November 27, 2024 • 21 mins
If you’ve ever received medical care, you'd likely agree the cost of care can be expensive. According to the National Health Expenditure Accounts, U.S. health care spending grew 4.1% in 2022, reaching $4.5 Trillion.
In this replay of one of our most popular episodes in our "The Toughest Questions in Health Care" series we're asking the question, "why is the cost of health care so expensive?" ChristianaCare Chief Financial Officer Rob McMurray and ChristianaCare Chief Population Health Officer Dr. Chris Donohue-Henry share insight on health care economics. Hear how challenges are being met with pioneering solutions to reduce cost while simultaneously boosting the quality of care.
Rob McMurray is the Chief Financial Officer, responsible for the direction and oversight of all financial operations at ChristianaCare. He also has oversight of supply chain operations.
Dr. Christine Donohue-Henry, M.D., MBA is the Chief Population Health Officer at Christiana Care. She is also the President and CEO of eBrightHealth ACO. Prior to her current role, Dr. Donohue-Henry was the Chief Medical Officer, Community Care at ChristianaCare from 2017 to 2019
Links
- ChristianaCare Price Transparency
- ChristianaCare ChargeMaster
- Delaware Medicaid Partners
- eBrightHealth ACO
- National Health Expenditure Data
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Hello everyone, I'm Megan McGerman.
Speaker 2 (00:02):
And I'm Jason Tokarski.
Welcome to For the Love ofHealth brought to you by
Christiana Care.
Speaker 1 (00:07):
We're taking a few-week break from new content,
so we're bringing back some ofour most popular For the Love of
Health episodes.
Speaker 2 (00:14):
Today we're revisiting one of our toughest
questions why is the cost ofhealth care so expensive?
With Dr Christine Donahue-Henryand Rob McMurray.
Speaker 3 (00:25):
Christine Donahue-Henry and Rob McMurray
Hospitals will lead the way indriving costs down for overall
healthcare spend into the future.
Speaker 2 (00:32):
You're listening to For the Love of Health, a
podcast about delivering careand creating health, brought to
you by Christiana Care, and nowhere are your hosts.
Speaker 1 (00:41):
Hello everyone, I'm Megan McGerman.
Speaker 2 (00:43):
And I'm Jason Tokarski.
Welcome to another episode ofFor the Love of Health brought
to you by Christiana Care.
Speaker 1 (00:48):
If you've ever received medical care, you'd
likely agree the cost of carecan be expensive.
According to the NationalHealth Expenditure Accounts, US
health care spending grew 4.1%in 2022, reaching $4.5 trillion.
Speaker 2 (01:08):
It's a complicated topic with a lot of contributing
factors.
So for the fifth episode of ourtoughest questions in
healthcare series, we're askingthe question why is the cost of
healthcare so expensive?
Speaker 1 (01:17):
Here to help us tackle that question are
ChristianaCare Chief FinancialOfficer Rob McHenry, and
ChristianaCare Chief PopulationHealth Officer, dr Chris
Donahue-Henry.
Rob and Chris, thank you bothso much for your time today.
Speaker 3 (01:29):
Megan, thanks.
Thanks for having us here.
Yeah, we're glad to be here.
Speaker 1 (01:33):
Obviously, the cost of care is a complex topic,
hence why it's one of ourtoughest questions in healthcare
.
How can we explain it to thegeneral audience so that they
truly understand how cost ofcare works?
Speaker 3 (01:46):
You know, when we talk about the cost of care,
really what we're referring tois health spend and those
numbers you mentioned a momentago refer to national health
spend.
There's a lot of components ofthat.
Hospitals, which is what we aremost familiar with.
Hospitals represent about 30percent of that spend.
So across the country we maythink when we think about health
care, we think hospitals.
Right, because it's what weassociate with, we see them, we
(02:07):
go to them, we know where theyare, they're important to us as
a community.
Hospital care is only 30% ofthat spend.
Physician care is roughly 14 to15% of the total health spend.
So combined hospitals andphysician care is less than 50%
of the total spend.
So it's really important tomaybe unpack what those numbers
(02:29):
are and those increases.
You mentioned a 4.1% increaseand really what's interesting to
me, when you look at the dataand the four years leading up to
the pandemic, 4.1% is lowerthan any of those year increases
.
When you look at, then, thedifferent types of spend,
hospital spend went up about2.2% this past year, so 4.1% in
(02:52):
total.
2.2% was hospitals and I thinkphysician was closer to 2.5%.
So 45% of the total spendincreased between 2% and 2.5%.
So the other 55%, what's inthere?
That's really important tounpack as we want to analyze
spending.
So what might be in there?
(03:13):
You have things like skillednursing facilities, home health.
There may be insurance costs.
