Hawaii balances two bills: This is health, not sick, care reform

Beth-Ann Kozlovich

HONOLULU—It’s almost June and with the beginning of this summer also comes the first changes under the Patient Protection and Affordable Care Act. By fall, more provisions kick in, although the majority of national healthcare reform will be phased in over the next four to 10 years. Implicit in the new law is a greater emphasis on patient-driven care, which will challenge our relationships with healthcare providers and personal responsibility for our individual wellbeing.

“Doctor, fix me” is over. The roll out of federal healthcare reform in Hawaii will also be complicated by how it aligns—or doesn’t—with Hawaii’s Prepaid Healthcare Act.

“Regulations have to be promulgated, interpretations have to be made, challenges have to be addressed, and we have all that in front of us,” according to Fred Fortin, Senior Vice President of Hawaii’s largest insurer, HMSA. Fortin says HMSA will be compliant with both laws and understands there will be some overlap and potential conflict. He notes that it may be until 2014 when the insurance industry segregates into three distinct markets—government, large-medium group, and exchanges—before we have concrete answers showing potential, comparative losses against gains between mandated state healthcare and the national reform.

“A lot of the [federal] act is about insurance reform and access to covered care,” says Chuck Sted, President and CEO of Hawaii Pacific Health (HPH), which includes Kapiolani, Pali Momi, Straub, and Wilcox Memorial. “We saw this coming about eight years ago so we [HPH] put in an electronic medical records system and we’ve taken significant steps to take cost out of healthcare. We will eventually be mandated to change how healthcare is delivered in Hawaii.”

From the viewpoint of an average doctor in practice in Hawaii, the new healthcare reform is not going to have dramatic impact. Bill Donahue, executive director of Hawaii Independent Physicians Association with 800 doctors in its membership, believes that “following on the heels of reform will be changes which will push to the forefront new models of primary care medicine, change the way primary care is reimbursed, and change how our system educates docs.” More money will shift to primary care residency programs, he says, and over the next few years, “the investment that physicians, hospitals, and insurers have made in medical information technology will begin to show an impact in quality, coordination, and, ultimately, the cost of care.”

What we don’t seem to be collectively doing is taking advantage of the control we can exert over our own preventative healthcare.

Sted says that’s already happening and cites an HPH pilot program in partnership with HMSA focusing on diabetes and congestive heart failure.

“The monthly data shows patients’ compliance with tests they should have, plus the results of timely interaction with their physicians, are beginning to also show actual improvements in patients’ health profiles,” Sted explains. “The enabler to the whole thing is the electronic medical records systems connectivity between the doctor and the patient.”

“That’s one of many partnerships and innovations across the state,” Fortin comments. “Look at the $16 million Beacon grant on the Big Island to build a coordinated tech system there.”

Hawaii County’s Beacon Community Consortium was one of 15 awardees granted monies from the U.S. Department of Health and Human Services earlier this month.

“The entire industry has come to realize we have to bring healthcare into the 21st century as far as technology, models of care, and appropriate measures for ensuring better outcomes for care are concerned,” Fortin says.

For many seniors, technology isn’t the key to better care. With Medicare reimbursements recently slashed and additional cuts to come, some docs are simply bailing out of the system and Donahue doesn’t see any way around the fact that not every doctor can serve all populations.

“There will be some attrition of physicians,” Donahue says. “None of the docs is getting rich on Medicare or Medicaid.” Donahue is hopeful that primary care medicine for Medicare and Medicaid plus some payment reform from the federal government will be sufficient for docs to stay and serve those covered under public programs.

Still, that presents a paradox for Hawaii. With an aging population, an existing shortage of doctors, nurses, and other medical professionals, retirees who have found their nest eggs hammered by the recession, and the already escalating number of Medicaid and Medicare patients, can reform provide a financial incentive to serve these groups? Sted says there’s a way: Combine reimbursements from HMSA or other commercial insurers plus federal and state monies.

“We’re in discussion with HMSA about this,” Sted explains. “We’re moving away from piecework, fee-for-service reimbursements. We need to move to aggregate funds, distribute them, and create value with the system. Put aggregated funds into salaries and recruit new docs. We need a new way of reimbursing—a gainshare pool.”

“We have to make this work in Hawaii’s economic reality,” adds Fortin. “Hospital inpatient costs rose 14 percent over the last 12 months and that’s compounded over a similar number the year before and the year before that. Outpatient costs rose 15 percent in the last 12 months and medical costs rose 10 percent in the past 10 months. These are extraordinary increases.”

To cope and even prosper, Fortin says old methods of cost cutting and deal making are changing. The old thinking meant besting opponents—seeing them as opponents in the first place—and negotiating to corral the best deal. And now?  “It’s no longer okay for this to be so politicized and an economically competitive struggle for the players,” he says. “That’s over.”

“This is a different time,” says Sted. “No one on the playing field that I can see right now is resisting. In the past, when we’ve talked about changes in healthcare, everybody has had their ox that they didn’t want gored. And a lot of constituencies held their ground and it slowed us down to make the changes we needed to make. Now everyone seems to be supportive of what they can do to be a part of change process.”

Donahue is more circumspect: There will always be some winners and losers in the system. “One person’s waste is another person’s profit margin,” he says. “We’re going to have to learn that. But there is a new willingness in Hawaii that we haven’t seen ever. People understand the current cost trend is unsustainable.”

Yes, people do. It hits us squarely in the wallet each month. As we complain and engage in rapid fire finger pointing, what we don’t seem to be collectively doing is taking advantage of the control we can exert over our own preventative healthcare. There are plenty of ads admonishing us to exercise and eat healthy food, bookstores and online sites spill over with information, but look around—just who is paying attention to this? Moreover, who is acting on it?

“It’s an ongoing struggle, more lip service than reality,” admits Fortin. “Most of us are in denial about how our behaviors affect our health. ... There has to be something of a reward for people who take caring for themselves seriously.”

The reward obviously isn’t just good health. Maybe the federal provision eliminating co-payments and deductibles for preventative care may do it. For Sted, it has to go deeper: reduced or no co-pay for healthier individuals, perhaps different layers of premiums for healthier employees.

Some of us are born with better genes and get off lucky. Some of us have more resources than others. Yet no matter what our circumstances, some of us enhance the chances of causing harm to our bodies and let others of us pick up the tab. It’s the nature of the system we’ve had up until now.

With the Patient Protection and Affordable Care Act, the uninsured are the really big winners and, yes, we’re all going to help pay for that. But there is a win for everyone. As healthcare reform impacts our lives over the coming years, and we in Hawaii get potentially caught between two healthcare acts, the one thing we all need to remember is that this is health, not sick, care reform. The underlying responsibility has shifted and will continue to shift right along with costs we’ll pay for what we get. We must take whatever health we have and do the best we can with it. Whole patient care starts and ends with the patient.

The entire interview with Chuck Sted, Fred Fortin and Bill Donahue is on the Town Square archive at hawaiipublicradio.org.