Healthcare and Employers
VCC Healthcare Conference
June 7, 2012
Bob Cramer
Norfolk Southern Corporation
Chair, VCC Healthcare Committee
NORFOLK SOUTHERN CORPORATION
• Fourth Largest Railroad Operating 20,000 route miles in 22
states east of the Mississippi River,
• Roots go back 175 years, 30 years as Norfolk Southern
• Historic Safety, Ethics and Work Culture – Accountability
• HQ in Norfolk, Large regional offices in Roanoke and Atlanta
• Fortune #243, $11 Billion Annual Revenues
• 5,000 non-union, 25,000 union employees, and 6000 retirees
w/medical coverage Annual Healthcare Spend $400 Million
----------------------------------------------------------------------------------------Responsible for strategy, design, financial and vendor
management for our healthcare and wellness programs.
Healthcare
Why are Employers becoming engaged?
• We are told that US healthcare costs more than in other
countries, yet may be of lower quality.
• We are concerned that the productivity of our
workforce is compromised by sub-optimal healthcare
• We know that the increasing cost of healthcare
services paid by employers is unsustainable.
Healthcare
Employer awakening
• Cost-shifting to employees, besides unpopular with
employees, is at best cosmetic, at worst a distraction.
• Consumer - directed medical plans require transparent
cost and quality information.
• Health and wellness initiatives ultimately depend on
quality primary healthcare delivery.
• Employers and our group insurance programs have
been key contributors to problems with healthcare.
Healthcare
What appears to be the underlying causes?
• Unlike other free-market enterprises, healthcare is not
currently accountable for Value to its customers.
• “No-Value” payment systems have perverted care delivery.
• Each stakeholder in its commercial silo seeks to optimize
its slice of the healthcare money pie, e.g.,
–
–
–
–
Who owns the X-Ray?,
Insurance Premium Increases, [PPACA 10% rule]
Provider/Plan Contract Disputes
‘Profit-centered’ hospital services
• Employers want to bake a smaller money pie.
Healthcare
Unsettling symptoms
Healthcare
Unsettling symptoms - continued
Healthcare
Unsettling symptoms - continued
“Primary care, characterized by continuity of care, an established
relationship between patient and physicians, was once the central
grounding of our healthcare system. The United States
healthcare system has been facing a decline in its primary
care workforce, infrastructure and access to primary care services for
several years. A number of factors, including poor
reimbursements to primary care physicians, low
comparative income, and poor quality of work life due to
high patient loads, have contributed to more doctors choosing to train
and practice in specialty medicine. This trend has lead to a shortage of
primary care providers across the country—likely contributing to
fragmented care, inappropriate use of specialists, and less
emphasis on prevention.” Kaiser Family Foundation April 2012
Healthcare
Unsettling symptoms - continued
• Wide income disparities exist between family physicians, whose
annual income averages $173,000, and specialties such as
radiology ($391,000) and cardiology ($419,000).
• Graduating medical students perceive the lifestyle associated
with primary care physicians as unfavorable.
• Only 8% of the nation’s medical school graduates go into
family medicine.
• 56% of patient visits in America are primary care, only 37% of
physicians practice primary care medicine.
Kaiser Family Foundation April 2012
Healthcare
Unsettling symptoms - continued
A higher ratio of specialists to population has been correlated
with higher mortality rates
A higher ratio of primary care physicians to population is
better for health. One theory is that patients with a usual source
of primary care tend to use more preventive health care and
have health problems treated at earlier stages.
Many experts believe that the decline in primary care has
contributed to overspecialization of care, fragmentation and
inefficiency in the health system.
Kaiser Family Foundation April 2012
Healthcare
Unsettling symptoms - continued
American Academy of Family Physicians:
“Don’t order annual electrocardiograms (EKGs) or any other
cardiac screening for low-risk patients without symptoms.
There is little evidence that detection of coronary artery stenosis in
asymptomatic patients at low risk for coronary heart disease improves health
outcomes. False-positive tests are likely to lead to harm through unnecessary
invasive procedures, over-treatment and misdiagnosis. Potential harms of this
routine annual screening exceed the potential benefit.”
Yet, an EKG was ordered by an NS member’s physician as
routine and paid as routine by the claims administrator.
Healthcare
Employers must get involved with the big picture
Employers can take and have taken measures within
their organizations to improve employee health and
manage healthcare spend, however
the real fix requires market-level change.
The Virginia Chamber’s Healthcare initiative will enable
an organized and collective employer engagement into
the healthcare discussion.
Employer Healthcare Committee
What’s its job description?
• Be a collective voice to other stakeholders,
• collaboratively prioritize, consider and advance quality
initiatives/healthcare reforms,
• provide collective input for appropriate legislative action
to effect healthcare system change, and
• with partners (VCHI, VBCH, et al.) collect and disseminate
best practices.
Employer Healthcare Committee
Employer Members
About 14 representative employers
Current Employer Members
Advance Auto
Estes Express
MeadWestvaco
Huntington Ingalls
Rolls Royce
Smithfield Foods
Capital One
Genworth Financial
Media General
Norfolk Southern
SAIC
Employer Healthcare Committee
Activities to date:
• Prioritized for action the following “problem areas” in
healthcare in order to enable true consumerism:
• Provider payment reform, [PCPs, Outcomes]
• Clinical outcome transparency, and
• Cost transparency
• Defined the Executive Healthcare Committee and
extended membership invitations
Healthcare Executive Committee
What is it?
• An employer-led inclusive collaboration of the various
stakeholders, establishing
• a forum in which employers and other stakeholders
exchange perspectives, to
• aid employers in contributing to and advancing
thoughtful macro-level change of healthcare, and
• enable servicing stakeholders to better align their
product and service development with the needs of
customer employees and employers.
Healthcare Executive Committee (Proposed)
What’s it look like?
Virginia Chamber Executive Healthcare Committee (Proposed)
Convener - Chair, Employer Healthcare Committee
Full Members (40) Associate Members (Open)
Medical Society of VA
Members (1)
VA Chamber
Employer Healthcare Committee
Members (14)
VA Academy Family Physicians
Members (1)
American Acad. of Pediatrics VA
Members (1)
VA Hosp. & Healthcare Assoc.
Members (3)
VA Assoc. of Health Plans
Members (3)
VA Business Coalition on
Health. Members (1)
Virginia Municipal
League
Members (2)
Employer Consultants
Members (3)
Virginia Association
of Counties
Members (2)
Virginia Economic
Development
Member (1)
VA Dept of HRM
Members (1)
Supporting/Sponsoring
Organizations
Virginia Nursing Assoc.
Members (1)
Virginia Oral Health Coalition
Members (1)
Issue-Based Sub-Commitees
1) All-Payer Claims Database
Pharm. Manufacturers Assoc.
Members (1)
Mental Health Service Providers
Members (1)
VA Center Health Innov.
Members (1)
2) Healthcare Exchanges
VA Health Information
Members (1)
VA Dept of Medical
Assistance Services
Members (1)
Associate Members
(All Others Interested)