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WASHINGTON-Employers' obsession with reducing health care cost at the expense of medical quality has created a "dysfunctional" health care market, a consultant warns.

As a result, less competition will mean bigger cost increases, predicts Dwight McNeill, president of Barrington, R.I.-based consultant WayPoint Health.

"How can there be any room for quality" when health care is being driven by cost considerations and Wall Street concerns? he asked during a panel discussion during the recent National Managed Health Care Congress in Washington.

As managed care market consolidation has produced what Mr. McNeill called "Wall Street harvests" for lucky investors, consumer unrest has grown. A widespread mistrust of managed care has arisen, and Congress has responded with what he called "organ-by-organ legislation," mandating minimum stays for certain operations.

Mr. McNeill offered a three-part series of "definitions a la Dilbert," named for the popular comic strip, to underscore his point.

""Employees" are defined as "our most valuable asset," he said.

""Outsourcing" as defined by Dilbert, is "taking work away from our most valuable asset."

""Health management" is "shifting cost and risk to our most valuable asset," he said.

The Dilbert theme reappeared in Mr. McNeill's recommendations for restoring quality to health care. Among Mr. McNeill's "top 10 list" for achieving that goal is "Treat your employees like your most valuable asset. Really!"

"Employers can no longer say employees are their most valuable asset and give them the cheapest health plan in town," he said.

His other recommendations include requiring accreditation of all health care plans offered, giving employees access to all the information resources they need to make responsible and cost-effective health care decisions and "outsourcing health management to employees."

Another speaker warned that if employers are not careful, health care decisions will be turned over to legislators.

Raymond B. Wernetz, vp-compensation and benefits for Rolling Meadows, Ill.-based Whitman Corp., said that with an emphasis on cost control above all else, employers are really saying to employees and providers alike, "We don't trust you."

As a result, there is a concern that employers soon may be depicted as the villains in the debate over managed care, he said.

"If you put all of your resources to (controlling) costs, you'll have virtually no time to manage care," said Andrea B. Castell, health services consultant with Bellevue, Wash.-based consultant Castell & Associates.

Managing costs is basically an accounting function, she said. It involves financial control, renegotiation with providers, collecting and displaying data, and patient and practitioner control.

Managing care, though, is an "accountability" function, said Ms. Castell. As such, it involves re-engineering and control over operations, she said.

She expressed sympathy for the challenges medical practitioners face. They must deal with fluctuating plans, accountability and liability for their actions and repeated changes in their reimbursement systems.

"Remember, the practitioner's responsibility is to the patient," she told her audience.

Dr. George J. Isham, medical director and chief health officer of Minneapolis-based HealthPartners, described how health care worked under both the old "open checkbook" model and the current system of cost containment by payers before sketching an ideal model for value-based care.

Such an ideal would feature, among other things, consumer-centered care, effective prevention programs, team-based care and meaningful outcomes data that isn't tinged by ideology, according to Dr. Isham.

Such a change is necessary for a variety of reasons, he said. Not the least of these is that the health care system can't sustain the conflicts of the current system, which include confrontations between care givers and health plans as well as between employers and employees.

In a brief question-and-answer session after the formal presentation, an audience member asked the panel what would drive improvements in the system in the next century and whether the system would be better than that of today.

WayPoint's Mr. McNeill said he could answer the question in two words: "baby boomers," who will demand changes.

Mr. Wernetz of Whitman replied that if employers can't "prove to the folks in Washington that what we're doing" is not just good for cost control but good for the country as well, the country will end up with a government-run health system.

Marianne Fazen, executive director of the Dallas/Fort Worth Business Group on Health in Dallas, moderated the session.