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Experts at a Detroit Health Care Summit Say Reform Needed to Keep American Business Competitive

October 16, 2009
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Kelly Services CEO Carl Camden, speaking Thursday, October 15, at a health care summit in suburban Detroit, said employer-based heath care coverage is “doomed.”

Appearing at the Health Care Leadership Summit, sponsored by Workforce Management sister publication Crain’s Detroit Business, Camden and Nancy Schlichting, CEO of Michigan-based Henry Ford Health System, agreed that comprehensive health care reform is critical to keep business competitive in a growing world economy.

In the long run, the employer-based system is doomed,” Camden said. Cost increases “are putting [businesses in] the United States at a competitive disadvantage.”

Moderated by Denise Christy, Humana’s Michigan market leader, Camden and Schlichting, who made up one of several panels at the summit at Rock Financial Showplace in Novi, Michigan, said double-digit growth in health care costs is unsustainable for businesses.

Camden said some companies have made the calculation that it is too expensive to hire workers in the U.S. because of high health care costs.

“We have made fun of socialist countries, but it costs significantly less to put workers there,” Camden said.

As a business with 22,000 employees, Schlichting said Henry Ford also is confronted with the problem of rising health care costs.

“We need to engage people at work to help them get healthier and change their behaviors,” Schlichting said.

Despite improvements made by Henry Ford and other hospitals in southeast Michigan in improving quality and reducing costs, Schlichting said the rising number of uninsured, which now stands at about 47 million, is a problem that is draining the resources of providers and needs to be solved through a government-industry partnership.

“This is a moral issue. Do we believe all Americans should be covered?” Schlichting said.

But in an earlier presentation, Dr. Paul Keckley, executive director of the Deloitte Center for Health Solutions in Washington, said southeast Michigan’s health care providers can’t rely too heavily on federal health care reform.

Though health industry professionals nationwide are focused on legislation in Congress, most of the changes that will lower health care costs must come from providers and the public, Keckley said.

“Here’s the dirty dark secret: What comes out of the bill in Washington in December is not going to be transformational change,” he said.

Keckley said federal health care reform would likely proceed at a glacial pace because lawmakers are wary of angering constituents who act on emotion rather than common sense.

He said true reform must stem from evidence-based medicine and preventive care, suggesting five cost-cutting steps that would not require a significant shift in spending:

“Even if it feels good, without hard data, [the health care system] doesn’t work,” Keckley said. “Let’s see if we can’t protect the parts of it that work well but correct the huge problems that it has.”

His five suggestions for reducing health care costs:

• Every price for every transaction should be known prior to purchase.
• Every treatment recommendation should be based on evidence.
• Every dollar spent on facilities and technology should be necessary.
• Every member of the public should know as much about the health industry as the auto industry.
• Every person should live a healthier life and manage his or her own care.

In making his case for comprehensive reform, Camden said Americans must acknowledge that the U.S. health care system is not the best in the world.

“Actually, we are one of the two worst systems in the world,” he said. “We pay more than others—50 percent to 60 percent more—and our outcomes are not the best.”

While sometimes providing excellent individual care, Camden said the American health care system is “overpriced and under-delivered.”

Schlichting said the problem with the current health care system is that it is too fragmented.

“We are rewarded for doing more [services, tests and procedures], for using more technology and we are not rewarded for primary care,” Schlichting said. “Medicare costs are totally out of control. We are paying more for less and need more preventive care.”

Another problem Schlichting cited is the high administrative costs incurred in the health insurance industry.

“Twenty-five percent administrative costs are very wasteful,” she said. “It is not helping us move forward.”


Filed by Jay Greene and Gabe Nelson of Crain’s Detroit Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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