Dreyfus On Health Cost-Cutting Marathon: 'We're Barely To Framingham'

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If you missed Andrew Dreyfus' speech last week to the Greater Boston Chamber of Commerce you are forgiven: it wasn't exactly Fifty Shades of Grey. To be fair though, the president and CEO of the state's largest health insurer, Blue Cross Blue Shield of Massachusetts, did make some good points about how hard it is to cut health care costs and the historic divisions that make it even harder, among other topics.

To put the problem in perspective for a Boston crowd, Dreyfus (who reportedly is very attached to his pedometer and competes with his daughter to see who can accumulate the most steps daily) offered this health-related metaphor:

"...If health care reform is a marathon, I believe then we are already at about mile 22 – past Boston College - on coverage, and at mile 15 on quality – crossing Wellesley at Route 16, but with those steep Newton hills still ahead. But when it comes to cost, we’re barely to Framingham, with a long, challenging race ahead of us."

Here, excerpted, are snapshots of his speech:

On The Path To Value

"First, we must hasten the redesign of our system for delivering care and paying for it. Second, we need to promote better health so we spend less time and money treating illness. Third, we must empower patients to play a central role in their care. And finally, we need to bridge some historic divides that subvert our affordability efforts again and again.

On Wellness Vs. Illness

"You’ve heard it before but it’s worth repeating: 50 percent of health care costs are associated with just five percent of patients, and 25% of costs with just 1% of patients. While these expensive patients include a small number of organ transplants, major traumas, and premature infants, the vast majority of spending is for people with multiple chronic illnesses, such as diabetes and coronary artery disease, or renal disease and depression. For these patients, staying healthy requires constant vigilance; they typically have multiple clinicians, multiple prescriptions, and are frequently hospitalized. By putting our focus on the health of the 5% of patients with multiple chronic conditions, we can help them lead healthier lives and reduce costs for all of us.

Some solutions are breathtakingly simple and low-tech, like ensuring patients have a PCP or nurse practitioner who coordinates their team of caregivers, deploying home health aides, social workers, and medical specialists as needed. Other solutions exploit new technology: telemedicine to monitor patients at home, medical records that connect hospitals and physicians offices, and social networks for patients to support one another.


Blue Cross recently partnered with a company called HealthBox on an accelerator program for health technology startups here in Massachusetts. Ten sets of entrepreneurs—chosen in a competition — are over in Cambridge right now getting intensive support to develop and launch their ideas, including some to help patients with chronic conditions.

While we renew our focus on the most expensive 5%, we must also reduce chronic illness by investing in wellness, at the individual, employer, and community level. We know where to start – better nutrition, more exercise, and a healthier environment.
The question is: how do we create and sustain healthy behaviors? We’re learning a lot from the field of behavioral economics. We know that immediate financial incentives, like a simple gift card, can nudge people to adopt a new behavior. We know that to make a new healthy habit stick, people need to develop a sense of purpose and mastery. Camaraderie or competition – in the form of a workplace fitness challenges, for example – can reinforce these habits over the long term.

Employers can help by creating a culture of health, where regular exercise becomes common in the workplace, where healthy foods are at eye level in the cafeteria and desserts are costly and hard to find. Blue Cross created a new insurance product especially for small businesses called Healthy Actions, which creates financial incentives for employers, employees and their physicians to assess and improve employees’ health."

On Empowering Patients

"This idea is relatively new, because our medical system has long taken a paternalistic view of patients. The assumption was that clinicians knew best, and patients, as used to be said of children, should be seen but not heard. Family members weren’t usually welcome in exam rooms, and patients’ preferences were often not valued.

But this legacy is changing. We now understand that patients — when they can — should be treated as full participants in decisions about their own care — that their perspective about is an important complement to expert medical opinion. Without it, we risk losing autonomy and connection when we need it most. Don Berwick, founder of the Institute for Healthcare Improvement and former head of Medicare and Medicaid, has written that 'the moats we dig between patients and clinicians can drain spirit from both.'

