With TFAH and other RWJF grantees, we are building a national population health evidence base for disease prevention and improvements in public health programs. Our aim is to show national, state and local political leadership that when they make strategic near-term investments in effective, evidence-based disease prevention programs they will spare millions of people from serious illness and save billions of public and private dollars in the long-term. As always, money talks loudest in health care. This time, however, we want it speaking our language of change.
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In a significant yet-to-be-published study which we recently funded, health policy experts Glen Mays and Sharla Smith at the University of Arkansas took the most comprehensive look yet at the effect of local public health spending on population health. They analyzed data from 2,900 local and state public health agencies and matched what communities spend on public health with rates of mortality among infants and deaths due to cardiovascular disease, diabetes and cancer.
Then they asked “Does more money matter?” The evidence conclusively answered, “Yes!” For each 10 percent increase in public health spending, mortality rates fell as much as 6.9 percent.
Mays and Smith also determined that funding public health is a faster and cheaper way to lower mortality rates than beefing up local medical resources. For instance, when an average community increases its public health spending by only 10 percent—roughly $300,000—the deaths from heart disease decrease 3.2 percent.
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To compute what this means for real people, I randomly Googled “cardiovascular mortality by county” and ended up in Larimer County, Colorado. Here, along the Front Range of the Rocky Mountains, county health officials reported 451 county residents died of cardiovascular disease in 2006. Under the Mays-Smith model, a 10 percent increase in public health funding would have saved 9 of those lives.
To get the same outcome without relying on public health would take 14 new primary care physicians for every 10,000 in population. If you figure that a typical new family doctor makes about $176,000 a year—that’s $2.5 million in new spending for enough doctors to achieve the same outcomes the community could realize by spending only $300,000 on programs to improve the health of the public.
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A separate study by TFAH took an in-depth look at the return on investment (ROI) in disease prevention. They documented that even a small investment in community prevention will produce substantial savings in overall health care costs.25
Analysis by the New York Academy of Medicine and an outside panel of experts found that an investment of $10 annually per person in local programs to increase physical activity, improve nutrition and prevent smoking could save the country more than $16 billion within five years.
Drilling deeper into one community’s data, the evidence showed that spending $10 per person annually on prevention programs in less than five years produced 5 percent reductions in type 2 diabetes, high blood pressure, heart and kidney disease and stroke. According to the experts, the ROI works out to savings of $5.60 for every $1 invested. Projected savings include $5 billion for Medicare; $1.9 billion for Medicaid; and $9 billion for private payers. The financial math is compelling, the human math is beyond calculation, and the immediate need overwhelming.
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Late last year TFAH followed up its ROI analysis with a national health and prevention strategy to modernize public health’s capacity to prevent disease, prepare for disasters and reduce health care costs. The top recommendation went straight to that 95-to-2 funding paradox and public health’s current $20-billion deficit. TFAH called for a stable, reliable funding stream for public health activities across local, state and federal levels. TFAH also proposed strengthening the public health workforce and an emergency health benefit for the uninsured and under-insured during major disasters and disease outbreaks.26
The new research in disease prevention further exposes an expensive and aimless sub-system of chronic care that’s addicted to an uninventive, even obstructive payment system that rewards oversupply of services and volume of care whether they work or not. This creaky carryover from the other side of our epochal divide locks down poor quality, inhibits innovation, and avoids change to a degree we do not see in other major sectors of our social and economic life. According to the Centers for Disease Control and Prevention,27 almost half of all Americans live with at least one chronic condition. The cost of their care consumes 75 percent of everything spent on health care every year. For example, diabetes–$174 billion; arthritis–$81 billion; heart disease and stroke–$448 billion; obesity–as high as $200 billion annually.
Not all of it is necessary. As many as 4.4 million hospital stays (median cost in 2006—almost $13,000 a stay) could be avoided by better managing chronic conditions, providing better care outside the hospital, improving access to effective treatment, and helping patients adopt healthier behaviors.28
The old way of doing business profited when people were sicker longer, but that model hurts everyone. Here’s where a fiscal revolution really is required to reallocate dollars away from business-as-usual poor-quality care. Instead, we should funnel funding to long-term health improving cost reducers like universal coverage, expanded access, higher quality, payment reform and better management by patients of their own chronic conditions.
The old conventional wisdom holds that the problems are too big, too entrenched and too expensive to tackle right now; wait until we first fix the economy. The new conventional wisdom says waiting makes matters worse; the problems are too intricately interwoven to compartmentalize as stand-alone, next-in-line patients waiting to be to treated one at a time.
When policy-makers get it right, they will realign private and public payment schemes to benefit quality performance over the volume of services. Finally, providers that successfully provide quality care and reduce excessive care will be rewarded, not penalized. This certainly makes good sense to most people. Mention it to your favorite doctor or hospital executive, though, and you’ll discover they may find this notion of “quality improvement” to be revolutionary—and not necessarily welcome.
The “value gap” between what we spend on care and what we get in return is a fundamental cause of America’s joined health care and economic crises. We spend twice as much per person on health care than any other advanced nation in the world but don’t deliver the quality of care, patient outcomes, improvements in public health and longer life spans as do many other countries.
This indisputable and shocking fact is still little known to the American people, under-reported by the media, and generally ignored or discounted by many leaders—as if “this can’t be” is sufficient refutation of a perceived attack on American exceptionalism. But within the serious health policy, legislative, philanthropic, academic, think tank and provider community, reversing the decline in American health status and health care is the all-consuming priority. For insight and answers, we turned to some of the best thinkers in the field and friends of the Foundation.
