Head of new U.S. corporate health plan cites surgery as biggest cost

[June 22, 2018] By Deena Beasley

San Diego (Reuters) - Dr. Atul Gawande, a surgeon who was named this week to head the company being formed by Amazon, Berkshire Hathaway and JPMorgan Chase to trim employee healthcare costs, on Thursday cited surgery as the single biggest U.S. healthcare cost and said there are ways to both cut costs and improve patient care.

Speaking in San Diego at the annual meeting of America's Health Insurance Plans, a health insurance trade association, Gawande also said that end-of-life care needs to take into account the wishes of patients, something which he said is now sorely lacking.

Gawande, who practices general and endocrine surgery at Brigham and Women's Hospital in Boston and as an author has made a name for himself as a critic of medical practices, said some of the focus on the high cost of health care in the United States is misplaced.

"We are screaming right now about pharmaceutical costs ... and that is just 10 percent" of total U.S. healthcare spending, Gawande said, noting how patients faced with a $200 drug co-pay see that as standing between them and their health.

But with surgery the single biggest healthcare cost, he outlined ways he has worked with hospitals to standardize procedures, resulting in lower costs and better results for patients.

"We need to act through data tracking ... to see when treatments are benefiting and when they are not," Gawande said.

He also discussed assessing end-of-life care. "People have priorities besides just living longer," he said. "We have to ask that, but we don’t ask. ... The result is the care we provide is not in alignment with their priorities."

Gawande emphasized that health insurance should not return to an era of denying coverage for pre-existing conditions.

"That is a disaster for any kind of healthcare. ... Life is the accumulation of chronic illnesses," he said. High-deductible health plans tailored for catastrophic coverage drive patients to ignore chronic health needs, resulting in higher overall spending, Gawande said.

The Trump administration on Tuesday issued a finalized rule to allow health insurance plans that do not comply with the Affordable Care Act, which required mandatory coverage for 10 essential health benefits, such as maternity and newborn care, prescription drugs and mental health treatment.

Amazon.com Inc, Berkshire Hathaway Inc and JPMorgan Chase & Co announced their joint venture in January, saying healthcare costs were rising too fast and holding back economic growth. The companies said they would use big-data analysis and other high-tech tools to improve care and cut waste.

The choice of Gawande, announced on Wednesday, to lead the new venture reflects plans to focus on the entire healthcare system, rather than just looking to curb prescription drug costs, as some investors had first thought.

(Reporting by Deena Beasley; Editing by Leslie Adler)

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