43 thoughts on “Health Care Reformers Debate the Road to Universal Coverage, Part II”

1. I don’t think that reforming Medicare alone—even if it could be done in the near term, instead of after endless demonstration projects—would solve our problems. Medicare is part of and a primary driver of the larger health care system, and it’s delivered by the same doctors and hospitals that serve non-elderly patients. Even if it were possible to cut the waste out of Medicare alone, providers would simply charge other payers more.
   While it’s clear that we need to limit spending, the concept of a national cap on health spending—which harks back to the Clinton reform plan—is unenforceable and would lead to unacceptable forms of rationing. Take the enforceability first: Even before CMS introduced the part D drug benefit, Medicare spending was growing faster than the costs of private insurance. You’re right when you say that this is partly because Congress never had the nerve to cut physician reimbursement as it had pledged to do. Why would the politicians do so in a post-reform world? And even if they did, it’s hard to see how they could simply hand budgets to doctors and hospitals and tell them to do the best they could with them. Inevitably, there would be horror stories and strong pressure to raise the budgets, just as there has been with managed care. In the eyes of the public, the government doesn’t have any more authority than HMOs do to dictate how much or what kind of care we’re going to receive.
   Nevertheless, as you point out, we cannot achieve and sustain universal coverage—whether through the Hacker/Clinton/Edwards approach or any other proposal—without cost control of some kind. Sen. Ron Wyden would have us believe that his scheme—to finance universal coverage by having employers turn their insurance premiums into wage hikes—would do the trick; but all he’s doing is passing the buck to workers who will inevitably have to pay future cost increases, plus the taxpayers who will have to subsidize them. At the opposite end of the political spectrum, the “Medicare for all” supporters want us to believe that if the government just ran health care, with a national spending cap, fee-for-service providers would deliver higher quality care for less than they do now. But a global budget is just a black box that lacks the tools to enable the many parts of our fragmented, wasteful system to work together effectively.
   You hit the nail on the head when you wrote, “Our healthcare system desperately needs structural reform. It’s not just that we need to contain costs to make care affordable; we need to improve the quality of care.” This is the key to a real solution: we have to stop talking about health care financing as if it existed in a vacuum, and begin looking at how the delivery of care must change so that we can use the abundant resources already in the system to finance comprehensive coverage for all.
   I also agree that reformers need to start talking to one another to find out where they have areas of agreement that could lead to a feasible compromise. But I reject the notion of “us” (progressives) and “them” (conservatives). Perhaps Ron Wyden’s “grand compromise” isn’t so grand, but at least he recognizes the need for a bipartisan approach. Also, there are other areas where conservatives and liberals can agree. One example is the notion of “report cards” on the quality and cost of health care providers. While those measures have a long way to go, there isn’t such a huge distance, really, between Arnold Relman, who believes that patients should choose among competing multispecialty groups, and Michael Porter and Regina Herzlinger, who think they should choose among specialized provider teams on the basis of value. It’s time for people who believe in delivery system change to start a conversation.

2. Ken– Thanks for your comments.
   Ken–
   Thanks for your comment.
   I agree that if we only reformed Medicare, providers would shift costs to other payers.
   But I’m assuming that a reformed Medicare would become the model for something like Hacker’s public-sector program. And if providers shifted costs to private insurers, then private insurance would become much more expensive than public-sector insurance and most people would switch to the public-sector insurance.
   I also agree that we need structural reform–which means changing how we pay for care (paying for quality, not fee-for-service) how we deliver care (in a much more co-ordianted, collaborative and less fragmented way); and how we involve patients in the process (through shared decision-making–which is a process that allows patients to really understand the benefits the risks and the odds involved in any elective surgery or test.
   AFter going through shared decision-making, 20 percent to 40 percent of patients decide not to go through with the elective surgery or test.
   This is patient-centered medicine which aims for “informed choice”–not just “informed consent.”
   It is completley different from “consumer-driven” medicine which assumes that if patients have “skin in the game” they will be able to pick the best doctor/hospital/value for their dollar.
   They wont’t–just as they don’t pick the best investments when left on their own to manage their own pensions.
   Part of the difference in the way conservatives and liberals tend to think about health care (and other social issues) is this: conservativdes are more likely to think that each individual is responsible for himself–it’s up to him make sure he gets good healthcare, saves enough for retirement, etc.
   Liberals tend to think that we are responsibile for each other and that it is incumbent on us to look out for the sickest, the youngest, the oldest, the weakest–those who have the bad luck to have cancer.
   In terms of how all of this works, we could learn a lot from other countries. (No need to reinvent the wheel). All other developed countires have various ways of “capping” growth in health care spending -by regulating prices paid to drug-makers, to device-mkaers and to doctors,by refusing to let people build hospitals, add to hosptials, or build surgical centers unless they can prove that the community needs more bews (we know that supply drives demand)etc. etc.
   Other developed countires cover everyone, have better outcomes than we do in many areas including fewer “preventable deaths” from diseases like diabetes, lukemia, repirsatory infections . . .and spend half what we do, per capita.
   People in these countires live longer–even if you compare them only to white Americans.
   They are doing something right, and we need to figure it out. Part of it has to do with thinking collectively, and addressing health problems before they become serious–no co-pays, so everyone goes for preventive care, chronic disease management, etc.
   As for Arnold Relman and Regina Herlinger–I can only imagine poor Relman shuddering at the comparison.
   Herzlinger thinks that a patient is a consumer and that a doctor is a retailer. She thinks the way to get better care is for an affluent suburbanite to stamp her little foot and say “I want, what I want, when I want it.”
   Relman understands that a patient is someone who is sick, often frightened, often in pain, often elderly, and he or she needs a doctor who is a professional who he can trust. A professional is someone who puts the patient’s interest ahead of his own. “Caveat emptor” has no place in Relman’s world of medicine. Herlinger’s world is all about “caveat emptor.”
   Porter thinks patients should choose between specialty groups because he doesn’t understand that the average patient with a chronic disesase isn’t suffering from one chronic disease, he’s suffering form 4.5 chronic diseases.
   And he can’t be in 4.5 hsoptials at once. Which is why we need multi-specialty groups like Mayo, Kaiser, the Cleveland Clinic where care for his 4.5 diseases can be co-ordinated.
   In these multi-speciality groups, healthcare is a team sport. It’s collaborative–and that’s the model we need to move toward. Medicare has been talking about paying doctors bonuses to join large multi-specialty groups.
   The bottom line difference between conservatives and progressives is this: in poll after poll, if you ask: “Is healthcare a right?” progressives say yes and conservatives say no.
   That’s a huge ideological divide. Wyden, by the way, is not a progressive, and you are absolutely right that his plan would shift the costs to workers. Moreover, insofar as private insurers would be in charge, they would do their best to shift costs to the sickest workers–as they have done with Medicare Advantage.
   Wyden’s vote was key in passing the Medicare Modernization ACt which created Medicare Advantage and a huge boondoggle for insurers and drug-makers.
   (The vote divided along party lines but Wyden, a Democrat, voted with the Republcans.)
   “Report cards” for doctors and hospitals are generally a bad idea because they measure only what is measurable. And the most important things in medicine are not easily measured. (When the patient died, how scared was he? How much pain was he experiencing? Was it a “good” death? How do you measure the quality of palliative care?
   Yet the most important care many of us will ever receive is the care we receive when we’re dying.
   Even if you’re talking about surgery where the patient survives, you need to ask: even if the surgery was technically perfect (no errors, no infectoins) how did it affect the patient? Did he leave the hospital, go home and play with his grandchldren? Or was he warehoused in a nursing home for the next four years?
   The CEO of a N.Y.
   hospital told me the most important question people never ask when “rating” surgery outcomes: “Did the patient even need the surgery? Would he have been better off without it?”
   A number of studies (even in other industries) have shown that when you do report cards, or try to pay for performance, people begin focusing on what you’re measuring–and ignoring the things that aren’t measured.
   MedPac (which makes reocmmendations on Medicare spending) has been thinking that it migiht make sense to give bonuses for higher quality care at a lower cost, but you cannot reward individual doctors.
   For one, just a few non-compliant (usually poor) patients can skew results,and then doctors would shun the poor.
   Secondly, these days it is rare that one doctor is responsible for an outcome.
   A primary care doc refers the patient to a specialist; he then goes into the hospital where a hospitalist co-ordinates his care; a surgeon and his team oeprate; someone else takes the patient through re-hab, he goes back ot his primary or the specialist for a follow-up visit . . .
   (MedPac has been looking at ways to bundle payment to an entire hostpial/ doctor group, putting together all of the doctors who refer to a particular hospital with that hospital in a sort of virtual group practice. It’s complicated, but can be done, and would be much better than fee-for-service.
   Finally,will conservatives and progressives be able to work together toward healh care reform?
   Yes, i think so, infoar as conservatives (and their consituents) are now very worried about the high cost of care. And bringing down the cost is the first step to being able to afford universal coverage.
   It also can be the first
   step to improving qualtiy (assuming that cost-cutting is done carefully, with a scalpel, not an axe) because higher quality and lower costs go hand and hand. (It costs Medicare about half as much when a patient goes to the Mayo Clnic in Minnesota than if a very similar patient goes to UCLA medical center. )
   Americans need to learn that “more care” is not “better care”
   Lobbyists won’t like it if we control costs, but ulimtately many conservatives will be more concerned about the employers and voters that they represent than the lobbyists . .
   Sorry to go on at such length, but you raised a great many important points . .

