Introduction
The following article gives a profound insight into the way sections of the marketplace and particularly aged care chains see the provision of health and aged care. Turner is talking about the care of the frail aged - people who cannot possibly act as informed customers. Furthermore their relatives are likely to be anxious, exhausted, less well informed and trusting. The consequences of policies like this are readily predicted. To anyone actually involved in care Turner's views are so wide of the mark that one wonders if they are delusional.
His views of government oversight and intrusion into care are industry wide.
ANDY TURNER. THE DYNAMIC. OUTSPOKEN and sometimes controversial CEO Of Sun Healthcare Group. Inc. got his start in the health services industry in 1974 when the pastor of his church asked him to take over the management of the church's nursing home. He and two partners later founded Horizon Healthcare Corp. in Tacoma. Wash. In 1986 they decided to move their corporate operations to Albuquerque. Three years later, he purchased seven unprofitable nursing homes from Horizon and left the corporation to form Sunrise Healthcare Corp. He slowed the bleeding the first year. and by the second he was showing a profit. Today Sun Healthcare Group, Inc.. operates 132 nursing homes across the U.S. with another 29 in the United Kingdom. while the rehab therapy division has a presence in more than 40 states and Canada. In 1995, Sun Healthcare's gross revenues exceeded $ 1 billion. Turner still owns some 12 percent of the corporation's stock.
Probably nothing better symbolizes Turner's vision and the success of his corporation than the Sun Healthcare corporate headquarters visible from I-25 North in Albuquerque. The strikingly modern building prominently features a number of sculptures and other art works. an aesthetic reflection of his commitment to the Southwest, and is crowned by an oval running track. Indeed this is not just first-class Office space; it is a work of art in itself. Two more buildings were recently added to the complex, including the 12,000 square foot Glaesner Training Center, which features state-of-the-art communications and teleconferencing facilities to enable Sun Healthcare to train and communicate with its employees worldwide.
Turner. 49, received his B.A. from Ohio State University. He and his wife Nora have three daughters, Angela, 13. Meredith, 11. and Stephanie. 8. Ralph Odenwald spoke with him at his off-ice.
NMBJ: You have been in the business of delivering health care services for more than 20 years now, How has the industry changed in that time?
Turner: Most of the changes relate to expense. The U.S. has a very good health care system -- the best in the world -- but it is very expensive. Most costs are paid on a cost-plus basis and as a result there has been very little incentive to control costs. By the 1980s, costs had grown so much that we had to put the brakes on by reducing expense without compromising quality.
Payments had been primarily from private insurance or government, which didn't reward efficiency. They paid on a "cost plus" basis. and the result was redundancy and fat in the system,
NMBJ: As you point out. the government has played an increasingly large role in providing health care to the citizens of this country. What do you see as the proper role for government in his system?
Turner: The government should butt out. If that happened, market forces would quickly resolve the problems in the industry, The government has an obligation to support poor people, but it should fund them through the private sector.
NMBJ: How would that work?
Turner: Right now. the government either delivers services directly or purchases them through an intermediary. They should provide medical services to the truly needy. but they should hire a private company to do it. The government would hire a private company say, Blue Cross, for example -- and tell them what services they are to provide to people and ask them to set guidelines and regulations for delivering those services. The government regulators are out of control. There are too many of them and they contribute directly to the cost of providing health services.
NMBJ: Are you advocating the elimination of Medicare altogether?
Turner: There shouldn't be a Medicare program as written today. Why should the government pay medical bills for someone like me who is relatively well off just because I reach the age of 65? The VA is a disaster. The cost per patient per day is the highest in the world, and if you ask someone who just got out of a VA hospital what they thought of the care. they would tell you it was awful.
We have an obligation to provide health care for poor people, but it should be managed health care under rules provided by the private sector. We should limit the government's role to the needy only. There is no sense for the government to pay a well-off person's medical bills, but in the case of Medicare that's just what we are doing. It was improperly designed from its inception, as a cost-plus program. There should be eligibility criteria based on income.
NMBJ: Is it politically realistic to expect such a radical modification of Medicare? The voters appear to feel very strongly about this program.
Turner: Not in our lifetimes. People have come to think of it as an entitlement. They feel like they have paid for this with their taxes for years and others have received it before them, so they should be entitled to receive it when they reach 65, too. We are taking small steps toward this now. but we will never get rid of the regulators completely.
NMBJ: Do we really want to get rid of regulators? Won't the quality of health care-suffer?
