Michael Dowling, North Shore-LIJ Health System’s President and CEO, discussed with clients, colleagues and friends of First Long Island Investors the current state of healthcare in the United States, the ramifications of the Affordable Healthcare Act (what some call Obamacare) and the future of healthcare for hospitals, service providers and patients.

Robert D. Rosenthal, Chairman & CEO of First Long Island Investors LLC (left), and Michael J. Dowling,
President and CEO of the North Shore-LIJ Health System (right).

Here are some of the highlights from the discussion:

Hospitals are Big Business and an essential component of the health delivery system

• People don’t like to think of them as such, but they are
• North Shore-LIJ employs over 47,000 people, making it the largest employer on Long Island, and it faces the same challenges as other employers
• Quality care and a high level of service are important, and patients want the best value for their dollar

Healthcare Today

• Changes in lifestyle is one of the reasons that has  led to poorer health in the US
  • Obesity rates, particularly among children and teens have risen significantly
• We are doing a better job of keeping people alive longer
  • We have added 35 years to life in the last 100 years, and have gotten so good at extending life that taking care of the elderly has added to high costs
• The government doesn’t focus primarily on the total costs of healthcare, just the cost to the government
  • More than 60% of hospital reimbursements come from the government (Fed & State)
• We are using a fee for service payment model which causes interests to be misaligned
  • It is to the hospital’s advantage to have beds full, so they are not compensated for providing well-care, and may do things they would not do with a different reimbursement structure
  • Some estimates suggest that 20% of the patients in hospitals shouldn’t be there
  • More procedures should be done outside of hospitals
  • The terminally ill should if possible be dying in their homes, not in hospitals

The Affordable Care Act

• The Affordable Care Act (also known as Obamacare) is a maze of confusion, not completely understood by many and the White House has already begun to make adjustments
  • Not everyone is covered under the Affordable Care Act and the plan doesn’t lower costs (no proof yet that it will)
  • The politicians who wrote the bill have limited knowledge about the healthcare business – especially what it takes to implement at the ground level

North Shore- LIJ

• The country needs more quality, well-rounded doctors
  • Opened a new medical school with Hofstra, which threw out the traditional method of medical education and focuses on training doctors in a different way
• Involved in more research
  • Would be surprised if a North Shore-LIJ employee doesn’t win a Nobel prize soon
• Building more ambulatory centers, 400 and growing
• Working with CVS to operate in-store clinics manned by nurse practitioners
  • Will lower emergency room visits
• Partnering with the Cleveland Clinic and Mayo Clinic to become more innovative
• Want to be like Starbucks, be in the community and deliver a quality product

The Future of Healthcare

• The business model of healthcare should change
  • Want to be paid not just for services but for keeping the population healthy and out of the doctor’s office and hospital as well
  • North Shore-LIJ is spending time and money on population well-care
• North Shore-LIJ is building its own health insurance company, and is working in conjunction with other insurance companies, to hopefully obtain an insurance license by the end of the year
  • Incentives for hospitals will be turned around, and hospitals will want to keep you out of the hospital to reduce total health care costs
  • Medical tests, which are overused in the US, will be reduced
• There will be fewer independent practices, as more doctors will be employed by hospitals
• Nurses and nurse practitioners will become more important and take on more roles of the primary care physician
• Prices for treatments will become more transparent and a larger proportion of the cost of treatment will fall to the patient, perhaps leading to a change in their lifestyle
• “Healthcare is what we do to ourselves, and unless we think of it that way we are not addressing the problem”

Michael J. Dowling
Mr. Dowling is president and chief executive officer of the North Shore-LIJ Health System, which delivers world-class clinical care throughout the New York Metropolitan area, pioneering research at The Feinstein Institute for Medical Research and a visionary approach to medical education, highlighted by the Hofstra North Shore-LIJ School of Medicine.  North Shore-LIJ operates 16 hospitals and nearly 400 outpatient physician practices and is the nation’s third-largest non-profit secular health system.  Mr. Dowling has been recently recognized as one of the 100 most powerful people in healthcare by Modern Healthcare magazine.  Prior to joining North Shore-LIJ in 1995, Mr. Dowling served in New York State government, as director of Health, Education and Human Services, and as deputy secretary to the governor.