3. Maggie,
   Great post, one of your best in a while. Ezra Cohn’s piece was also well written and insightful.
   At 30K feet, the buzz words: “integration,” “patient centered home,” “comparative effectiveness,” etc., are salves on an open, or dare I say, gushing wound. However, I am afraid their use in current context is a wonderful example of form over substance. None of them as they are intended will work as patches or incremental fixes in our bleeding system. I am convinced that they will only be effective with a system overhaul–which the candidates are loathe to talk about. There is too much interconnectedness between payments, insurers, cost growth, and on and on, to view these concepts in isolation.
   Watching the PCMH concept stumble in its formative planning (I am privy to some of it), watching the FDA cave on Avastin (and NICE’s stumbles of late), and hearing some of the MEDPAC trustee offline “chatter” about bundled payments, virtual bundling, etc., etc., does not give me the warm and fuzzies.
   I dont know what fixes we will have in 5 years, but it will be bipartisan and partially toothless, and likely a 10-20+ year work in progress. As Winston Churchill says: “You can always count on Americans to do the right thing – after they’ve tried everything else.”
   Brad

4. Hi Brad —
   Thanks fo commenting–
   You write: “patient centered home,” “comparative effectiveness,” etc., are salves on an open, or dare I say, gushing wound. However, I am afraid their use in current context is a wonderful example of form over substance. None of them as they are intended will work as patches or incremental fixes in our bleeding system. I am convinced that they will only be effective with a system overhaul–which the candidates are loathe to talk about.
   I’m wondering what you have in mind by a “system overhaul?” I agree that our healthcare system needs structural change, and I’m intrigued–I’d like to know more about what you would envision, and how it would happen . . .
   (I do think that what we need will be extremely disruptive, which is why I think we have a better chance of doing something radical if we start with Medicare where: a) it’s obvious to virtually everyone that Medicare will run out of money if we don’t do something and b)because it’s a govt program to begin with , MedPac and Congress have more power to move in . . .
   When I talk about Medicare reform paving the way for national health reform, I am thinking of a complete system ovderhaul of Medicare–changing how we pay and what we pay for— with unbiased medical research deciding what is or isn’t covered for which patients.
   Under Medicare, doctors also need to be paid more to do the things we really need–co-ordinate care, try to manage chronic diseases, preventive care,
   palliative care– while being paid less to do some of the most expensive, sometimes questionable procedures.
   Last week, Robert Laslewski wrote a very interesting post titled: “There Won’t Be Any Health Care Reform Without Physician Payment Reform and There Won’t Be Any Physician Payment Reform Unless the Docs Lead The Way.” You’ll find it here http://healthpolicyandmarket.blogspot.com/search/label/Medicare%20Advantage.
   I think he is right. Physicians themselves need take a hard look at Medicare’s fee schedule and revise it, paying more to doctors who practice cognitive medicine (listening to and talking to patients, treating problems before they become serious) and less for some invasive not entirely proven procedures.
   MedPac has suggested that perhaps specialists who are on salary and not affected by fee-for-service should be the ones re-examining the fee schedule.
   The altnerative is to have non-physicians regulate prices–or to have an across-the-board cut in physicians’ fees which everyone realizes is a crude tool and politically, a non-starter.
   I understand that the health care industry lobbyists are incredibly powerful and will oppose any rational attempt to make health care better and more affordable.
   But at this point, I agree with Dr. Ezekiel J. Emanuel, Director of Bioethics at the National Institute of Health (and brother of Rahm),
   “Without controlling healthcare costs, any attempts at universal coverage will be transient. . . . Fortunately . . . those who count in [our] political process—voters, employers, governors, and others—are concerned about [the] costs [of healthcare] in a way that they have not been genuinely concerned about the fate of the uninsured.”
   I think that those employers, governors, and affluent Americans
   would join in a coalition that is determined to bring down health care cos.
   But we have to take great care that curbing health care inflation doesn’t mean shifting costs to the sickest Americans, or in any way, reducing the quality of care.
   On the other hand, I’m convinced that lower costs and higher quality go hand and hand. And if some (or many) of the “people who count in our political process” understand this, they can help us defeat those who are profiting from the status quo.
   (I’m writing about this on http://www.tpmcafe.com in the 3rd post of a 3 part series that I began a few weeks ago. The third part should go up early this week.)

5. Hi Brad —
   Thanks fo commenting–
   You write: “patient centered home,” “comparative effectiveness,” etc., are salves on an open, or dare I say, gushing wound. However, I am afraid their use in current context is a wonderful example of form over substance. None of them as they are intended will work as patches or incremental fixes in our bleeding system. I am convinced that they will only be effective with a system overhaul–which the candidates are loathe to talk about.
   I’m wondering what you have in mind by a “system overhaul?” I agree that our healthcare system needs structural change, and I’m intrigued–I’d like to know more about what you would envision, and how it would happen . . .
   (I do think that what we need will be extremely disruptive, which is why I think we have a better chance of doing something radical if we start with Medicare where: a) it’s obvious to virtually everyone that Medicare will run out of money if we don’t do something and b)because it’s a govt program to begin with , MedPac and Congress have more power to move in . . .
   When I talk about Medicare reform paving the way for national health reform, I am thinking of a complete system ovderhaul of Medicare–changing how we pay and what we pay for— with unbiased medical research deciding what is or isn’t covered for which patients.
   Under Medicare, doctors also need to be paid more to do the things we really need–co-ordinate care, try to manage chronic diseases, preventive care,
   palliative care– while being paid less to do some of the most expensive, sometimes questionable procedures.
   Last week, Robert Laslewski wrote a very interesting post titled: “There Won’t Be Any Health Care Reform Without Physician Payment Reform and There Won’t Be Any Physician Payment Reform Unless the Docs Lead The Way.” You’ll find it here http://healthpolicyandmarket.blogspot.com/search/label/Medicare%20Advantage.
   I think he is right. Physicians themselves need take a hard look at Medicare’s fee schedule and revise it, paying more to doctors who practice cognitive medicine (listening to and talking to patients, treating problems before they become serious) and less for some invasive not entirely proven procedures.
   MedPac has suggested that perhaps specialists who are on salary and not affected by fee-for-service should be the ones re-examining the fee schedule.
   The altnerative is to have non-physicians regulate prices–or to have an across-the-board cut in physicians’ fees which everyone realizes is a crude tool and politically, a non-starter.
   I understand that the health care industry lobbyists are incredibly powerful and will oppose any rational attempt to make health care better and more affordable.
   But at this point, I agree with Dr. Ezekiel J. Emanuel, Director of Bioethics at the National Institute of Health (and brother of Rahm),
   “Without controlling healthcare costs, any attempts at universal coverage will be transient. . . . Fortunately . . . those who count in [our] political process—voters, employers, governors, and others—are concerned about [the] costs [of healthcare] in a way that they have not been genuinely concerned about the fate of the uninsured.”
   I think that those employers, governors, and affluent Americans
   would join in a coalition that is determined to bring down health care cos.
   But we have to take great care that curbing health care inflation doesn’t mean shifting costs to the sickest Americans, or in any way, reducing the quality of care.
   On the other hand, I’m convinced that lower costs and higher quality go hand and hand. And if some (or many) of the “people who count in our political process” understand this, they can help us defeat those who are profiting from the status quo.
   (I’m writing about this on http://www.tpmcafe.com in the 3rd post of a 3 part series that I began a few weeks ago. The third part should go up early this week.)

6. Thanks Maggie.
   Essentially, we are talking about the same thing. When I say overhaul, I mean something more than piecemeal change…of the sort you are referencing, and wont probably wont get regardless of who is elected. Gridlock, lobbyists, and the like are so dispiriting. Just see below:
   Health Care Marketplace | Health Care Industry Spent $445M on Federal Lobbying in 2007
   Health care interests spent $445 million on federal lobbying in 2007 — more than any other sector of the economy — to finish as the top spender for the second consecutive year, according to the Center for Responsive Politics, CQ HealthBeat reports. A more specific breakdown of 20 industries that spent the most on lobbying in 2007, pharmaceutical and medical products companies rank first with $227 million in spending, while health insurance companies spent the second-most at $138 million. Hospitals and nursing homes spent $91 million, ranking fifth; while health professionals spent $70 million, ranking 15th; and HMOs/health services spent $52 million, ranking 19th.
   Among specific organizations or companies, the Pharmaceutical Research and Manufacturers of America spent the third-most at $22.1 million, the American Medical Association spent the fourth-most at $22.1 million and the American Hospital Association was fifth, spending $19.7 million. The U.S. Chamber of Commerce spent the most of any organization ($53 million), followed by General Electric ($23.6 million).
   According to the CRP, the pharmaceutical industry has spent $1.3 billion on federal lobbying in the last decade, more than any other industry. In addition, the drug industry’s reported lobbying increased by 25% from 2006 to 2007. Lobbying firm Patton Boggs, whose clients include Bristol-Myers Squibb and Hoffman-La Roche, reported $41.9 million in 2007 revenue — an increase of 20% over 2006 — and the most among Washington, D.C.-area firms (Reichard, CQ HealthBeat, 4/14).
   Overall, corporations, labor unions and others spent $2.79 billion on lobbying in 2007, up 7.7% from 2006, the CRP data show.
   I wish I had the answers, but I dont. The more I dig below the surface, kick the tires, and talk with folks in DC, or Albany (NYers like us), the more I get utterly frustrated.
   Also, in regard to physician pay, go to the Health Affairs blog. Several weeks ago they had a fabulous series on SGR reform. That will give you some idea how hard change will be.
   Sorry for the sketchy answer, but I am getting more pessimistic as this campaign drags on. We really need a leader who can lead. Now, time for my Prozac.
   Brad

