FEATURE STORY

A New Newsletter for Healthcare's New Times

Welcome to our first issue of Healthcare Matters. This newsletter replaces the former NewsConnection and Insight quarterly newsletters. As a valued Thomson Reuters customer and a healthcare provider, you'll have access to intelligent information concerning the research, industry news, and company news that matters to you the most.

Healthcare matters are top of mind not only for those of us working directly within the industry, but also for the nation as a whole. This has been demonstrated again and again throughout the ongoing debates within Congress and this year's presidential race.

Riding this wave of healthcare reform, the keynote speakers at our recent client conference, the Healthcare Advantage Conference, included former U.S. Senate Majority Leader Bill Frist, M.D.; Forrest Sawyer, former NBC, MSNBC, CBS, and ABC anchor; and Kaveh Safavi, M.D., J.D., chief medical officer, Center for Healthcare Improvement, Thomson Reuters. Each shared thought-provoking presentations that highlighted trends and issues in today's healthcare industry - and how those issues are affecting voters.

Over-arching issues
Frist spoke from his perspective both as a physician and a politician, highlighting some major "landscape issues," including the following:

• Healthcare consumes an increasingly greater share of our economy. Healthcare spending as a share of the overall U.S. economy has gone from about 5 percent in 1970 to 16 percent today - and it will continue to go up. Frist shared estimates projecting healthcare will consume close to 20 percent of our overall spend in the next ten years. Compare that to spending on commodities like energy, defense, and housing which have all gone down.
• Our spending does not match our results. As one of the wealthiest, most powerful nations in the world, we spend twice as much per capita on healthcare than anyone else, yet we're far from being the healthiest. About 45 countries in the world have longer life expectancies beyond age 75 than we do. In addition, the most developed countries have lower infant mortality rates than the U.S. He also said this is not just a "health" issue because health is the most important determinant of overall well-being, happiness, and productivity.
• Cost, affordability, and the uninsured. Healthcare premiums continue to rise and "eat up the American dream." An average family of four now spends about $14,000 per year on healthcare - and given the median income is only three times that, one out of every three dollars that family earns goes to pay for healthcare. Many Americans can no longer afford rising premiums, contributing to the increasing number of uninsured Americans, now at 47 million (15.9 percent).
• Federal entitlements. The three federal entitlements (Medicare, Medicaid, and Social Security) are "gobbling up" our budget and "crowding out" things like education, national parks, etc. Much of the focus in the media has been the fact that Social Security is in danger of running out, however, Medicare funds are currently projected to be depleted in 2019, while Social Security won't be depleted until 2041 - 22 years later. "Our generation has over-promised, in a moral sense, what we can deliver," Frist said. "If you look at the next 75 years and the dedicated income streams coming in - how we're going to pay for things and what we've promised in terms of benefits - we have a $32 trillion over-promise for Medicare, whereas Social Security is only $7 billion over-promised. It's a moral issue - the burden falls on our kids. They're going to have to work twice as long just to support all of us."

Frist acknowledged that the U.S. healthcare system is at a "tipping point" and is in dire need of major reform. "The most fundamental element of the healthcare debate is: What are your ethics? What is your fundamental moral belief? That's why it's so tough to legislate, to make major reforms. There are two camps: people who believe healthcare is a consumer good, and people who believe that healthcare is a social good that should be available in equal amounts to everyone," said Frist.

"The transformation in healthcare is going to be private-sector driven. It needs to be patient-centered and provider-friendly. The goal has to be universal care, affordable health insurance for all Americans from a basic ethical standpoint. I do think as a rich country, we should not be denying the opportunity for good healthcare to Americans today," he said.

Economic struggles
Like Frist, Sawyer also discussed the fact that our country's economic growth cannot keep up with the rapid increases of healthcare costs and spending. Sawyer also echoed Frist's concern over how, as a nation, we pay significantly more than other developed countries but do not appear to be reaping the benefits. However, he also noted one significant difference: In the U.S., we treat patients with chronic conditions longer - to later stages and with more advanced treatments.

In Sawyer's discussion of solutions, he said, "Healthcare information technology is one of the most crucial aspects of healthcare cost containment." Again, he touted the information revolution when he praised putting more information into the hands of consumers, saying that it allows ordinary people to affect change on a regular basis.

Key trends
Safavi examined the impact of major factors influencing healthcare services and the effects those trends will have on the industry's profitability and leadership. He talked about trends stemming from inpatient services, finances, emergency department services, clinical services, Present on Admission indicators, and consumer action.

Safavi acknowledged that hospital and healthcare leaders are operating in a constantly changing and demanding environment and made several conclusions including:

• Technology is affecting how and where diseases will be treated.
• New sources of inpatient business are emerging.
• Clinical performance is improving, but a large gap still exists between the best and worst hospitals.
• Clinical and financial performance are not correlated and need to be managed independently.
• Consumer Directed Health Plans are emerging as an important new type of health plan that speaks to the consumerism issue, but their true value has yet to be determined.

"The only sure information is that which happened in the past," said Safavi. "But like a mutual fund disclaimer states, 'Past performance is not an indication of future performance.'" He left the audience with this, "Well-thought through decisions are enabled by complete and reliable information, and a solid understanding of the current state of affairs."

Save the date for the 2009 Healthcare Advantage Conference: May 5-8, 2009, at the Hilton in San Diego, Calif. Watch for future information about our next line-up of thought-provoking speakers.

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