 Aloha welcome to healthcare in Hawaii. I'm Josh green your host senator from the big island work with the Hawaii IPA And as an emergency room doctor today I'm joined for part two of a really interesting conversation with a health expert here in the state of Hawaii I'm joined by Reg Baker who was chief operating officer and chief financial officer at HMA a Prominent CPA in our community leader at the chamber terrific guy a great deal of knowledge, and we spoke about macroeconomics So in healthcare, it's good to see you again to be back Reg You're a terrific wealth of knowledge We went over some really interesting points about the impact of the national experiment with the Affordable Care Act We talked about healthcare costs. We've talked about so many different things But today we have an opportunity at your advice, and I think it's very smart to talk about more of the micro System of health care in our state. Why don't we start by unpacking this a little bit when you say micro Microeconomics of health care. What do you mean? I think you know just driving down or diving down into the The local aspects of providing health care in Hawaii, you know You know whether it be in a metropolitan area or in a rural area underserved area You know, what are the challenges at the state level and the provider level that's encountered in trying to provide quality health And that's that's been kind of a frequent concern that we have and I come from the neighbor islands and a lot of people will say Can't find a doctor. I can't find a nurse What's your perspective on that? Where are we with the provider population in our in our state? This may not be politically correct, but I think it's getting worse before it's gonna get any better You know, I'm seeing more physicians Talking about leaving the profession. You know the challenges are great The profits aren't as good as they used to be I know that they just came out with this great survey and said that the eight of the top ten highest paid Professions in Hawaii are in health care and that may be the case But it's significantly down from what it was five or ten years ago And so a lot of people I think a lot of the professions the providers that are out there If you're over 50 or 55 60 years old You're beginning to give some serious thought about getting out of practice and moving on Yeah, that's a big that's a huge problem. I'm glad you bring that point up. I I remember statistic from a couple a couple years ago and had some it ran something like this that the average health care provider in Hawaii was about Four years older than the average health care provider in the mainland Which was to say our average age was closer to like mid fifties and theirs were closer to 50 So like you say we could see a wave of retirement if people can't Muster up the energy or or business acumen to stick in business Well, and I think the youth the younger ones that are coming out are not particularly Keen on going into some of the underserved areas. They they have different values You know that that maybe some of the older practitioners had and they're looking more equality of life They're looking at a better education system something that May not be available out in some of these underserved or rural areas Yeah, that's complete. I can tell you from experience. That's true when I came to Hawaii at age 30 This was in year 2000. I'm 46 now. I came and worked with the National Health Corps scholarship Which paid my medical school loans back, which was terrific and I one of the best experiences of my life However, I came in I was single. I didn't have any debt because of that and I was able to take essentially the lowest salary in the state to go and work in Ka'u and It worked out for me because I didn't have a family. I didn't have a house. I didn't have any of those things I didn't have children to educate which is one of the big challenges people want to have good schools around their kids and Then a few years past after I did my service now, I still practice on the big island But I have to split my time between a wahoo, of course and and big island And I think had I come in as a 30 year old already married to Jamie My wife and already with a couple kids and say with a lot of loans I don't know how I would have practiced in a rural area more than likely you wouldn't have You know just it would have been extremely difficult if not impossible to justify You know, I'm you know giving up what you could have had here that would help with with the wife and the children To go there where there's very limited resources. Yeah, it's it'd be tough And you know, there's a lot to love about the rural areas I mean, I love the teachers in the schools and the principals there and what have you but sometimes you can't get your car fixed or sometimes you just You know, you can't find other services like specialty services and all of those things pile on so I think you're totally right the providers are One reluctant to go work in rural areas Big Island the economics are a problem 51% of the individuals on Big Island are on Medicaid Which means that the economics as you pointed out last show just don't work for businesses in health care They're gonna have to be subsidized but also We're short on providers anyway. So if they have a choice Like I still work all my clinical time up in Javi or Kona, but a lot of people don't have that luxury of having their loans Already repaid or what have you and you're very fortunate. Yeah I I wonder if that's not gonna have to be part of the solution. It'll have to be I think there's two or three things that could be done that Maybe we're doing a little bit of it now, but we need to be doing a lot more of it But we touched on it a little bit the last you know the session that we had but You know having you know, the PA's any MPs maybe get more involved. They come in a different type of structure All right, they may not have the same