7. “The CEO of a N.Y. hospital told me the most important question people never ask when “rating” surgery outcomes: “Did the patient even need the surgery? Would he have been better off without it?””
   I’m very intrigued by this. If hospitals like Mayo and the Cleveland Clinic are so much better than many others at providing cost-effective care, perhaps they could start to codify how they do it.
   At Mayo, for example, under what circumstances will they NOT offer heart bypass surgery (CABG) as an option to the patient with several blocked arteries? When will they NOT offer chemotherapy to late stage cancer patients or stop it if it hasn’t shown any positive results? Same questions for hip and knee replacement, kidney dialysis and organ transplants. What is the process they go through to determine what a patient wants and doesn’t want as the end of life approaches? How does age and mental status (Alzheimer’s, dementia) factor into the equation? In theory, we should be able to develop best practice benchmarks and protocols for the most expensive procedures and courses of treatment that can either be copied by other hospitals and doctors to help them improve or to develop payment mechanisms that would reward the most cost-effective providers and penalize those who aggressively overtreat.
   With respect to measuring physician performance, there might be some things we can learn from the British experience in evaluating primary care doctors on no fewer than 146 separate metrics with points assigned to each up to a maximum total possible score of 1,050 points. The most intriguing aspect of their approach is that under certain limited circumstances, the doctors themselves were able to eliminate individual patients from the pool to be evaluated. Acceptable reasons to eliminate a patient included clear non-compliance, the patient was already on the maximum dose of a prescribed drug but couldn’t tolerate it, and the patient had heart disease that called for a statin drug but also had advanced cancer and was likely to die soon anyway so it was reasonable to not prescribe the statin. Up to 6% or thereabouts of patients were removed from the evaluation pool based on one of these (and other) acceptable criteria. The upshot was that the doctors themselves were more willing to accept the evaluation as a fair measure of care quality.
   It is absolutely critical that we find a way to control healthcare costs without explicit rationing like global budgets. I think reasonable P4P approaches could be developed if doctors would cooperate and provide their input. I also think it is highly unlikely that we will ever be able to significantly reduce regional variations in practice patterns unless there are ultimately adverse financial consequences for doctors and hospitals that treat too aggressively and order too many marginal or wasteful tests and procedures.

8. Brad & Barry– thanks much for your comments–
   Brad–
   As it happens, after I replied to your comment, I was watching a Sunday “60 minutes” piece on Dr. Paul Farmer who, as you no doubt know, is the U.S. physician has made such a difference in improving healthcare in Haiti and Rwanda.
   Asked what his work demonstrates, Farmer said: “If you set your goals high enough, and stick with it, you can make progress.”
   This is what I believe. Have to believe. Otherwise, why go on?
   I absolutely agree that we need a leader who can lead.
   Sometimes our government has been ahead of the public, with very good results. I think of civil rights legislation, FDR’s New Deal.
   In restrospect, most Americans are happy that we had civil rights legislation and Social SEcurity. But at the time, many opposed these ideas.
   I am hoping that our next president–or a small group of progressive, powerful Senators and Congresspeople –can lead healthcare reform.
   And I really do think that if we reform Medicare in an intelligent way, that would be a great demonstration project for national health reform.
   Barry–
   You wrote:
   “If hospitals like Mayo and the Cleveland Clinic are so much better than many others at providing cost-effective care, perhaps they could start to codify how they do it.
   At Mayo, for example, under what circumstances will they NOT offer heart bypass surgery (CABG) as an option to the patient with several blocked arteries? When will they NOT offer chemotherapy to late stage cancer patients or stop it if it hasn’t shown any positive results? Same questions for hip and knee replacement, kidney dialysis and organ transplants. What is the process they go through to determine what a patient wants and doesn’t want as the end of life approaches?”
   These are very good questions.
   I’m afraid that part of the answer (but only part) is that some of these things can’t be codified.
   Much of what really good doctors know is experiential, intuitive, and very difficult to articulate. (You might want to read “Patient Autonomy” , a book by Carl Schneider. He’s brilliant ont his.)
   When a doctor looks at a 6 month-old with a 102 fever and, if has seen many, many similar patients over a period of years, he may have a very strong and pretty accurate feeling, just by the baby’s “look” (color, how she moves or doesn’t move, eyes, ec.) that she is or isn’t in trouble.
   Also, Mayo etc. probably aren’t going to talk about how they decide who needs by-pass and who doesn’t because they don’t wnat to be sue for “discriminating” (against patients who probably wouldn’t survive the operation )
   But we could find some of the answers to your questions by talking to countriees like Switzerland and Sweden, that have very good care, and finding out what guidelines they use.
   Their guidelines wouldn’t necessarily fit our cultural values, but it would be a place to start thinking about these issues.

9. Maggie:
   Thanks for your response. Re: the idea of a public-sector plan out-competing private plans, that couldn’t happen unless there was a standard national benefit package coupled with guaranteed issue and community rating. Otherwise, the private insurers would just lure away the healthiest people with low-cost plans, and the public plan would suffer from adverse selection. That’s exactly what happened in the ‘90s with small-business insurance purchasing alliances.
   Shared decision-making has helped many patients avoid unnecessary procedures, but it’s mainly applicable to certain kinds of elective surgery. Where it really fits into the overall concept of structural reform is that depends on the physician-patient relationship, which I believe needs to be at the core of any real reform. I agree that this is different from the “consumer-driven care” concept of Herzlinger, et al., which rests on the assumption that consumers can be wise health-care shoppers, despite their lack of information. I devote a chapter in my book, Rx For Health Care Reform, to explaining why that isn’t so.
   Similarly, I’m on the same page as you are with regard to pay for performance. Even in the U.K., where physicians are rated on 146 different criteria, most of what they do isn’t measured, and there are ways to game the system. In this country, where the average doctor is being rated on far fewer criteria, and usually with an inadequate patient sample, because of the fragmentation of payers, it’s just a shell game—and one that may lead to avoidance of noncompliant or very sick patients.
   The “report cards” I was referring to could be effective in comparing the value of care delivered by particular provider groups, rather than individual doctors. That’s what the Buyers’ Health Care Action Group did in Minneapolis a decade ago, at a time when the science of performance measurement was even more primitive than it is today. The big corporations in BHCAG paid two dozen provider groups directly, rather than through insurers. They provided their employees with information on the groups’ cost and quality, and let the employees choose among them. If the workers picked a doctor in a higher-cost group, they paid a higher portion of the premium. Over time, members of this plan gravitated toward the lower-cost, higher-quality groups.
   Recently, the Minnesota legislature passed a reform bill that, at its core, seeks to replicate what BHCAG accomplished. Under this plan, provider groups would set their own budgets and consumers would choose among them. Insurance companies would be transformed into conduits for health care funds and consumer guides and would no longer manage care or negotiate prices. It’s unlikely that Republican governor Tim Pawlenty will sign this bill, at least in its current form, because he wants to rob a state fund for increasing health care access to close his budget gap. But the BHCAG idea is still alive.
   When I spoke about report cards, this is more what I had in mind. I don’t believe that we’re ready to rate individual physicians on the quality of their care. Also, I understand the difference between competition among multispecialty groups and competition among “focused factories” that specialize in particular procedures, diseases, or body parts. The latter certainly wouldn’t be a good approach to the restructuring of care delivery. But the point is that Arnold Relman and Regina Herzlinger—even if they dislike each other’s point of view—are both interested in changing how health care is delivered. That sets them apart from many other reformers—as well as the Presidential candidates—who talk mainly about how to finance care. I believe the closest the Democratic candidates have come to this kind of “deep reform” is by supporting the idea of the patient-centered medical home and the expansion of health IT. Those are just patches on the dysfunctional non-system we have today. So it’s incumbent upon those who believe in real structural reform to come together and debate their ideas, regardless of their political orientation.

