Paying Less and Getting More

Glenn Steele Jr., M.D., Ph.D., has an optimistic outlook on the U.S. health-care system. Noting that escalating costs of health care are unsustainable, Steele encouraged students and industry leaders at the 18th annual Wharton Health Care Business Conference to “think of it is a great opportunity.”

President and CEO of Geisinger Health System and an expert on health-care management, Steele argued that there is a tremendous amount of waste in typical U.S. health care services. Steele cited a study that found that 50 percent of care given in high-volume markets was “either too much, too little or wrong.”

Steele firmly believes that this waste can be drastically decreased.

“If you redesign most of the stuff that we do … in a best practice, efficient, nonvaried way, you get decreased cost and increased quality,” he said.

Glenn Steele Jr., M.D., Ph.D., president and CEO of Geisinger Health System, speaks with attendees at the Wharton Health Care Business Conference.

Under Steele’s direction, the Geisinger Health System has done just that. Because the Geisinger Health System encompasses an insurance system as well as health-care offerings, it has an incentive to reduce costs through more highly focused care. That’s exactly what it did. The health system set goals and strategies for its providers that incentivized pre-emptive care and treatment that evaluates patients’ whole health profile. The result: better outcomes for both the patient and the insurer.

For example, Geisinger set nine goals for patients with type-2 diabetes. By educating doctors about implementation of best practices and best methods of care, the rate of patients who reached these nine goals went from 2.4 percent to between 12 percent and 14 percent. Nearly 100 percent of patients reached seven or more of these goals. Patients who are three years in a steady state of controlling their diabetes are less like to have a myocardial infarction, stroke, amputation or retinopathy. In other words, good health significantly decreases the overall cost of care.

Steele admitted that the Geisinger Health System is uniquely positioned to decrease such costs.  Geisinger utilizes electronic medical records, which improve access to patient information and allow doctors across specialties to better connect the dots.  In addition, Geisinger also benefits from its built-in insurance company. Health systems that do not encompass an insurance division may have less motivation to decrease the cost of care, as an independent insurer would reap the benefit.

“The real question is: Is this generalizable in other systems that aren’t designed like Geisinger?” Steele told the audience.

Steele charged the students and professionals in the room to find a way to make it work across several types of systems.  If these students and professionals look at the U.S. health system as the opportunity he hopes, they may soon find a way to drive down health-care costs.

The annual Wharton Health Care Business Conference took place on Feb. 16 and 17 in Philadelphia.

Editor’s note:  To view the full collection of images from the event, visit the Wharton Flickr photostream.

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