Final
Presentation from Colorado for Health Care
HEALTH CARE TASK FORCE
Votes:
Action Taken:
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01:38 PM -- Call to Order
Senator Keller explained that the workforce shortage issue can be brought up in more detail possibly on October 13th or another date and requested that people let the staff know if they would like to testify.
01:39 PM -- Presentation of Report Entitled: "Sky High Health Care Costs in the Mile High City: How Denver Hospital Systems Have Driven Up Health Care Costs and What We Can Do About It"
Julia Green, Director of Colorado for Health Care, stated they are working on educating the voters on referendums C and D and talked about why health care is surging. She distributed three handouts 1) a report entitled "Sky High Health Care Costs in the Mile High City" (Attachment H); 2) a review of the Denver Consolidated System's Response to the report (Attachment I); and 3) an article by Malcolm Gladwell entitled, "The Moral-Hazard Myth" (Attachment J). Ms. Green then introduced Mr. Tom Moore.
01:45 PM
Mr. Moore introduced himself as the principle for the Center for Strategic Health Purchasing that has begun to work for various state and local settings around the country trying to bring together pertinent research to support local efforts to understand the dynamics of the health industry and what is going on. He commented on the morning presentations and how the health care system is in disarray. He stated it reflects a structural problem in health care delivery: we do not get the information, we do not analyze, and we do not plan.
Mr. Moore went through some slides that captured the points in the "Sky High Health Care Costs in the Mile High City" report (Attachment H). He discussed how hospitals consolidated in order to be more efficient and stated that although that may be the case, prices went up as well. He pointed out that consolidation has been profound in Denver in that it went from a fairly wide and diverse group of community hospitals into essentially three private systems and one public system causing a tremendous amount of market control. He stated that one result that has come along with consolidation is the levels of unprofitable community service have gone down. Mr. Moore defined unprofitable community service as services for which there is no fundamental revenue or reimbursement stream. He gave the example of mental health services that have gone away due to lack of funds in order to increase funds in more profitable areas. He added that Denver's operating margins are high above the national average, health care premium costs have risen sharply, and smaller employers (between 0 and 50 employees) are carrying the heaviest load because they have low bargaining power. He stated that when health care costs go up health care declines, and that there is an unpredictability in costs and an increase in the number of people who can pay to cover the costs of those who cannot pay.
Mr. Moore stated that another effect of consolidation is that it allows the provider to set prices and those prices may not resemble the cost but rather may be set at what people will pay. He stated the core of his argument is that health care can no longer be left to the market.
Senator Tochtrop brought up the certificate of need program that was around twenty years ago and if a program such as this would help lower health care costs if it were to return. Mr. Moore agreed and discussed with Senator Tochtrop how certain hospitals have too much technology. He added that it would be more effective to place the technology in hospitals where it is needed rather than where the patients are located in order for the hospital to make a profit. Senator Keller asked about bed availability and Mr. Moore stated that the cost and quality of medical care is driven more by available beds then the need for care.
Senator Tochtrop commented on the difference between the economics of health care and other areas, and Mr. Moore added that the health care industry is more secretive than others as well. He said that in any other area you can find out anything you want to know, but with health care you cannot.
Mr. Moore talked about how the problems with declining coverage may have a ripple effect in the economy and reduce the number of small businesses, etc. He stated there needs to be some type of systematic oversight on health care. Mr. Moore then took questions from the committee
Senator Keller asked Mr. Moore if he saw a role for insurance companies. He said there was a role for third parties. He discussed how health plans offer preferred hospitals for specialty treatment based on the fact that they serve their marketing purpose rather than on evidence of outcomes and performance of the facility. He stated that secrecy is intolerable.
Representative Butcher commented on the previous presenters and Mr. Moore's reasons why the cost of health care is growing. She believes the real issue is we do not know how to manage health care and what is missing is the information from the health care insurance providers. She stated that she did not think it mattered what a hospital provides but rather how much it costs to provide that care. Mr. Moore agreed and stated that disclosure is where they have to start, and talked about the need for a federal minimum standard, but that it would be more effective to have local laws.
Representative Frangas asked that if every hospital had to disclose how much they charge for care, would that encourage all the hospitals to increase their charges to the highest charge because they would know how much people are paying for care. Mr. Moore stated that if the lower cost hospitals raised their costs to meet the higher cost hospitals then the consumer would just refuse to pay, instead, it will cause all hospitals to lower the cost or explain themselves to the consumer.
02:24 PM
Mr. Moore concluded his presentation urging the committee to read the study (Attachment H).
02:29 PM -- Recess.