Pharmaceuticals is in there,right, and when you look then at
other increases, you see thatthis past year is in there,
right, and when you look then atother increases, you see that
this past year pharmaceuticalsincreased eight and a half
percent.
So it's important, while wetalk about an important spend
like healthcare across thecountry, to unpack those and
(03:35):
then really see what the driversare, because that helps shape
our strategy at Christiana Careand define some of what we're
going to do about it.
Speaker 1 (03:44):
So if those are the components of cost, how is
healthcare paid?
Speaker 3 (03:48):
for In several ways.
There is insurance.
Most of us who are employedhave some type of employer
sponsored insurance.
There's also governmentalpayers, like Medicare or
Medicaid, and then there's asmall portion of the country
that goes without insurance.
So those are the, I'll say, thecategories of insurance, or how
healthcare is paid for.
Speaker 2 (04:08):
Obviously, there are multiple payers involved when it
comes to paying for healthcare.
What is the current mix ofpayers?
What does that look like in thesystem?
Speaker 3 (04:16):
At ChristianaCare, what I can speak to, what we
reflect, is somewhat what yousee across the country.
Two-thirds of our payer isgovernmental programs, medicare,
medicaid.
About 30% is commercialinsurance or employer-sponsored
insurance.
So if you're an employee, youhave an employee health plan
that typically carriescommercial insurance.
(04:36):
That's about 30% and then theremainder again is those who may
not have insurance.
And what's really important tonote from my perspective is to
think about those differentpayer categories.
So for ChristianaCare,two-thirds of the work our
caregivers do taking care ofpatients, two-thirds of the work
(04:58):
is for people who havegovernmental insurance, medicare
or Medicaid predominantly.
And why is that important?
Well, when you think aboutthings like the cost of care and
the cost to provide care,medicare and Medicaid on average
, this past year raised ourrates, our reimbursement rates,
(05:19):
less than 2%.
So the cost of care toChristianaCare is really
important and we have a lot ofstrategies in place driven at
the quality of care and the costof care.
Speaker 4 (05:30):
That's exactly right, rob.
In fact, we've had our MedicareACO since 2016, really focused
on our Medicare patients.
Similarly, our Medicaid ACOlaunched in 2021.
And that is really an alternatepayment model by which we can
better address a patient'squality outcomes and total cost
(05:51):
of care, really by focusing oncare coordination and how we
transition patients through thesystem and, ideally, really care
for them in the outpatientsetting.
Speaker 1 (06:02):
So those ACOs, accountable care organizations,
what kind of success have youseen with?
Speaker 4 (06:06):
those.
So in our Medicare ACO we havesaved CMS $54 million since we
started and then similarly withthe Medicaid ACO.
We actually started with asignificant downside arrangement
with Medicaid in 2019.
And through now from 2019, wehave saved the state $7.7
(06:30):
million.
Speaker 2 (06:30):
So what are the key drivers of costs in healthcare
plans at this point?
Speaker 3 (06:35):
You know, the drivers for the cost of anything really
come down to two broadcomponents.
There's the cost to providethat service, whatever it may be
, and then there's the demandfor that service, the usage of
that service, or in healthcare,what we like to say is the
utilization of those services.
That's really important.
When we investigate the cost ofcare and why healthcare is
(06:56):
expensive, how does that playout?
Well, you think about a patient.
A patient has insurance,whether it's governmental or
employee-sponsored, whatever itmay be.
They're making decisions.
They're making decisions eitheron their own or, preferably
with the advice of a physician,on where they're going to get
care, what care they're going toget and when they're going to
(07:18):
get that care.
Those three pieces right, welike to say right care, right
place, right time.
It's really important.
It's not a cliche, because thatwill drive costs of care.
Where I think it's important toinvestigate or consider is what
drives human behavior.
When you look at things likeutilization health plans that do
(07:45):
not have that creativity builtinto their health plans.
There are no incentives ordisincentives for their
population and, as a result,their experiences are higher
cost of care, they have higherutilization, they have a higher
cost trend and ultimately, theyhave less healthy employees and
dependents and it's because theyhaven't designed their health
plan accordingly to drive theright results.
(08:07):
You can put design functions inplace so that employees,
consumers of care, will likelysee their primary care physician
, maybe on an annual basis,depending on the features of the
plan.
Maybe they'll have programslike tobacco cessation, for
example.
Maybe there'll be disincentivesthat will essentially pass more
(08:30):
of the cost of an emergencydepartment visit to that plan
participant or that employee,because you don't want somebody
that doesn't need to go to theemergency department to go to
the emergency department Withour benefits team here at
Christiana Care.
Speaker 4 (08:44):
we sat down probably three years ago and talked about
the health risk assessmentsthat many employers do for their
employees and the fact thatthere's really no evidence to
show that that drives down thecost of care.
What does is connection to aprimary care provider.