issues. It's a Somebody who's gone through, you know, 12 years of additional education to become a physician You know, they'd have a different cost structure that they could maybe you know a nurse practitioner or a physician assistant Could provide some of that care, but you also get into telemedicine a little bit more right, you know And provide some of the more specialty care, you know through telemedicine type applications Well, we just passed that you know We do a lot of things that the legislature which even give me heartburn and I sit in the legislature But we did pass a bill this year mandating all the plans to cover Like they cover other services telehealth So I'm hoping that your vision like on that issue may come to pass that maybe we will have centers of excellence straw up Queens Kaiser's programs, but that they're able to reach out with those specialists and use either primary care people or you are people like me in The rural areas or the nurse practitioners with that telehealth with these extenders so that we get the benefit of Extremely intense highly trained individuals where there's a lot of them In Honolulu a lot more, you know, I can't help but think that you know for for 50,000 Yeah, a hundred thousand at the top end. Yeah, you could have a very Sophisticated satellite type office that has an MP or a PA in there that's got all the technology that the telemedicine can be done The way it and that hundred thousand dollar investment in a rural community would provide you with most Yes of the type of you know care that needs to be done out there I'm sure that's true because look the money's alone that you say from not having to travel every time someone travels to a wahoo It's five hundred to a thousand dollars I don't care what you say between plane tickets and maybe a hotel and your extra tests and all that stuff If you can get basic follow-up basic care, of course there's always a need for a stethoscope on the chest and some things are surgical, but There's no question that 95% of the healthcare that I've ever delivered could be delivered through at least some kind of relationship Like that and and I would appreciate it. Okay, so so that's one providers practitioners. We have to have an expansion You like telehealth What about our hospitals the local hospitals? How would you look at them? What's your what's your assessment? We have to Somehow make them I won't even use the word profitable, but more cost efficient You know, there's I think I look at what's going on over on Maui And there's a great opportunity over there to bring some very high-quality health care. Yeah to the island And it keeps bumping into roadblocks, you know, and it's baffling to me Why we're not able to come together and provide a hundred and thirty thousand people with good quality health care And letting you know one obstacle that might benefit less than a thousand people prevent that Yeah, yeah, you know, so I think you know using that model on other islands Once we get it to work on Maui. I think could Address some of the facility issues that we've got it may happen I think the sheer economics of our health care system where we've our our subsidy of HHSC Hawaii Health System Corporation for those out there who don't know that acronym it's gotten pretty significant it's over a hundred million dollars and It's money well spent in the care of people But if we could spend 50 or 40 million dollars instead and have whether it's Kaiser or HPH or Queens partnering It seems to me it would be beneficial. For instance some Like give me your opinion of Queens taking over North Hawaii community hospital Is that the kind of model that you think could work? I think if we see patient outcomes improve I think if we see Additional services being provided in a better level level of health care. Yeah, then yes. Yeah, I think I think it's necessary. I mean people People in the neighbor islands already understand that if you have a severe problem We're going to get you over to a wahoo where there's more where there are trauma surgeons or neurosurgeons or Super specialists. We all want that for our loved ones our children, you know, of course immediately And I I hate to ever have to transfer patients but what's most important is someone get well and I think that if we do establish centers of excellence and Do a better job of providing the kind of hardcore bedrock essentials at our Neighbor island hospitals will prevent first of all many of those transfers But when we need them will be better fortified and so I I hope that this Queens Experiment works and I I don't know what to tell you I guess I should give people a little update today. We had special session and the governor did veto the measure that would have provided resources to Kind of bridge the impasse on the workforce in Maui Be quite frank. I would have voted to override that veto. We didn't have a vote on it today instead we're going to look at an amendment next week and I think something has to be done. It's an imperfect situation You were an executive What would you would you support something like that in general? You know, I'd have to spend a little bit more time looking at the details of it Yeah, but I heard that it was an additional 40 million It was it was an additional 40 million that was proposed I think right now he'd like to see a cap at 25 million to Get people essentially severance so that they can move into the next model. You're pretty, you know, you're pretty economically Frugal, I would guess but on the other hand we want the system to at least be tried Well, we need to get to health care. Yeah to the point where we're gonna be proud of it on Maui Yeah, that's number one If we could do it if we have to do it for 40 million and you do what you got to do But I think that if we were to explore ways of maybe making it a little bit more economical Maybe even getting Kaiser to participate in some of the offset You know that