RWJBarnabas CEO Ostrowsky: Health care funding is unsustainable

Medicare is willing to pay thousands and thousands of dollars for beneficiaries who show up in emergency rooms, but stalls when given an idea that could save it that money.

That’s the experience of the CEO of New Jersey’s largest health system, Barry Ostrowsky, who leads RWJBarnabas Health.

“We can predict now, with precision, how many of those folks we are going to see over the course of the next 12 months, based on the demographics of our service area,” Ostrowsky said Thursday at the annual New Jersey Association of Health Underwriters State of the State event in Monroe Township.

The number of broken hips and other orthopedic injuries that are caused by bad lighting, dangerous floor covers or because “the tea cup is on the fourth shelf,” is part of that predictable list, he said.

“But if you go to (the Centers for Medicare and Medicaid Services) and say, ‘I need $3,500 to “seniorize” your beneficiaries’ residents’ … Medicare says ‘We don’t have a code for seniorizing,’” Ostrowsky said.

Instead, the federal department asked for a letter to explain the program.

“That is, to me, the blinding glimpse of the obvious that we have structural programs that have gotten so effective, perhaps, in taking in a claim and adjudicating it and sending out a check that … the patient has been lost in the shuffle,” Ostrowsky said.

“I don’t want to stand here and attempt to make you believe our enterprise is strictly altruistic. It’s a business enterprise that employs 33,000 people, and it has to be run like a business. But it doesn’t have to be run like a business at the expense of the mission.”

But, Ostrowsky said, the dependency that health systems across the country have on federal funding is not sustainable.

“Someone will, at some point, change the way Medicare is run, by possibly putting out the beneficiaries to bid. (CMS could say), ‘Who is willing to bid to take care of all these beneficiaries on an annual capitated basis, and we’ll take the lowest bid, and the only things we will audit are patient access, quality and patient experience,’” Ostrowsky said.

If that were to happen tomorrow, “We would effectively file for bankruptcy next month. We would have no idea how to do that,” he said.

But the idea to address orthopedic injuries is not a new idea for RWJBarnabas, which serves a population of 5 million in the state, and has already seen a significant change in its pediatric population.

The system is, through its own resources, funding programs to keep the population healthier.

(READ MORE from ROI-NJ on the NJAHU event. And READ MORE from ROI-NJ on health care costs.)

Ostrowsky said that, in studying vulnerable populations, the system discovered its services only have an impact on 30 percent of the patients — but not because of a lack of care.

“It’s not about another screening and it’s not about another physician, and it’s not necessarily about expanding hours of a clinic. It’s about the everyday challenges of social determinants that befall people, and, frankly, make (it) difficult to enjoy life,” he said.

The system knew that, at a certain time of year, there is a significant increase in the number of pediatric asthma cases. Clinicians know it isn’t just the weather, but can also be circumstances at home, Ostrowsky said.

“So, we started our own program, funded by, frankly, our own resources, in a given city in New Jersey, and we knocked on the doors of folks that we have seen, families we have seen in our emergency departments, and said, ‘Let me tell you why we are here.’ And so, for argument’s sake, we saw about 250 of these families,” he said.

The teams found there was a lack of trust, and many were not allowed into the homes.

“It’s flat-out intrusive. Who are you to tell me the drapes are bad to have, because the drapes hold germs and will make my child sick? And, of course, by extension we are saying, ‘You as parents are doing something or not doing something that are making your children sick,’” Ostrowsky said.

“It’s not as simple as saying, ‘We have a solution to stop you from getting sick,’ and people will accept it.”

The health system has already seen a reduction of ER visits from the program, but not enough to call the program a success.

“It is counterintuitive for us, because that’s our business, but that’s our mission. If we can put ourselves out of business because everyone is healthy, that’s great,” Ostrowsky said. “If that means we make fewer dollars on the bottom line and don’t brag about margins the way we once have, so be it. “

The way around that is to cut back on the volume of health care and stop the confrontational relationships that systems have typically had with health insurers — often demanding increases annually on list prices for certain services, blaming the high cost of living in the state.

“You can’t keep pointing to property taxes in New Jersey; that can’t be the answer,” Ostrowsky said.

Instead, he said, the goal should be to stop people from unnecessarily seeking health care services.

“And if that’s not enough of a motivation from a feel-good approach, it is clearly a motivation from an economic and business approach,” he said. “Let’s not villainize the patient, it’s not his or her fault, necessarily. It’s a system that’s been built that has ignored structural investment to stop illness and disease.”