Does the American healthcare industry require reform or revolution?
According to Brereton “Gubby” Barlow, CEO of Premera Blue Cross, it’s going to take a radical economic disruption to stem the runaway costs of an industry that threatens to swamp the US economy.
Barlow was the keynote speaker of the inaugural Symposium on Creating a Sustainable Healthcare System, co-hosted by Premera, one of the region’s largest healthcare insurers, and the University of Washington Foster School of Business Executive MBA Program.
The event, held October 26 at Seattle’s Bell Harbor International Conference Center, approached the overarching theme of “Economic Disruption in Healthcare” from every possible angle.
And there are many angles.
Paint it black
Barlow painted the big picture, specifically the ominous rise in health care costs as a component of the United States economy. The Congressional Budget Office reports that health care accounts for 18 percent of the nation’s GDP currently, and projects that it will account for a third of the economy by 2035 and continue climbing at a hastening clip.
“If left unchecked,” Barlow said, “health care and interest are going to bankrupt the economy.”
His solution is simple in concept if difficult in practice: clarify costs and coverage, and give consumers the power and responsibility to make their own choices.
This concept has been introduced in new high-deductible health plans that offer low premiums and tax-free healthcare savings accounts, but also impose greater out-of-pocket expenses. Barlow cited a Milliman study finding 50 percent less health spending on consumers in these new plans over traditional plans.
“We need to shelter patients from financial devastation,” he said. “But we also have to get consumers to have real skin in the game. It’s worked well in every other walk of economic life, from food to cars to computers.
Barlow emphasized that the shift of decision power in healthcare from the supply side—physicians, hospitals, government, insurers—to the demand side—consumers—is both necessary and inevitable.
“In health care finance and delivery, we’re still in the mainframe era: complex, sophisticated, extremely expensive,” said Barlow, a member of the Foster School’s Advisory Board. “Yet I’m optimistic that this is going to change for one simple reason: with health care, as with computers, when consumers get directly involved, costs will come down.”
After Barlow’s keynote, the symposium program embarked on a more granular examination of the forces currently at work in the healthcare system—from Medicare to network integration to innovations in healthcare delivery—culminating in a panel focused on how to reconcile the issues.
Topics and speakers included:
“Challenges in Hospital Financing”
Edward Kim, Vice President of Goldman Sachs, Healthcare and Higher Education Group
“Economic Challenges in Biopharmaceutical R&D”
Roger M. Perlmutter, MD, Former Executive Vice President of R&D, Amgen
“Purchasing Innovation in Healthcare”
James C. Robinson, PhD, Director of the Berkeley Center for Health Technology
“Economic Impact on Provider Groups”
Lloyd David (EMBA), Executive Director/CEO, The Polyclinic
“Economic Forces in Network Integration”
Rodney F. Hochman, MD, Group President, Providence Health & Services
“New Breed Health System: Adapting Strategy to the Evolving Market Environment”
Megan Clark, Senior Consultant, Health Care Advisory Board
“Impact and Challenges of Medicare”
James C. Capretta, Fellow, Ethics and Public Policy Center
A panel attempting to reconcile these diverse issues consisted of Brian Ancell, executive vice president of Healthcare Services & Strategic Development at Premera; Don Brunell, President of the Association of Washington Business; Dan Fulton, President & CEO of Weyerhaeuser; Rod Hochman, Group President of Providence Health & Services; and Johnese Spisso, Chief Health System Officer at UW Medicine.
Founding a symposium
The symposium was devised and driven by current Foster EMBA student Dr. John Henson, a neurologist and Associate Chief Medical Director at the Swedish Neuroscience Institute. Sparked by the numerous healthcare industry questions of his EMBA classmates, Henson saw an opportunity to organize a panel rich in knowledge and experience and found a willing partner in Premera, which helped draw more than 350 participants to the symposium.
Additional sponsors were Point B Consulting, the Association of Washington Business, the Seattle Metropolitan Chamber of Commerce, Seattle City Club, the Washington Policy Center, and Providence Health & Services.