NCW health care gains a new vision
Wednesday, November 23, 2011
The vision of how our regional health care system may evolve when Central Washington Hospital and the Wenatchee Valley Medical Center join forces is beginning to emerge.
On Monday, the medical center’s Dr. Peter Rutherford and Dr. Stu Freed shared the framework of an approach that they hope will put North Central Washington in a position to become a national model for high-quality, low-cost health care.
They made a presentation to a group of executives at a seminar sponsored by McQauig and Welk at the Riverside Playhouse.
The merger, which includes creation of a new foundation to manage the for-profit medical center and the not-for-profit hospital, should create significant savings that will lower the cost of health care in the valley.
Part of the savings will come from eliminating duplication of services. Both institutions have executive teams, laboratories, emergency rooms, operating rooms, and information technology systems. Eliminating redundancy should drive costs down about 9 percent, said Rutherford.
But a potentially bigger savings, said Rutherford, can be realized by focusing medical resources more strategically on prevention, particularly in high-cost categories like diabetes. Clinical trials that the medical center conducted showed that home-based monitoring of patients with chronic health issues reduced costs 15 percent.
The local cost of care for Medicare patients is extremely competitive, averaging $5,700 compared to $8,400 nationally.
The current system of fee-for-service creates perverse incentives by rewarding providers for doing more procedures. Where health care reform appears to be headed, said Rutherford, is similar to the once-despised managed care system of the 1990s but with two critical differences. Quality standards would be established and there would be a severity adjustment, which would pay providers higher fees to cover extremely ill patients. The hope is that would fix the abuses under managed care, such as companies dumping ill people.
Rutherford and Freed said the medical environment here, with a collaborative medical environment and geographic isolation, provides an opportunity to build something special.
Depending on how the health care reform rules are written, this newly integrated health care organization may qualify as an Accountable Care Organization, in which Medicare would establish cost benchmarks and then split the savings with organizations that beat those standards. This would provide a strong incentive to lower costs, something that is sorely needed.
There are other ways in which health care costs can be reduced. This involves not only providers but also patients. Creating incentives for individuals to reduce their insurance costs by providing rebates for healthy lifestyles could make a difference.
Rutherford and Freed make an awfully good case for the value of integrated health care. Rutherford hit the nail on the head when he said that if we wait for a solution from Washington, D.C., we won’t like the outcome. I applaud their willingness to take the initiative, build on their unique strengths and strive for an approach that provides wide access, lower costs and high quality.
For the moment, we are stuck between the old system and the controversial health care reform. As Rutherford said, it’s like having one foot on the dock and another on the boat. The trick is knowing if and when to take the leap.
May fortune favor the bold and the creative.
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