THE BUSINESS OF HEALTH CARE
DISPATCHES FROM ‘THE BUSINESS OF HEALTH CARE POST-ELECTION’
BY RICHARD WESTLUND

health_care.jpg Back in March, experts at “The Business of Health Care Post-Election” predicted the Trump administration and U.S. Congress would likely make major changes to U.S. health care policies, with profound impacts on patients, providers, investors and businesses. The sixth annual conference, presented by Florida Blue, brought more than 850 health care executives, physicians, consultants and students to the University’s Watsco Center on March 3. Excerpts from a few conference sessions follow. Read papers from each session, watch video and more, online at bus.miami.edu/health2017.

NO SUCH THING AS CLOSED BORDERS
HEALTH CARE IN A GLOBAL WORLD

“While health care is a national issue, we need to look carefully at the global implications, such as training our medical professionals and preparing for pandemics like Ebola, that could jeopardize our national security,” said University of Miami President Julio Frenk, M.D. Frenk opened the conference with a conversation with Ashish Jha, M.D., Harvard University’s K.T. Li Professor of International Health and director of the Harvard Global Health Institute at the Harvard T. H. Chan School of Public Health. “Health care is the quintessential example of a ‘glo-cal’ sector, where services are delivered by local hospitals, doctors and nurses who are deeply connected with global networks,” Frenk added, pointing out that infectious diseases such as Zika and Ebola don’t respect national borders.

“Every aspect of U.S. health care has global components, including the foreign physicians and nurses who practice here, the medications made outside our country, and the knowledge we export around the world,” Jha noted. Expanding on those topics, Jha pointed out that about 25% of U.S. physicians and nurses were trained abroad. “This is a mobile field of talent, where professionals are in demand around the world,” he said. “And it’s not just professionals who can move around. Patients also seek out lowercost settings to receive elective services. … There are already foreign clinics that cater to the wealthy,” Jha said. “When middle-class Americans face a $12,000 deductible, that market may change dramatically.”

Would the U.S. be better off if it could shut its borders, health-wise? “The answer is a resounding no,” Jha asserted. “Instead, we must make investments in public health to protect the American people in an interdependent world.” For decades, U.S. politicans have offered bipartisan support for health care as an instrument of foreign aid and soft diplomacy. U.S. aid, Jha said, has been enormously successful in saving lives around the world.

“But even if you don’t feel that’s enough to justify spending, that money has been well spent in terms of its impact on the stability of these countries and their attitudes toward America,” he said. “This is a much better way to protect our country than sending in the military.”

Continued U.S. investment in global public health is also essential for identifying and containing outbreaks of infectious diseases, reducing the risk for Americans, Jha said. “Ebola was a warning to us,” he added. “We got lucky, because this disease doesn’t spread that easily. But 100,000 people fly into the U.S. every day, so it’s impossible to keep out an infectious disease.” Jha likened the threat of pandemics to that of a fire in a crowded city neighborhood. Building a protective wall around one home is unrealistic, he said. Instead, the U.S. should be sure other countries have the “smoke detectors and fire extinguishers” they need so a problem doesn’t engulf the entire neighborhood.

Frenk added that much of the conversation in Washington revolves around the “upstream” aspects of health care, like the costs of treatment and medications. But investments in disease prevention and wellness can help address “downstream” obstacles and deliver a powerful return on investment by keeping Americans healthy.

THE COUNTRY’S ‘MOST EXPENSIVE DATA-ENTRY WORKFORCE’
PHYSICIANS NEED DATA, BUT THERE MUST BE A BETTER WAY TO GET IT

More data could lead to medical care that is lower in cost and has consistently better outcomes, but right now, data entry is a significant burden on medical practices. That was one issue raised by panelists in a discussion that brought together – for the first time ever – leaders of five major provider associations: the American Hospital Association, the American Medical Association (AMA), America’s Health Insurance Plans, the Healthcare Financial Management Association and the Medical Group Management Association (MGMA). AMA CEO and Executive Vice President James L. Madara, M.D., noted AMA surveys show that, for every hour a physician spends with patients, another two hours are needed for data entry.