there could be other options that we could explore and see if we could work something out Yeah, you know, we've got basically three different parties involved. We've got the state. We've got Kaiser We've got the union but we can't forget probably the most important is the population on Maui Right and somehow there's got to be a compromise or a little bit of compromise on all different parties Where nobody's happy, but it gets the job done I agree because I what I don't think some of those three parties realize and I'll I'll claim myself to understand this is you can spend 25 or 30 million dollars real quickly if you Have some terrible outcomes on some people's health. If you if you really Diagnose someone or you don't have services available because you've had to downsize or close a unit or award You could you could have a catastrophic lawsuit or changes in care And so I think it's probably better to move forward Yeah, and this is you know, this will provide a trial balloon to see what's next what whether it's Big Island or Kauai I know that you had thought about that. I think that we're gonna have to get ready for at least some more innovation I think we do I think we got to start getting creative and try to figure out a way to address some of these issues In a different way because the old way just doesn't seem to be clicking anymore, right? yeah, the old way of just pure subsidies and No pressure to add new programs or to streamline programs in kind of a confederated state model just We limp along I guess it's the way to put it and I don't I'm not sure that the neighbor Island folks like that Now let me ask you a quick at the normal hospital environment, and then we've got the clinics and the physicians What's your feelings about the skirt skilled nursing facilities the sniffs that are maybe Can be a middle ground somewhere in between to provide a bridge that maybe not everybody has to go into a hospital environment They can go into a different environment. I'll I first of all I Really like the model Very much to use that I would even go one step further than sniffs I even like the concept of having Like LTACs long-term acute care facilities, which for those of you again to throw a healthcare acronym out there Those facilities can bridge even some of the more serious acute stuff that the hospitals If it's a Medicare patient and they've already been there for a long time and they need more services But it's just simply way too expensive to be still in Queens and Queens isn't getting reimbursed any longer having LTACs in a whole Whole spectrum is what I kind of would advocate for of healthcare services Health care is in general a good business to go into it provided the reimbursements are good enough But I think that with our aging population We better get ready instead of having just like the doctor's office and the hospital and nothing in between We better start inventing this system. I think we better agree. So we're about halfway through. I'm gonna take a one-minute break This is Josh Green with healthcare in Hawaii I'm joined by Reg Baker who is a health economist in my mind and a leader in our in our business community Aloha, I'm Chantel Seville the host of the Savvy Chick show You can watch the show every Wednesday at 11 a.m Honolulu time and enjoy how to be inspired and powered if you're a woman or girl Everyone is welcome, but it's really dedicated to you and we look forward to seeing you You can also find us on thinktech Hawaii comm see you soon. Aloha Hi, my name is Justini spirit to this is my co-host Matthew Johnson every Thursday at 4 p.m We host the Hawaii food and farmers series. This is the place you can come to for insight on the perspective and history and passions of Hawaii's farmers and all folks involved in Hawaii's local food system What kind of folks we have on so we have everyone from local farmers We have foodies chefs. We also have journalists Researchers anyone who's actually working to help make Hawaii's local food system that much better so join us every Thursday and Tweet in us and ask us some questions and leave your comments as well Hi, welcome back to healthcare in Hawaii I'm your host Josh Green state senator and ER physician joined today by Reg Baker who in my mind is one of the best thinkers in healthcare We've had already a part one discussion about the macroeconomics of healthcare in our state We've now moved on to the microeconomics of healthcare in Hawaii We were speaking just a moment ago about what happens in hospitals and health centers and physicians offices Economically, where is that space in between? What do we do for people that might need? Long-term care skilled nursing care. How do we pay for that rich? What would you say? How do we do it? Well, you know, you got the standard reimbursements that you would get from the payers and from Medicare and Medicaid, but then You'd also I think Have some of the hospitals interested in taking a closer look at this because if we can get some of these patients Out of the hospital beds. Yes and move them into a Long-term care facility or a skilled nursing facility That allows them to open those beds up and have more of a turn in there to be able to generate more of that First-day revenue, which is the highest amount of revenue that a hospital can generate And if they can get rid of those dead beds and have more first-day revenue in there They're gonna come out way ahead and they might be receptive to helping fund a little bit of this To get these different facilities up and running to give them those beds so partnerships partnerships Potentially between the strobs or well, I guess we should say the Queens and the Kaisers and Yeah, the Hawaii Pacific Health of the world Yeah, I I see that there'd be mutual benefit and with an aging population that the projection is that by 2050 a Full 22% of all of our citizens will be senior citizens people are gonna have health problems They're