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Articles / 2009

An interview with Community Memorial Health System, Part II

Ventura Breeze
Sunday, 11/04/2009
by Tim Pompey

With the debate over health care reaching critical mass in Washington, The Breeze thought it might be helpful to talk with some health care professionals from Community Memorial Health System (which operates Community Memorial Hospital and Ojai Valley Community Hospital) about some of the health related issues being bandied about in Congress. Gary Wilde, President & CEO, Michael Ellingson, Vice President of Marketing & Development, and David Glyer, Vice President, Finance, agreed to answer some important questions and (hopefully) bring some clarification to the debate. Here is the second part of our interview with CMH.

T: Can you explain the typical “business” model for health care in America?

G: Yes, I think there is a standard business model. The system we now have pays based on services rendered, a feebased system. Just like you’d buy a car or go into a restaurant to order a meal. But health care is different in that consumers almost never pick and choose what they buy. So, the typical consumer is insulated from the full cost of health care. Furthermore, in this business model, it’s a competitive market for patients. Everyone in health care wants more patients and patients want more full service. In the middle of this are the doctors, referred to professionally as the “gatekeeper.” They are the filters in this process. Typically, doctors are paid a monthly fee for maintaining a total number of patients. And, in addition, they are paid incentives to keep patients well.

T: Worst case scenario, no health care reform gets passed, what happens to health care as an industry in the next ten years?

G: Things are going to change at the provider level, whether or not health care reform gets passed. There will be external pressures or incentives to align physicians and hospitals and get them to work together to be more efficient. I think they’re going to have to work together to find ways to lower costs.

D: Reduction of Medicare payments to providers will also happen, regardless. There will be a movement to provide more healthy options. Physicians will be provided incentives to keep patients well and out of the hospital with recurring issues.

T: Can you clarify what is meant in the current national political discussion as a “public option” for health insurance?

G: Generally defined, a public option is an option where the Federal government would sponsor a health insurance plan as an option for individuals. These individuals could buy this from the government in lieu of standard health insurance. It could be done a couple of ways. One, as an extension of Medicare, but we’ve already defined the current problems with that program. The other is to simply have a separate U.S. health insurance program. The debate regarding this is who would be eligible. Some are saying it should be available for everyone. Others contend it should only be for those who can’t afford it. We would prefer not to have a public option. We’d rather be able to negotiate rates with the government, just like we do with groups like Blue Cross. Currently, in the House, Pelosi wants a public option to compete with standard health insurance. In the Senate, it’s a different story. One suggested alternative is an “insurance exchange,” a co-op in which everyone is covered and all resources are pooled. This would allow health care to share the risk more broadly and have a larger pool to work with.

T: What do you think needs to happen to lower the overall cost of health care?

G: One solution would be to require that everyone be insured, just like they do with auto insurance here in California. Also, we have to address defensive medicine issues. A suggestion here would be to establish a separate medical court system to address malpractice and speed up the process. Finally, providers need to do a better job dealing with the methods of cost. There should be an emphasis on keeping people healthy. We refer to this as establishing an “accountable care organization.”