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Coalition Aims to Slow Rise in Health Care Costs

April 12, 2010
In The News

The Healthcare Quality Coalition didn't run television ads, issue a weekly barrage of news releases or hold regular news conferences. Its members didn't appear on cable television news shows. It has no staff or dues.

Yet the coalition helped ensure that the recently enacted health care reform legislation contained several provisions to slow the rise in health care spending.

The coalition consists of more than 40 health care systems, clinics and organizations.

More than a fourth of them are from Wisconsin. Members include many of the country's most respected health care systems, such as Mayo Clinic and Cleveland Clinic.

They were brought together by a common goal: changing the way doctors and hospitals are paid from a system that pays for quantity instead of quality.

"If we don't do that, then the other changes we make around the edges are still not going to do the two things we need most," said Jeff Thompson, a physician and chief executive of Gundersen Lutheran Health System in La Crosse. "We need to improve the reliability of health care, and we need to decrease the cost of that care."

Doctors, hospitals and other health care providers now are paid more when they do more - even if the services are unneeded or less-expensive treatment options are available.

That gives them little incentive to look for ways to become more efficient. Just the opposite - doctors and hospitals providing quality care at a lower cost are paid less.

The health systems and clinics in the coalition believe they are being penalized for trying to do the right thing.

Minnesota and Wisconsin consistently rank first and second in the country in health care quality based on measures compiled by the federal Agency for Healthcare Research and Quality.

At the same time, Medicare spending in both states - after adjusting for differences in wages, payment rates and health status - is lower than in other parts of the country.

Medicare spending in La Crosse, where both Gundersen Lutheran and Mayo Clinic operate, is 77% of the national average. It is 89% of the national average in Madison and in Rochester, Minn., home to Mayo Clinic.

In contrast, Medicare spending is 139% of the national average in the Miami area, 127% in Lubbock, Texas, and 120% in Oklahoma City.

The genesis of the coalition came from the late Joan Curran of Gundersen Lutheran, Brent Miller of Marshfield Clinic and Bruce Kelly of Mayo Clinic.

The three, who oversaw government relations, realized their message would carry more weight if they worked together. By early 2009, they also knew health care reform would be on the agenda.

"We all said we have to commit to this," said Thompson of Gundersen Lutheran.

Soon they were contacting other organizations in Wisconsin, Minnesota and Iowa.

The coalition eventually included Aurora Health Care; ThedaCare; Bellin Health and Prevea Health in Green Bay; Dean Health and UW Hospital & Clinics in Madison; as well as Affinity Health and Ministry Health.

Health systems and organizations in Minnesota and Iowa also became members.

Curran, who died Dec. 30, got the idea of reaching out to health care systems and organizations throughout the country, recognizing that the group would be more effective if it wasn't limited to the Upper Midwest.

"The coalition exists because of her efforts," Miller said.

Cleveland Clinic, Intermountain Health Care in Utah, Geisinger Health System in Pennsylvania and Group Health Cooperative in Washington - each cited in health policy circles as model systems - joined the coalition.

So did other health systems and organizations, including the Institute of Healthcare Improvement, whose chief executive, Donald Berwick, is expected to be the next head of the agency that oversees Medicare.

"You got into the senators' and congressmen's offices very easily," Thompson said, "because you were showing up with this list of pretty high-performing health care systems."

An ally in Kind

The coalition also had a strong ally in U.S. Rep. Ron Kind, a La Crosse Democrat who was putting together a group of about 30 representatives that became known as the Quality Care Coalition to focus on payment reform and lessening the wide variation in Medicare spending throughout the country.

The Quality Care Coalition - which included Reps. Bruce Braley of Iowa, Jay Inslee of Washington and Betty McCollum of Minnesota - also wanted Medicare to update the formula that adjusts for regional differences in wages and other costs when setting payment rates.

The group's goals were behind a last-minute threat by Kind and several other representatives to pull their support for the legislation.

"That apparently got some attention when we needed it," he said. "We also knew we were at the point of maximum leverage with our votes, and if anyone was going to listen, it was at that moment."

The threat led to negotiations that began Friday evening, less than two days before the historic vote, and lasted more than seven hours, ending with an agreement completed at 3 a.m. Saturday.

President Barack Obama called Kind later that morning to pledge his support for the agreement.

The agreement contained several concessions:

• The Institute of Medicine - the health arm of the National Academy of Sciences - will evaluate and recommend ways to improve the formula used to adjust for wages and other geographic factors when setting Medicare rates.

The Department of Health and Human Services will implement the changes by Dec. 31, 2012.

• The IOM will do a second study on how to change Medicare rates to reward doctors and hospitals for providing quality care at a lower cost.

The new Independent Payment Advisory Board in turn will be encouraged to use the study's recommendations to make changes in Medicare rates by 2014.

In addition, Kind and his congressional allies negotiated $800 million in higher payments over the next two years for physicians and hospitals in areas with the lowest Medicare rates.

Kathleen Sebelius, secretary of the Department of Health and Human Services, also promised to hold a national summit on the geographic variation in health care spending.

Those were minor provisions in the massive bill. And critics, including some economists, contend the new law doesn't do enough to slow the rise in health care spending.

But the law contains other provisions to control costs, including projects to test new ways of paying doctors and hospitals.

"It's a step in the right direction," said Rachel Roller, vice president of government affairs for Aurora.

Still, the coalition plans to continue to push for its key goal.

"We firmly believe that, for the long-term good of the economy and the country, we need to fundamentally change how we pay for health care," Thompson said.