The rising cost of health care is not a new issue -- for some time policymakers, healthcare providers, and various other well-intended actors have sought to reduce costs, bend the cost curve, or more generally, fix the problem. These efforts, largely, have come up short. Why? The experience of one our local health systems helps answer that question and shows the challenges Massachusetts faces in reducing costs.
In 2005 Berkshire Medical Center realized their readmission rates for chronic heart failure patients, although slightly below the national average, were not at best U.S. practice. Being a responsible community hospital, BMC went about trying to reduce these rates. Their efforts included updating prescribed medication and enhanced inpatient treatment, but ultimately, it became clear that the most at-risk patients required an intensive and comprehensive approach. A multidisciplinary heart failure program was established at the hospital, where physicians, advanced practice nurses, the visiting nurse association, and support staff worked with patients and families. The team made sure necessary follow-up appointments were scheduled, proper medications were ordered and administered, and that patients and families were educated about healthy lifestyle choices and how to respond to warning signs of worsening heart failure.
Berkshire Medical Center’s focus on keeping the highest-cost cardiac patients healthy reduced hospital readmissions, a major driver of costs in the healthcare system. Unfortunately, these savings are unsustainable because the current healthcare payment system does not reward this behavior. Based on a complex set of payments made by government agencies, private insurers and individual consumers to hospitals, doctor groups, community health centers and other providers, our healthcare payment system creates incentives for providers to treat as many patients as possible, instead of rewarding providers who work hard to keep patients healthy. Under this system, BMC actually loses money, while their patients grow healthier.
In an ironic, if not disheartening twist, Berkshire Medical Center’s readmission rate for heart failure patients dropped to 18.2% in 2008 – far below the national average of 24.7% and equal to the best practices in the nation. Yet this success actually represents a loss of $225,000 in revenue each year for the hospital ($7,500 per readmission). Added to the investments BMC made in the heart failure program, one can see why this well intentioned effort is the rarity and not the norm.
The incentives in our healthcare system make it virtually impossible to reduce cost. Payments are made based on the amount of care delivered, not the quality of that care, or perhaps most importantly the quality of life achieved for patients. And so we end up with a system that costs more and more, without necessarily improving the health and well being of our communities.
In the coming months, the Massachusetts Senate will focus on the next stage of health care reform – reducing costs by improving our payment system. My goal in this debate will be to ensure we stabilize or reduce costs, by transitioning to a system where efforts like those that BMC has undertaken are rewarded and promoted. This transition will require a commitment from all those involved – hospitals, doctors, healthcare workers, business and all levels of government – to chart a course with the best interest of the public in mind. It will require sacrifices and changes, but the alternative – soaring costs with no end in sight – is no alternative at all.