We have to be smarter about buying health care services

For the past 35 years I have worked nationwide in the restaurant industry. So, why am I writing about health care? Because the wellness of employees and their dependents has a direct impact on the overall quality, effectiveness and success of all businesses. Also, I passionately believe that all citizens should have the ability to effectively purchase quality health care services. Equally important, we all have the responsibility to maintain and promote our own good health.

I am also writing because I worked in the health care industry. For 15 years, I built and operated multisite health care service businesses whose customers were employers and insurance companies. The patients were everyday people like you and me. That experience gave me an intimate insight into how our health care financing and service system functions. It also brought me to the conclusion that the current system is totally unsustainable. This is not to say that good health care isn't delivered; it is. But the way in which people "buy health care services" is not.

For the past 40 years, U.S. employers have been the principal funding source of health care through company-sponsored and -purchased insurance plans. Beginning in the mid-'80s, these program costs began accelerating dramatically, requiring employers to initiate cost-containment programs. The containment programs, however, have had little or no effect on the overall increases in health costs. Health care costs have grown at annual rates of two to three times the rate of inflation for the past 15 years.

Providing employee health insurance has grown to the point that it is no longer affordable for most small business and is unsustainable for large companies. Currently, annual health insurance costs about $4,000 for an individual and $11,000 for a family. This represents 10 percent to 20 percent or more of each employee's compensation. It does not count the cost of Medicare, which is an additional tax on wages paid by the employer and the employee. Without dramatic changes, those costs will increase and the system will fail.

Individuals and businesses often buy goods and services in the same way. We compare quality, service and price and buy accordingly. That experience is significantly different in health care, which does not have an open marketplace system. In fact, it is highly regulated and individuals are unable to shop for either quality or price. Why? Because the vast majority of consumers do not buy care directly; they use it, but an insurance company pays for it. Further, because individuals are able to "have someone else" pay for the services, the incentive to buy smart and right doesn't exist. In addition, little or no quality and price information exists that people can use to make informed purchasing decisions.

The use of health care services is further complicated by the heavy promotion of new procedures, devices and medications, all in the name of "improving" our health. Yet we have limited or no information on the comparative benefits, both clinical and cost of the new products and services. As former Washington Gov. Booth Gardner once remarked, "I didn't know if I was getting the MRI exam because I needed one or because the hospital needed to amortize its investment."

Cost isn't the only thing out of whack. In the rest of our economy, if you buy a product that does not meet your standards, you vote with your feet by not returning. But, a huge issue in health care is the measurement and reporting of quality, safety and outcomes, and an alarming lack of consistent standards, which means consumers, you and I, cannot evaluate the results to make informed purchasing decisions, as you will see in the next commentary by Rand, a major non-profit research organization.

This is no way to run any enterprise, to improve quality, outcomes or control costs. Continuing what we have is simply not acceptable.

We are not starting from ground zero -- numerous groups and ideas exist to build upon as we proceed. We'll hear from others in this series toward that end. What we need now is active participation from individuals and businesses -- and from all of us from all walks of life, and all parts of our country, to get involved and create a broad-based, well-developed policy that currently is missing, with the clout to move Congress.

If you have questions about the quality of our care, just read what researchers from Rand have to say.

David Huether is president of Taco Del Mar and chairman of the board of CodeBlueNow!

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