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Taking Next Steps of Reform

To get an idea of why health care reform is so important, said Pam Kehaly, president of Anthem Blue Cross, you have to understand how much it costs.

“The issue today is how to restrain the rising cost of health care while delivering high-quality care,” Kehaly said at a policy roundtable discussion in Sacramento yesterday. “Last year, that was a $2.7 trillion expenditure. We throw these numbers around, but it’s hard to understand the magnitude of what we’re talking about. But if you sat at your dining room table tomorrow morning and turned over dollar bills, one after the other, it would take you 92 years to reach $2.7 trillion.”

Or put another way, Kehaly said, the cost of health care is about $8,400 for every American every year. “That means, for a family of four, it’s pretty much like buying a new car every year,” Kehaly said. “The amount of the economy of France — that is, how much France and the French people spend on everything — that’s how much we spend on health care.”

Kehaly spoke at “Striving for High Value Health Care: Lessons Learned in California,” a symposium sponsored by NEHI, a national health policy institute based in Massachusetts and Anthem Blue Cross, part of NEHI’s “Bend the Curve” initiative, which aims to spread the word to states across the country about how to increase quality and lower costs. 

NEHI identified seven particular areas where that nexus could be achieved most easily:

  • Getting patients to take their medications properly;
  • Preventing hospital readmissions;
  • Reducing medication errors;
  • Cutting back on antibiotic overuse;
  • Discouraging avoidable emergency department visits;
  • Immunizing children; and
  • Decreasing hospital-based infections.

Those seven groupings represent about $521 billion of waste and inefficiency, according to Wendy Everett, president of NEHI. “We are at a significant crossroads today, between inefficient, ineffective, wasteful care, and the kind of care that we want health care to be,” Everett said.

“In Massachusetts [where NEHI is based], health care expenditures increased by 66%” over a short period of time, Everett said. During that same time period, she said, “we decreased our spending on education, on public health and public safety. And the irony is, those are the things that keep us healthier. So there is a hidden cost in the rise in health care cost. It takes away from education. It takes away from all of those social services.

When you increase health care cost, something else has to be cut.”

So, unless you want to reduce health care services or raise taxes, she said, there’s only one other alternative.

“There is a third way,” Everett said. “We can look at how efficient health care delivery is. If we could cut out just 25% of the waste, that would pay for so much of this. Because one-third of our health care spending does nothing to improve the quality of care delivered.”

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