Focus on outcomes

Assemblyman Richard Pan says industry is ready to change

It was an Occupy General Hospital moment: Physician and current Sacramento Assemblyman Richard Pan told SN&R that 50 percent of the health-care dollars in America are spent on the sickest 10 percent of patients.

But this is the state of the nation’s health-care industry. “And where we are now is unsustainable,” Pan insisted.

This, of course, is not news to many. But it is big news to hear that Pan is optimistic on the two-year anniversary of President Barack Obama signing the Affordable Care Act.

As a member of the Assembly health committee, Pan hears encouraging dialogue under the rotunda dome, people talking about meaningful change. Things such as incentivizing doctors and insurers to focus on outcomes, not just earning income for more and more surgeries.

Pan says the industry is motivated by recent, and unfortunate, rate jumps. “We can’t sustain double-digit increases in health-care costs every year forever,” he said. “A very large portion of the medical community understands that we really do need to move in a different direction.”

Specifically, he cited California’s forthcoming health-insurance exchange—a stipulation of Obama’s health-care reform act where formerly priced-out patients will be able to purchase viable coverage at lower costs—which will continue to motivate insurers and physicians. This is because they’ll be focusing more on patient outcomes—there’s that term again—since there will be less of a financial incentive to perform procedures or see a revolving door of patients.

But these changes, like a lot of things in medicine, will be gradual. “It is a long road,” Pan conceded. “But let’s put it this way: This is really an opportunity for transformation.”