It improves screening forhealth conditions and it
(09:05):
improves the total cost of care.
So we actually changed ourbenefit design here at
Christiana Care in order toincentivize that primary care
visit and saw significantlyincreased use of primary care
through doing that and, as aresult, a decrease in our total
cost of care.
So it absolutely played outhere and continues to.
Speaker 3 (09:27):
So what I hear you saying is by shaping those,
those benefits, the behaviorswe're driving care to a lower
cost setting, avoiding a highercost setting, driving down cost
overall.
And I think what I hear youalso saying is we have healthy
people, healthier people as aresult.
So the benefit of that, theoverall benefit of that, is
(09:50):
healthier people utilizing theright care at a lower cost,
greater productivity out ofthose healthier people as well.
Speaker 1 (09:57):
As you're having these internal conversations,
you're also focusing onvalue-based care.
Can you walk us through that?
Speaker 4 (10:03):
Sure so value-based care.
Can you walk us through that?
Sure so value-based careessentially is population health
, so how you manage a populationof patients and generally we
think about a population as apopulation under a payer so
Medicaid, Medicare or differentcommercial insurance and in that
model there are expectations tomeet, quality measures and then
(10:25):
expectations around total costof care.
So if you're able to decreasecost year over year while
maintaining or increasingquality for that population,
there's an opportunity for boththe health provider and the
payer to share in that savings.
And ideally that share in thesavings that the payer receives
(10:47):
also goes on to improve thedollars back to the employer, so
it helps the affordability ofthat care as well.
Speaker 1 (10:54):
Chris, you are a primary care physician.
How does this improve care forthe?
Speaker 4 (10:58):
patient.
The way that this improves careis it drives primary care docs
to engage regularly with theirpatients, and we talk about not
just visits with patients butthe time between visits when
patients may have questions,care, working to build care
management patients betweenthose visits, which ultimately
leads to better chronic diseasemanagement, better cancer
(11:48):
screening, better control ofbehavioral health conditions,
which also are significantfactors here but overall leads
to improved health of ourpopulations we serve so in the
national conversation ofvalue-based care, I've heard the
term risk associated with this.
Speaker 1 (12:08):
How is it a risk?
Speaker 4 (12:09):
Well, it's a risk in the sense that if you commit to
decreasing the total cost ofcare and you don't achieve a
decrease, then that loss, if youwill, is shared between the
payer and the provider.
Speaker 2 (12:22):
So we've talked a lot about quality of care and
efficiency and wellness.
Dive a little deeper into that.
What are we doing here,specifically at Christiana Care,
to get further into thiscontrolling of cost?
Speaker 4 (12:34):
So over the last many , many years Christiana has been
focused on our inpatientquality, driving to centers of
excellence in our hospital,working with hospital-acquired
infections, zero harm, and thatwork has been tremendous.
At the same time, we've beenbuilding our capabilities in the
outpatient space to bettermanage patients to keep them out
(12:56):
of the hospital.
Our next horizon is really tobring the two together to think
about how the whole carecontinuum is focused on
population health and that meanslength of stay.
How are we getting patients whodo need to be admitted in the
door the right care as quicklyas possible and have them go
home at a reasonable timeframeand really focusing on
(13:19):
efficiency overall and ProjectBedrock.
Speaker 3 (13:22):
Project Bedrock is an enterprise-wide project that is
focused on driving operationalperformance right.
So it's across the clinicalspectrum, it's across the
administrative spectrum, allacross the organization, in
really driving down overall costand looking at ways that we can
(13:44):
be more efficient, changingwhat we do, changing how we
think, changing how we workright to become more efficient.
At Christiana Care we launchedthis project about a year and a
half ago.
We've paired up administrativeleaders with clinical leaders
and gone after projects to saywhat can we do differently about
(14:05):
, let's say, efficiencies in anoperating room?
And we have a very formalized,rigid structure to identify what
these opportunities are.
We measure them and then wereport back.
This happens on a weekly basis.
There's other work streams aswell.
One of those is supply chainright.
So we look at ways that we canget better contracts with our
supplier, providers, useproducts more efficiently and so
(14:29):
forth, looking to driveefficiencies to drive down that
cost.
We've realized we have aresponsibility at Christiana
Care to help control that costof health spend.
Even though the hospitals areonly 30%, we are looking broader
, across all of healthcare todrive that down.
Speaker 2 (14:47):
Recently, ChristianaCare was ranked as the
number five health system byMoney Magazine, which is awesome
.
Congratulations.
Money Magazine gaveChristianaCare an A for price
transparency.
What does that mean?
What is price transparency andhow does that benefit the
community?
Speaker 3 (15:01):
And aside from Money Magazine, there is an
independent price transparencyverification provider called
Turquoise.
Turquoise gave us their highestlevel, their highest rating.
We were the first hospital andhealth system in Delaware and in
the region to get that highestrating.
