Chairman’s Letter

Dreaming of the Future

In my final letter to the IHA membership as chairman, I have several thoughts to share. First and foremost, I want to thank you, my colleagues, for the honor and privilege of serving in this position. It has been an exhilarating experience, and I hope that I have met the challenge to your satisfaction. I want to thank Brian Tabor and his talented team at IHA for their support and their very capable and professional management of the Association’s many and varied activities.

Second, I wanted to discuss the recent RAND ResearchReport, “Hospital Prices in Indiana: Findings from an Employer-Led Transparency Initiative.” This study, which was sponsored by the Employers’ Forum of Indiana (EFI), suggested that in Indiana, “the gap between private hospital prices and Medicare prices is unusually large—closer to three to one than two to one—which underscores the need to understand and address that gap.” The study was based on the shared claims data of several Indiana-based employers. As you might expect, the report delivered an analysis and critique of hospital prices from around the state and offered a variety of strategies that employers could consider to “rationalize” hospital prices. The IHA team appropriately responded to this EFI initiative directly by identifying perceived weaknesses in the study’s methodology and conclusions. As a result, EFI leadership asked IHA to participate in a deeper discussion about the quality and value of health care services in Indiana. My hope is that the deeper discussion will be based on a comprehensive evaluation of the state of health and health care in Indiana. IHA will continue to work with EFI and other stakeholders to address the critical issues of prices, quality, resource distribution, service-area demographics, value, morbidity and mortality.

Finally, I wanted to share my personal dream for the future of health care. In all honesty, I think that private health insurance, as we know it, is a flawed business concept. Private insurers are all about risk-avoidance, which is challenged when the young and/or healthy opt out of coverage or jump plans. This great nation should provide a base of health care coverage for all. I dream that might be provided through a competitive marketplace where large insurance entities vie for membership in Medicare Advantage for all plans. The goal of these plans would be to assist patients in attaining and maintaining their optimal level of health. Integrated health care delivery systems would share limited risk with the large insurance entities to demonstrate alignment of interests. The state would support chronic disease management initiatives across the 92 counties, and healthy food deserts would be eliminated. Finally, the Justice Department/FTC would allow for greater collaboration among and between integrated delivery systems to encourage more efficient allocation of expensive resources and eliminate the wasteful redundancy that exists today.

Does this mean the end of health care as we know it? Probably, but that is not necessarily a bad thing. The existing system is broken beyond repair. Our society cannot bear the burden of an ever-increasing share of the gross national product dedicated to health care. I believe there will still be an opportunity for product and service innovation, but health systems will have to be much more cost-conscious, as they will have much more skin in the game. One important note: Funding for services through the Medicare Advantage plans must not only be case mix-adjusted, but also reflect adjustments for the inevitable uncovered patients, extraordinary service capabilities and medical education. The cost of providing care for everyone will necessarily have to be covered through taxes just like Medicare. This scenario acknowledges that eventually everyone gets sick or injured and requires health care resources. This approach eliminates the problematic cost shift so apparent in the RAND study and aligns the interests of the federal government, large insurance entities, integrated delivery systems and, where appropriate, enrollees in holding down costs and improving health.

I hope and pray that we as a nation get beyond the partisan divide and take the steps necessary to provide a more equitable, accessible and quality-driven health care system for all. I expect that most of you share that sentiment as well.