By Tommy G. Thompson, Independent Chairman, Deloitte Center for Health Solutions, Former U.S. Secretary of Health and Human Services
For too long, U.S. health care has operated on the basis of payment simply for services provided. Health plans and providers usually were immune from consumer questions about safety and quality of care. But it's time to transform the American health care system from curative to preventive—one that delivers safe and effective care to all Americans and rewards innovation in how it's accomplished. The Institute of Medicine tells us as many as 98,000 deaths and one million injuries a year are due to medical errors and preventable adverse drug events. Consumer education, price transparency, information technology, and coverage for the uninsured are the tools required to reduce those staggering numbers and build a vastly improved health care system.
A primary reason that U.S. health care costs are rising at an unacceptable rate is that Americans simply are unhealthy. Either they are overweight, or they smoke, or they don't exercise enough. Seventy-five percent of the costs of American health are from preventable chronic diseases. To fix the problem, key industry stakeholders—employers, physicians, health plans, and the government—need to educate consumers about the importance of adopting healthier lifestyles, preventing chronic diseases, and effectively managing the diseases they already have.
Employers, who currently are leading the battle against rising health care costs, are taking constructive steps: implementing wellness programs, providing incentives for healthy lifestyles, encouraging prevention, and instituting care management for unhealthy employees. I've been all over the country talking to CEOs and CHROs and, from what I can tell, focusing on preventive health and chronic illnesses ends up improving the bottom line.
Price transparency can support consumer education and empowerment, and serve as a catalyst to health care transformation. The cost of health care in the U.S. is about $7,000 per person annually, yet most consumers don't know how much they pay for the services they use. Employers and health plans say consumers with access to cost information will be more discriminating in their health care purchases. A recent report by the Deloitte Center for Health Solutions, part of Deloitte & Touche USA LLP, discusses how price transparency—in tandem with quality service—is a key building block of a more responsive and accountable health care system. The Deloitte report evaluates the status of current efforts to improve price transparency in the U.S. health care system. It also underscores the key role that state governments can play in advancing transparency by using their considerable leverage as regulators, employers, payers, and users of the health care systems they govern to assure fair play in the disclosure of prices to protect consumers.
Widespread implementation and adoption of health care information technology (HIT) systems such as health information exchanges (HIEs) and electronic health records (EHRs) can facilitate price transparency, as well as lower costs and improve quality. However, funding and adoption issues must be addressed before advanced technologies will enable our physicians to deliver enhanced care to improve patient safety. Few of today's health care providers can afford to make extensive investments in HIT. It also is a low priority in government funding, even though HIT is recognized as vital to improving the country's health care system. In addition, adoption rates are low, particularly among physicians.
It is time for the U.S. health care industry to take serious steps to move HIT forward. New, creative funding sources need to be identified to address the significant costs associated with updating hospitals' IT infrastructures and implementing integrated, state-of-the-art HIT systems. Doctors, nurses, and technicians must learn how to use new technology and incorporate it into their daily work processes. In this way, we can be sure that technology is having its intended effect—improving health and saving lives.
Finally, no discussion of transforming the U.S. health care system can be complete without addressing the issue of providing care to America's more than 45 million uninsured. The nation cannot continue to ignore its growing health care financing crisis and hope for a "silver bullet" government cure. There is none. Any real and lasting solution will require broad-based collaboration and a focus on specific issues and possible responses, including regulatory and tax reform and development of missing health care informatics.
In four states, plans for a universal care program have been announced; in 21 states, legislatures have been informed that 50 percent or more of new revenues coming to the state will be required to fund health care obligations. I suggest that each state be required to create uninsured pools and open them up for bids from health plans, without restrictions or mandates. Additionally, industry stakeholders should engage in a dialogue around innovative approaches to health care financing to increase access to health care for those who need it most.
I'm a firm believer that every sector of the health care system not only can be improved but also must be improved. Transformational change requires leadership and collaboration among all health care industry stakeholders to achieve the ultimate goal of better health care at a lower cost for all Americans.
The views presented in this commentary are those of the author and should not be attributed to The Commonwealth Fund or its directors, officers, or staff.