10. Maggie:
    Thanks for your response. Re: the idea of a public-sector plan out-competing private plans, that couldn’t happen unless there was a standard national benefit package coupled with guaranteed issue and community rating. Otherwise, the private insurers would just lure away the healthiest people with low-cost plans, and the public plan would suffer from adverse selection. That’s exactly what happened in the ‘90s with small-business insurance purchasing alliances.
    Shared decision-making has helped many patients avoid unnecessary procedures, but it’s mainly applicable to certain kinds of elective surgery. Where it really fits into the overall concept of structural reform is that depends on the physician-patient relationship, which I believe needs to be at the core of any real reform. I agree that this is different from the “consumer-driven care” concept of Herzlinger, et al., which rests on the assumption that consumers can be wise health-care shoppers, despite their lack of information. I devote a chapter in my book, Rx For Health Care Reform, to explaining why that isn’t so.
    Similarly, I’m on the same page as you are with regard to pay for performance. Even in the U.K., where physicians are rated on 146 different criteria, most of what they do isn’t measured, and there are ways to game the system. In this country, where the average doctor is being rated on far fewer criteria, and usually with an inadequate patient sample, because of the fragmentation of payers, it’s just a shell game—and one that may lead to avoidance of noncompliant or very sick patients.
    The “report cards” I was referring to could be effective in comparing the value of care delivered by particular provider groups, rather than individual doctors. That’s what the Buyers’ Health Care Action Group did in Minneapolis a decade ago, at a time when the science of performance measurement was even more primitive than it is today. The big corporations in BHCAG paid two dozen provider groups directly, rather than through insurers. They provided their employees with information on the groups’ cost and quality, and let the employees choose among them. If the workers picked a doctor in a higher-cost group, they paid a higher portion of the premium. Over time, members of this plan gravitated toward the lower-cost, higher-quality groups.
    Recently, the Minnesota legislature passed a reform bill that, at its core, seeks to replicate what BHCAG accomplished. Under this plan, provider groups would set their own budgets and consumers would choose among them. Insurance companies would be transformed into conduits for health care funds and consumer guides and would no longer manage care or negotiate prices. It’s unlikely that Republican governor Tim Pawlenty will sign this bill, at least in its current form, because he wants to rob a state fund for increasing health care access to close his budget gap. But the BHCAG idea is still alive.
    When I spoke about report cards, this is more what I had in mind. I don’t believe that we’re ready to rate individual physicians on the quality of their care. Also, I understand the difference between competition among multispecialty groups and competition among “focused factories” that specialize in particular procedures, diseases, or body parts. The latter certainly wouldn’t be a good approach to the restructuring of care delivery. But the point is that Arnold Relman and Regina Herzlinger—even if they dislike each other’s point of view—are both interested in changing how health care is delivered. That sets them apart from many other reformers—as well as the Presidential candidates—who talk mainly about how to finance care. I believe the closest the Democratic candidates have come to this kind of “deep reform” is by supporting the idea of the patient-centered medical home and the expansion of health IT. Those are just patches on the dysfunctional non-system we have today. So it’s incumbent upon those who believe in real structural reform to come together and debate their ideas, regardless of their political orientation.

11. Maggie,
    I would like to call everyone’s attention to the front page article in today’s New York Times titled “For the Elderly, Being Heard About Life’s End.” The approach to end of life care used in this New Hampshire community makes perfect sense, in my opinion, and could be easily replicated elsewhere. I think there is a lot of money to be saved and plenty of pain, discomfort and aggravation to be avoided if elderly patients are engaged early, asked what they want and don’t want regarding end of life care and then have those wishes respected and honored. It’s not rocket science.

12. seems to me all this smart wonkspeak ignores some very basic politics, which ultimately trumps. people trust their docs, who often overtreat them. few people accept that and support docs when they complain that the “system” denies them from practicing as they see fit, which is construed as overtreatment. individual practitioners prevail over faceless insurers, researchers, bureaucrats. medicare’s history is the result where government keeps attempting to hold line on costs and providers compensate by increasing volume. until there’s broad public acceptance (which remains very modest, but seems to be growing) of the overtreatment problem, we’ll be mired the wonk swamp and serious change will be impossible.

13. Is it possible the Mayo Clinic/Cleveland Clinic, et al, are making decisions about treatment/surgery with an informed patient? Maybe this is how they’re avoiding unneccesary procedures…by simply communicating and educating their customer. It is possible.
    Reformers need money, lots of it. Until we get it, we’re beat. Brad pointed to what the industry spends as an example of what we’ve been facing for years. Lack of money, lack of unity.
    You have a lot of great ideas, Maggie.

14. I know that physician payments under the current Medicare RBRVS system are problematic, but let’s not forget Medicare’s relative successes in terms of institutional reimbursement: DRGs, and prospective payment systems for home health and SNF rehab services. The problems with Medicare and expenditure are not universal, but center on issues of rates and volume, specifically with respect to pharmaceuticals (where Medicare has abdicated its power to negotiate drug reimbursement rates) and to physician reimbursement.
    Also – a grand bargain with respect to medical malpractice or selective subsidization of the medical school debt of providers might allow for movement on the physician reimbursement front.
    LE

15. Sometimes it the unexamined assumptions that are faulty. In the current environment one of these is that “people are afraid of change” or put another way “people are generally happy with their present plan”.
    There usually are some poll results cited to back this up, but people have been subjected to forced change a great deal in the past 20 years. Some examples:
    1. Non-profit insurers made for-profit without the consent of the participants (especially the Blue’s).
    2. Employers changing providers and/or benefits, deductibles and premium contributions.
    3. Creation of HMO’s and severe penalties for not joining or going outside the plan (or any plan for that matter).
    4. Standardization of Medicare plus plans, but the refusal of private insurance companies to offer all the options in a given market.
    5. Dropping health care for retirees or making the premiums unaffordable. Also having two-tiered benefits packages which disadvantage new hires.
    I don’t think people are afraid of change, I think they are afraid of not being able to pick the kind of change they wish to participate in. The fear theme is just an excuse to maintain the status quo.

16. Maggie:
    WSJ has a front page article on young physicians and their work ethic/attitude and no commment from you?! Where ya been?!
    Seriously, though, there’s lots to talk about in your post and your f/u comment, isn’t there? Where to start?
    First, a mini-rant. It’s time that people stop comparing the Cleveland Clinic with the Mayo Clinic when it comes to cost-effective care. CCF is the black hole of medical expenses. While it certainly generates good outcomes in those areas in which it does well, this most definitely does not translate into lower cost or greater efficiency while doing so.
    It is disingenuous on its face to discuss reform the health care economics in the U.S. without explicitly discussing cost. On this it appears that we agree. Any reform must address the twin demons of demand: unchecked patient demand for care and unchecked need for care on the provider side to protect against malpractice tort. Without some ‘skin in the game’ there is simply no disincentive for a patient to continue to obtain care past any point of diminishing return. Likewise, even if NO REVENUE IS GENERATED THAT BENEFITS A PHYSICIAN, no amount of care is enough if the next test/medicine/procedure might be the one to prevent either the initiation of a tort or loss thereof. Rational economic reform cannot occur without rational tort reform; we must move from our system of punitive prevention to one of predictive prevention based on the no-risk accumulation of error data and implementation of the results of root-cause analyses based therein.
    Some system demand is simply unavoidable. An aging population, however healthy or unhealthy, will consume more medical resources. The longer we live the longer we will consume these resources. The more effective a particular intervention becomes (joint replacement, cataract surgery) the more frequently it will be performed, and reasonably so.
    There is incessant talk of increasing the fees of cognitive services (warranted) and decreasing payment for other, un-named services. Which ones would those be? Would they continue to be, as has been lo these past 20 years or so, those services that are simply the most frequently performed like cataract surgery and joint replacement? Must we continue to punish those areas of American medicine (areas that drive expectations for outcomes all over the world) because of their excellence in outcomes?
    Roughly 22% of the healthcare dollar goes toward physician services. However, this statistic makes no mention of the fact that some percentage of that number goes to overhead expenses, largely staff salaries/payroll taxes/benefits. How is it that previously not-for-profit insurance companies now removing profit from the system, and “non-profit” hospitals doing the same get a free pass? I think I read that the topo 50 non-profit hospitals had a “profit” of $4 Billion in 2007.
    To those clamoring for central control of health care expenditures I respectfully refer you to the Health Care Economist (healthcare-economist.com) for his review of medicine around the world. Each and every country cited is running a deficit and the deficit is growing. Each and every country cited manages expenses, at least in part, through explicit, mandatory rationing.
    Want a healthier population? Spend money wisely on public health. Want medical care when you are truly sick that is truly the best in the world? Be careful how you pay the doctors taking care of you. Want a doctor available to see you in the middle of the night when you are sick? Better look at the way doctors are being trained now.
    Oops, that was another post…

17. Ken–Thanks for your response. You write:
    Re: “the idea of a public-sector plan out-competing private plans, that couldn’t happen unless there was a standard national benefit package coupled with guaranteed issue and community rating”
    That’s exactly what the Clinton plan and, I think the Obama plan (which is less detailed, but written in the same spirit) calls for. Clinton is very clear that private sector plans will have to meet a very high bar in terms of being comprensive and cannot cherry pick young healthy patients by charging them less.
    You are right that what Porter and Relman have in common is changing how healthcare is delivered –and that is important.
    The programs you describe in Minnesota sound very interesting. And I do believe that the rest of the nation would do well to look at Minnesota as a model. The state has a very long history of a much more rational approach to healthcare.
    Barry– Thanks for calling everyone’s attention to today’s NYT story: “For the Elderly, Being Heard About Life’s End.”
    I agree–it’s very good.
    I’d add only that we need much more palliative care which not only offers patients choices, but makes sure that they are not in pain. I’ll be wriring about palliative care soon.
    At the same time, we have to respect the fact that when it comes down to facing death, some patients will want everyone to do anything possible.
    I don’t think we should let a patient’s relatives push for “doing everything” if that is not what the patients wants. But if that is what the patient herself/himself desires I think we must respect the individual’s wishes.
    That said, palliative care can go a long way toward reducing the panic that people feel when they realize that they are facing death.

18. Robert, bingo, Larry, Jim and Lisa–
    Interesting comments. Thanks for keeping the thread going.
    A kind husband and has just made dinner for a tired wife, but I’ll be back to you tomrorow.
    mm

19. Inconvenient fact: at least 50% of the public has no confidence in the ability of Mrs. Clinton or Mr. Obama to competently implement any of the “changes” they promise.
    Could that be why JAMA recently editorialized that any changes in health care will small and incremental? Of course.