gonna have heart problems and cancers. Yeah, and if that's gonna happen in 2050 and this is 2016 right now We better get going otherwise. We're not gonna make it work. Sure Yeah, and people have a lot of needs and we've seen an increase in diabetes We've seen an increase in all kinds of health problems where we do better Americans are living in many ways Healthier lives as opposed to 30 years ago, of course, and they're gonna be living longer by 2050 Who knows what that average life expectancy is gonna be it could be in the 90s by then Wow That would be amazing and people are gonna need a lot of care And and I think that the model is changing some as you alluded to earlier We are seeing some mid-level providers provide care in Hawaii. We've kind of maybe been a little bit ahead of the curve We've empowered nurse practitioners to be PCPs. We've Experimented with some of these alternative payment models We've looked at some of the things that the feds are talking about and tried to tease out what might be suitable for us but we've got a long way to go because I I like you have seen a lot of angst amongst the provider community and Right now we're already seven eight hundred dollars doctors short if that Continues to grow and our population grows people love coming to Hawaii. Oh, well whammy. It's gonna be tough Well, we only have a few more minutes left and you have so many different insights. Talk to me about What you think the Affordable Care Act ramifications are on Hawaii? What's your what's your feeling and we're heading into a new presidency? In the next few years in the next few months rather. Well, what's your what's your guess on what's gonna start happening? well, we've already seen One payer fail as a result of the Affordable Care Act I think we're seeing a lot more of that on the mainland. Yeah, I think we'll still see some Consolidation, I think I see that there are some large losses being generated. I'm not long I'm not sure how long we can continue with that. Yeah You're talking about like HMSA losing a lot of money. Yeah, HMSA has lost a lot of money I think some of the others have You know some maybe not as much as others, but you've got this Requirement that you have to risk payment process that if somebody has more of the Fully loaded Affordable Care Act Policies and others don't There's a risk adjustment payment that ship money and so right yes And so that there's a lot of that going on right now matter of fact there was a Healthcare Co-op. I think in Oregon that just this week Declared insolvency because of that payment that I had to make Wow And so it's it's beginning to have that ripple effect. It's you know starting to sting a little bit And I'm not sure how long we can continue to do that You know so that the Affordable Care Act though in general I would say Really has an impact at Hawaii too much. It has created some increased costs, right? You know because now we've got insurance policies. We've got a lot more Covered that's going to cost some money and that's where the disconnect happened because they didn't project Exactly how much they need to charge in order to cover these costs. They were in some ways, but beneath that That's where those losses are coming from But you know we've had pretty good healthcare in Hawaii for 30 years And I think we've had one of the lowest uninsured rates in the country, right? And so we we had a good model. It seemed to be working. I Think this may have set us back a little bit, but you know I'm hopeful that we will recover and get our footing and move forward Do you think there's any chance that in let's call it healthcare 2.0 under under the next administration? I think they would entertain taking any of the lessons learned from Hawaii Say prior to the passage of Affordable Care Act and you'd lie some of our prepaid health experiences or other Experiences in these other markets to to be effective. I would sure hope so And regardless of who you support or don't support Hillary was out here many years ago when when Bill was the president and took a look at our pre-cared model prepaid healthcare model and She liked it and she wanted to take it back to Washington and use it as a model for the country That didn't happen then maybe it was too much ahead of the times And then when President Obama came into office He had his Affordable Care Act, which was quite different from what Hillary had wanted There's going to be a big push by the Republicans To try and tweak that affordable care model in some form or fashion If Hillary is the president at that time There would be some room for maybe to come back and revisit that interesting. We'll have to rely on our administration and our delegation, but also people like you who are very you know well thought-out and trusted advisors to many of these decision-makers to Push some of these ideas because I interestingly I don't think they're particularly partisan I think they're more about people and if I may Probably a lot simpler to have implemented than what we ended up getting with the Affordable Care Act It's gotten simple as good, you know if you can achieve this desired results and keep it simple Yeah, that's the best model to have. Okay. Well, I think that's just about the perfect note to end on I've been really pleased to talk to hope we can do this again You are a terrific mind and you've experienced so much in healthcare So we will come back in the coming months and years to talk more about health care Look forward to it. This is really this is the way I want this show to work Which is to bring experts like Reg Baker here who is served as a COO as a CFO at a major health Company who also is in the trenches with businesses. He knows what the chambers have experienced He knows what small businesses need again I'm your host Josh Green with healthcare in Hawaii and we're gonna keep exploring a better way to get healthcare for our people in Hawaii. Thanks for joining us