In the Wake of the Supreme Court Decision: Health Care Cost Reduction Strategies

At Altarum's July symposium, “Sustainable Health Spending and the U.S. Federal Budget,” David Lansky, CEO of Pacific Business Group on Health (PBGH) described the results of a survey his firm conducted among its large company clients. In 10 years, he reported, only 23 percent expected to be providing health benefits. "The risk of employer exit," he said, “is serious.”

In the wake of the Supreme Court’s decision upholding the Accountable Care Act (ACA), the major actors in the nation’s health care enterprise are moving to prepare for changes on the order of the PBGH research for large employers. The Altarum symposium focused primarily on determining how health care costs can be set at a sustainable portion of the gross domestic product; meaning a level that won’t bankrupt the country. Later in the same week, a Bipartisan Policy Center (BPC) symposium focused on the impact of the ACA on the insurance industry and on the impact on Medicaid for the states.  Those conversations focused largely on finding ways to ensure affordable access to care, primarily through state insurance marketplace exchanges created by the ACA that are scheduled to take effect in 2014.

Speaking to the BPC session, Mike Hash, acting director at the Center for Consumer Information and Insurance Oversight at HHS noted that since 2002, the number of working Americans covered by their employers has fallen from 64 percent to 55 percent. If PBGH projections about employer exit prove to be accurate, and if they reach down into mid-sized and smaller companies, the readiness of the insurers that will be part of the state-based exchanges could become problematic.

That is one reason BPC panelist Sabrina Corlette, a health policy researcher at Georgetown’s Health Policy Institute who studies consumer access to affordable insurance, noted the massive public information effort that will be needed to aid consumers as these changes occur. “Invest in outreach and education,” she said, “Federal government and states need massive education campaigns, to help people understand rights and responsibilities under the law.”

The all-permeating factor at the center of these and similar discussions around the country is, of course, the unchecked growth of the cost of care. It is perhaps no surprise that the business community is not waiting for the federal establishment to put in place cost-containment programs that address their true concerns. “Companies care about the total cost of care,” Lansky said, and then ticked off several factors influencing business health decisions:

  • Programs should incentivize high performers;
  • They want to know that employees have good health outcomes;
  • They want consistent reliability;
  • High-deductible plans are “going nowhere;”
  • Benefits are declining;
  • There is no outcome data; and
  • The health care marketplace is “going the wrong way” (i.e., building new hospitals).

Meanwhile, employee wellness programs that have been considered potential tools for cost reduction continue to find that estimates and projections on financial return on investment (ROI) only present another point of uncertainty. A recent Harvard study that suggested a 6:1 dollar return on such programs was greeted with great skepticism from experienced practitioners. A recent discussion among highly experienced managers and consultants in the very high-quality LinkedIn group Wellness is a Business Strategy  (10,000+ members) did not come to agreement on the value of ROI for what are essentially behavior change initiatives that can take years to show results in terms of hard health care costs. (The discussion topic: “Is it really right to focus on the ROI for Wellness Initiatives? Given that it takes three to four years to see any real impact.” Can be found here:

During another Web conversation on Twitter produced by @Co_Health, “Maximizing employer ROI,” guest commentator and senior corporate HR consultant Wendy Lynch notes in her tweets that in her experience, “Few companies get positive ROI from broad wellness programs... The evidence is weak that we can move the unhealthy to being healthy…  Wellness initiatives aren’t for saving money…  The company uses them to attract and keep health-minded individuals.”  (A summary is here:

This does not mean that employers will not accept a value for, if not a specific dollar ROI for, internal wellness programs, even as some of them start to drop employees from benefit programs. But it does reflect business concerns that reliable outcome data – for patient care or for wellness programs – is not readily available.

Elsewhere, the ACA created provisions intended to strengthen basic health services and re-orient health care focus to prevention and wellness. This is evident primarily in the creation of the National Prevention and Health Promotion Council and expressed in its National Prevention Strategy. Far less well known are initiatives that intended to expand the tools available to primary care and preventive medicine physicians.

The nation’s primary care enterprise is well known for being much reduced, as physicians move toward specialization. This phenomenon thus reduces the potential for primary care to establish and reinforce lifestyles that may ultimately help patients veer away from the chronic, long-term and costly behavioral maladies that nation is confronting. This fall the Agency for Healthcare Research and Quality (AHRQ) is taking the innovative step of adding to primary and preventive care education practices from integrative medicine. AHRQ will fund the creation of a new and unprecedented National Coordinating Center for integrative Medicine. Its first mission will be to manage and support a series of related education grants made to medical schools that will fund an integrative medicine residency (IMR).  The schools will incorporate “evidence-based integrative medicine” into existing preventive and primary medicine residencies.

This initiative reflects the gradual development – and awareness -- of evidence-based integrative approaches involving nutrition, stress management, health coaching, and selected healing modalities that were first advanced by the Institute of Medicine and then implemented through the National Institutes of Health’s National Center for Complementary and Alternative Medicine. The residencies offered under the AHRQ IMR program offer an expanded set of tools and broader diagnostic framework to incorporate in primary care and preventive medicine.  

Evaluations and studies of the cost-effectiveness of integrative therapies have grown since 2005 and have increasingly influenced health providers and policy developers. (For a 2010 summary of these programs, see The Integrator Blog here: The major institutional player now applying these lessons is the Pentagon. Its research programs into integrative therapies since the early 2000s is identifying cost-effective adjunctive and alternatives to painkillers for wounded soldiers, for instance, and whole-person approaches to reduce the acute states of post-traumatic stress disorder and depression that have ravaged the lives of service members. The military’s current emphasis on resilience training and its Total Force Fitness program borrow a great deal from its research into integrative therapies in the last decade.

The distance between Washington health care budget policy sessions and the use of acupuncture for pain control in combat zones is not so far apart as it may at first seem. The latter experience, along with others across the integrative spectrum, may not prevent employers from drastically reducing their health benefits programs, but by expanding the palette of cost-effective care approaches presents options sorely needed to slow the growth of care costs.

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