“We have created the most expensive dataentry workforce in the country,” he said. “We badly need interoperability between electronic health care records (EHRs) so that data can flow among patients and providers. We also need technology that allows individuals to control their own data, just as they do with their bank accounts.

” About 78% of physicians now in practice said they were dissatisfied with their burdens, said Halee Fischer-Wright, M.D., president and CEO of the MGMA. That number comes from a recent survey by the association, which also found that $40,000 per physician per year is spent just documenting care quality. “That interferes with the physician’s ability to build a relationship with the patient, and getting better outcomes largely depends on that relationship,” she said.

Madara isn’t advocating giving up on documentation and data gathering. He believes that better data on patient outcomes may be able to lower costs, as well as increase quality of care. “We created AMA tools for pilot studies of hypertension,” he said. “That has helped individuals gain more control of this chronic condition, decreasing strokes and heart attacks. In this case, even marginal improvements can save big dollars.”

But, Madara pointed to the importance of measuring outcomes from the patient’s perspective, rather than the provider’s. “We have extensive data on the input side, such as how many knee replacement procedures are being performed,” he said. “Patients with knee replacements derive value from being able to drive a car, walk the dog and get around without pain. So, we need to look at the whole series of health care events that lead to that positive functional outcome and see where we can improve the process.”

WHERE TO INVEST NOW?
ELECTION IMPACT ON THE BUSINESS OF HEALTH CARE

Tax reform, a border adjustment tax, immigration restrictions, loosening of Dodd-Frank financial regulations – President Donald Trump has talked about all of these policy changes, which may have global implications for business and investment. But how does uncertainty related to politics affect investment? “There is always regulatory and political change,” said Karthic Jayaraman, managing director of The Carlyle Group, a private investment firm based in London with health care holdings in the U.S. and other parts of the world. “You have to deal with that uncertainty in making investment decisions.”

U.S. health care businesses will continue to attract capital due to demographics that mean the nation’s health care demands will only increase, said Brian Kinkead, vice chairman of the Global Healthcare Group at Bank of America Merrill Lynch. However, he added, political risk is a growing concern. “With the high level of polarization in Congress, the GOP might push a program through now, only to have the Democrats overturn it [if] they come back into power,” Kinkead said. “Legislation used to be bipartisan, and you could be reasonably confident as an investor that the basic foundation would be in place. Now, it is a challenge to determine where to invest in health care at the right valuation.”

Another concern for investors is the potential for U.S. tariffs on imported medical devices or drug products, said Jacques Mulder, global health sector leader at Ernst & Young. But, he said, “a tariff might not be as frightening as one might expect,” because the $175 billion spent on pharmaceutical products is only a small percentage of the $3 trillion U.S. health care market.

Some of the companies that investors and lenders feel more comfortable about right now include managed care companies serving the Medicare Advantage market, said Kinkead, who explained that Medicare has typically received bipartisan support in Washington.

Mulder said investors should also take a close look at innovative medical technology companies. “We are embracing the science of outcomes, and new products and devices can reduce risks and improve the delivery of care,” he said. “In the undeveloped world, technology can provide people with remote access to physicians and other services.”

Noting that the Carlyle Group likes to “hedge its bets” by building a varied investment portfolio, Jayaraman said diversification is also a major theme for many health care companies. “We are seeing U.S. provider companies investing in European markets,” he said. “As a result, we expect to see more global health care companies in the future.”

Click for more – excluslively online – including:
• Former U.S. Secretaries of Health and Human Services Donna E. Shalala and Kathleen Sebelius on replacing the Affordable Care Act.
• Leaders of five of the nation’s major health industry associations on what to keep and change from the ACA.
• How changes to the ACA and Medicaid may affect South Florida health care providers
• The need for transparency to help bring down health care costs
• The changing role of health care providers

Spring 2017
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