Could segmented health care be part of the solution?

It is obvious that the major agenda topics for the new president will increasingly come into focus prior to the elections in November, and we hope that the redesign of health care will be high on this agenda. We all know that the health care system in the U.S. is broken, based on all four aspects of our Journey to Excellence: the overall quality is mediocre, the service delivery recently reported through HCAHPS is lacking, the business literacy is in jeopardy as the AHA predicts 1,200 hospitals will go bankrupt this year and the community value as represented by the level of charity care provided by non-profit hospitals and health systems is under scrutiny by the IRS and congress as we speak.

We all know that the redesign of American health care will most likely be evolutionary rather than revolutionary. However, it is imperative that all of us who are working in this industry spend significant time looking at the pieces of the puzzle that could be put together to create a new delivery process which would easily be able to significantly improve the low scores in the four directions outlined above. As I am in the midst of my travels to CHRISTUS regions, I have spent time in planes and sitting in airports reflecting on some of these pieces more thoroughly, and today I’d like to share what I think may be the most important one.

I am proposing that we need to get increasingly comfortable with segmented health care as one of the primary solutions to our dilemma. Our experience in Mexico with segmented health care gives me even more reassurance that this would be most helpful, but it is only added to the knowledge and experience I‘ve gained by reflecting on my medical school, internship and residency training experiences where I practiced in segmented delivery systems.

First, what do I mean by segmented?

For me, segmented health care means that you provide the health care in different settings and with different amenities according to the patient’s or family’s ability to pay for such services.

I know that many people initially react to this idea by asking, “Dr. Royer, are you proposing different levels of health care for the poor and the rich?” Obviously, based on what you have read in my blog before and knowing that I am the team leader for a Catholic, faith-based health care system that is founded on incarnational spirituality, that is not the case. We have proven in Mexico that you can provide equal clinical quality of care and service delivery while providing different locations and amenities for various populations based on their economic status. So in reality, my proposal is to provide equitable health care for all from the clinical and service perspectives, but not providing equal amenities to all.

It is clear to me now as I have reflected on my early years in health care and have reinforced these experiences with my observations in Mexico in the last seven years of our Journey to Excellence that our failure in the U.S. to control our costs and to reduce our bad debt is primarily from the fact that we are providing amenities/private rooms, flat screen TVs, free telephone access, free internet connections, menu selections and private bathrooms to people who cannot afford them. These amenities obviously have to be built into our overhead costs for providing health care, and therefore have increased our expenses. As a result, we are increasing our revenues to potentially address these expenses, but because people cannot pay, the prices that are driving our revenues are increasing as well as our bad debt.

This is in reality also what has happened to Starbucks, which I mentioned in my post last week. I indicated that they significantly increased their prices for a 20-cent cup of coffee in order to have the monies to rapidly expand their shops throughout the world. But they, like health care, have reached a point where the differentiation between the price and the cost are so distant that the value added is no longer present.

I am sure that many people reading this blog would say “Can we safely go back to ward medicine or four-bed suites with the infectious disease issues facing us today and with the expectation by most Americans that they need the private room and the amenities described above?”

To me, the answers are clear. We will need to continue to undertake a re-educational process for American citizens to inform them that we are committed to equal quality and service, but just as in any other industries, you cannot buy amenities associated with your purchase if you cannot pay for them. By creating a segmented system, we will thereby be able to decrease the cost for health care and better care for the large number of uninsured who are getting no care in the U.S. We will need to remind them that clinical and service quality are what they need and want, and that for the short period of time they’re in our outpatient, inpatient, senior campus programs or hospice and palliative care programs, the amenities add no value to their care and certainly can be minimized and not missed during those episodes.

A key example of this would be when we go into a car dealer to buy a car. Adequate transportation is the expected outcome. But indeed, some of us can only afford a used car, and some can afford a luxury automobile. But transferring this analogy to health care, I believe we are giving sunroofs, high-class stereo systems and GPS systems to everyone, even those who can only afford the cheapest of models. Therefore, we are creating a cost structure that has proven to not be sustainable, and if we continue it, we’ll fail in the future.

Again, we must remind people over and over that we are not sacrificing quality or service, but in fact the package in which that care is delivered will need to be wrapped differently for different people based on their ability to pay or not pay.

Second, with regard to patients who need special care either because of the intensity of their illness or infectious issues, we had the answers years ago, and we still have them today. If the severity of their illness is significant, they can be moved to our cardiac care units of ICUs, whose physical layouts I would suggest need not be changed, since the value of the amenities there are mainly focused in the high technology required or the visibility required by the nurses and physicians who are caring for them. With regard to infections, we always had this issue in ward medicine in the 1960s and ‘70s, and that’s why we created infectious private rooms close to the wards where these patients could be placed when they needed to be isolated. Because these rooms were different, my belief that we may have paid even more attention to the infectious disease and isolation precautions than we do today.

Because everyone is now in a private room which can be changed to an isolation room by merely putting a sign outside the door, I wonder if we are not as diligent to our infectious disease precautions because, in fact, that room does not look that much different from any other room that we might have. Segmented medicine requires that different types of care will be rendered in different settings, and this may in fact positively affect the level of care delivered.

In closing, I readily admit that this proposal as one piece of the puzzle for health care redesign may seem radical and may be interpreted by many as a step backward rather than a step forward. But based on significant reflection on my training and the segmented system in Mexico where those who can pay are treated in one series of our hospitals and clinics and those who cannot pay are treated in another network of short-stay hospitals and clinics, I am convinced that a segmented health care system is at least worth putting on the table for reconsideration by the task force for health care redesign.