Turner: The quality of health care suffers because of governmental support and regulation. The system takes away incentives to improve. The marketplace would close poor operators. If the government were to withdraw, disparities in quality would show. People would shop. They would find out which hospitals really offered the best care, and the ones that didn't would be out of business. We don't think about free enterprise in the health care industry.
NMBJ: Many people Find it difficult or even somehow wrong to talk about providing health services as a business. Are the two concepts in any way incompatible?
Turner: They are incompatible only if we say that free health care is a right and should be administered by the government. Right now in this city you have hospitals that are governmental, not-for-profit and for-profit. All deliver the services that most patients are likely to need. So the compatibility now exists, Not-for-profits do make a profit, of course. They can't afford to run in the red any more than for-profits can. I think operating health care as a business is a must. As long as the government operates the system. there will be no incentive to do better
NMBJ: Is less choice for the medical consumer the inevitable result of the cost-cutting pressure?
Turner: I think it is. On the other hand too many of our choices are being made by bureaucrats.
NMBJ: Do you think then that we've had too much choice up to this point, or are you saying that people haven't been forced to make the choices they should have to make?
Turner: I have no complaint with the concept of choice, but I do think that one avenue for cost containment is the limitation of choice. And some of that also has to do with rationing. When you're talking about choice, you're not only talking about buying service from this provider or that provider, you're also talking about what particular services you can buy from any provider. That's another element of choice. If you look at what health care costs are in an individual's lifetime I think its clear that we spend something like 90 or 95 percent of our health care expenses in the last three or four years of our lives. So I do think we need to reevaluate how we spend our health dollar and whether we want to have that much money spent on us as we're approaching death. For me choice is both --horizontal and vertical.
NMBJ: Have medical and hospital costs begun to moderate?
Turner: Yes they have, because some of these issues that I'm speaking about have bun to take effect. You asked me earlier whether my vision of the proper way to administer a health care delivery system in this country was politically realistic and I said yes. But there will be steps as we strive toward it, and it will take many years to reach my vision. I think we have begun to take those steps. In the 1980s people were saying. "Wait a minute. This is out of control. The Consumer Price Index goes up by 5 percent and health care costs arc up by 14 per cent." We have gone through the worst of it. and I think we are now just beginning to modify how health care is delivered.
NMBJ: Is it pressure from the government that has brought costs down?
Turner: I think the private sector has done it. There's always tinkering with the way government runs its programs, but there hasn't been any significant change. The significant change that has transpired is that insurance companies, HMOs. and large employers have said we can't afford this any more. If I'm General Motors. I can't produce an automobile and continue to see my health care costs escalate 14 or 15 percent a year. The government is just getting on the bandwagon late as usual.
NMBJ: Has patient care suffered as a result of the cost cutting?
Turner: No. I really don't think so. There was, and there continues to be. tremendous fat in the health care delivery system at a number of levels. We haven't even begun to cut the fat.
NMBJ: Where do you see areas of fat in the system?
Turner: A lot of it has to do with administration, the paperwork demands. Everyone hates to be admitted to the hospital because you're badgered by the paper pushers before you can get into bed. If you look at the administration of any acute care hospital system there is fat beyond belief. They have planners and assistants to the planners and human resources personnel and consultants and communications departments with 10, 12 people in them. It's nuts. So I think the first place to start would be to cut all that bureaucratic crap at the top. Then at the actual bedside I think there is fat. Why do we have to have a registered nurse change a bedpan? That's primary care. Somebody had a theory that this would be better care. A licensed practical nurse or nurses aide could be used. We've gone way off the deep end in terms of that kind of thinking. There is tons of fat in the health care delivery system.
NMBJ: What do you see for the future of health care? What is the industry going to look like in 2020 when you and I have retired?
Turner: I think we're going to see a significant reduction in costs. and I think the role of government is going to be dramatically diminished. When you and I are ready to retire. I don't think long-term nursing home care is going 'to be significantly different than it is today. I believe that the place for the most significant changes is going to be in acute care. What's broken is at that level of care, and that level of care is changing dramatically right now. So in the year 2020 when you fracture your hip, there are going to be fewer people taking care of you. There may be longer lines for our treatment.
You're going to spend less time in the hospital and you're going to get quickly shuttled to what we now call a nursing home where I think the care will be pretty similar to what it is right now.
I think private businesses will become the primary purveyors of health care services and that the government-run homes are going to be fewer. I don't see much of a future for not-for-profit homes. I just don't think that the religious orders are going to have the incentive to stay in the health care business that they have today.
