Medical Device Daily Washington Editor

WASHINGTON — The idea of agreeing to disagree is often a proxy for agreeing to dig in and budge not one inch.

But when it comes to healthcare, the cost of staying put means there isn't much traction. This was the central message of one of the panels held on the second day of the World Health Care Congress, as three actors on the healthcare stage discussed ways for bringing health insurance to all Americans, a view that seems to be a growing, though still debatable, consensus.

Three panelists approached the subject from very different starting points but came to conclusions not as sharply distinct as past arguments on the subject.

Steven Burd, president/CEO of Safeway (Phoenix, Arizona), the large grocery store chain, said that Safeway spent $1 million on healthcare in 2005, more than 120% of the company's net income.

And, Burd said, "I don't believe that you can solve the coverage problem without solving the cost problem," arguing that a nationalized, single-payer system would "move us further away from a more effective, market-based solution."

He also pointed to a well-known rock and hard place of modern healthcare: The uninsured often end up in the emergency room for treatments that could have been cheaper and less painful if handled sooner; conversely, he said, "heavily insured workers often treat healthcare as a free good" because the cost is largely invisible to them.

Burd also argued that from 50% to 70% of healthcare costs are the results of individual behaviors, primarily those that are negative.

"More insurance policies need to reflect behavioral differences," he said, presenting figures showing that the cost of healthcare for smokers is $16,000 a year higher than for non-smokers.

Safeway's employee plan for non-union employees, Burd said, drove down costs by 15% by including incentives for healthier behaviors, and the savings allowed the provider to drop its premiums. The plan calls for more accountability on the part of the patient and provides 100% coverage for preventive care.

Burd echoed the claims of previous presenter, George Halvorson, CEO and chairman of Kaiser Foundation Health Plan (Oakland, California) that a small set of diseases account for a large chunk of the U.S. healthcare tab. Burd said that 74% of costs concentrated in "the big four," which are cancer, cardiovascular disease, diabetes, and obesity-related disease, while Halvorson had i.d.'ed five concerns, diabetes, asthma, congestive heart failure, coronary artery disease and depression (Medical Device Daily, April 24, 2007).

And Burd noted another behavioral patient issue.

He cited national statistics regarding patient compliance with a doctor's recommendations, showing that it's not good: 32% coronary artery disease non-compliant and 55% more or less ignoring their doctor's recommendations.

"If we can encourage compliance, we can have an effect on those chronic diseases," he said, going on to cite five key principals, that are necessary to reform healthcare.

• delivery of care has to be market-based,
• individuals must accept more responsibility for their own well-being,
• financial assistance has to be available for low-income individuals,
• lower premiums are needed as behavioral incentives,
• and there should be "equal tax treatment," meaning removing the payroll tax exemption for healthcare premiums.

"There's a real opportunity to cut 25[%] to 50% of healthcare costs," reduce them to 7% of GDP and make the U.S. economy "more competitive again," Burd said.

Also presenting at the congress was Phil Bredesen, Governor of Tennessee, discussing his state's attempt to rein in costs while also expanding coverage.

He stressed the importance of keeping "a spotlight on the fact that the fundamentals . . . work against what we want to achieve." And he likened the current system to shopping for groceries, not at Safeway, but at a store where the consumer does not have to pay.

"In that environment," he said," a box of oatmeal would cost $20."

Bredesen said that administrators in his state "found most of the uninsured worked for small businesses, so we tried to put together a targeted" program that started out with a fixed amount of money and figured out how much coverage it would buy.

However, he said that most prospective users "weren't very interested in paying for some catastrophic event in the future," but were more keen on how to pay for a doctor next week.

"It's a low-cost plan, about $150 a month," he said, and the cost is shared equally between state, employer and employee. The plan covers mental health and "it's portable, it's owned by the individual" and available to companies of less than 25 employees.

Reed Tuckson, MD, executive VP and chief of medical affairs at UnitedHealth Group (Minneapolis), said he was impressed by "the absolute urgency to move on [insurance reform] and the sense that we're all in this together."

He said that UHG approached a number of organizations from across the political spectrum about developing a position on universal health coverage.

"To our very great surprise, through a very careful search for common ground," the healthcare services provider was able to bring together "16 organizations who have no history of working together on anything [but who] were able to find common ground to move things forward" to insure the uninsured.

Tuckson said that the group published a position paper on universal insurance in January, but that the effort required some flexibility.

"In short, what we did was everyone had to look for their second best choice" in order to come up with a position that everyone agreed upon. However, he did not advocate a radical restructuring of healthcare.

"Let's build upon existing public and private institutions," he said, with an appropriate mix of incentives and tax credits to motivate individuals "to act appropriately."

Tuckson warned against too much thinking and not enough acting. "Paralysis from analysis, we don't need," he said, adding that if every minor element has to be solved before reforms are in place, lives will be lost.

However, the public has a place the debate as well, Tuckson said, and that Congress will find it easier to move when "the American people give Congress some cover. "The American people are going to have to come forward" and exhibit some flexibility regarding their healthcare coverage, he said.