November 1, 2011

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Teri Klug




Allison Johnson

November 1, 2011

The healthcare system is enormously complex, making reform difficult on every level. Industry leaders say that it will take every interested party—insurers, providers, patients, employers and the government—working together in order to create meaningful change.

We’d like to give a special thank you to Dave Gessel, vice president of government relations and legal affairs of the Utah Hospitals & Health Systems Association, for moderating the discussion and to Holland & Hart for hosting the event.

Participants: Wesley Smith, Salt Lake Chamber; Dave Gessel, Utah Hospitals & Health Systems Association; Mark Adams, Ogden Regional Medical Center; Earl Hurst, Moreton & Company; Bob Howard, Diversified Insurance Group; Scott Barlow, Central Utah Clinic; Blaine Benard, Holland & Hart Brent Williams, Dental Select; Michelle McOmber, Utah Medical Association; Jeremy Spencer, Total Dental Administrators; Joe Campbell, EMI Health Dean Sanpei, Intermountain Healthcare; Brent Bennett, Spectra Management; Doug Hasbrouck, HealthInsight; Joseph Carbone, Eye Care For Kids Kim Wirthlin, University of Utah Health Care

We’re in the midst of major healthcare reform with the federal law that passed a little over a year ago. Where do you think we’re going to end up with that law?

BARLOW: I’m not sure where the courts are going to fall, but the reality is a lot of the tenets and principles underlying it are continuing to move forward because I’m not sure we have any alternatives. The system clearly needs dramatic change. So issues of transparency, risk sharing are going to shift to the provider, at least to some degree. The question is how much and exactly how that’s going to occur.

Our industry is going to face all the tenets that underlie that law, and we’re going to see a lot of movement on the commercial side to do some of those things anyway. We’re trying to make sure we measure our successes, measure what we’re doing, report that publicly and more commonly than we’ve done in the past. We’re trying to really look at proactive care, disease avoidance and care avoidance versus care drawing and care provision principles, and trying to make sure that those rules are developing in our system, because that’s going to be our industry for sure. The bigger question is how and when.

SMITH: Mitt Romney promised that he’ll grant a waiver immediately if he’s the president, and other candidates have said similar things—so it’s hard to tell how exactly that will turn out.

In reality, the economics will drive healthcare. And with the bigger-picture economic situation, the Super Committee has been appointed with 12 legislators who are going to look to trim the federal budget deficit by $1.2 to $1.7 trillion, and that’s over the next 10 years, but we’re still going to have a budget gap grow in those next 10 years. The economic issue is out there, and it’s unsolved. So regardless of how the courts rule or what the next president does, economics are still going to drive healthcare.

ADAMS: HCA is taking the approach that change is inevitable and we need to be prepared to do things differently as a healthcare provider. And I do believe economics is the driving factor there. Resources are going to be limited, so although we don’t know exactly what’s going to happen with reform, we’ve got to be prepared as an organization to deal with different incentives and a different approach to the delivery of healthcare.

Long term, the current system of service is unsustainable, so we’re making preparations for becoming more engaged in risk sharing and incentive sharing to deliver healthcare more cost effectively. The big focus for us is figuring out how to drive down cost, be more efficient and be prepared for an environment where the incentives are different.

HURST: We consult with both large and small employers, and the biggest challenge that employers face every day is how to provide health benefits to their clients. Our clients continue to see increases in their health insurance premiums on an annual basis.

We’ve been talking about those challenges for several years now. We’ve always said it’s unsustainable. How can an employer continue to pay 10 percent more, 15 percent more, 20 percent more each and every year to provide insurance benefits for their employees?

The concern I have about the legislation is it didn’t do anything really—at least from my understanding—to address two key factors that drive the cost of insurance. The first is the cost of care, which continues to outpace inflation. Second is utilization of healthcare, which continues to increase dramatically. Consumers have consumed 50 percent more healthcare in the last seven years than we did seven years prior.

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