Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, May 26, 1993 TAG: 9305260280
SECTION: VIRGINIA PAGE: A1 EDITION: METRO
SOURCE: GEORGE KEGLEY STAFF WRITER
DATELINE: LENGTH: Medium
Paul Keckley, a Nashville health-care expert, told a Roanoke forum that every national task force "assumes there will be another tax on business," he said. And the impact, he predicted, will be "a short-term depressed job market and [lower corporate] earnings."
Keckley, founder of a health-care marketing research and planning firm, talked for more than an hour about the worsening problems of the $840 billion health-care industry. Health care isn't a system today, he said, "it's a confederation of self-interest."
He described the concept of managed competition at the forum sponsored by Carilion Health System, a Roanoke-based hospital company; Roanoke Regional Chamber of Commerce; Blue Ridge Small Business Development Center; and Johnson & Johnson, a New Jersey manufacturer of health products and pharmaceuticals.
Business will be paying an estimated $60 billion to $100 billion more to fund a managed-competition program, Keckley said. Employees also would pay a tax on their benefits, he said.
Under competitive health care, an individual's care would be managed, choices will be directed and treatment prescribed by a network or other organization. Two or three systems likely will replace a collection of hospitals, doctors and other care-provider groups, he said.
In a competitive system, doctors will treat patients by agreed guidelines. "Ultimately, the long-term success is in the improved wellness of the population, instead of how many you can get in the operating room," Keckley said.
With managed competition, a company and employees would share payment of a fixed amount - perhaps $300 a month - to a health system and "that would cover everything." Cost items would be "a matter of management."
Reform of health care will reduce costs and improve quality, Keckley said.
Health-care costs, the fastest-growing line item in the profit-and-loss statements for many companies, also account for 34 percent of a typical family budget, he said. They will rise to 50 percent by 1997 if not controlled.
Of the 37 million Americans without health insurance, 25 million work at companies that do not provide coverage and 12 million do not have jobs, according to Keckley.
He expects that Hillary Rodham Clinton's task force will announce selection of managed health care in June, "but the problem is that they don't know how to pay for it."
Keckley said he discarded the concept of government health care because it is "too liberal and too anti-U.S. economy." Probably only one-fifth of the members of Congress would support nationalized health care, he added.
Health-care costs can be reduced by such incentives as employee wellness programs, annual physicals and education programs, Keckley said. For example, Tenneco Corp. of Houston, reduced its health-care cost by 30 percent through an aggressive incentive program, he said.
Unfortunately, disincentives cost more, he said. Overweight people, smokers and workaholics pay more for health care.
Managed care requires that patients see medical specialists only when referred by a primary-care practitioner, Keckley said.
"We have created a system that is confusing," he said. "People don't understand health care and they don't want to."
Surveys show that only 11 percent of the population questions a doctor's credentials and 14 percent can accurately describe the drugs they're taking, he said.
The panacea, according to Keckley, would be for patients to do what they're supposed to do and for smoking to become illegal. That way, health-care costs would drop by $400 billion, he said.
Managed care probably would spell the end to 80 percent of the insurance companies in the health-care field, he said, "because their role [in a competitive system] will be not to manage risk but to cost-effectively manage paperwork."
Many hospitals in rural areas will disappear or convert to outpatient clinics, Keckley predicted, because half of them have excess bed capacity. He told of a rural 54-bed hospital with only four patients.
Coalitions such as the Blue Ridge Regional Health Care Coalition in Roanoke are analyzing costs and beginning to negotiate toward a competitive system, Keckley said.
Dick Robers, president, said the Blue Ridge group of 60 corporate members representing 30,000 employees has negotiated frozen price-list agreements with hospitals.
by CNB