20. “I don’t think we should let a patient’s relatives push for “doing everything” if that is not what the patients wants. But if that is what the patient herself/himself desires I think we must respect the individual’s wishes.”
    I think this is an area where we could learn a lot from other countries. There is a big difference between explicit rationing based on QALY metrics or arbitrary age cutoffs for interventions like kidney dialysis, CABG, hip and knee replacement, etc. and how various healthcare systems define good, sound medical practice. For example, to what extent do healthcare systems in Canada, Western Europe and Japan offer any surgical interventions at all to elderly patients with advanced Alzheimer’s or dementia? Even if late stage cancer patients are offered chemotherapy as long as they want it, are other potentially beneficial surgical procedures withheld? I think both doctors and patients outside the U.S. may be much better than we are at “letting go” when the time comes.
    If our practice patterns in end of life situations moved more toward those in Europe (assuming fear of malpractice litigation is not an issue), even patients and family members who want to “do everything” could accept that everything was done WITHIN THE SYSTEM. We could even make interventions outside the definition of good, sound medical practice available if patients or family members were able and willing to pay out of pocket. Alternatively, we could offer them before the fact as part of an enhanced insurance policy which carried a higher premium cost to the patient. This would be similar in concept to auto insurance in certain states where consumers are offered one price if they agree to give up their right to sue except for a narrow list of very serious injuries or a higher price if they want to retain an unlimited right to sue for even minor injuries.
    I’m sure some of the doctors among your readers could speak to this with much more authority than I can, but I think there is a lot of money that could be potentially saved with a more sensible approach to end of life care. By the way, I have always been a big supporter of hospice care when the doctors think that life expectancy is less than six months and palliative care to make sure that pain is well controlled.

21. Dr. Kevorkian offered low cost end of life care and he was imprisoned for it.
    Speaking of the Wall Street Journal, on the front page on Monday April 28 was a story “Cash for Chemo” regarding MD Anderson’s pre-pay collection tactics, specifically an insured patient who had to come up with $100k before they’d treat her leukemia. As I was reading this article, I was processing invoices for an MD Anderson construction project. Hmmmm. Can’t afford to provide chemo treatment, but has hundreds of thousands for bridge building…hmmm. MD Anderson’s response to the article is here:
    http://www.mdanderson.org/about_mda/mendelsohn/display.cfm?id=2f7c9ca1-d0dc-4260-816357a3de7a6528&method=displayfull
    I read the first few sentences and thought they were going to say “therefore MD Anderson is going to do this, or supports that, or calls for XY and Z” I thought MD Anderson was actually going to do something positive. After the first few sentences, this is what I read: “Blah blah blah” lip service.
    It is the MD Andersons’, the Johns Hopkins’ the MacLaren Generals of America that should be reforming and improving healthcare, they’re in the position to do it…instead they spend their money on lobbyists to maintain the status quo. People like me all the way up to Fortune 500 companies like General Motors and Toyota have beat down the door of healthcare offering their help…and help is resisted or turned away. I’m really upset about this, we all should be…quite frankly to the point of a public lynching.
    Speaking of public lynching, did you guys catch the 6 part series in the Ft. Worth Star Telegram regarding John Peter Smith Hospital? Could have been any hospital system, huh?
    And finally, small, incremental steps are called “kaizans” and this is the Toyota Production Systems model, to seek one kaizan after another.

22. With regard to “letting” a patient’s family “push” for doing everything…I think most people will follow the advice of their trusted physician. If you educate (communicate!) patients and their families, I believe they’re going to make the right choice. Oftentimes guilt of loved ones rules their decision making, sometimes religion…it’s up to our physicians to put us on the right road and help us make those tough choices without the guilt or left always wondering if we did the right thing.
    Sometimes pushing to do “everything” IS the right thing and if that’s what the patient wants, then that’s what they should get.

23. Larry, Robert, Jim,Brad, Bingo, Barry, Lisa–
    Thanks you all for your comments.
    Larry– Actually DRG’s haven’t worked out as well as hoped because hospitals can always “up” the DRG by rediagnosing. For instance, when the patient picks up an infection in the hospital, this may mean a new DRG. I agree that Medicare definitely needs to negotiate for lower prices on drugs and devices–and that we need more loan-forgiveness for med students willing to go into specialties and geographic locations where they are needed.
    Robert– You write: ” I think people are afraid of not being able to pick the kind of change they wish to participate in.”
    I agree–and that is why they are particularly afraid of broad government mandates that would apply to everyone: as in everyone has to sign up for the government plan.”
    They are resentful when a private insurers changes something–but at least they can drop the plan and look for another one.
    But the other major reason so many people are wary of single-payer is because they are afraid it will cost them more.
    Fully sixteen percent of the “better-paid” workes in the U.S. (earning over $60,000) have employer-based insurance that costs them Nothing. Their employer pays the whole premium. They suspect, rightly that if we switch to single-payer, the amount that they have to contribute to the pool will be more than zero.
    In addition, the “better-paid” workers who have to contribute something toward their employers’ insurance are asked, on average, to pay only 27% of the premium. They, too, fear that single-payer would require that they pay more than they are now paying into the pool. And again, many of them are right since they would be helping to subsidize low-income people who can’t afford insurance.
    Low-income people are more likely to favor single-payer, but they are also less likely to vote, and less likely to make large campaign contributions . . .
    Jim– I agree that people tend to trust their own doctor–and so if he is overtreating them, they probably won’t question it.
    We’ve been brainwashed by drug-makers, device-makers and some physicians to think that if Medicare or a private insurers says “no” to care they are trying to deny us something we need. Sometimes the people who say “no” are right.
    For example both the VA and the Mayo Clnic stopped giving Vioxx to most patients long before Merck was forced to withdraw it from the market (because it was killing some people.)
    Looking at medical evidnce, both Mayo and the VA figured out that, for most people, Vioxx was no better than other pain-killers, was much more expensive, and was riskier.
    We need more physicians standing up and explaining to patients that overtreatment can be dangerous.
    Brad: I agree change will be hard. And we need real leadership. That’s why I don’t see major, significant reform happening in the next administratoin’s first term.
    But I think economic pressures are going to force reform as more and more people cannot afford our wasteful chaotic healthcare system.
    I just hope that we don’t wind up with reform that leaves everyone at the mercy of for-profit insurers–or that shifts all of the responsbility to patients.
    Bingo,
    You cover a lot of ground, but here are a few responses:
    Yes, some not-for-profit hospitals run big surpluses and some of them should be paying income and property taxes. Too often they use the surpluses to expand when the community doesn’t need more beds. See my earlier posts on hospital waterfalls, etc.
    When it comes to healthcare, the supplier rather than the consumer tends to drive demand. The big-ticket items are not things that most patients ask for: the chance to die in an ICU, a third round of chemo, etc. Eight percent of our healthcare dollars are spent on 20 percent of the population suffering from serious chronic diseases; the amount spent on people who just enjoy going to the doctor is trivial by comparison.
    I’ve written about suppply-driven healthcare and the waste in our system here:http://dartmed.dartmouth.edu/spring07/html/atlas.php
    You might find it interesting.
    I agree completely about cost. Health care inflation is the elephant in the middle of the room. And the trajectory is much steeper in this country than in other countries. They have problems, but on average, their healthcare inflation is running 1/2 percent ahead of thier GDP growth; ours is running 2% over GDP growth–which is why we are heading for a wall.
    We know, based on outcomes research, that we perform too many angioplasties, bypasse, back surgery, cataract surgery (see the piece I am posting this afternoon on cataract surgery.)
    In regions of the country where heart patients, back patients etc. receive less surgery, outcomes are no worse, they are often better. We have three decades of reserach on this. (See the article that I referred you to above.)
    On the Cleveland Clinic, go to http://www.dartmouthatlas.org and download their 2008 report (http://www.dartmouthatlas.org/atlases/2008_Chronic_Care_Atlas.pdf)
    You will see that in many areas Cleveland Clinic ranks close to Mayo, though not in all.
    (I agree Cleveland Clinic is not as efficiet as Mayo,
    but it is much better than many other hospistals, in part, I suspect because doctors are on salary. Doctors who don’t work for a hospital but have privileges and are paid fee for service tend to generate a lot of waste.
    Fee-for service provides an incentive to “do more” and doctors who don’t work for the hopsital often don’t collaborate well with other doctors–don’t share info about what tests they are doing what they are prescribing etc.
    Barry,
    You wrote:
    “I think both doctors and patients outside the U.S. may be much better than we are at “letting go” when the time comes.
    If our practice patterns in end of life situations moved more toward those in Europe (assuming fear of malpractice litigation is not an issue), even patients and family members who want to “do everything” could accept that everything was done WITHIN THE SYSTEM. We could even make interventions outside the definition of good, sound medical practice available if patients or family members were able and willing to pay out of pocket. Alternatively, we could offer them before the fact as part of an enhanced insurance policy which carried a higher premium cost to the patient”
    First, I agree that Europeans are much better at accepting death. Our fear of death is, I think, tied up with our individualism. Since we think in terms of “I” the idea of “I’ ceasing to exist is terrifying. A Frenchman takes comfort that France will go on . . .
    Doctors in other countries agree that “American doctors just don’t know when to stop.”
    That said, it is very difficult to change a deeply ingrained cultural value.
    And the idea of telling a family that “If you can pay out of pocket” we’ll try the best new experimental treatment on your mother” just won’t fly. People would go on television, begging for the money. The folks who produce the evening news would just love it!
    You can’t tell people that they don’t have the right to try to live longer because they are too poor. Or because they didn’t have the wit to buy the right insurance 20 years ago.
    What you can do is give them a palliative care specailist who talks to both the patient and the family, is compassionate but realistic about what the patient’s options are, lay them out for him: “we could try this and you might live another three months, but you probably won’t feel any better and you may well feel worse . .” etc. Ideally, a palliative care team includes a doctor, a nurse and a psychologist specifically trained in palliative care. And they really can guide the patient and family through the process of dying.
    But right now, we pay them very little, We don’t pay them for the two hours they might spend meeting with a family. This is an area where Medicare needs to pay doctors much more(and other insurers will follow suit, as they usually do) while paying some specialists less for certain over-priced intensive services.
    Also, regarding my last response on whether Mayo could “codify” what it is doing. See the newest Dartmouth report here–http://www.dartmouthatlas.org/atlases/2008_Chronic_Care_Atlas.pdf)
    There’s a very interesting section on Mayo and the Mayo Clinics in various parts of the country. Some are working better than others. But as I recall, none are as good as St. Mary’s in Rochester Minn. What the report explains is that even Mayo itself cannot duplicate the system. So much of what Mayo does right has to do with a spirit of collaboration in the Minnesota hospital, the people there, a certain tradition of hospital care that goes back to the Mayo Brothers. . . Adn there are the expectations of patients in Jacksonville vs. Rochester, Minn . . .REad it I think you’ll find it interesting.
    Lisa–I agree that doctors can educate patients and help lead them through the process of accepting death. But many doctors see Death as the Enemy. That’s why we need more palliative care specialists, something I’ll be be writing about soon.
    And I also agree that it’s distressing to see hospitals putting expansion ahead of patients’ needed.