Evidence supports this view. When patients participate in clinical decisions, they follow regimens more closely, and treatments tend to be more effective and, at times, less expensive. One study found a 23 percent reduction in surgical interventions when patients could choose between surgery and a less invasive, less costly option.

As patients begin to participate in choices about our health, it will change how we view our responsibilities as well.

One new responsibility we must assume is to understand more about the cost of care. Blue Cross has several plans in which out-of-pocket costs vary based on where members receive their care. Choose a high value facility – meaning one that provides high quality at lower costs – and your co-pays are lower. Choose a facility that’s more expensive, your care is covered but your share of the cost is higher. We must strike a careful balance here. We cannot create financial barriers to needed care, but we should encourage patients to consider the relationship between their health choices and the cost of care.
Now it is our job – as a health plan – to offer easy-to-use tools to help our members make health care choices. Today, Blue Cross members can use their smart phones to find locations for flu shots, retail-based clinics, MRI centers, and low-cost hospitals, and our tools are becoming more sophisticated every day. Soon, when a member is sent for an MRI by an orthopedist, they will be able to choose an MRI site, based on location, total cost of care, quality data, and estimated out of pocket cost."

On The Historic Divides In Health Care

"But even in Massachusetts, we can be quick to divide ourselves into camps, harbor suspicions, and conclude that one group cannot understand another’s perspective...

The first is the persistent question of whether government regulation or market competition can best control costs. As long as we debate the merits of one versus the other, we fail to think about how to use each to its best advantage. In fact, we need government – which already funds half the care in Massachusetts — to provide proper safeguards, and we need competitive forces to prompt innovation and improvement. The new law offers a careful balance of the two, and our job is to make sure that both government and the market deliver.

A second natural tension is between the business of medicine and the practice of medicine. For more than a century, we have appropriately elevated physicians as the authority on what is best for patients. As a consequence, the business of health care –including health insurance and hospital administration — has been seen, at best, as a necessary evil, and at worst, as a threat to the sanctity of medicine.

But experience is starting to outgrow that narrative. The quality and safety movement I mentioned earlier has brought the principles of process engineering and efficiency to health care, saving time and money and improving safety. And as a result of our Alternative Quality Contract, physicians are embracing, rather than rejecting collaboration with health plans.

As physicians and hospitals adopt business principles to improve care, health insurers must listen more carefully to physician and patient requests to simplify health care. Massachusetts health plans are held – by law — to the highest standards in the country on the percentage of our premiums that must be devoted to spending on medical care. But that should only be a beginning — we can reduce complexity for physicians and hospitals by standardizing administrative requirements and quality measures.

For patients, we need to make the arcane language of insurance understandable, starting with the infamous EOB – that’s the often unintelligible form you get in the mail that says “this is not a bill.” Starting in 2013, our members will begin to receive a completely revamped explanation of benefits. The new version explains charges, claims and out-of-pocket costs in plain English, and helps members understand how their coverage works.

The last conflict we must reconcile is between our view of health care as an individual vs. collective good. All of us are patients, and naturally we worry about whether the best health care will be there when we need it. As a result, we tend to evaluate health proposals based on whether we believe they will advance our individual interests. On this basis, most suggestions to control health spending get rejected as threatening patient care, and lead to accusations of “death panels” or rationing.

Yet many of the problems of health care can only be solved if we also treat health care as a collective good. For example, we must improve our health care infrastructure, just as we invest in common needs such as roads and bridges, our electrical grid and broadband internet service. But because we fail to see health care as an interconnected system, we fail to make the needed investment. For example, we will never solve what may be our greatest health challenge – the rising epidemic of obesity among our youth – unless we reverse decades of underinvestment in public health – a clear collective good.

To achieve affordability, we must, I believe bridge these divides. Together, we must recognize that regulation and competition can be mutually reinforcing, that the business and clinical sides of medicine can support one another, and that collective stewardship of our health care system can improve, rather than undermine, individual care."

This program aired on September 25, 2012. The audio for this program is not available.

Rachel Zimmerman Twitter Health Reporter
Rachel Zimmerman previously reported on health and the intersection of health and business for Bostonomix.