Volume 12 - January 5, 2010

HEALTH CARE “REFORM” VS. HEALTH AND ECONOMICS:

A TALE OF TWO CITIES

An opinion piece by

Sean Sullivan, JD

President & CEO

The Institute for Health and Productivity Management

Health care costs often are cited as a cause of competitive disadvantage for American business in the global economy.  Whatever the true situation (total labor costs still remain higher in Europe and Japan),  Congress and the Administration are  about to make it worse – at precisely the time when the government of China is preparing to invest in making a healthier work force into yet another competitive edge!

Following my presentation on Health and Productivity Management this past October at the China Public Health Conference in Beijing, I was asked to comment on health care reform in the United States.  I observed that the “reform” being proposed by the U.S. Congress and the Obama Administration had little to do with health and, unfortunately, everything to do with politics.  Real reform would involve value-based changes in payment and delivery systems to encourage incentives for wellness and prevention as well as more optimal outcomes from medical treatments – with the overall goal of  reducing  the total burden of illness  on our economy and our society. 

Instead, what is about to happen is a costly expansion of access – via heavily subsidized private insurance and enormously costly state Medicaid extensions – to a dysfunctional system,  based on misleading “data” regarding the number of long-term “hard-core” uninsured  (those lacking coverage for more than a few months  and unable to pay for it).  This number is closer to 20 million rather than the 45-50 million figure , (which includes people who are without insurance for any period of time, even if they can afford to buy it,)  frequently cited by the Administration and the media;  it is hardly the basis for intelligent,  effective reform of health care.  As Dr. Jeffrey Flier, Dean of the Harvard Medical School, put it in a recent editorial piece in the Wall Street Journal titled “Health’ Debate’ Deserves a Failing Grade,  “….while the legislation would enhance access to insurance, the trade-off would be an accelerated crisis of health-care costs and perpetuation of the current dysfunctional system.”

As Congress prepares to make the nation’s true crisis in health care – exploding costs of medical services for an aging population – even worse, a yet larger crisis in the nation’s actual health status continues to worsen and drive our national medical bill ever-higher. 

The Healthy People reports issued every 10 years set goals for improving many indicators of national health status over the succeeding decade.  This government exercise began in 1980, and soon will issue its fourth report – for the years 2010 – 2020.  At the end of each decade, progress is measured using numbers collected by the Centers for Disease Control’s National Center for Health Statistics.  For the first such decade of 1980 – 1990, improvement was shown in 41% of the measures chosen.  In the next decade of 1990 – 2000, this had dropped to improvements in just 24% of the measures, and the projected figure for 2000 – 2010, the most publicized decade yet, is even lower (about 20%).

It’s particularly instructive to look at two important specific measures to see how they have behaved over this same period.  Obesity (typically measured by Body Mass Index, or BMI) is at the hub of a many-spoked  “wheel” of chronic risk and disease known as Metabolic Syndrome, and often is closely associated with the onset of Type 2 diabetes.  High blood pressure, or hypertension (HTN), is called the “silent killer” because it greatly increases the risk of heart attack, stroke and kidney disease.  In the decade just ending, the Healthy People goal for obesity was to reduce the incidence rate from 25% to 15%; instead, it increased to 34% -- a huge swing from high expectations to disappointing realities.  And, similarly for HTN, instead of a big reduction in incidence from 28% to the goal of 16%, there was a slight increase to 29%.

So with roughly a third of the population at high risk for Type II diabetes or coronary artery disease because of these two factors – and the situation worsening rather than improving – it appears that  Congress and the Administration are “fiddling while Rome burns” with their obsessive focus on the uninsured,  when the nation’s real problems are deteriorating health,  witnessed most dramatically by the national “epidemic” of obesity and Type II diabetes,  and its consequent chain of rising medical  expense.  The health care “reform” seemingly about to emerge – or escape – from Washington is unworthy of the name, and will make the real problems worse rather than better.

This myopic public policy fails utterly to harness the true engine of improvement in American health care, which is the value-driven strategies and actions of employers in the private marketplace.  Instead,  Washington  actually threatens to throw sand in the gears of this engine,  through harmful insurance “reforms” that, together with expanding access for the relatively small number of hard-core uninsured,  will restrict the freedom of companies featured in earlier eDitorials – like Safeway, Verizon and Whole Foods – to design and manage benefits and programs that improve the health and performance of a vastly larger number of well-insured American workers,  and to reduce the total burden of illness in the workplace and the economy. 

Health care costs often are cited as a cause of competitive disadvantage for American business in the global economy.  Whatever the true situation (total labor costs still remain higher in Europe and Japan),  Congress and the Administration are  about to make it worse – at precisely the time when the government of China is preparing to invest in making a healthier work force into yet another competitive edge!

 

About The Institute for Health and Productivity Management

The Institute for Health and Productivity Management (IHPM) is a global enterprise created in 1997 to establish the full value of employee health and maximize its impact on business performance.  It does this by helping employers to:

  • Identify the total cost impact of employee health on business performance – including lost productivity;
  • Choose the best opportunities to reduce this cost impact by improving health and performance;
  • Measure the success of their efforts.

IHPM works with all who have a stake in employee health: employers, providers, suppliers, health plans and workers themselves.  Through its national advisory groups and an expanding network of alliances and affiliates, the Institute is building the evidence-based business case for improving health to produce gains in productivity.

Mission

The Mission of the Institute is to establish the full value of employee health as a business asset – as human capital -- and an investment in corporate performance. IHPM pursues this mission by:

  • serving as a global resource on health and productivity management – in the U.S., Latin America, Europe, the UK, and Asia;
  • developing the tools, metrics, and methods to drive and measure better health and resulting corporate performance;
  • championing investment in health capital as a global strategy for corporate success;
  • educating and equipping purchasers and providers to gain greater value from improving employee health.

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Sean Sullivan, JD is co-founder, President and CEO of the Institute for Health and Productivity Management (IHPM).

Prior to founding the Institute, Dr. Sullivan was the original President and CEO of the National Business Coalition on Health, and also spent ten years as a Washington-based health policy analyst – as a fellow at the American Enterprise Institute for Public Policy Research, and as Executive Vice President of New Directions for Policy.  He is the author of articles and monographs on health policy and health care market trends, and has testified on these subjects before Congress and state legislatures. 

Dr. Sullivan speaks both nationally and internationally on health and productivity management as a leading business strategy for the modern knowledge-based economy.

Mr. Sullivan holds degrees in economics from Harvard, and law from Stanford.

If you are interested in contacting Dr. Sullivan contact Deborah Love at deborah@ihpm.org or call 480.305.2100.

IHPM’s web site is located at www.ihpm.org.

 

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