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Health care panel points to problematic priorities as reason for high costs

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New Jersey apparently doesn't have a “high cost of health care” problem, it has a “poorly constructed health infrastructure” problem.

Focusing more on providing high-tech health services and hospital systems, instead of focusing on primary care, is the cause of New Jersey’s poor health care reputation, based on the discussion at a forum on the future of health care hosted by The Atlantic on Wednesday at the New Jersey Performing Arts Center in Newark.

In discussing the methods needed to curb the current cost for health care in the state, opposing views on the roles of hospitals came to light.

“You don’t have a price problem in New Jersey. Sixty percent of (services) are at or below the national average. You have high utilization,” said David Newman, executive director of the Health Care Cost Institute. “You are getting the highest, most technological care possible.”

“The question is, is (high-tech care) resulting in better outcomes?” Newman asked.

The institute is, for the first time, providing a look into costs for New Jersey on the online price tool Guru, Newman said, with the exception of information from Blue Cross Blue Shield.

Horizon Blue Cross Blue Shield CEO Robert Marino found himself put on the spot to defend the perceived lack of transparency in how the OMNIA Health Alliance had been formed and promoted.

Amid a panel discussion specifically about New Jersey health care, Marino was looped in to answer for some of the controversy surrounding the new plan, and said the company is looking at how to change the terminology used to separate the current Tier 1 and Tier 2 hospitals.

“That’s industry nomenclature and is used by the federal government,” Marino said, adding that some have assumed the numbers indicate a level of quality, which is not the case.

Barnabas Health CEO Barry Ostrowsky agreed with the reason for the prices.

“We are not overcharging for a poor product,” he said.

But Shannon Brownlee, senior vice president at the Lown Institute, said the product itself is the problem, and the focus needs to shifted to primary care, as well as changing the equation for the new value-based services that still looks at price as a factor.

The U.S. is the only developed country that still views health care as a privilege rather than a right, which needs to change, according to Brownlee.

“We have a massive problem of lack of access in this country,” she said. “Population health is a common good.”

Though the idea of health being a right rather than privilege is not a popular rationale in the free market, that attitude change needs to take place, Brownlee said.

On the flip side, the U.S. has the lowest in-hospital times around the world, paired with high readmission numbers.

“We’ve invested in infrastructure that’s very much technology-based and hospital-based and specialist-based, we have not invested in … primary care,” she said.

And the lack of primary care is the reason why most people use emergency care as a first resort, a point used by hospitals in defense of expanding emergency and urgent care services in the state.

But that burden on a population with major socioeconomic barriers is creating the vicious cycle of high costs, Brownlee said.

Extracting wealth from the highly hospital-based system and giving back to communities is the solution, she said.

Raymond Castro, senior policy analyst at New Jersey Policy Perspective, added that part of the issue is a huge disconnect with the role of the state government, saying that, currently, the moves in the industry are light years ahead of policies governing them.

"As all the participants agreed, health care options in New Jersey are too costly, and too often unable to deliver solutions that allow patients to return to our community," Paul Matey, senior vice president and general counsel at University Hospital, said. "As a leader in critical care, and a key component of the safety and welfare of the greater Newark region, University Hospital is exploring many of the value-based models discussed in an effort to expand access to quality, affordable health care."

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