Michael Millenson, moderator—Intro—consumerism is a legacy of the Clinton health plan and the backlash against managed care

Bill McGuire, UnitedHealth Group— Health care system doesn’t work well—doesn’t work in any country, so it doesn’t matter who pays for it. It is time to drive for change, and consumerism can advance it on behalf of everyone.

We’ve got a problems and every constituent has got a problem—wont get better with fundamental change. United thinks that trend is slowing but Wall Street thinks that’s a problem as they wont be able to charge so much. Left to the system that we have, all use will be inappropriate. We need to re-use re-design what we have to make use of new tech, need to help individual anticipate those needs. Need to build (what looks like a damn complex system in his slide) an inter-operable system around the consumer.

He believes that personal coaching will help consumers. And that this series of problems can be solved across the continuum. Where benefits change matter— the important thing is what tools are there to make this consumer care work? The results so far: Discretionary use in outpatient services is down, apparently no evidence of diminished use of necessary services (although that’s not what the RAND experiment said). But we need to add the support to the system, and also get consumer credit into the health system.

Meanwhile I am also at the same time running the questions from the audience which are delivered over wireless devices and laptops by a clever little company called VisionTree. You can guess what they’re about today! But the moderator is keeping the subject on the one at hand, despite the frenzied concern of the United PR flack who appeared over my shoulder.

Overall I have a limited understanding what he means by his explanation of the universal consumer-focused system. His slide is called “A modern vision for the integration of Comprehensive Assets focused on the individual” —  I think he needs a new copywriter. But the key idea is the main hope that consumer directed care will work. 

On the other hand, despite the criticism of United and McGuire in today’s news, at least compared to may corporate CEOs of late who also have huge paydays he at least has led a company that has consistently increased earnings. And frankly it’s not exactly his fault (or that of other insurers) if their customers have let them get away with lowering their medical loss ratios year after year.

John Brennan,Vanguard Chairman & CEO,—  believes that the consumer is smart. The defined contribution market  has grown and they’ve grown with it. There are 4 main needs to serve consumers. 1) Effective candid communication and education…keep it simple. 2) Technology (especially real time information) 3) Providing choices 4) Willingness to adapt and evolve.

Jim Guest, Consumers Union—test products, get it out to consumers in plain English.  They’re pushing for that in health care. what have they learned? Give the public a consistent format so that they can compare one to another to another. Like a nutrition content guide on the back of food products, and the same template on credit cards. they are starting to do that with drugs, at bestbuydrugs.org Insurance institute for highway safety crash test cars and gives that information out—in the mid 1990’s half the side crashed vehicles ended up in marginal category, now it’s barely any 10 years later. Finally lets get Medicare data about physicians out. Business Roundtable, consumer groups and others all want to get that information out.

Michael asks….

Should you move to consumer directed health plan?

John Brennan—We offer consumer plans, but not very popular.Need to do a better job explaining it. Only 10% at Vanguard have chosen it so far. He talked to a lawyer/accountant this morning who couldn’t understand what the option meant.

Jim Guest—Consumer’s union supports consumer informed health care—consumer driven healthcare seems to mean a different thing. The consumer voice hasn’t been strongly heard. more driven by industry than by consumers. They don’t offer a consumer driven option

Why do I need a HDHP to take part in this wonderful consumer information?

McGuire—you don’t need one. We need a system that people can access. But some of these elements have no applicability for some portions of the population. and it’s a disservice to put the wrong people into that situation. But the consumer support is necessary for everyone.

McGuire—Price alone is not a good guide, Need the cost over a population over time….

Are we going to have another panel in 5 years with another buzzword like we did with managed care/capitation?

McGuire—managed care advocates weren’t very insightful! I would never had said that! this time there are fundamental issues that will be long lasting —information is fundamental, technology will be fundamental, so its a different situation.

Guest—whatever direction this goes, consumers will have to be put in the legislation/business forefront. that genii is not going back in the bottle.

Now we’re getting into some meat. Mark McLellan head of CMS is on the same panel as Uwe Reinhardt. Bob Galvin from GE is the moderator. Two main issues are whether price controls work, and how we determine coverage…

Mclellan—Price controls aren’t working well in Medicare, and its no good just setting prices, as the level of the price doesn’t matter when you see massive differences in utilization

Uwe agrees. He thinks that at the moment we’re not ready for price controls. Pharm might force up prices using its political power, OR the Congress facing up to budget realities might price below marginal cost.

The audience here, not too surprisingly felt that there shouldn’t be price controls on pharma and medical products. (77% to 22%).

But now the harder question. How do we deal with coverage?

Ask the audience….If a new treatment extended life for 6 weeks, should it be covered 8%? Not Covered at all 22% or not covered but available for people to pay if they can afford it 68% 

Uwe says that he offered Manhattan Inst, and the WSJ Editorial Board the same choice.  They haven’t answered him, because they won’t put their name to it so far! Other countries do it the other way; it’s not covered, (I guess you can pay retail).

Mark says, those drugs are covered under part B in Medicare, and we’re going to move to performance….but essentially he can’t really answer the question. Uwe says that at some point there has to be a price for a life. In England a QALY is 50,000 GBP.

Question—How do we continue to encourage innovations in new technologies such as new equipment and devices and yet address the current irrational situation in which sales commissions and physician ‘incentives’ can and often do exceed equipment actual cost and physician payments for installing said devices?

Mark—At the moment we are paying for volume. We need to change the way that we pay like the Medicare demos to pay based on quality, and that changes incentives. Then you’ll see investment in EMR, and avoid the incentives that are a consequence of the payment system we have set up.

Uwe—one idea is to treat based on probability of paying for likelihood to getting sick over a life cycle. It doesn’t pay an insurer to invest money for long term pay-off. We need to think how that sort of health maintenance to be financed. At the moment Duke is trying it but no insurer is prepared to fund it.

Mark—need to learn more about the value of treatments when they’re on the market. As genomics comes down the track we’ll need to know more and more about this. To do that we need better data systems of real life clinical use.  Now we’re seeing some movement from private sector to find out more about that.

Uwe—that information must be publicly funded and supported; But at the moment there’s almost no government funding of that information in health services research. Doesn’t make sense for all private sector to reinvent the wheel. Government has to help fund this. Government has to spend more, especially on IT.

Mark—well we are spending “some” more. And there is some collective private (plans and employers) efforts on looking into this

Uwe—what have the private employers done?

Bob G—Not enough (and that from the head of this at GE!). We need to do more, but for some populations (the elderly) the government must do more….

Uwe—Mark, how can we get more money for IT? Who’s rear end do we have to kick?

Mark— most potential for supporting IT comes from those initiatives that pay for more lower cost of care. Want to identify what constitutes high value health care and paying more for it. That’s the best avenue. Most IT investment he sees is in software to maximize billing in Medicare. He wishes that there was relatively more put into clinical information systems.

Mark’s question to Uwe—What are we not thinking about? What’s new that we should be looking at?

Uwe—we need to make up what’s after this! You know there’s something after consumer care!  Perhaps the answer is figuring out via psychology how people make health care decisions. What do they use to judge those decisions

Mark—Now have some 20 measures in Medicare. But that might be a universe of hundreds of dimensions…how do we turn that into information that consumers can use….

Despite some obvious political differences with McLellan, he is a very, very polished presenter, and very bright. And Uwe is of course great…..at TCHB we ♥ him.