BCBS working on sustainable health care system

Talk about it

Is a sustainable health care system possible or is the population doomed to ever-increasing premiums and medical costs?

Paul von Ebers, CEO of BlueCross BlueShield of North Dakota, told a group of 50 Jamestown business people Wednesday the health care system in North Dakota is not sustainable. The major reason? Rising costs.

“Health care is a critical issue,” von Ebers said. “It’s a major and growing cost to business. And a lot of people in the state are not insured because it’s too expensive. What we’re doing is just not sustainable.”

BCBS is the dominant insurer in the state, providing about 85 percent of the health insurance. From 1999 through 2010, von Ebers said BCBS premiums have doubled as have the claims BCBS pays out. The average premium increase is about 8 percent a year.

“What’s driving the premiums is the claims we’re paying,” he said. “And the costs are outstripping workers’ earnings. Our customers can’t pay more.”

A large part of the reason for the increased costs is a combination of longevity, lifestyle and new technology. For example, “mega” claims, defined as lifesaving care using the latest technology and costing more than $250,000, were 18 in 2000 compared to 73 in 2009.

“The simple reason (for increased costs) is we’re using more and better services — going to the doctor more, getting more surgeries, taking more drugs,” von Ebers said. “All of society is using more services. If we’re going to sustain health care we must find a solution that doesn’t drive out providers.”

The key to sustaining health care, von Ebers said, is to impact costs. First, BCBS lowered its administrative costs. Now the insurance company is working with doctors and hospitals to reduce the 8 percent inflation rate while still providing quality care.

“Our goal is to reduce medical inflation by 1.5 percent annually,” he said. “That doesn’t sound like much but it will save $30 million in the next three years. But an annual premium increase of 6.5 percent is still too high.”

BCBS is collaborating with the state’s health-care providers to develop strategies that increase the quality of care while also increasing efficiency and reducing redundancy. Increasing the quality of life, with exercise, nutrition and the like, von Ebers said, will also lower costs.

A major component of the BCBS initiative is a different payment method to providers.

“We need to move from the ‘fee for service’ payment model to the ‘outcome based’ method,” he said.

The present “fee for service” means providers are paid based on the services, such as procedures, tests and patient visits.

“Now, if you do more you get paid more. The more visits, the more the doctor makes,” von Ebers said. “It’s called ‘hamster medicine’ with doctors running from patient to patient. We don’t want them doing hamster medicine.”

“Outcome based” care focuses on the patient and coordinated treatment. It’s based more on the idea of a patient in relationship with his or her family physician, particularly in managing complex diseases.

“And the doctor is rewarded for doing coordinated medicine,” he said.

BCBS is looking at and developing programs and initiatives that include new payment methods, rewarding doctors and helping people live healthier lives, he said.

“We have programs available such as the worksite wellness initiative, to help us take better care of ourselves,” von Ebers said.

Because of the small population, with only six major providers, von Ebers said, the state is unique. It’s much easier to collaborate on sustaining North Dakota’s health care system.

“We can really put our heads together and figure this out,” he said, before the Patient Protection and Affordable Care Act goes into effect in 2014.

Asked about the new health-care reform law, von Ebers said “we need to fix it, not repeal it.”

Sun reporter Toni Pirkl can be reached at (701) 952-8453 or by e-mail at tpirkl@jamestownsun.com

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