It is about making transparentthe costs for the services we
provide to patients, so thatcould be on a procedure by
(15:25):
procedure or visit by visit,Whatever those services are.
We've posted those charges andthen mapped it against the major
insurance providers to say thisis what you can expect to pay
when you come to Christiana Carefor that service.
At Christiana Care there's a keyword in our mission and that's
(15:46):
called value, and we want all ofthe people that we serve in all
the communities we serve tounderstand that value, but it's
the value through their lens.
So we'll give them tools likeposting our charges online to
show that transparency.
And we also offer ability forpatients or members of the
community to give us a call andwe have counselors and other
(16:07):
assistants to help withunderstanding what the costs of
care are, because they arecomplex.
It goes beyond pricetransparency but it really
supports it.
When you look at the ways thatwe bill people, we are looking
at friendly billing options, andsome of those are electronic.
So if you go to your doctor atChristiana Care, you can have
the opportunity to have yourbill sent to you via text or an
(16:31):
email.
And what's really interesting inthis, and where I see the value
, is that there's a feedbackloop with this transaction.
So if I'm a patient and I get abill from my doctor, I can pay
it online on my phone and then Ican review or provide feedback
about my visit.
I can provide feedback aboutthe payment.
(16:51):
We had a patient and she usedthis transparent payment system
and provided feedback, and herfeedback was I didn't realize
that I could take advantage of apayment plan for my services.
What really was important andwhat this patient said was I
have trouble paying for my care.
I was going to avoid care.
(17:13):
I was not going to go back tothe doctor because I didn't
think I could afford it, butwith a payment plan, I realized
that I can and I'm going to getthat care.
That's transparency in action.
That is the value oftransparency, whether it's on a
website with charges, whetherit's a phone call or whether
it's the way we can help billpeople and provide that feedback
(17:36):
loop is really important.
Speaker 4 (17:38):
Rob, that is so important.
I can't tell you how many timesI've had the experience of
having a patient bring in a billfrom an inpatient stay and be
very, very concerned about thecharges.
They're not understanding thiswas in the past and another
health system, but it really hasthe potential to get in the way
of healing for that patientjust having been admitted and
(18:01):
really goes such a long way topromoting their wellness long
term.
Speaker 1 (18:05):
And Chris, let's dive a little bit deeper into that
your experience in primary care.
Why is this so important, atthe end of the day, for the
average listener right now?
Speaker 4 (18:15):
I went into primary care because I believe in
prevention, I believe inwellness, I believe in keeping
people healthy.
I believe value-based care isthe way we can do this together
because it allows for adifferent payment model that
doesn't incentivize frequenthospital utilization.
In these type of payment models, it incentivizes us building
(18:38):
infrastructure to keep patientshealthier and out of the
hospital.
Speaker 2 (18:43):
This is part of our series of the toughest questions
in healthcare, and it's notjust about what's happening
right now.
It's using the crystal ball tolook a little bit into the
future.
So what does the future ofhealthcare costs look like to
each of you?
Speaker 3 (18:56):
I wish I had the crystal ball to tell you, but
what I will say is I amoptimistic about the cost of
care going forward.
We shared some stats earlier.
We talked about that 4%increase year over year.
Hospitals and physicians are at2% to 2.5%.
What we are doing is startingto make a difference, as Chris
mentioned a moment ago.
When you talk about value-basedprograms, you talk about the
(19:18):
investments we are making right,whether it's a project bedrock
internally that's focused onefficiencies, or where we are
making investments for places toget care.
What do I mean by that?
We recently announcedneighborhood hospitals that we
are investing in.
So you're talking about a lowercost setting to provide care.
We have partnered with someprivate physicians on ambulatory
(19:42):
surgery centers.
In the area we have three ofthose that takes a surgery that
could be done in a higher costenvironment in an acute care
facility into an ambulatorysurgery center Same quality,
lower cost, better experience.
Right Now, there's always areason to have certain surgeries
in the hospital, those that canbe moved out.
(20:03):
We are doing that.
That is less revenue for us asa health system, but we know
it's the right thing for thepatient and it drives down cost.
We are also investing intechnologies.
We're talking about things likehospital at home.
We're talking about things likevirtual nursing, skilled
nursing at home.
Right, these are right care,right place, right time.
This is about getting care in ahome.
(20:23):
It's cheaper, it's betterexperience, it's better in the
long term.
Speaker 4 (20:26):
I am highly optimistic and confident that
hospitals will lead the way indriving costs down for overall
health care spend into thefuture being successful in
population health and doing thethings we need to do, making the
changes, making the commitmentswe need to propel us forward.
(20:53):
I can tell you that ourclinicians are also very
invigorated by this model,thinking about how to care for
patients in a different and abetter way, and those are the
conversations that we're havingacross the organization and
really just see unlimitedpotential in the future.
