Anchorage Away!

The biggest criticism of the Affordable Care Act (so-called “Obamacare”) – beyond questioning its very existence – is the ability to reduce and manage an industry where large annual cost increases have just become a way of life. Private lobbies literally gutted all those elements of the law, as it was being debated in Congress, which would have provided the kind of competitive factors that really would have pushed medical costs downwards. This included not allowing Americans to buy their pharmaceuticals from approved markets overseas (like Canada) and not establishing any direct programs operated by the government to provide a cheap alternative to existing health insurance. We pay more for pharmaceuticals than anyone else on earth, and our annual per capital healthcare costs are vastly higher than anywhere else.

But what if we could have a system that creates the following efficiencies: “emergency room use has been reduced by 50 percent, hospital admissions by 53 percent, specialty care visits by 65 percent and visits to primary care doctors by 36 percent. These efficiencies, in turn, have clearly saved money. Between 2004 and 2009, [the system’s] annual per-capita spending on hospital services grew by a tiny 7 percent and its spending on primary care, which picked up the slack, by 30 percent, still well below the 40 percent increase posted in a national index issued by the Medical Group Management Association.” New York Times, July 21^st.

The “system” currently operates in Alaska and was born of our treaties with Native Americans in the area: “the native-owned Southcentral Foundation in Anchorage, the Alaskans described techniques that could be adopted by almost any health care organization willing to transform its culture. Such a transformation would require upfront financing for training, data processing and the like, but the investment should rapidly pay off in reduced costs.

“The foundation, established in 1982, provides primary outpatient care to Alaska natives and American Indians who had previously been the responsibility of the federal government’s Indian Health Service. It serves 45,000 enrollees in the Anchorage area and 10,000 more scattered in remote villages, most reachable only by air, on an annual budget of $200 million. It also jointly owns and manages (with a consortium of native tribes) a small hospital, and has built a modern campus of outpatient clinics with the help of loans, grants, bonds and retained earnings… About 45 percent of its revenue comes in what amounts to an annual block grant from the Indian Health Service, a source unavailable to most health systems; another 45 percent comes from Medicaid, Medicare and private insurers, and the rest from philanthropy and grants.” NY Times.

Think the patients are being short-changed, that they are living with untreatable ailments? Think again. “Patients are virtually guaranteed a doctor’s appointment on the day they request it, and their calls are answered quickly, usually within 30 seconds. The percentage of children receiving high-quality care for asthma has soared from 35 percent to 85 percent, the percentage of infants receiving needed immunizations by age 2 has risen above 90 percent, the percentage of diabetics with blood sugar under control ranks in the top 10 percentile of a standard national benchmark, and customer and employee satisfaction rates top 90 percent.” NY Times.

Okay, it is a small system, and it would have to be scale to operate on a national level, but what is happening at national level –with escalating healthcare costs and profits – is no longer sustainable. One medical catastrophe and an ensuing bankruptcy is a lesson way too many Americans are still experiencing. What are the reference points that might work on a bigger scale? According to the NY Times:

Assigning small teams — consisting of a doctor, a nurse, and various medical, behavioral and administrative assistants — to be responsible for groups of 1,400 or so patients…

Integrating a wide range of data to measure medical and financial performance...

Focusing on the needs and convenience of the patients rather than of the institution or the providers...

Building trust and long-term relationships between the patients and providers.

Changing from a reactive system in which a sick patient seeks medical care to a proactive system that reaches out to patients through special events, written and broadcast communications, and telephone calls to keep them healthy or at least out of the hospital and clinics.

There’s a lot more, but the patients in this system are happy with the results, the costs are way down, and the coverage is operating exceptionally well. We need to look at successful medical problems and take the best of what they can teach us.

I’m Peter Dekom, and as I see solutions to our biggest problems, I am forced to remember that we have, and are likely to have for the foreseeable future, a stalemated, sloganeering-instead-of-solving, do-nothing Congress.