24. MedBlog Power 8

    5/07/2008 – 5/13/2008Next revision: 5/13/2008
    (Key: Rank, Blog name, Last week’s rank, Post of note)

25. I’m always a little skeptical of pointing to Mayo or the Cleveland Clinic as an oasis in the desert of health care.
    Does anyone know details about their finances? Are they able to do what they do because of huge subsidies from their respective foundations? Do cash paying VIPs and a regular stream of “executive physicals” provide unique income? Maybe they don’t have to play by the same economic rules as the rest of us, which would make using them as an example of how things should be done somewhat inappropriate.
    Anyone have any insight here?

26. PCB-
    I can’t speak to their finances but from a patient advocate perspective I can tell you they ARE an oasis and I’ll tell you why I have that opinion.
    I was at another healthcare “symposium,” it’s been a couple of years now, but people had broken off into different smaller sessions. Myself and several other consumer advocates gathered with healthcare professionals and we offered our perspective and debated back and forth.
    I’ll pause here and tell you, myself and many other consumer advocates really are not heard by the healthcare industry, but we persevere and keep talking to the doors slammed in our faces.
    So, we had our little discussion and the event wound down and everybody went back to their tables. As I was gathering my things to leave a gentleman from the session approached me, shook my hand and said “I heard you, I’m taking what you said back to the Mayo Clinic with me.” His nametag said MAYO CLINIC.
    I don’t care about their finances, this isn’t a scientific study or poll or anything, so you can take what you want from this, but my compass is pretty good and if somebody were to ask me where’s a good, patient-centered facility, I would say Mayo Clinic without hesistation based solely on that exchange. Plus, none of us advocates have ever heard complaint one from anybody who’s ever been treated at the Mayo Clinic. They can build all the waterfalls they want with no complaint from me, clearly they have their priorities in order.
    Sad, huh?
    As a side note, immediately following that workshop I met with a reporter for a major media outlet, what do you suppose is the first thing he heard from me? All about this exchange with the Mayo Clinic.

27. Any talk of comprehensive healthcare reform quickly comes up against the value fault line; i.e. how does a particular proposal not only provide for universal coverage (the easy part), but at the same time assure sustainable value? The plans that have addressed the more practical side of reform seem to fall into two major camps: those that would administer cost and quality and those that would rely on the market place. We have not had much luck with government-mandated price controls in past applications and this record is not likely to change significantly when applied to healthcare.
    Thus Marcia Angell’s comments about the “fundamental illogic to trying to contain costs in a market-based system” seem at odds with the structure of the healthcare system. A market place does not exist where the monetary link between customer (patient) and provider is absent. It’s curious how in nearly every other industry where the market place operates more or less freely, sometimes with the imposition of government operating rules, adjusted prices generally decline, and quality and functionality increase over time. Whatever accounts for the opposite outcomes in the healthcare industry it cannot be blamed on the smooth functioning of a market place or the profit motive behind it.
    From where I sit, some of the most significant contributors to a dysfunctional market in healthcare include the predominance of employer provided health insurance and the lack of long term interest in customer satisfaction/outcomes on the part of providers. Although threatened, the dominant source of health insurance in this country is employer sponsored health insurance, paid for at the expense of the employee’s take-home pay, about which the employee has very little say in selecting. The incentives for insurers are to deny admission and payment for as long as possible. Providers are incentivized to provide more services in order to compensate for cost constraints, not from their customers, but from their insurers.
    To top it all off, we have a system in which a lifetime of medical short sightedness can be fobbed off to the federal government in the form of Medicare. Providers have no incentive, economic or otherwise, to operate efficiently or effectively in the long term interest of their customers.
    I am a big fan of the Guaranteed HealthCare Access Plan (GHAP) authored by Dr. Ezekiel Emanuel and Professor Victor Fuchs. As best as I understand their proposal, the federal government would establish a rules-based framework that would determine “what” was expected of providers and leave it to providers to determine “how” they would organize to deliver those services, much like the regulated portion of our financial services industry. Healthcare would be delivered by integrated health plans better able to provide integrated care to treat chronic diseases. The government would provide the means by which consumers would purchase a health plan in the form of a risk-adjusted healthcare certificate. Consumers would be free to choose from among participating health plans that would be required to take on all who applied. Medicare, Medicaid and other means-tested programs would be folded into GHAP.
    Under such a system, health plans would have a far greater interest in the long term welfare of their customers. More than likely, providers would invest in more primary and follow-up care knowing that every customer might be a customer for life. Delivery models would likely proliferate, providing customers with choices and testing the economic viability of each. Some might even make a profit – so be it.

28. MedBlog Power 8

    5/07/2008 – 5/13/2008Next revision: 5/13/2008
    (Key: Rank, Blog name, Last week’s rank, Post of note)

29. Pcb, Lisa and Bill
    Pcb–
    It doesn’t take money to do things right. (Though admittedly, a hospital located in poor area that cares for many uninsured and Medicaid patients might have a hard time affording adequate staffing.)
    But when reserachers look at outcomes at adequately funded hospitals what they find is that the best outcomes can be found, not at the wealthiest hospitals, but at hospitals that have fewer resources and spend fewer resources per patient.
    These are the most efficient hospitals. They don’t have 10 specialists see a patient; they get the diagnosis right earlier in the process. Fewer people are involved; the care is better co-ordinated; and the patient doesn’t spend as long in the hospital.
    There are fewer complications and outcomes are better.
    Here’s the difference as described by Dartmouth’s reserachers comparing UCLA, the Mayo Clinic’s St. Mary’s Hospital and the Cleveland Clinic:
    “Chronically ill patients in their last two years of life had twice as many
    physician visits at UCLA compared with St. Mary’s (Mayo), and they spent 47% more days in the hospital
    (see Tables 3.1 and 3.2). When we look at the resources available at these two hospitals, we see
    equally large differences. Compared to the Mayo Clinic, UCLA used almost twice the number of
    full-time equivalent physicians, and about one and a half times the number of beds in managing
    similar patients (see Tables 3.3 and 3.4). Yet there is no evidence that greater care intensity at
    UCLA resulted in better outcomes. As noted in Chapter One, greater intensity of care at academic
    medical centers is associated with worse outcomes for patients and higher costs. More
    is not better.
    Given the catastrophic rate at which health care costs are rising, it seems clear that a way to
    measure the efficiency of hospitals is needed. In the health care market, efficient providers are
    those delivering comparable outcomes and patient satisfaction for the lowest cost. The Mayo
    Clinic and the Cleveland Clinic, for instance, allocate relatively fewer resources per capita and
    spend less per capita than their peers, while simultaneously receiving high marks on established
    quality measures. Other academic medical centers use far more resources, deliver far more supply-
    sensitive care, and cost significantly more per capita, but with no better quality or outcomes.
    We propose employing the spending, resource input, and utilization profiles of the relatively efficient
    academic medical centers as benchmarks for gauging the performance of the rest.”
    You can find the most recent Dartmouth report here http://www.dartmouthatlas.org/atlases/2008_Chronic_Care_Atlas.pdf
    It’s worth noting that at Mayo and the Cleveland Clinic doctors are on salary. They have no incentive to “do more” in order to make more money. The amount they are paid does not vary based on how many tests or procedures they perform.
    At UCLA, by contrast, doctors are paid fee-for-servcie.
    Lisa– Yes, Mayo is a leader in terms of evidence-based medicine and collaboration among its doctors. They could make more money if they practiced in Beverly Hills and overteated patients at UCLA. But these doctors are truly committed to the science of figuring out how to give patients the best care.
    Bill– You write: “It’s curious how in nearly every other industry where the market place operates more or less freely, sometimes with the imposition of government operating rules, adjusted prices generally decline, and quality and functionality increase over time. Whatever accounts for the opposite outcomes in the healthcare industry it cannot be blamed on the smooth functioning of a market place or the profit motive behind it”
    The reason prices come down in other markets, and don’t in the healthcare market, is largely because the consumer has very little power in the healthcare market.
    Put it this way: if you were thinking about buying a thin-screen TV a few years ago and found the prices a little high, you could wait a couple of years, more competitors would enter the market, and prices would come down.
    If you have cancer and discover the drug you need costs $100,000 annually, you can’t wait six months in hopes that prices will fall.
    In addition, in other markets consumers will hunt for bargains: you might buy a $30 toaster instead of a $200 toaster deciding that the cheaper toaster is “good enough.”
    When shopping for health care very few people are looking for a doctor or a treatment or a hospital that is “good enough.” (Keep in mind that 80% of our nation’s health care dollars are spent on people who are very sick, suffering from major chronic diseases.)
    In healthcare, the seller has all the power, and can set prices where he likes. The seller is the “price-maker” and very sick patients are the “price-takers.”
    This is why, in every other developed country in the world, the government steps in and regulates prices or sets spending caps or uses some other method to make sure that patients are not gouged.
    Why doesn’t our government do this? Because the health care lobbyists are very powerful. As an industry, healthcare spend more money lobbying last year than any other industry in the U.S. Drug-makers spent the most. This is why Congress passed a law in 2000 saying that Medicare could not try to negotiate with drug-makers for lower prices on drugs. We just have to pay whatever they decide to charge . . .
    I agree with you about Emmanuel and Fuchs; I think they are very good.
    And teh idea of a patient have a life-time relationship with doctors who work,on salary for a multi-specialty health care plan is excellent. This is why places like Kaiser Permanente in Norther Califorona work so well. Patients (and doctors) tend to stay with Kaiser for life. Kaiser isn’t perfect, but overall, the quality of care is very good. (The fact that turnover among patients and doctors is so low is a very good sign.)

