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Smarter care, better habits can have impact on health costs

Aug. 30, 2013 @ 12:26 AM

WHITE SULPHUR SPRINGS -- These days, healthcare is "everyone's favorite topic," said William Winkenwerder Jr., president and CEO of Highmark.

So he spent some time Thursday morning at the West Virginia Chamber of Commerce's 2013 Annual Meeting and Business Summit to talk about what is driving costs, what the future may hold and what his company is doing to make health care more affordable.

Highmark is a Pittsburgh-based company that serves 33.5 million Americans through its businesses in health insurance, dental insurance, vision care and information technology. It has more than 20,000 employees, is among the largest health insurers in the country, and the fourth-largest Blue Cross and Blue Shield-affiliated company.

"It seems (healthcare) is going to be even more of a topic in the upcoming days and weeks this fall as Obamacare and some of its far-reaching provisions are implemented," he said. "We're spending 17.5 to 18 percent of the entire economy on healthcare. ... That compares with 1970, when I was in high school thinking about a career in health care and medicine. At that time, we were spending 7.2 percent of the economy on healthcare. If we were spending that now, we would have no federal budget deficit."

One in four federal dollars goes for healthcare, Winkenwerder said.

"Here in West Virginia, we're all spending $7,600 per person, per year in healthcare, 13 percent higher than the national average," he said.

Figuring out the effects of the 2,300-page Affordable Care Act is complicated, and Highmark has an entire team dedicated to it.

But he said he believes it's unsustainable, and that all Americans have a stake in helping reverse the high prices of their healthcare.

"There's no silver bullet in the solution to the cost problems," he said. "There are several solutions. Some involve a company like ours, and some involve each of us as citizens to make healthcare costs more affordable. ... We do spend more money in the United States than any other country in the world. We're not spending it as efficiently as we could and getting bang for our buck."

Individuals, and their employers who have influence on their lives, have some changes to make, because unhealthy lifestyles lead to chronic disease, he said. According to a report from the U.S. Centers for Disease Control, 75 percent of healthcare costs are incurred by preventable disease that could be addressed through physical activity, better nutrition, not using tobacco products and other things that people can control with their own behavior.

"That gives you an idea of how much we can be saving," said Winkenwerder, who said he was told himself that he was overweight, which surprised him. So he worked to take off 10 pounds.

There's a 13 percent rate of diabetes in West Virginia and the state ranks fourth in obesity, he said. Many people are like himself, carrying around a little extra weight and not realizing it until they're 20, 50 or more pounds overweight and facing chronic disease.

Also what needs to be addressed is "perverse incentives in the medical payment system," Winkenwerder said. "If something is subsidized, they tend to cost more because the real cost is shielded from the consumer. It's counter-intuitive that the more we subsidize, the more the costs go up."

The aging population also is a factor, as are technological advances, which are great but expensive, he said.

The country needs to work on avoiding defensive diagnostics, which could be replaced by careful observation, he said. Also to be avoided are overtreatment and uncoordinated care that leads to patients getting more unnecessary tests.

Highmark's efforts to address issues include finding the right combination of incentives to encourage employees to live healthy lifestyles, for which a study has shown they're getting a $1.65 return per dollar on their investment. Another initiative involves transparency in the costs and values of healthcare services. Everyone knows the cost of a gallon of gas, but not the price of a well visit, colonoscopy or CT scan, he said.

Highmark created Highmark Health Tools online, allowing patients to go online and check both the price and the quality of different services. The resource is not much help if you're in an ER with crushing heart pain, but if you're getting a test, it could help you make a wise choice, he said, and there's some early data indicating that it's affecting people's choices.

"We know the things we buy and use dollars for, but if it's somebody else paying for it, we have no idea," he said. "In my experience in healthcare, we've created a system where nobody knows what it costs. We need to get that information out to people, and we think it could make a difference especially now that benefit plans are changing."

Highmark also has a Quality Blue Program partnering with physicians and healthcare providers to increase vaccinations and prevent infections, decreasing hospitals stays and even saving lives.

It's also working on partnerships for healthcare delivery systems to integrate services and financing to lower costs.

"There are enormous challenges in the healthcare system, and with the health of people in United States," he said. "Highmark aims to be problem solver.... We have ideas and plans. We intend to continue to work very hard."

Business owners are key players, he said.

"Employers have a critical role in helping shape what the environment looks like in the future," he said. "Our health and how much we spend on it and apportion for resources for health care -- what could be more important? Take risks for solutions that might not be popular. Give it a try. You have to try to change behavior and practices. The prospect, if we do that, is good."

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