Last week the Watchdog attended a reception at the Westmoreland Club in Wilkes-Barre at which Glenn Steele, President and CEO of Geisinger Health System, talked at length about the ground breaking programs that were praised by President Barack Obama and are at the core of ‘Obama Care.’ At first the Watchdog scribbled down a couple of notes, but as he caught on to Geisinger’s revolutionary approach based on Free Enterprise rather than an expanded Medicare, he began to fill page upon page of notes.
Steele pointed out that the Geisinger System is relatively rare in that it consists of both a health insurance company and providers, including hospitals and medical practices. So where most hospitals are seeking to maximize revenue for service and keeping beds filled, Geisinger’s main concern is to eliminate errors and prevent unnecessary illness and treatment since they make their big earnings from the insurance side of their business.
As an example, studies showed that a huge amount of emergency room and hospital costs came from the segment of the population 75 and over. So Geisinger provides nurses to do outreach work with the population to advise and encourage them to take proper care of themselves, to take their medicine as prescribed, and the nurses are available to answer questions on a 24 / 7 basis. They are proactive in contacting the elderly on a regular basis. The result: Emergency room and hospitalization rate for this group declined by about 50%!
Geisinger also studied the number of adverse results from coronary treatment and surgery. The rate was a respectable 1.4 %. However, when they instituted a multi-point ‘best practices’ check list that the surgeon and staff were required to follow unless they provided a good reason (and Steele said that a doctor saying he was taught to do things that way 40 years ago was not considered “good reason”), the failure rate was driven down to a fraction of the former amount.
Steele asserts that re-engineering reduces cost, provides more favorable outcomes, and increases value to the patient.
Geisinger took the brave step of entering into contracts with the government whereby for about 30% of their procedures they were reimbursed not on the basis of “fee for service,” but rather on outcomes. It has worked for them. And it is one of the main concepts upon which Obama Care is predicated.
Steele predicted much consolidation would take place because hospitals that cannot make the transition from “unsustainable business models” to “outcome based compensation” would not be able to survive as reimbursements for Medicare and Medicaid are reduced. They would merge or be acquired by hospitals such as Geisinger who have successfully made the transition.
Steele said that many hospitals acquire medical practices in order to drive patients to them. (Lancaster General came immediately to the Watchdog’s mind.) But for Geisinger as a health insurance company, acquiring practices is meant to successfully treat patients to minimize the need for hospitalization.
He also talked about how technicians can at time do a better job in diagnosing and assisting patients than doctors. He gave as an example the treatment of hypertension.
He sadly relates that federal and state administrators are often afraid to make changes permitted under Obama Care for fear of baseless political attacks.
He bemoaned the excessive portion of Gross National Income going towards health care as compared with other countries and considers. He cited this as a cause of jobs being shipped abroad.
He also noted that most medical schools are training their students in the old fashion way and progressive, successful systems such as Geisinger and Kaiser have to retrain new hires.
Over the past ten years, Geisinger has grown from 7,000 to 15,000 employees, with an average compensation of $72,000 annually. (He didn’t indicate whether the “average” was a mean, medium or mode.)
Geisinger, like Lancaster General, has invested heavily in medical records. He said that current laws pertaining to restraint of trade and privacy are inhibiting, but they are finding ways to accomplish their goals. Ultimately patients will be able to obtain their records through a web site “portal” from anywhere in the world via the Internet. This will enable surrogates (friends and family members), doctors and patients to work together. This will also benefit the patient when they visit ‘urgent care’ facilities.
The above hardly does justice to Steele’s comments and the Watchdog apologizes for any errors in his note taking or memory. All this information and much more is readily available on the Geisinger web site. We intend to review them to update the above and as a basis for further reports.
Incidentally, from what Steele said, Geisinger is making a lot of money after a flat 2007. As is apparent from the latest Lancaster General Health 990 Report about which we will comment after the Lancaster Newspapers have their chance, LGH’s profits have dropped almost in half from past highs. Just wait till you hear what gifting they have eliminated!
Let’s hope LGH learns from Geisinger.