30. Pcb, Lisa and Bill
    Pcb–
    It doesn’t take money to do things right. (Though admittedly, a hospital located in poor area that cares for many uninsured and Medicaid patients might have a hard time affording adequate staffing.)
    But when reserachers look at outcomes at adequately funded hospitals what they find is that the best outcomes can be found, not at the wealthiest hospitals, but at hospitals that have fewer resources and spend fewer resources per patient.
    These are the most efficient hospitals. They don’t have 10 specialists see a patient; they get the diagnosis right earlier in the process. Fewer people are involved; the care is better co-ordinated; and the patient doesn’t spend as long in the hospital.
    There are fewer complications and outcomes are better.
    Here’s the difference as described by Dartmouth’s reserachers comparing UCLA, the Mayo Clinic’s St. Mary’s Hospital and the Cleveland Clinic:
    “Chronically ill patients in their last two years of life had twice as many
    physician visits at UCLA compared with St. Mary’s (Mayo), and they spent 47% more days in the hospital
    (see Tables 3.1 and 3.2). When we look at the resources available at these two hospitals, we see
    equally large differences. Compared to the Mayo Clinic, UCLA used almost twice the number of
    full-time equivalent physicians, and about one and a half times the number of beds in managing
    similar patients (see Tables 3.3 and 3.4). Yet there is no evidence that greater care intensity at
    UCLA resulted in better outcomes. As noted in Chapter One, greater intensity of care at academic
    medical centers is associated with worse outcomes for patients and higher costs. More
    is not better.
    Given the catastrophic rate at which health care costs are rising, it seems clear that a way to
    measure the efficiency of hospitals is needed. In the health care market, efficient providers are
    those delivering comparable outcomes and patient satisfaction for the lowest cost. The Mayo
    Clinic and the Cleveland Clinic, for instance, allocate relatively fewer resources per capita and
    spend less per capita than their peers, while simultaneously receiving high marks on established
    quality measures. Other academic medical centers use far more resources, deliver far more supply-
    sensitive care, and cost significantly more per capita, but with no better quality or outcomes.
    We propose employing the spending, resource input, and utilization profiles of the relatively efficient
    academic medical centers as benchmarks for gauging the performance of the rest.”
    You can find the most recent Dartmouth report here http://www.dartmouthatlas.org/atlases/2008_Chronic_Care_Atlas.pdf
    It’s worth noting that at Mayo and the Cleveland Clinic doctors are on salary. They have no incentive to “do more” in order to make more money. The amount they are paid does not vary based on how many tests or procedures they perform.
    At UCLA, by contrast, doctors are paid fee-for-servcie.
    Lisa– Yes, Mayo is a leader in terms of evidence-based medicine and collaboration among its doctors. They could make more money if they practiced in Beverly Hills and overteated patients at UCLA. But these doctors are truly committed to the science of figuring out how to give patients the best care.
    Bill– You write: “It’s curious how in nearly every other industry where the market place operates more or less freely, sometimes with the imposition of government operating rules, adjusted prices generally decline, and quality and functionality increase over time. Whatever accounts for the opposite outcomes in the healthcare industry it cannot be blamed on the smooth functioning of a market place or the profit motive behind it”
    The reason prices come down in other markets, and don’t in the healthcare market, is largely because the consumer has very little power in the healthcare market.
    Put it this way: if you were thinking about buying a thin-screen TV a few years ago and found the prices a little high, you could wait a couple of years, more competitors would enter the market, and prices would come down.
    If you have cancer and discover the drug you need costs $100,000 annually, you can’t wait six months in hopes that prices will fall.
    In addition, in other markets consumers will hunt for bargains: you might buy a $30 toaster instead of a $200 toaster deciding that the cheaper toaster is “good enough.”
    When shopping for health care very few people are looking for a doctor or a treatment or a hospital that is “good enough.” (Keep in mind that 80% of our nation’s health care dollars are spent on people who are very sick, suffering from major chronic diseases.)
    In healthcare, the seller has all the power, and can set prices where he likes. The seller is the “price-maker” and very sick patients are the “price-takers.”
    This is why, in every other developed country in the world, the government steps in and regulates prices or sets spending caps or uses some other method to make sure that patients are not gouged.
    Why doesn’t our government do this? Because the health care lobbyists are very powerful. As an industry, healthcare spend more money lobbying last year than any other industry in the U.S. Drug-makers spent the most. This is why Congress passed a law in 2000 saying that Medicare could not try to negotiate with drug-makers for lower prices on drugs. We just have to pay whatever they decide to charge . . .
    I agree with you about Emmanuel and Fuchs; I think they are very good.
    And teh idea of a patient have a life-time relationship with doctors who work,on salary for a multi-specialty health care plan is excellent. This is why places like Kaiser Permanente in Norther Califorona work so well. Patients (and doctors) tend to stay with Kaiser for life. Kaiser isn’t perfect, but overall, the quality of care is very good. (The fact that turnover among patients and doctors is so low is a very good sign.)

31. MedBlog Power 8

    5/07/2008 – 5/13/2008Next revision: 5/13/2008
    (Key: Rank, Blog name, Last week’s rank, Post of note)

32. I propose a much simpler form of health care.
    Get rid of all insurances companies, no fault, worker comp and especially lawyers.
    Licence properly trained doctors and allow them to practice real medicine, and charge the office visit say 30 to 50 $ a visit or having a sliding scale for patient who cannot afford to.
    Kaiser Permanente is an awful insurance, they dump patient who stay in the hospital tool long on the street of LA. and provide awful care.
    Think about that: A patient could have a complicated orthopedic or plastic surgery overseas like Indonesia performed by US Board certified Doctors for 1/4 of the price including plane ticket and hotel overseas. The only difference is that it is more difficult to sue doctors in Indonesia.
    Why not allow patient to choose:
    Go to a doctor’s practice and not be aloud to sue and pay 20 to 40 dollars a visit, or go to a doctor’s practice who pay malpractice and practice defensive medicine and pay 200 to 400 $ for the visit. (Free Choice)
    Allow the governemnt to insure everyone for catastrophic insurances.
    Allow blog to exist for patient to network and weak out bad practitioners, and allow the regulatory bodies to certify and wead out substandard doctors.
    It is that easy.
    Market forces alone will lower prices (If lawyer are out of the loop)
    Pharmaceutical companies would also lower the prices of drugs if they do not have to spend huge amout of money to be so defensive. If there were no insurance and people were not willing to pay high prices for drugs, then the price of drugs would be lower.

33. maggie,
    Let me try this again, I’m not doing a good job of getting my point across.
    Mayo may be able to pay docs on salary and focus less on supply sided production because of their unique financial position.
    Just a quick example:
    http://www.twincities.com/localnews/ci_9206914?nclick_check=1
    Even if docs are salaried, mayo still bills insurance fee for service. So mayo gets paid less when docs do less and see fewer patients. When they take time thinking about patients, collaborating with other docs, and practicing medicine more like it should be done, they aren’t making money. It’s perverse, but its true. I understand their outcomes are better, it makes sense docs practicing the way it should be done have better outcomes. But practicing the right way doesn’t pay well.
    Maybe Mayo can support that model of care and pay their docs competitively because they have money coming in from their foundation. And from other unique Mayo income streams such as cash paying VIPs, business connections for executive physicals, etc.
    For systems that don’t have the Mayo foundation and the unique cash paying revenue, they can’t pay their docs and have them doing all that good stuff that insurers don’t pay for.
    So maybe the mayo culture is possible to a large extent because of their unique economic situation, and replicating it elsewhere won’t add up (literally).