Speaker 1 (21:10):
Rob and Chris.
Thank you both so much for yourtime today.
Thank you.
Speaker 2 (21:14):
We'll have more information on the cost of care,
including a link to ChristianaCare's price transparency site
in the show notes atchristianacareorg.
Speaker 1 (21:21):
And while you're there, you can subscribe to For
the Love of Health on ApplePodcasts or Spotify and follow
Christiana Care on social media.
Speaker 2 (21:30):
We'll be back in two weeks with another great
conversation.
Speaker 1 (21:31):
Until then, thanks for joining us for the love of
health.
Hello everyone, I'm Megan McGerman.
Speaker 2 (00:02):
And I'm Jason Tokarski.
Welcome to For the Love ofHealth brought to you by
Christiana Care.
Speaker 1 (00:07):
We're taking a few-week break from new content,
so we're bringing back some ofour most popular For the Love of
Health episodes.
Speaker 2 (00:14):
Today we're revisiting one of our toughest
questions why is the cost ofhealth care so expensive?
With Dr Christine Donahue-Henryand Rob McMurray.
Speaker 3 (00:25):
Christine Donahue-Henry and Rob McMurray
Hospitals will lead the way indriving costs down for overall
healthcare spend into the future.
Speaker 2 (00:32):
You're listening to For the Love of Health, a
podcast about delivering careand creating health, brought to
you by Christiana Care, and nowhere are your hosts.
Speaker 1 (00:41):
Hello everyone, I'm Megan McGerman.
Speaker 2 (00:43):
And I'm Jason Tokarski.
Welcome to another episode ofFor the Love of Health brought
to you by Christiana Care.
Speaker 1 (00:48):
If you've ever received medical care, you'd
likely agree the cost of carecan be expensive.
According to the NationalHealth Expenditure Accounts, US
health care spending grew 4.1%in 2022, reaching $4.5 trillion.
Speaker 2 (01:08):
It's a complicated topic with a lot of contributing
factors.
So for the fifth episode of ourtoughest questions in
healthcare series, we're askingthe question why is the cost of
healthcare so expensive?
Speaker 1 (01:17):
Here to help us tackle that question are
ChristianaCare Chief FinancialOfficer Rob McHenry, and
ChristianaCare Chief PopulationHealth Officer, dr Chris
Donahue-Henry.
Rob and Chris, thank you bothso much for your time today.
Speaker 3 (01:29):
Megan, thanks.
Thanks for having us here.
Yeah, we're glad to be here.
Speaker 1 (01:33):
Obviously, the cost of care is a complex topic,
hence why it's one of ourtoughest questions in healthcare
.
How can we explain it to thegeneral audience so that they
truly understand how cost ofcare works?
Speaker 3 (01:46):
You know, when we talk about the cost of care,
really what we're referring tois health spend and those
numbers you mentioned a momentago refer to national health
spend.
There's a lot of components ofthat.
Hospitals, which is what we aremost familiar with.
Hospitals represent about 30percent of that spend.
So across the country we maythink when we think about health
care, we think hospitals.
Right, because it's what weassociate with, we see them, we
(02:07):
go to them, we know where theyare, they're important to us as
a community.
Hospital care is only 30% ofthat spend.
Physician care is roughly 14 to15% of the total health spend.
So combined hospitals andphysician care is less than 50%
of the total spend.
So it's really important tomaybe unpack what those numbers
(02:29):
are and those increases.
You mentioned a 4.1% increaseand really what's interesting to
me, when you look at the dataand the four years leading up to
the pandemic, 4.1% is lowerthan any of those year increases
.
When you look at, then, thedifferent types of spend,
hospital spend went up about2.2% this past year, so 4.1% in
(02:52):
total.
2.2% was hospitals and I thinkphysician was closer to 2.5%.
So 45% of the total spendincreased between 2% and 2.5%.
So the other 55%, what's inthere?
That's really important tounpack as we want to analyze
spending.
So what might be in there?
(03:13):
You have things like skillednursing facilities, home health.
There may be insurance costs.
Pharmaceuticals is in there,right, and when you look then at
other increases, you see thatthis past year is in there,
right, and when you look then atother increases, you see that
this past year pharmaceuticalsincreased eight and a half
percent.
So it's important, while wetalk about an important spend
like healthcare across thecountry, to unpack those and
(03:35):
then really see what the driversare, because that helps shape
our strategy at Christiana Careand define some of what we're
going to do about it.
Speaker 1 (03:44):
So if those are the components of cost, how is
healthcare paid?
Speaker 3 (03:48):
for In several ways.
There is insurance.
Most of us who are employedhave some type of employer
sponsored insurance.
There's also governmentalpayers, like Medicare or
Medicaid, and then there's asmall portion of the country
that goes without insurance.