Karen Davis, my philanthropic colleague at the Commonwealth Fund, puts it this way: “The United States has been slow to learn from countries that have systematically adopted policies that curtail spending and enhance value.” She suggests a series of policy changes with “the potential to substantially bend the curve of projected health care spending” with estimated savings as high as $1.5 trillion over a 10-year period.29 Typical policy options and projected savings include:
- $194 billion: Patient-centered medical homes for Medicare’s primary care patients.
- $43 billion: Negotiated pharmaceutical prices.
- $229 billion: Hospital/physician services bundled in a single episode-of-care payment.
- $191 billion: Promoting public health and reducing obesity.
In addition, the Commonwealth Fund analysts predict that insuring all Americans will save another $1.6 trillion when combined with initiatives to improve quality and performance.30
David Eddy at Archimedes, Inc., a RWJF grantee; Greg Pawlson, executive vice president of the National Committee for Quality Assurance; and a group of associates, reminded us how powerful existing data can be when it’s looked at in new ways with new tools. They demonstrated how the systematic use of national performance measures can improve health if they are used to drive health care delivery. The measures they used—called the Health Care Employer Data and Information Set (HEDIS)—track how performance improvements over time affect the morbidity and mortality of specific diseases. What Eddy’s group found when they analyzed HEDIS results for diabetes and cardiovascular disease from 1995 to 2005, is that the improvements translate into the prevention of nearly 1 million heart attacks, 800,000 strokes and 100,000 cases of end-stage renal disease. The HEDIS data makes the point: If we can measure quality, we can achieve it.31
John Wennberg and his associates at the Dartmouth Atlas, meanwhile, estimate that paying only for care that is needed can save Medicare $30 billion a year without negatively affecting health outcomes. The trick is to bring the high-cost and medium-cost Medicare regions inline with the more efficient, better value spending levels of the low-cost regions. Better yet, do this in the larger health care system and the experts believe the savings will be just as big.32
Peter Orzag, the new director of the Office of Management and Budget and former head of the Congressional Budget Office, building on Wennberg’s work, takes it even further, concluding that the United States spends at least $700 billion a year on health care that does nothing to improve or affect patient status. His solution: Stop funding futile activities and improve health care by following evidence-based standards of best practice.33
Clayton Christensen at the Harvard Business School applies his popular concept of “disruptive innovation” to health care and comes up with the first breakthrough business model designed to make health care more affordable. This is exactly what advocates for the bottom line in both the public and private sectors have been waiting for. Christensen and Jason Hwang of the Innosight Institute shift the center of gravity in health care’s business model from high-cost “solution shops”—doctors and hospitals—to a technology-based value-added model that achieves attractive operating margins by delivering high-quality services and high-demand products at a lower cost. A nurse practitioner rather than a physician, for example, follows a rules-based diagnostic test to verify common childhood strep throat, then writes a prescription to cure the infection. Christensen estimates that by adopting his “disruptive” value-added business model, hospitals and clinics can deliver care at prices 60 percent lower than the old-guard solution shops.34
The hardiest tests of our national character come when we are called upon every two or three generations to confront truly “tipping point” menaces to the health, security and well-being of our way of life. You can count the Republic’s toughest tests on the fingers of one hand. Thankfully, the American people and our leaders have passed each trial by applying the lessons learned the last time around.
Back in the darkest moments of the 20th century, as our nation teetered between Great Depression and World War, American families were driven by fears and anxieties much like what we are living through today. In the first week of January, 1941, Franklin Delano Roosevelt, “thinking of our children and their children,” went before Congress.35 With his characteristic optimism and determination he reminded Americans what matters the most—the common good.
“There is nothing mysterious about the foundations of a healthy and strong democracy,” he said, ticking off equality of opportunity, jobs, and security for those who need it. “The inner and abiding strength of our economic and political systems is dependent upon the degree to which they fulfill these expectations.” It still is.
Amazingly, many of our expectations for health care remain unfulfilled, even after some 70 years of trying. Like then, millions are uninsured and without needed care, hospitals can be just as dangerous, the “haves” always have it and the “have-nots” do not, and what you get for what you’re charged still seems out of whack.
RWJF Blueprint For Change
What has changed—and it’s taken us oh so long—is that, as detailed in this report, now we know what to do and how to do it, so long as we follow the clear-cut, principled, evidence-driven blueprint set forth in this year’s president’s message:
- Cover the uninsured.
- Improve the quality, value and equality of health care.
- Bring down spending.
- Prevent disease and promote healthier lifestyles.
- Strengthen public health's capacity to protect our health.
- Address the social determinants of health.
In that same speech, FDR told us, “Since the beginning of our American history … we have been engaged in change—in a perpetual peaceful revolution—a revolution which goes on steadily, quietly adjusting itself to changing conditions.”
Thus, in this new century, history dares us to face up to the changing conditions of our generation’s America and fix what is broken, discard what has failed, and accomplish what is needed and new.
I have tremendous hope that we can develop common sense solutions to our nation's crisis of health. I believe that we can continue to make great strides when it comes to disease—that we can catch it earlier, treat it better, and prevent it from starting in the first place. I believe that we can increase the quality and equality in our health care system. And I believe that we can overcome the obstacles to better health facing our society. The tools are already on the table.
But to do all of that, we must connect what we know with what we do. There is no responsible reason for not acting. Accepting the status quo and doing nothing is not a viable alternative; the consequences of inaction are far too serious.
And above all else, we must remember that what matters most to Americans is knowing that they have the opportunity to lead healthy lives, that health care will be available when they need it, and that they get the best quality and value for what they spend on that care.
We can do this. One child at a time, one family at a time, one community at a time. We can do this, even if it means changing the world around us and changing ourselves in the process. The evidence is in, and the time to act is now.
Respectfully submitted,
Risa Lavizzo-Mourey, M.D., M.B.A.
President and Chief Executive Officer