Health care reform requires new way of thinking, leaders say

CEDAR RAPIDS – Pilot projects proposed by the Iowa Health System could become models for other states.

Bill Leaver, president and CEO of the Iowa Health System, said the pilots are needed to reduce costs and control chronic diseases in the face of health care reform.

Iowa Health System, the state's largest health system with 20,000 employees, is the parent organization of St. Luke's Hospital in Cedar Rapids.

Leaver and Ted Townsend, president and CEO of St. Luke's, spoke Friday, Feb. 25, to the Gazette Editorial Board as health care reform reaches its one-year anniversary.

“The current system is broken,” Townsend said, noting that rewards are based on volume, rather than outcomes.

The pilot under consideration in Fort Dodge, where all doctors are employed by one hospital, would develop an accountable care organization under which chronic diseases would be managed.

Compensation would use global or bundled payments, rather than fee-for-service.

Payments are divided among all providers who give care to the patient.

Incentives come from contributing to the wellness of the patients, rather than compensation coming from using as many services as possible when the patients are sick.

“Let's define what quality is,” Leaver said. “Let's define what value is and pay for that.”

Townsend said Fort dodge would not just be a role model for the state, but for any rural community.

A similar pilot is proposed with bundled payments for orthopedics in Des Moines.

Townsend said competition in Cedar Rapids has been successful in contributing to low-cost, high-quality health care, but that model cannot be sustained.

With 77 million more Americans eligible for Medicare within 20 years, the community needs to coordinate care and  focus on controlling chronic diseases before emergency care is needed, he said.

St. Luke's plans to consolidate its outpatient cancer services in the forthcoming Physicians' Clinic of Iowa medical mall, Townsend said.

He said the hospital will lease space in the mall, which will be built beginning this spring on Second Avenue and 10

^th

Street SE.