So those are the, I'll say, thecategories of insurance, or how
healthcare is paid for.
Speaker 2 (04:08):
Obviously, there are multiple payers involved when it
comes to paying for healthcare.
What is the current mix ofpayers?
What does that look like in thesystem?
Speaker 3 (04:16):
At ChristianaCare, what I can speak to, what we
reflect, is somewhat what yousee across the country.
Two-thirds of our payer isgovernmental programs, medicare,
medicaid.
About 30% is commercialinsurance or employer-sponsored
insurance.
So if you're an employee, youhave an employee health plan
that typically carriescommercial insurance.
(04:36):
That's about 30% and then theremainder again is those who may
not have insurance.
And what's really important tonote from my perspective is to
think about those differentpayer categories.
So for ChristianaCare,two-thirds of the work our
caregivers do taking care ofpatients, two-thirds of the work
(04:58):
is for people who havegovernmental insurance, medicare
or Medicaid predominantly.
And why is that important?
Well, when you think aboutthings like the cost of care and
the cost to provide care,medicare and Medicaid on average
, this past year raised ourrates, our reimbursement rates,
(05:19):
less than 2%.
So the cost of care toChristianaCare is really
important and we have a lot ofstrategies in place driven at
the quality of care and the costof care.
Speaker 4 (05:30):
That's exactly right, rob.
In fact, we've had our MedicareACO since 2016, really focused
on our Medicare patients.
Similarly, our Medicaid ACOlaunched in 2021.
And that is really an alternatepayment model by which we can
better address a patient'squality outcomes and total cost
(05:51):
of care, really by focusing oncare coordination and how we
transition patients through thesystem and, ideally, really care
for them in the outpatientsetting.
Speaker 1 (06:02):
So those ACOs, accountable care organizations,
what kind of success have youseen with?
Speaker 4 (06:06):
those.
So in our Medicare ACO we havesaved CMS $54 million since we
started and then similarly withthe Medicaid ACO.
We actually started with asignificant downside arrangement
with Medicaid in 2019.
And through now from 2019, wehave saved the state $7.7
(06:30):
million.
Speaker 2 (06:30):
So what are the key drivers of costs in healthcare
plans at this point?
Speaker 3 (06:35):
You know, the drivers for the cost of anything really
come down to two broadcomponents.
There's the cost to providethat service, whatever it may be
, and then there's the demandfor that service, the usage of
that service, or in healthcare,what we like to say is the
utilization of those services.
That's really important.
When we investigate the cost ofcare and why healthcare is
(06:56):
expensive, how does that playout?
Well, you think about a patient.
A patient has insurance,whether it's governmental or
employee-sponsored, whatever itmay be.
They're making decisions.
They're making decisions eitheron their own or, preferably
with the advice of a physician,on where they're going to get
care, what care they're going toget and when they're going to
(07:18):
get that care.
Those three pieces right, welike to say right care, right
place, right time.
It's really important.
It's not a cliche, because thatwill drive costs of care.
Where I think it's important toinvestigate or consider is what
drives human behavior.
When you look at things likeutilization health plans that do
(07:45):
not have that creativity builtinto their health plans.
There are no incentives ordisincentives for their
population and, as a result,their experiences are higher
cost of care, they have higherutilization, they have a higher
cost trend and ultimately, theyhave less healthy employees and
dependents and it's because theyhaven't designed their health
plan accordingly to drive theright results.
(08:07):
You can put design functions inplace so that employees,
consumers of care, will likelysee their primary care physician
, maybe on an annual basis,depending on the features of the
plan.
Maybe they'll have programslike tobacco cessation, for
example.
Maybe there'll be disincentivesthat will essentially pass more
(08:30):
of the cost of an emergencydepartment visit to that plan
participant or that employee,because you don't want somebody
that doesn't need to go to theemergency department to go to
the emergency department Withour benefits team here at
Christiana Care.
Speaker 4 (08:44):
we sat down probably three years ago and talked about
the health risk assessmentsthat many employers do for their
employees and the fact thatthere's really no evidence to
show that that drives down thecost of care.
What does is connection to aprimary care provider.
It improves screening forhealth conditions and it
(09:05):
improves the total cost of care.
So we actually changed ourbenefit design here at
Christiana Care in order toincentivize that primary care
visit and saw significantlyincreased use of primary care
through doing that and, as aresult, a decrease in our total
cost of care.
So it absolutely played outhere and continues to.
Speaker 3 (09:27):
So what I hear you saying is by shaping those,
those benefits, the behaviorswe're driving care to a lower
cost setting, avoiding a highercost setting, driving down cost
overall.
And I think what I hear youalso saying is we have healthy
people, healthier people as aresult.
So the benefit of that, theoverall benefit of that, is
(09:50):
healthier people utilizing theright care at a lower cost,
greater productivity out ofthose healthier people as well.