34. sorry about the link, let me try again:
    http://www.twincities.com/localnews/ci_9206914

35. pcb–
    I guess you didn’t go to the Dartmouth report– see link in my last comment.
    (btw I wasn’t able to open the newspaper link that you sent, so I can’t respond to it. . .)
    You write: “Even if docs are salaried, mayo still bills insurance fee for service. So mayo gets paid less when docs do less and see fewer patients. When they take time thinking about patients, collaborating with other docs, and practicing medicine more like it should be done, they aren’t making money.”
    That’s correct. And Mayo doctors spend a lot of time collaborating, thinking about patients, etc. And Mayo isn’t making money while they are doing that.
    Mayo also does a lot of charity care–no charge or reduced charge.
    I imagine they also get a lot of donations from wealthy people.
    Mayo has a long tradition (going back to the Mayo doctors) of being a non-profit that is less interested in making money in more interested in medicine.
    When the Mayo Brothers founded the Mayo Clinic the AMA was outraged by their business model–for just that reason.
    If you would look at the Dartmouth report, you will see other medical centers (like Intermountain) that are not as famous as Mayo, that are also extremely efficient– patients see fewer specialists, spend less time in the hospital, outcomes are better, etc.
    Previous Dartmouth reports have also shown how some of NYC’s richest hospitals (Mt. Sinai, which has a huge endowmnet, for example) are at the opposite end of the spectrum from Mayo.
    Having resources and money does not make a hopsital efficient. Quite the opposite, having money and resources often makes a hospital wasteful.

36. If you look at the history of this country, good project sponsored by the gouvernment are often the by product of something else. For instance, We were able to go to the moon, not because we wanted to but we had to beat the Soviets.
    It is a waste of time to wait for a leader to help us. People like FDR are very rare indeed.
    In our life time in my opinion Doctors (I carefuly reviewed my diploma and it states Doctor in medicine and not PROVIDER) should get together locally, and upon themselve create clinics and make patient sign that (All lawyers should stay out, and patient will sign clauses not to sue and the cost of healthcare will spiral down.
    Doctors/Nurses and other professional would work on a salary and concentrate in doing good medicine and spending the time taking a good history to come out with a diagnosis removing both factors for ordering too many tests (Fear of unscrupulous lawyers and incentive to make money for ordering unnecessary tests)
    Overtime these health center will change the patient culture that health care should be perfect with the understanding that it will always be available reqardless of having a job or not or pre existing conditions.
    As these health care centers expends they will develop clout in obtaining medications, and approve what is appropriate for the patient.
    I reviewed previous comments which are good, except that we should not hold our breath to have a leader able to go against the grain of special interests group.

37. David–
    Thanks very much for your
    comment.
    I agree that physicians should be the leaders in health care reform.
    Talking to and listening to so many physicians, I am persuaded that the vast majority really are more concerned about their patients than about themselves (or their incomes.)
    And they understand what is wrong with our system, much better than most laymen.
    The idea of “no-fault” clnics where patients agree not to sue and doctors feel no need to practice defensive medicine strikes me as a very good one.
    The only thing I would add is that such clinics would also need to agree to not charge patients (or payers) when clear errors are made. (The clinic should absorb the cost.) And while some errors are inevitable (people are human, mistakes are made) if a doctor became assoicated with too many erorrs, he would be investigated by his peers, and if there was no clear and reaonsable explanation (i.e. he is taking much more difficult patients than most doctors) he would be fired.

38. While I think it would be helpful if more doctors, especially those who do most of their work in a hospital setting, were paid on a salary instead of a fee for service basis, and it would also be helpful if expensive surgical procedures were routinely priced on a bundled basis, it is still possible to change the culture and the paradigm at individual hospitals. To do that requires both leadership and effective management. I define leadership as vision and the ability to inspire others to sign onto the vision. Management relates more to process and execution.
    Suppose, for example, that the CEO’s of UCLA Medical Center or Massachusetts General decided that they wanted their institutions to stand for high quality, patient centered, cost-effective care. Infection rates would be driven as close to zero as possible, and they would embrace and copy good ideas from wherever they could find them. Lower level staff (especially nurses) would be encouraged to speak up when they see something wrong without fear of retribution from more senior people (especially doctors). They would hold themselves accountable by routinely posting as much useful information as possible about infection rates, medical outcomes, and prices actually collected from Medicare, Medicaid and private insurers. They would convey the message to everyone in the organization that the institution would likely be rewarded with more patients if it outperforms the competition on outcomes and/or cost-effectiveness. Compensation and non-monetary forms of recognition would be designed to drive and reward the desired behavior from both staff and doctors with practice privileges. The wealthiest institutions with the largest endowments are actually in the best position to drive change in this direction. I think they could do it if they wanted to, but, apparently, for whatever reason, they don’t want to.

39. Barry–
    I’ve talked to Dr. Wennberg (of Dartmouth) about this and he has talked ot the people who run the UCLA medical center.
    “Off the record, they know they have a problem,” says Wennberg. “But what can they do?”
    It’s established that supply drives overtreatment. UCLA has many more specialists and beds per patient than Mayo.
    “In order to pay their debt, they have to keep those beds filled and those specialists busy.”
    They can’t simply close down wings of the hospital and fire specialists–they need the income stream.
    And so, they overtreat patients. This is what make the outcomes worse–iatrogenic disease caused by unnecessary treatments and the confusion that results when ten or more specialists are consulting on the same patient (which happens regularly at hospitals like UCLA as well as major medical centers in NYC).
    One solution that Dr. Don Berwick talks about is paying hospitals to keep their beds empty–in other words of the percentage of beds that are filled goes down this year (when compared to last year) the hospital would be paid more. This is rather like paying farmers not to plant.
    Berwick got the idea from a hospital administrator in Sweden who was boasting that occupancy rate in his hospital was down for the year–which meant that they were being more efficient in diagnosing patients, treating them, and getting them out of the hopsital quickly.
    Of course in our “money-driven system” a hospital administrator would not normally be rewarded for having empty beds. . .
    Once a hospital expands unncessarily it is very hard to stop the overtreatment. The hospital needs to “do more” to more patients in order to support the expansion.
    This is why we need more laws restricting growth of surgical centers, hospitals etc. unless someone can show a real health need in the community. (Not just that it would be “convenient” to have a pediatric hospital on the East Side of Manhattan, as some have argued, when we have excellent pediatric hospitals on the West Side, in the Bronx, and downtown. There’s no medical need to have one on the East side though it would be convenient for some East Side parents and doctors.

40. MedBlog Power 8

    5/07/2008 – 5/13/2008Next revision: 5/13/2008
    (Key: Rank, Blog name, Last week’s rank, Post of note)

41. “I’ve talked to Dr. Wennberg (of Dartmouth) about this and he has talked to the people who run the UCLA medical center.”
    “Off the record, they know they have a problem,” says Wennberg. “But what can they do?”
    “In order to pay their debt, they have to keep those beds filled and those specialists busy.”
    “They can’t simply close down wings of the hospital and fire specialists–they need the income stream. And so, they overtreat patients.”
    Wow! What an indictment. Suppose this were common knowledge among both patients and referring doctors. Isn’t it likely that UCLA and other hospitals like them would start to lose business, at least for the more routine cases that other hospitals could easily handle? This is a classic example of why we need price and quality transparency, along with unbiased infomediaries to help patients sort through their medical options.
    As for paying hospitals not to fill beds, one possible alternative might be for the government (taxpayers) to buy up surplus beds at some reasonable cost per bed and then have those beds removed from the number that the hospital is licensed to operate. If the institution later wants to expand to meet new or growing needs, it would have to repay the money it previously received for its then surplus beds as well as finance the capital cost of adding new beds assuming the old ones are obsolete and are not economic to renovate or reconfigure.

42. Barry–
    You’re absolutely right– this is an incredible indictment.
    It very accurately describes how, once a system is built, it can take on a life of its own. The beds are there, the money has been borrowed–now, the only way to pay off the debt is to “put heads on the beds.”
    I published Wennberg’s quote in a piece I wrote for Dartmouth Medicine, the alumni magazine for Dartmouth Medical School which is also read by many others in the Dartmouth community who are interested in medicine.
    The story drew quite a few letters–almost all positive–but none expressed surprise about what Wennberg said.
    Less than 1 percent of patients understand that this is what is going on.
    But among sophisticated physicans, a great many are aware of how the supply of hospital beds drives hospitalizations, and why. And many are wary of hospitalizing their patients unless absolutely necessary.

43. Barry–
    You’re absolutely right– this is an incredible indictment.
    It very accurately describes how, once a system is built, it can take on a life of its own. The beds are there, the money has been borrowed–now, the only way to pay off the debt is to “put heads on the beds.”
    I published Wennberg’s quote in a piece I wrote for Dartmouth Medicine, the alumni magazine for Dartmouth Medical School which is also read by many others in the Dartmouth community who are interested in medicine.
    The story drew quite a few letters–almost all positive–but none expressed surprise about what Wennberg said.
    Less than 1 percent of patients understand that this is what is going on.
    But among sophisticated physicans, a great many are aware of how the supply of hospital beds drives hospitalizations, and why. And many are wary of hospitalizing their patients unless absolutely necessary.

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