BOISE — As the president and CEO of Idaho’s largest private employer for the past decade — and also as both a doctor and a lawyer — David Pate has strong ideas about what’s wrong with our nation’s health care system.
Pate, who announced last week that he’ll retire from St. Luke’s Health System at the end of January, said when he arrived a decade ago, he had three priorities, including helping oversee the transition into a health system rather than a “confederation of pieces,” building a strong record on quality and safety, and one that’s universal: “It was very clear that we’ve got to fix health care.”
“It’s still too expensive,” Pate told the Idaho Press. “There’s lots that has to be done, and most all of us agree that the fundamental problem is fee for service, where you have to pay for everything you do. It just creates the wrong incentives.”
That model, which is how health care long had worked in the United States, involves patients, along with their insurers, paying every time they receive a service from a health care provider. “The perverse thing about fee for service is that we get rewarded if you’re sick,” Pate said, “because if you’re sick you need more health care services that we provide.”
He said it’s so ingrained that many health care providers budget for an increase in revenues over the winter months because of flu season. “How perverse is that?” he asked.
He led a move to try to shift St. Luke’s instead to a “value-based” system, where it’d get paid a fixed amount to care for a certain patient — whether or not that patient needed services. “We made a decision to transform our business model away from fee for service to value, where we would take (on) the accountability for patient outcomes and the cost of care,” Pate said. As of 2017, he said, “A third of our revenue is at full risk.”
That means St. Luke’s has entered into contracts with insurers and even some large companies to care for patients for a fixed monthly payment, “whether you end up in the emergency room, hospital, office visit — in fact, even if you go someplace other than St. Luke’s. We get that fixed payment for every month, and we don’t get to charge the insurance company more if we do more services.”
That gives St. Luke’s an incentive to keep those patients healthy, he said.
“We believe that’s where health care needs to go,” he said.
St. Luke’s now partners with about eight different insurance companies in that effort, Pate said; its biggest partner is Select Health, which it brought into the market in 2014 for this purpose.
Asked his advice for the state of Idaho as it faces challenges with health care, Pate said health care often involves “putting out fires,” like caring for a patient who shows up at the emergency room with a heart attack. “We’re very well equipped to take care of those kinds of things. But it’s also very expensive,” he said. “And frankly, what would be a much better impact we could have, is if we could begin taking care of your friend or family member, say, 20 years earlier, before they developed all the risk factors — if we could modify those risk factors, help them be healthier so they avoid these problems.”
That includes addressing issues like childhood obesity, he said. “We’ve got to find ways to intervene further upstream, and improve people’s access to health care and their actual prevention before they develop things,” Pate said. “Because there’s a lot of things we can treat, but it’s just darn expensive. If we can prevent some of these things, that would be a wise investment on the state’s part.”
Addressing the “social determinants of health” is part of that, he said, from poverty to education levels.
“This is one of the reasons why St. Luke’s has been a big supporter of Medicaid expansion,” Pate said. “We would be better off to provide people with access to health care and to preventive services rather than waiting for something catastrophic to happen to them, where they end up in the health care system and now it’s very costly to treat and may even be too late, and we can’t avoid complications.”
STATE NEWS: OCT. REVENUES SHORTIdaho state tax revenues fell $7.4 million short of forecasts in October, or 2.4% short, with shortfalls in both sales taxes and individual income taxes. For the fiscal year to date, that puts general fund revenues at $3.6 million ahead of the revised forecast. If current trends hold, that would put the state on track to end the current fiscal year next June 30 with a balance of $68.5 million.
The state still is collecting considerably more in tax revenue than last year, but the increase is less than lawmakers anticipated when they ended their legislative session in April; at that time, the budget they’d set for the current year was projected to result in a year-end balance of $173.8 million.
The difference in projected ending balance now compared to the April projection: $105.3 million. Though the state’s budget still is balanced — it’s not spending or planning to spend more than it brings in — the change in the rate of growth is what prompted Gov. Brad Little to direct state agencies to begin paring back budgets; they’re working on plans now for a 1% rescission from the current year’s budget, and a 2% base reduction from their agency requests for next year.