Speaker 1 (09:57):
As you're having these internal conversations,
you're also focusing onvalue-based care.
Can you walk us through that?
Speaker 4 (10:03):
Sure so value-based care.
Can you walk us through that?
Sure so value-based careessentially is population health
, so how you manage a populationof patients and generally we
think about a population as apopulation under a payer so
Medicaid, Medicare or differentcommercial insurance and in that
model there are expectations tomeet, quality measures and then
(10:25):
expectations around total costof care.
So if you're able to decreasecost year over year while
maintaining or increasingquality for that population,
there's an opportunity for boththe health provider and the
payer to share in that savings.
And ideally that share in thesavings that the payer receives
(10:47):
also goes on to improve thedollars back to the employer, so
it helps the affordability ofthat care as well.
Speaker 1 (10:54):
Chris, you are a primary care physician.
How does this improve care forthe?
Speaker 4 (10:58):
patient.
The way that this improves careis it drives primary care docs
to engage regularly with theirpatients, and we talk about not
just visits with patients butthe time between visits when
patients may have questions,care, working to build care
management patients betweenthose visits, which ultimately
leads to better chronic diseasemanagement, better cancer
(11:48):
screening, better control ofbehavioral health conditions,
which also are significantfactors here but overall leads
to improved health of ourpopulations we serve so in the
national conversation ofvalue-based care, I've heard the
term risk associated with this.
Speaker 1 (12:08):
How is it a risk?
Speaker 4 (12:09):
Well, it's a risk in the sense that if you commit to
decreasing the total cost ofcare and you don't achieve a
decrease, then that loss, if youwill, is shared between the
payer and the provider.
Speaker 2 (12:22):
So we've talked a lot about quality of care and
efficiency and wellness.
Dive a little deeper into that.
What are we doing here,specifically at Christiana Care,
to get further into thiscontrolling of cost?
Speaker 4 (12:34):
So over the last many , many years Christiana has been
focused on our inpatientquality, driving to centers of
excellence in our hospital,working with hospital-acquired
infections, zero harm, and thatwork has been tremendous.
At the same time, we've beenbuilding our capabilities in the
outpatient space to bettermanage patients to keep them out
(12:56):
of the hospital.
Our next horizon is really tobring the two together to think
about how the whole carecontinuum is focused on
population health and that meanslength of stay.
How are we getting patients whodo need to be admitted in the
door the right care as quicklyas possible and have them go
home at a reasonable timeframeand really focusing on
(13:19):
efficiency overall and ProjectBedrock.
Speaker 3 (13:22):
Project Bedrock is an enterprise-wide project that is
focused on driving operationalperformance right.
So it's across the clinicalspectrum, it's across the
administrative spectrum, allacross the organization, in
really driving down overall costand looking at ways that we can
(13:44):
be more efficient, changingwhat we do, changing how we
think, changing how we workright to become more efficient.
At Christiana Care we launchedthis project about a year and a
half ago.
We've paired up administrativeleaders with clinical leaders
and gone after projects to saywhat can we do differently about
(14:05):
, let's say, efficiencies in anoperating room?
And we have a very formalized,rigid structure to identify what
these opportunities are.
We measure them and then wereport back.
This happens on a weekly basis.
There's other work streams aswell.
One of those is supply chainright.
So we look at ways that we canget better contracts with our
supplier, providers, useproducts more efficiently and so
(14:29):
forth, looking to driveefficiencies to drive down that
cost.
We've realized we have aresponsibility at Christiana
Care to help control that costof health spend.
Even though the hospitals areonly 30%, we are looking broader
, across all of healthcare todrive that down.
Speaker 2 (14:47):
Recently, ChristianaCare was ranked as the
number five health system byMoney Magazine, which is awesome
.
Congratulations.
Money Magazine gaveChristianaCare an A for price
transparency.
What does that mean?
What is price transparency andhow does that benefit the
community?
Speaker 3 (15:01):
And aside from Money Magazine, there is an
independent price transparencyverification provider called
Turquoise.
Turquoise gave us their highestlevel, their highest rating.
We were the first hospital andhealth system in Delaware and in
the region to get that highestrating.
It is about making transparentthe costs for the services we
provide to patients, so thatcould be on a procedure by
(15:25):
procedure or visit by visit,Whatever those services are.
We've posted those charges andthen mapped it against the major
insurance providers to say thisis what you can expect to pay
when you come to Christiana Carefor that service.
At Christiana Care there's a keyword in our mission and that's
(15:46):
called value, and we want all ofthe people that we serve in all
the communities we serve tounderstand that value, but it's
the value through their lens.
So we'll give them tools likeposting our charges online to
show that transparency.
