Background: George C. Halvorson, Chairman and CEO, Kaiser Foundation Health Plans and Hospitals, USA

The theme: Finding the right balance between acute and chronic care.

Let me offer a couple of thoughts about this balance. Although these might be controversial, I hope they’ll also be useful.

It’s time to focus on the numbers so we can focus intelligently on the right care - acute care gets the attention, while chronic care uses up all the money.

80% of the $2.1trillion the U.S. spends on health care is spent on chronic conditions and 75% result stem from five care conditions.

Although childbirth, cancer, and infectious diseases get the majority of public attention, they do not account for the majority of costs. The opportunity is in chronic care and primarily those five conditions: heart failure, asthma, coronary artery disease, diabetes, and depression. Additionally, many people have two or more of these conditions.

With the majority of money being spent on these five conditions, one would think they’d be getting great care, but multiple studies show that this is not the case. For example, a Rand study of 2,500 patients with chronic care conditions showed that care was “adequate” less than 50% of the time.

Another stat: the likelihood that a single patient is receiving all needed care is less than 8%.

Diabetes is the fastest growing disease and is 32% of money spent but fewer than 8% of patients are receiving all needed care. What’s clear: the opportunities are huge.

Some of the challenges:

• Care linkage deficiencies: patients have multiple clinicians who don’t communicate
• No data: we need longitudinal data and to know who’s giving care where
• No systematic care support: better systems are needed to guide clinicians in their practice
• Perverse financial incentives: we pay by piece, not for the whole outcome

What we need:

• Computerized care data to better identify patterns
• Consistent care linkages
• Focus on the chronically ill because that’s where the dollars are

The two ways to address this: a focus on best treatment for a particular condition; and a focus on prevention and risk reduction - small changes that can make significant transformations in people health.

For example, the Pima people, native American Indians who live along the border of Mexico and the U.S. - by age 60, under 10% on the Mexican side had diabetes, while 50% of those on the U.S. side did.

The longer term vision for America has to be a national culture of health with better eating and more exercise. We also need an industrial revolution in healthcare - systems support for both care givers and patients.

Potential reductions are up to 70%, depending on the strategy and the disease and the returns can come much more quickly than people think, many within six months to a year. There are some very low hanging fruit out there.

We need to focus on and change our approach to care, away from the current splintered and fragmented system in which there’s massive variation in the delivery of care.

Where we should focus our efforts:

Electronic medical records
• Personal health records -these could come from insurance records with the standardization that is coming.
• Data registries - would help to provide consistent care for relatively small numbers of people
• Visible accountability for results - keeping track of people doing the right job
• Virtual consults - with EMRs, people will want and have access to a second opinion
• E-care - secure messaging and e-consults with physicians

In sum, chronic care conditions give us the best target and opportunity we have to cut costs and improve care.