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Martin Hickey has certainly seen all sides of healthcare, first as a young doctor on the Navajo Reservation and the Veteran’s Administration in Albuquerque, next as medical faculty at University of New Mexico, and then as chief executive officer of Lovelace Health Systems and other healthcare organizations. He’s also headed several group practices. Now he’s CEO of New Mexico Health Connections and a member of New Mexico’s health insurance exchange board.
On the subject of healthcare reform, Hickey didn’t mince words recently when speaking to fellow execs at Economic Forum, a business group.
Starting with criticism that Obamacare will be a train wreck, Hickey said bluntly that the system we have now is a train wreck, “and if we don’t do anything, it will only get worse.”
In case anybody was inclined to disagree, he painted them a picture.
The industry, he said, has operated in the dark, without accountability or competition, and has now been forced into the light. This observation restates my complaint of a few months ago that a veterinarian can give you an estimate of what your dog’s procedure will cost, but you can’t expect the same of your doctor.
“We have provided you the best healthcare that someone else pays for,” he said.
Up to one-fourth of premiums pay for those who can’t afford insurance. Healthcare soaks up 18 percent of the gross domestic product, costs and premiums continue to rise, and “there are no market forces to stop it.” That’s not sustainable. “We spend two times more than other industrial nations and yet we’re 38th in morbidity and mortality.”
Physicians are rewarded for generating procedures, not for keeping people healthy, and hospital facilities fees are two to 10 times the cost of a doctor’s office. Healthcare was the last industry to computerize.
“The system is broken,” he said.
What’s coming is a giant course correction, and it won’t be easy. “Like it or not, you’re going to have to learn this stuff,” he said. “Medicare was first grade. What’s coming up is high school and college.”
He cautioned that the new system will be an actuarial nightmare because there are many unknowns, and insurers don’t yet know how to price. Yes, it will be confusing, so businesses should involve their accountants and insurance brokers, he said.
And yet, Hickey sees a promised land on the other side of the desert, reachable through the health insurance exchanges required by the Affordable Care Act.
“There is nothing to restrain costs now. This transparent and open competition will begin to push prices down,” he said. “We’re trying to build a new market through choice.” For the first time, consumers will have simple choices.
The forces of competition are already working in Massachusetts, where the exchange has reduced premium growth. Hickey predicts the same results in New Mexico. The exchanges are expected to function as an Amazon.com of healthcare, with rates and services posted for comparison.
Hickey’s own organization, New Mexico Health Connections, will sell insurance on the exchange beginning Oct. 1. It’s a cooperative chartered by the Affordable Care Act to provide nonprofit competition in the state.
Another creation of ACA is the Affordable Care Organization, which is incentivizing doctors to provide appropriate care and not just rack up procedures. Presbyterian Health Care System is one of 32 ACOs in the nation. A system taking on risk will find it’s more profitable to keep people healthy than to keep raising premiums, Hickey said.
Hickey didn’t tell his audience anything new, and he didn’t minimize the difficulties, but against the steady chatter of politically motivated scare rhetoric, the only weapon is a constant reminder of healthcare reality, spoken by people as credible as Hickey.