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On managing health care costs

Fascinating story in the Statesman on one approach they are taking to manage health care costs in Travis County.

A new world of health care is unfolding for some chronically ill Austin-area residents like [Marshall] Kettelhut, who was a cook at Long John Silver’s before he became too sick to work in 2010.

Health care providers are being nudged to change by a convergence of events: the 2010 federal health care law; efforts to overhaul government health coverage by innovating; new government payment schemes that reward — and punish — hospitals for performance; and a realization by health care providers that a system of ever-rising costs that pays based on procedures is unsustainable.

Kettelhut is among the first to experience changes that might one day touch almost everyone who receives health care. The treatment he is receiving from two Seton Healthcare Family clinics provides a glimpse into the future of a system being tugged toward paying for quality, not quantity.

“If we are able to spend more time with the patient, their costs are going to go down,” said Dr. Norman Chenven, CEO of Austin Regional Clinic. “They won’t go to the ER and won’t have to be hospitalized. It doesn’t take very much to avoid that admission.”

Toward that end, major hospital systems in Central Texas have paired up with providers such as Austin Regional Clinic to help patients avoid costly and preventable ER visits and hospitalizations. They are targeting the biggest hospital users: chronically ill people, elderly patients and low-income people with complicated health problems.

“What medicine is looking for is value,” said Dr. Ernest Haeusslein, Kettelhut’s cardiologist and medical director of the Seton Heart Specialty Care and Transplant Center.

Right now, the value is in targeting patients like Kettelhut, Haeusslein said.


Temple-based Scott & White Healthcare has long had a system of integrated electronic patient records, and “doctors and hospitals (are) working with patients to decide what care is appropriate and what care is redundant and has no value,” said Dr. James Rohack, director of the hospital system’s Center for Healthcare Policy.

Like Seton’s work with Kettelhut, Scott & White and St. David’s are experimenting with programs that shower resources and attention on the sickest patients. At Scott & White, frail and vulnerable patients meet with an aide before they leave the hospital and are seen afterward at home for a week or two, said CEO Dr. Robert Pryor.

Scott & White also is keeping its clinics open later to prevent overuse of the ER, he said. And it has opened a free clinic.

“We are focusing on the 20 percent of the population that causes 80 percent of the health care costs,” Rohack said.

Basically, this is the same approach that Harris County is taking with its Chronic Consumer Stabilization Initiative, and it’s based on the idea espoused by Malcolm Gladwell several years back. It’s an eminently sensible way of going about the business of managing costs, and as Harris County has shown it can be a real cost-saver, but it’s also politically risky since it depends of devoting a fair amount of resources to people who are otherwise powerless and generally not terribly sympathetic. The fact that an even greater amount of resources are expended on these people, in a much less effective and efficient fashion, in the absence of such programs, is almost never acknowledged in the arguments against them, but that’s how it goes. I wish Travis County a ton of success, and I hope of a lot of other entities follow their lead, because we’re going to need this example duplicated all over the country if we’re going to get our hands around the health care cost problem.

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