Shorb: Increased Care Comes With Need for Lower Costs

By Jennifer Johnson Backer

In increasing access to care and outcomes, health care organizations in Memphis and elsewhere in the nation need to find innovative solutions to bring down the cost of providing care, Gary Shorb, president and CEO of Methodist Le Bonheur Healthcare, said in a speech to industry leaders at the University Club earlier this month.

A 2012 analysis from The Commonwealth Fund found the U.S. spends more on health care than 12 other industrialized countries: Australia, Canada, Denmark, France, Germany, Japan, the Netherlands, New Zealand, Norway, Sweden, Switzerland and the United Kingdom – yet health care quality in the U.S. does not achieve better outcomes than the least expensive systems in the study.

“We have got to figure out ways to bring down the cost of providing care,” Shorb said. “We spend five times as much for below average results,” as he explained West Tennessee’s death from heart failure rates rival Russia’s rates and that the region’s stroke incident rate is on par with most Eastern European nations.

Higher health care spending in the U.S. “cannot be attributed to higher income, an older population, or greater utilization of hospitals and doctors,” according to The Commonwealth Fund. Instead, the study found the U.S. spends more due to higher prices, and “perhaps more readily available access to technology and obesity.”

In 2012, Methodist Le Bonheur closed the year with a 3 percent operating margin, all of which went back into recapitalizing the health care system, Shorb said. But the system received fewer reimbursements from Medicaid and Medicare, in addition to losing about $80 million on providing care to the uninsured.

Shorb told the audience he believes the U.S. has a moral imperative to increase access and coverage to its citizens.

“While ObamaCare or the Affordable Care Act takes a lot of hits, I believe there is a lot of good in this act,” he said. “There are still a lot of people out there who, because they don’t have access to care, don’t seek it out.”

“We have got to figure out ways to bring down the cost of providing care.”

–Gary Shorb
President and CEO, Methodist Le Bonheur Healthcare

Providers need to work collaboratively to seek both regional and community solutions to bring down the cost of care, and improve outcomes and access, he said.

Shorb told the audience, “We are in a crisis; we can’t afford to sustain what we have in place.”

He pointed to cost-savings measures like Wal-Mart Stores Inc.’s 2012 move to offer all U.S. employees and their families free heart and spine surgeries at six major health centers at no cost to workers. The retailer pays for free consultations and care, along with travel, lodging and food for the patient and caregiver.

Patients receive treatment at six health care organizations that have been rewarded for patient care and keeping down costs: Cleveland Clinic in Cleveland, Ohio; Geisinger Medical Center in Danville, Pa.; Mayo Clinic sites in Minnesota, Arizona and Florida; Mercy Hospital Springfield in Springfield, Mo.; Scott & White Memorial Hospital in Temple, Texas; and Virginia Mason Medical Center in Seattle.

Shorb said by narrowing the network, Wal-Mart can control costs, treatment disparities, and patient outcomes. At some hospitals, 40 percent of Wal-Mart employees referred for surgery didn’t need it.

That model also is coming to other cities, including Memphis as narrower networks allow employers and health care organizations to drive greater efficiency and higher quality, Shorb said. Already, Methodist is using a model in partnership with Cigna in which patients are assigned to specific doctors. Providers who hit quality goals receive higher payments – which lead to a reduction in costs. The cost savings are split between physicians and employers.

“Fewer choices of health systems and physicians, that’s where we’re going,” he said. “The smaller the market, the more successful we will be in achieving quality improvements and cost-savings measures.”

Shorb also cited other initiatives in the works, including the Congregational Health Network, a collaborative partnership between Methodist and faith-based ministries to improve community health by preventing and managing chronic diseases; a partnership with the University of Tennessee Health Science Center to establish a health disparities center; and physician alignment strategies, and more sophisticated use of data to drive outcomes.

“We are well-positioned to drive change in our community,” he said.