume on the information? Assuming one could get all the information and publish it and have it, to what extent are our--are the kind of patterns you are talking about going to show up so strikingly obvious? I mean, in some areas, I suspect they are. But will they differentiate? Will it be clear which plan is better, which doctor is better? How does a consumer, how do people decide that? I mean, how much should we really expect of that information?

DR. GOLDSMITH: If the plans are all using the same provider networks, it would be pretty amazing if they differed very much. I think the variation that’s there is in the delivery system, and I can tell you the physicians know it’s there because of the pattern they employ when they decide where to send their children for care or where their wife or they go for care.

There’s a lot of time expended trying to figure out the safest, most competent person to send them to. And maybe if we could just figure out how to quantitate that process, you know, we’d be a little bit ahead of the game.

DR. GINSBURG: Well, this was a great discussion and we’re running out of time, so I’d like to close the meeting with a couple of summary things.

First of all, those green things passed out are evaluation forms, and we’d really appreciate if you filled them out. We do surveys as well, and we’re very sensitive to high response rate information being much more valuable than low response rates. So please do that.

Let me just make some comments about some of the key points that I heard today at the meeting. You know, one was that the backlash to managed care by consumers has been leading to less management of care and to many organizational changes in the system. The pattern of consolidation that we’ve seen in hospitals and health plans has increasingly a regional or a national focus. It’s less adjacent competitors than before. And physicians have had a very hard time in finding intermediaries to help--organizations to help them intermediate their relationships with either health plans or hospitals.

Jeff Goldsmith in responding to this expressed concern about the anti-competitive direction of many of the organizational changes and feels that this may very well cost society a lot in either paying more for health care or in a sense precluding forces that might drive more efficiency in the delivery of care. And he criticized hospital boards for dissipating their resources rather than take steps to deal with their situations.

The paper on specialty physicians showed a very extensive degree of action on the part of groups of specialists to increase their clout with health plans and hospitals. This is something that I don’t believe has been put forward much in our health policy research or health policy debates and that organizations of specialists have emerged in many communities as very important threatening competitors to hospitals for their most lucrative outpatient services and pose a risk of additional fragmentation of the delivery system.

Marsha Gold had raised a question about the various developments in specialty organization, what their implications are for patient care, particularly focused on this issue of the scope of care of primary care physicians versus specialists and what implications that would have for them.

Turning to the presentation on Blue Cross/Blue Shield plans, we heard that the Blues remain key players in the changing health care systems and that they still are distinguished from their competitors, despite the erosion of some of their traditional advantages and disadvantages. And we did hear about the issue of limited innovation from those plans and a suggestion by our respondent Ed O’Neil in a sense focusing on the consumer and the Blues rethinking their old public benefit role probably is one of their greatest potentials, but it’s likely to come from individual plans rather than from the association, which now is torn by some of the competitive conflicts among the various Blue Cross and Blue Shield plans.

Our discussion afterwards about the future focused very much on the consumer, and it’s something that we didn’t hear a lot of through the conference. And what I take from it is that it’s been the consumer unhappiness with some of the developments of health care that has been heard very loudly, both by health care organizations in the market and by government, although I’m not sure that these organizations that have heard the consumer very loudly have figured out productive things to do to respond to what the consumer is saying. Many of our other comments were about saying that really the way out of the morass we’re in is for organizations to innovate and be able to listen to the consumer and provide what they’re really looking for, and likely the Internet is going to be an important component of that response.

I want to thank very much the panelists for their contributions here. You all did outstanding jobs, and I particularly want to thank Brad Strunk and Marsha Gold for filling in at the last minute and being able to do a great job, nevertheless. I want to thank the staff of the Center that have worked so hard on this conference, particularly Ann Greiner and Cara Lesser and also Roland Edwards, who provided us the great support throughout this process.

Thank you.

[Applause.]

[Whereupon, at 12:01 p.m., the meeting was concluded.]