It’s all about debt, according to MedTrend Inc. President Maureen Swan, who on Tuesday told the executive leadership session at a Tennessee Hospital Association gathering that local debt, national debt and international debt is the fundamental reason for the nation’s health care crises — if not directly, then indirectly.
Swan spent more than two hours explaining her reasoning to a packed convention center room at the Gaylord Opryland Resort & Convention Center, and the silence from the audience spoke volumes. She called today's dynamic the great debt super cycle and pointed out that employers and consumers are maxed out all the way around. There’s no room for movement. Historically, this has not been the case. Americans used to save; we no longer do.
Since 1971, the nation’s economy has been built on exponential debt growth. This has occurred despite lower real wages, which didn’t have their expected adverse effect because money was easy to acquire, homes were easy to buy and the values of those homes continued to increase.
Similarly, U.S. health care spending continues to rise and shows little sign of stopping. The bottom line: None of this is going away. Swann said it’s mathematically impossible for our current construct to continue and the health care sector will bear the brunt of whatever it takes to fix because the dollars now allocated to the sector via Medicare are astronomical. Government payments to providers will continue to go down.
So what's a health care executive to do? Redesign and redeliver everything, she said. Reduce costs, improve value.
Swan offered some examples: Lowe's Corp. has contracted with the Cleveland Clinic to provide lower costs, in bundled payment fashion, for heart surgeries provided to Lowe's employees. UPS has initiated a program that flies its sick employees to surgery centers anywhere in the country for procedures at “rented” surgery center facilities and will bring the employees’ doctors along for the ride.
For hospitals, the biggest challenge is what to do about Medicare rate reduction. Swann’s view is that the upcoming presidential election is largely irrelevant to all things health care. The budget crisis is a health care crisis and one can’t be solved without the other.