Covering the business of health care

One of the biggest expenses many people will incur is the cost of a long-term illness or recovery from an accident. It’s no secret that hospital stays are expensive and that’s not likely to change even after the Affordable Care Act. Covering these costs will be an important part of business journalism going forward.

The New York Times had a story about Kaiser Permanente and how it’s just not making enough money despite being held up as a model for what the system could be:

When people talk about the future of health care, Kaiser Permanente is often the model they have in mind.

The organization, which combines a nonprofit insurance plan with its own hospitals and clinics, is the kind of holistic health system that President Obama’s health care law encourages.

Kaiser has sophisticated electronic records and computer systems that — after 10 years and $30 billion in technology spending — have led to better-coordinated patient care, another goal of the president. And because the plan is paid a fixed amount for medical care per member, there is a strong financial incentive to keep people healthy and out of the hospital, the same goal of the hundreds of accountable care organizations now being created.

Yet even with all of its effort, its chairman and chief executive, George C. Halvorson, acknowledges Kaiser has yet to achieve the holy grail of delivering that care at a low enough cost. He says he and other health systems must fundamentally rethink what they do or risk having cost controls imposed on them either by the government or by employers, who are absorbing the bulk of health insurance costs. “We think the future of health care is going to be rationing or re-engineering,” he said.

Mr. Halvorson is convinced that Kaiser’s improvements in the quality of care save money. But he also says that the way to get costs lower is to move care farther and farther from the hospital setting — and even out of doctors’ offices. Kaiser is experimenting with ways to provide care at home or over the Internet, without the need for a physical office visit at all. He also argues that lower costs are going to be about finding ways to get people to take more responsibility for their health — for losing weight, for example, or bringing their blood pressure down.

And there are other concerns, such as whether an all-encompassing system like Kaiser’s can really be replicated and whether the limits it places on where patients can seek care will be accepted by enough people to make a difference. Or whether, as the nation’s flirtation with health maintenance organizations, or H.M.O.’s, in the 1990s showed — people will balk at the concept of not being able to go to any doctor or hospital of their choice.

Besides paying for the care, the increased sophistication of data gathering and computer equipment is making what to do with patient information another big piece of the health care story. The Wall Street Journal had this story about one insurer’s answer to the question.

As it prepares to vie for new business from some of the 30 million additional people entering health exchanges through the Affordable Care Act next year Aetna Inc. is looking to analytics as a means of lowering the cost of some coverage. According to Michael Palmer, head of innovation for the Hartford, Conn.-based insurance company, Aetna is using a new analytic platform to predict which ailments its members are likely to contract over the coming year in order to lower the odds that they will develop cardiovascular disease, one of the more expensive and endemic diseases it has to cover.

This information could help improve health outcomes for patients, dramatically lowering health care costs for themselves, their employers and Aetna itself, says Mr. Palmer. “Better outcomes also lead to better costs. It’s a virtuous cycle,” he told CIO Journal Wednesday after a presentation at the Structure: Data conference in New York. But Mr. Palmer also noted that it’s difficult to get people to act on the information they’re given, even if it’s for their own good.

For example, Aetna can tell its members if they’re likely to develop cardiovascular disease. It does this by tracking data from lab results, pharmacy data and claims data of its 18 million members, looking for data showing that a given individual suffers from three of any of five factors – high cholesterol, high blood pressure, low HDL (so-called good cholesterol), high triglyceride levels, and abdominal girth – all of which are indicative of metabolic syndrome. “We found we can predict at the individual level the probability of their getting metabolic syndrome in the coming year,” Mr. Palmer said.

Combine this information with preventative medicine and it’s likely that our society can lower the cost of health care. It would be nice if people had the information to take steps to better their health and take care of themselves.

As more of the population ages, it will be increasingly important for the business media to cover all angles of healthcare and the companies in the industry. But the most important part will be helping people connect the pieces of information and make the best decisions possible.