The Milwaukee Post

May 18, 2018 • Milwaukee County Post • 9 By JOHN TORINUS If you dig deeply enough, it's possible to discern some relief from the roaring infla- tion in health care costs that is putting major hurt in the budgets of government at all levels, on businesses and on individ- ual Americans. Milliman consultants put the 2017 heath cost inflation at 4.3 percent, twice the gen- eral inflation rate, but the lowest since it started tracking it in 2001. That could mean that the concerted efforts at cost reduction, especially by pri- vate companies, are starting to "bend the curve" on what was once hyperinflation. Pressure by payers on the medical-indus- trial complex (MIC), which constantly seeks more revenue, may finally be having an impact. There are other signs as well. The bun- dled price of a joint replacement at some bone shops in the Milwaukee region has been running between $26,000 and $28,600 for a half dozen years, meaning that price increases have disappeared for those pro- cedures. In other words: zero inflation. Hallelujah for that! It's amazing what happens when prices emerge from the MIC-induced fog and consumers can see prices clearly. Further, bundled prices appear to have rationalized prices for joint replacements across the regional market. The median price in Milwaukee ran $47,500 a half- dozen years ago; it has dropped to $36,500 today. That is actual deflation. Hallelujah again! That's how markets are supposed to work. They are supposed to reward value, the combination of quality, service and price. They are supposed to eliminate ven- dors that can't compete, like the ones in Milwaukee that charge as high as $80,000 for a new metal joint. Those can only sur- vive in a "non-market," the prevailing model. Another encouraging trend is a shift from in-patient care at expensive, danger- ous hospitals to outpatient clinics. Prices and infection are usually lower at the clin- ics. I encourage friends who need an elec- tive procedure, like a heart bypass, to seek out the cheapest one they can find. It's counterintuitive, but cheaper is better. Just like in manufacturing, high quality means fewer defects, less waste and there- fore lower costs and prices. In short, there is an inverse correlation between price and quality. Payer insistence that MIC providers shift away from an obsession with vol- umes of procedures, medical edifices and revenue increases to the delivery of value is yet another positive trend. Eventually, value-based purchasing will rule the day. Better analytics using big data will increasingly pierce the MIC opacity on prices and quality so consumers can find best doctors, clinics and hos- pitals — and the lowest prices. Often the value-ori- ented consumers will find themselves being treated at "lean" clinics and hospitals. Innovators in Wisconsin, like Theda Care in Appleton and Bellin in Green Bay, have led the way to the same lean disci- plines that Toyota invented and American manufacturers, of necessity, adopted. Because MIC competition is limited, the lean transformation was slow to take off. But after 10 years of evangelism by Dr. John Toussaint of Theda Care, there is progress. More and more hospital corpora- tions have gotten religion on the need to deliver defect-free quality and less price inflation. By no means, though, has the inflation beast been tamed in the health care sector. It is still chewing up bigger chunks of GDP every year — 18 percent and heading to 20 percent. Out-of-control drug prices are the latest demon, for which no one seems to have an answer. Witness President Donald Trump's lame speech on the topic last week. It contained no action items of note. The 4.3 percent inflation rate is not good enough. That is especially true in the private sector. Because Medicare and Medicaid use de-facto price controls to set the pace for half of the nation's health care spending, the inflation rate hits 7-8 percent for private plans. Premium hikes are far worse for individual plans on the Obama exchanges. A truly sad part of the overall picture is that average Americans end up holding the bag for the bloated costs and prices. They are also on the receiving end of cost shifts from employers to employees. The employer-employee split is now 57- 43 percent. For a family of four that means an average of more than $11,000 on the employee side. That's a big annual hit to a family budget. As proved out over the last decade, reform will not come from either political party. It's hard to bring about meaningful, value-based change if you don't listen to pragmatic problem-solvers, if you only lis- ten to wonks who have never paid for a health care plan for employees or to people inside the MIC. Still, the early returns from payer pres- sure for value-based health care are encouraging. The recent wins are reason to keep fighting the good fight. (John Torinus is chairman of the board of Serigraph Inc. in West Bend and blogs regularly at www.johntorinus.com. His col- umn runs occasionally in the Post.) Baldwin clearly gets connection between climate change and security To the editor: Republican U.S. Senate candidate and former Marine Kevin Nicholson questions the "cognitive thought process" of veter- ans who are Democrats. According to Nicholson: "I disagree with a thought process that leads you to vote for a Democrat like Tammy Baldwin, who does- n't take any of these issues on national security seriously." However, Senator Baldwin has spoken on the Senate floor about the impact of climate change, which the Department of Defense states is a threat multiplier that can enable terrorism and other forms of violence. The U.S. military has expressed concern about climate change since the George W. Bush Administration, and dozens of Defense Department documents on this issue can be accessed at www. climateandsecurity.org. With the GOP routinely dismissing the climate threat, it's important for voters to know if Nicholson breaks with his party and supports our military on this subject. Notably, Republican Mike Gallagher of Wisconsin's 8th District, another former Marine, is a member of the House of Representatives' bipartisan Climate Solutions Caucus. Nicholson touts himself as a straight talker, and he should be called upon to explain his view on the relationship between climate change and national secu- rity. Terry Hansen Oak Creek Trump's move on Iran deal is very concerning when it comes to peace To the editor: As an advocate for peace, I am very con- cerned about Trump pulling the United States out of the Iran nuclear deal. Sanctions do nothing but harm the people of Iran. Both Security of State Mike Pompeo and National Security Adviser John Bolton are hawks who I believe would love war with Iran. It is illegal for the president to declare war, as only Congress can legally declare war, but the actions of Trump and his Cabinet are doing nothing positive and pushing the United States toward another war in the Middle East. Instead of bringing troops home, he is destabilizing the area. It is my hope that we can influence our members of Congress to bring some sani- ty to our government and withdraw all authorization to the illegal conflicts in the Middle East and work toward peace instead of continued killing. Patrick Auld Franklin OPINION LETTERS TO THE EDITOR The prescription for relief in health costs Torinus Various steps have tamed inflation in health sector and you can, too

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