C. Duane Dauner Mathies Acceptance Speech 2004
Presentation by
C. Duane Dauner
President/CEO, California Healthcare Association
April 16, 2004
It is indeed an honor to be recognized by the Partners in Care Foundation. Receiving the Mathies Award for Vision & Excellence in Healthcare Leadership is something I will never forget. Following in the footsteps of the outstanding leaders who are previous recipients makes it even more special.
I am reminded of a comment Dr. Karl Mennniger made to me early in my career; “most truly significant social accomplishments are not achieved in a single person’s lifetime.” His admonition and the fact that teams, not individuals, produce wins are humbling, as well as encouraging.
I am grateful for the opportunity to work with so many visionary leaders. My co-workers and family members have been major supporters and contributors to my career. I appreciate their friendship and the value they bring to me personally and professionally.
It seems we are continually in the best of times and the worst of times. During the past two decades, almost annually it has been said that the challenges in health care are the most demanding in history. The irony is that such observations generally were accurate. Each year, the breadth of challenges, the depth of their impact and the confluence of internal and external forces are reaching unprecedented proportions.
Some of the trends emerging within society are particularly disturbing. Our propensity to engage in self-destructive behavior and to expect, even demand, that the health care system “fix us” has profound implications. Led by obesity, use of tobacco products, abuse of substances and alcohol, and reckless behavior, people are pushing the health care system into an expensive refuge for reinstatement rather than a prevention-oriented, episodic treatment and recovery system.
Within health care financing and delivery, the health plans embarked on a strategy of takeovers, consolidation and mergers. This led to a fad of conversions to for-profit publicly-traded status. With this fundamental shift in structure and business goals came a new game plan built on market segmentation, differentiation, predatory practices, proliferation of benefit offerings, and transfer of risk – first to providers and then to consumers.
In response, health care providers created new forms of critical mass to level the field. Niche providers emerged, taking advantage of technological advancements and selective marketing. Regressive competition took on meaning that was unheard of just a few years ago.
All the while, productivity and “efficiency” of each segment within the health care industry is improving. The ultimate product, however, is not overall cost effectiveness. The result is fragmentation, duplication and destructive competition. Total costs rise while each competing segment is squeezed financially.
Unfunded mandates, demands from organized labor and financial pressures on employers and individuals clash. The health care financing and delivery systems, inextricably linked to these conflicting forces, have fallen victim to a tidal wave of inconsonant business strategies.
The fallout of individual, corporate and cultural breakdowns is a divided public policy process. It is one thing to engage in divisive competition but it is quite different to produce counter productive public policies. Examples at the state level, and to some degree at the federal level, are all too frequent.
The implications of these trends are enormous. From a loss of trust in the health care system to the absence of civility and respect, we stand to lose vital cornerstones of the best health care system in the world.
Among our most vulnerable Achilles heels are a dangerous number of uninsured Americans, unrelenting health care cost increases, chronic government underpayments and an absence of aligned incentives. We can wring our hands and do nothing, limit our efforts to elusive “big picture” global solutions or concentrate on changes that we can directly influence.
I believe we should continue to push forward on the broad policy front – insuring the maximum number of residents; promoting equitable access to health care; defining a minimum uniform benefit package; enacting constructive market reforms; and establishing realistic, consistent standards on health plans and health care providers.
At the same time, we should devote ourselves to making needed changes in the one area we can influence as payers and providers – that is, aligning incentives. As long as health plans or providers can win at the expense of any stakeholder in the health care equation, fragmentation and predatory practices are inevitable.
Visionary leaders in California are on the move in private efforts to change the paradigm, to move away from battles formed around billed charges, payment avoidance games and deflection tactics.
Our challenge is to hold the system together, defeat efforts that undermine health care (even though some of these initiatives are seemingly progressive), and implement changes that will make a difference. By turning around the incentives between hospitals and physicians, and between these two key provider groups and health plans, the compass controlling our direction will be recalibrated.
Alignment of incentives will produce solutions that are compatible with improving quality, becoming cost-effective individually and collectively, operating in a more transparent manner and balancing individual choice with responsibility and societal goals.
A renaissance is in the making. There is little doubt the road is rocky and disruptive land mines exist. Nevertheless, through the continuous leadership of visionary pacesetters, many of whom are in this building tonight, the emergence of new models is certain. These innovative and far-reaching developments will lay the foundation for needed public policy changes as the cyclic nature of society returns balance to California’s political environment.
I am excited about our future. The golden age of health care is before us. Through the efforts of all of us, and the outstanding work of community organizations such as the Partners in Care Foundation, health care in California and the United States is in good hands.
Thank you for the Mathies Award and for your role in improving health care.
