Improving Health Care

Health care delivery needs a new business model — one that puts consumers in the center and uses the power of the market to improve quality and lower costs.

Physicians at Ventura County Medical Center in California are using digital-imaging equipment and a mobile mammography van funded in part by the Verizon Foundation to extend their reach to women in underserved areas.

While the American health care system is without peer in many important ways, delivering it to people is becoming increasingly expensive, inefficient and, as a result, beyond the reach of millions.

The strain this brings to families also falls on businesses. Verizon alone provides health insurance for 835,000 employees, retirees and family members at a cost approaching $4 billion a year. With more Americans dropping out of the system — 45 million by some estimates — employee-sponsored health plans end up subsidizing those who fall through the cracks.

From Verizon’s perspective, health care delivery needs a new business model — one that puts consumers in the center and uses the power of the market to lower costs, improve quality, create more choices and expand accessibility.

Verizon’s Chairman and Chief Executive Officer Ivan Seidenberg has personally spearheaded Verizon’s advocacy on this issue for nearly a decade. He is leading the Business Roundtable’s Consumer Health and Retirement Initiative, which played an important role in advocating for the funding of health care information technology initiatives in the American Recovery and Reinvestment Act of 2009 that was enacted in February 2009.

The Business Roundtable’s plan for comprehensive health care reform consists of four parts:

• Creating greater consumer value and efficiency. Consumers need more transparency and wide distribution of information about the cost, quality and effectiveness of the health care services they purchase. As it is, the current system pays for activity, not outcomes.
• Providing the most affordable health insurance options for all Americans. Competition and innovation can be powerful weapons in this market. An open, all-inclusive market for health insurance to replace the current state-based system would encourage new entrants and give consumers the power to shop for the policy that suits them best.
• Placing an obligation on all Americans to have health insurance coverage either through their employer or the private market. Some 45 million Americans are not covered today, which precludes a one-size-fits-all solution. We need a competitive system that provides affordable options and encourages insurers to innovate around the needs of consumers and their families.
• Offering assistance to uninsured, low-income families so they can meet that obligation for coverage. For some families, more help will be needed. Targeted subsidies would be funded from the cost savings generated by a more competitive, efficient system.

In our view, however, the first step in redesigning the health care delivery model is infusing that market with information technology.

A modern health information technology infrastructure could significantly reduce costs while creating hundreds of thousands of new jobs. Analysis by the Information Technology and Innovation Foundation found that a $10 billion investment in health care IT could create more than 200,000 jobs.

What’s more, a heavy injection of IT into the health care system has been shown to improve efficiency by $165 billion a year and lead to additional benefits:

• Better access to better care, especially in rural, isolated or underserved areas, or for elderly or disabled patients unable to travel.
• Access to a common set of medical history and data, ensuring that health care professionals have the latest and most accurate information about their patients.
• The ability for people who live far from their elderly parents to remotely monitor their parents’ care and prescriptions and consult with physicians and caregivers regardless of their location.
• Electronic transmissions of prescriptions would provide greater accuracy than hand-written ones and would allow physicians to monitor refills and makes refills easier for patients.

Our experience tells us that it will clearly take a broad coalition of interests to achieve the kind of systemic reform that is needed. We are convinced, however, that true reform of the health care system lies in the same principles that have driven our economy in the past: competition, innovation, choice and a market that serves everyone. We intend to keep working at it until there is a solution.