Today’s healthcare providers face a number of weighty challenges—more, perhaps, than those in any other industry. After all, Texas hospitals and taxpayers are paying to treat the uninsured. Providers are battling a looming physician shortage, despite not having enough residency slots to meet demand. D CEO recently gathered four of the region’s top healthcare leaders to discuss these challenges, and what it’s going to take to overcome them. Participating were Baylor Scott & White Health CEO Joel Allison, Methodist Health System CEO Dr. Stephen Mansfield, Texas Health Resources CEO Barclay Berdan, and UT Southwestern’s Executive Vice President for Health System Affairs Dr. Bruce Meyer. The following excerpts have been edited for length and clarity.
D CEO: One of the more challenging topics this legislative session is healthcare reform. As you know, about 1 million Texans would be insured largely through federal dollars if state legislators expanded Medicaid as part of the Affordable Care Act. However, they’ve refused. How can Texas address this population?
The bottom line for us to be able to have any opportunity to get some kind of a solution for Texas to reduce the uninsured is that it’s going to take the business community to really step up and help us. If you look at what goes on in Austin, you don’t really get anything passed unless one of the three top leaders is a champion for it. Either the governor or the speaker of the house says this is my issue and I want to move it forward. Secondly, you have to have the business community behind you to really get something through.
I think it definitely has to be a business case. If you look at the American healthcare system versus other healthcare systems across the world … we stand out in two distinct areas, profoundly, by a large margin. One is the cost of our healthcare system per capita, in terms of gross domestic product. It is extremely high compared to those other nations.
The other is that we are the only one of those [countries] that does not offer universal coverage. All of those other nations offer their citizenry health insurance as a benefit. I think it’s because there’s a high correlation between the two; the cost of your system is driven substantially by the way that those who don’t have access to the healthcare system, who don’t have insurance, end up using the system. Until we fix that, I don’t think we fix our cost problem.
To make the case for businesses to get involved, I agree with Joel on that. Joel and I and others in healthcare are the only ones trying to get this done in Texas. But I think business leaders can make this happen, if it’s meaningful to them.
One of the things I think you have to remember is that insurance coverage doesn’t necessarily mean access. One of the challenges about expanding the Medicaid program is that there aren’t a lot of providers who are very happy with Medicaid.
Ultimately, if we go down that path, we could have a lot of people who maybe have some form of coverage, but most of us in the provider world would say that coverage still doesn’t cover the cost when we get [reimbursed]. There’s not much incentive for physicians and other providers to expand access to people who are covered by the Medicaid program. That’s why I think the program that’s modeled somewhat after the Arkansas waiver, which focuses on insuring that population through private insurance, is probably a much better approach. It uses the networks and the relationships that already exist.
In the state of Texas, only about a third of physicians accept Medicaid. So if we expand the Medicaid program, I don’t think that really expands access to care. We just don’t have enough providers. We’ve really got to work for a program that is beyond Medicaid, whether that’s on the private exchange or public exchange, that will give people access and draw down that federal dollar to get people their own choice about what plan they can enroll in. That gives us a real opportunity.
D CEO: Let’s talk about access, especially in the state of Texas, which, by some estimates, is adding 1,000 residents a day. The region added just under 400,000 people between April 2010 and July 2013. Add to that the growing senior population and the newly insured through the ACA. What are some of the things your systems have done to increase access?
In the time that I’ve been here at Methodist, we’ve almost tripled in size. We’re trying to expand the health system, but our greatest emphasis for expansion is around primary care access. To me, as the healthcare system reforms, my hope is that more and more care will be provided outside hospitals, especially for the chronically ill patients. We need to focus on access points in addition to hospitals.
Hospitals aren’t going away. Hospitals are still going to play a key role in our healthcare delivery system just as they do in every other time, but we have to position ourselves, I think, from an access point to emphasize more around primary care, more around urgent care, trying to take smaller components of the health system and make them more convenient for consumers.
I think it’s really important for us to think about the whole continuum of services through an individual’s lifetime. One of the challenges we have in healthcare in America today is that we have all these silos that really don’t talk to one another. The ability to bridge these, to connect those silos, have a system make sense from the individual patient’s point of view or from a population’s point of view, is really a challenge.
I think we’re going to go through a revolution that’s already starting, where retail concepts are going to begin to have much more impact on access. And I think all of our systems are going to have to learn how to think about patients, and I know sometimes we don’t like to think about them as consumers, but they are consumers of services. And price is one point to which consumers have a sensitivity.
D CEO: What about the impending physician shortage? Is there a way to compel more students to stay in Texas after their residencies?
I don’t care how many students we train in the state of Texas, and we train many. They leave here for their residencies because we are capped. We have 600 residents at Baylor Scott & White Health today. More than half of them are unfunded. We cannot take all who we want to take. So they leave the state, and they usually settle and start their practices within 100 miles from where they do their residency. So we’re spending $165,000 to train a medical student and they leave the state of Texas. We’ve just exported our intellectual capital to another state. We need to address that.
D CEO: What’s the best way to get the cap broken?
For us, we’re already the second largest training institution in the United States. We could double in size, in terms of our training programs, and still not fulfill the projected need in Texas for physicians over the course of the next 10 years.
The last time the cap got revised was 1996. In the United States as a whole, about a third of graduate medical education is unfunded. So individual institutions are bearing that themselves. Even at our place, as an example, 35 percent of our residents—and we have 1,600 residents at our shop, we’re huge—are unfunded. So we’re paying that off our revenues as a fixed expense.
What is the value proposition around the cost of training graduate medical education? Because, an idea that we’re going to rejigger entirely and set the expanded cap for the number of people we’re training, it’s really financially unfeasible in the current political environment. We’ve got to look at the current funding and say, what’s the value proposition?
We’ve got to establish the overriding value, and the way to do that at the federal level is to talk about what the return on investment is of that $165,000 for medical students, or the $225,000 to $240,000 per graduate medical education slot.
The statistics that Joel mentioned are important. In Texas, we export more than 400 medical students a year because we have 400 fewer slots in graduate medical education than the medical students who graduate from here. Seventy-five percent of graduate medical education folks are in practice within 100 miles of where they did their residency. Fewer than 50 are within 100 miles from where they went to medical school. So that net export is a functional brain drain on the state.