And we also offer ability forpatients or members of the
community to give us a call andwe have counselors and other
(16:07):
assistants to help withunderstanding what the costs of
care are, because they arecomplex.
It goes beyond pricetransparency but it really
supports it.
When you look at the ways thatwe bill people, we are looking
at friendly billing options, andsome of those are electronic.
So if you go to your doctor atChristiana Care, you can have
the opportunity to have yourbill sent to you via text or an
(16:31):
email.
And what's really interesting inthis, and where I see the value
, is that there's a feedbackloop with this transaction.
So if I'm a patient and I get abill from my doctor, I can pay
it online on my phone and then Ican review or provide feedback
about my visit.
I can provide feedback aboutthe payment.
(16:51):
We had a patient and she usedthis transparent payment system
and provided feedback, and herfeedback was I didn't realize
that I could take advantage of apayment plan for my services.
What really was important andwhat this patient said was I
have trouble paying for my care.
I was going to avoid care.
(17:13):
I was not going to go back tothe doctor because I didn't
think I could afford it, butwith a payment plan, I realized
that I can and I'm going to getthat care.
That's transparency in action.
That is the value oftransparency, whether it's on a
website with charges, whetherit's a phone call or whether
it's the way we can help billpeople and provide that feedback
(17:36):
loop is really important.
Speaker 4 (17:38):
Rob, that is so important.
I can't tell you how many timesI've had the experience of
having a patient bring in a billfrom an inpatient stay and be
very, very concerned about thecharges.
They're not understanding thiswas in the past and another
health system, but it really hasthe potential to get in the way
of healing for that patientjust having been admitted and
(18:01):
really goes such a long way topromoting their wellness long
term.
Speaker 1 (18:05):
And Chris, let's dive a little bit deeper into that
your experience in primary care.
Why is this so important, atthe end of the day, for the
average listener right now?
Speaker 4 (18:15):
I went into primary care because I believe in
prevention, I believe inwellness, I believe in keeping
people healthy.
I believe value-based care isthe way we can do this together
because it allows for adifferent payment model that
doesn't incentivize frequenthospital utilization.
In these type of payment models, it incentivizes us building
(18:38):
infrastructure to keep patientshealthier and out of the
hospital.
Speaker 2 (18:43):
This is part of our series of the toughest questions
in healthcare, and it's notjust about what's happening
right now.
It's using the crystal ball tolook a little bit into the
future.
So what does the future ofhealthcare costs look like to
each of you?
Speaker 3 (18:56):
I wish I had the crystal ball to tell you, but
what I will say is I amoptimistic about the cost of
care going forward.
We shared some stats earlier.
We talked about that 4%increase year over year.
Hospitals and physicians are at2% to 2.5%.
What we are doing is startingto make a difference, as Chris
mentioned a moment ago.
When you talk about value-basedprograms, you talk about the
(19:18):
investments we are making right,whether it's a project bedrock
internally that's focused onefficiencies, or where we are
making investments for places toget care.
What do I mean by that?
We recently announcedneighborhood hospitals that we
are investing in.
So you're talking about a lowercost setting to provide care.
We have partnered with someprivate physicians on ambulatory
(19:42):
surgery centers.
In the area we have three ofthose that takes a surgery that
could be done in a higher costenvironment in an acute care
facility into an ambulatorysurgery center Same quality,
lower cost, better experience.
Right Now, there's always areason to have certain surgeries
in the hospital, those that canbe moved out.
(20:03):
We are doing that.
That is less revenue for us asa health system, but we know
it's the right thing for thepatient and it drives down cost.
We are also investing intechnologies.
We're talking about things likehospital at home.
We're talking about things likevirtual nursing, skilled
nursing at home.
Right, these are right care,right place, right time.
This is about getting care in ahome.
(20:23):
It's cheaper, it's betterexperience, it's better in the
long term.
Speaker 4 (20:26):
I am highly optimistic and confident that
hospitals will lead the way indriving costs down for overall
health care spend into thefuture being successful in
population health and doing thethings we need to do, making the
changes, making the commitmentswe need to propel us forward.
(20:53):
I can tell you that ourclinicians are also very
invigorated by this model,thinking about how to care for
patients in a different and abetter way, and those are the
conversations that we're havingacross the organization and
really just see unlimitedpotential in the future.
Speaker 1 (21:10):
Rob and Chris.
Thank you both so much for yourtime today.
Thank you.
Speaker 2 (21:14):
We'll have more information on the cost of care,
including a link to ChristianaCare's price transparency site
in the show notes atchristianacareorg.
Speaker 1 (21:21):
And while you're there, you can subscribe to For
the Love of Health on ApplePodcasts or Spotify and follow
Christiana Care on social media.
Speaker 2 (21:30):
We'll be back in two weeks with another great
conversation.
Speaker 1 (21:31):
Until then, thanks for joining us for the love of
health.
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