Industry Insights

March 13, 2014

LHC in DC: ‘No matter how painful it is for your individual company or for the industry’

LHC in DC: ‘No matter how painful it is for your individual company or for the industry’
by Nashville Health Care Council | Mar 13, 2014

Published March 12, 2014 by

Editor’s note: This is the second post from the Nashville Health Care Council’s 2014 Leadership Health Care Delegation to Washington. Click here for other entries from the current and past years’ visits.

Leadership Health Care’s annual two-day delegation to Washington, D.C., came to a close on Tuesday with a morning of meetings featuring key policymakers. Following a breakfast reception with Sen. Lamar Alexander (R-TN) and Sen. Bob Corker (R-TN), the nearly 100 delegates heard remarks from Rep. Jim Cooper (D-TN) about the long-term outlook for health care spending growth. Rep. Cooper challenged delegates to take leadership roles in helping to solve the problem.

If health care spending growth continues, it’s going to take every tax dollar in America to pay for social security, Medicare and Medicaid by 2040, he said -so there won’t be anything left over for things like defense.

Sen. Rand Paul (R-KY), right, noted in his remarks that as the Baby Boomer generation ages, there are fewer workers paying in to the Medicare system, resulting in payment squeezes to hospitals and physicians. Additionally, he argued that the health care system is broken “because the consumer doesn’t care about the price of health care and neither does the provider. No one shops based on price,” he said. “Market forces have been largely removed from health care services leading to an explosion of costs that will be passed on to future generations without significant reform.”

However, Cooper noted that several factors have led to a slowdown in health spending growth in the past four years – including the slowdown in technology spending, higher cost sharing among consumers and increased provider efficiency around issues like hospital readmissions – making a material positive impact on the federal budget.

“We’ve had some good years,” Cooper said. “We’ve got to make it continue, no matter how painful it is for your individual company or for the industry.”

Rahul Rajkumar, MD, senior advisor for the Centers for Medicare and Medicaid Innovation, spoke to delegates about some of the 20 payment and service delivery model programs that the Innovation Center is testing across the country in an effort to reduce costs while improving quality. Noting the decline in health care spending, he said, “We now feel fairly confident that these changes in health care payment and delivery are beginning to bear fruit.”

In addition to slowing in cost growth, he highlighted the 1.5 percentage point decline in the 30-day hospital readmission rate since January 2010, as well as the 40 percent reduction in central line infections as evidence of improving quality as the industry experiences a paradigm shift around new quality incentives.

The Accountable Care Organization model championed by the Innovation Center is also showing positive results, he said, citing an independent evaluation that found the Pioneer ACOs had gross savings of $147 million and beat quality benchmarks on all of 15 published measures.

Looking ahead, Rajkumar (pictured at right) urged delegates to look at the changes they can make to continue building on the successes to date – such as focusing on better health, better care and lower costs; engaging in accountable care; investing in quality infrastructure; and testing new models and innovations.

Cooper challenged delegates to turn Nashville into “more of a health policy center” by focusing on finding solutions to the problems and hurdles the industry faces.

“This is not someone else’s problem; this is not another generation’s problem,” Cooper said. “This is why you, who are currently in positions of power and influence in your companies, need to figure this out and need to have business plans that make the problem better.”

Photos by Keith Mellnick

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