One in five Medicare patients returns to the hospital within 30 days of being discharged according to a recent article in the New England Journal of Medicine. White House budget director Peter Orszag read the study and noted that, according to the study’s authors, readmissions accounted for about $17.4 billion of the $102.6 billion in hospital payments that Medicare made in 2004 (the year the study was done.). “That would be more like $25 billion today,” says Bob Wachter, chief of the Division of Hospital Medicine at the University of California San Francisco. (UCSF) .
Reducing readmissions serves as just one example of how we are going be able to afford to provide all Americans with high quality care—by saving $25 billion here, and $25 billion there. As I have suggested in the past, the fat cannot be found in one section of our health care system. It s marbled throughout the very, very expensive meat. Wasteful spending on drugs, devices, unnecessary procedures and windfalls to for-profit insurers must be cut, along with reimbursements to some hospitals and physicians that are not providing good value for our health care dollars.
It’s a sign of the times that our White House budget director also is a blogger, and on his blog, he points out that “the evidence suggests that many rehospitalizations could be prevented. For example, the study documents an alarming lack of physician follow-up visits after discharge from a hospital.”
More than half of the patients who were readmitted had not seen a doctor since they left the hospital while “suggests considerable opportunity for improvement,” the authors of the NEJM study note. No one was checking to see if these patients (or their families) had made a follow-up appointment with a physician. Many may not have understood discharge instructions regarding medications. They were simply discharged, and left to figure out what to do next on their own.
The study’s authors conclude: "Hospitals and physicians may need to collaborate to improve the promptness and reliability of follow-up care.”
One way to encourage collaboration is to “bundle” payments to the hospital and physicians who see the patient during the thirty days following discharge—paying bonuses when outcomes are better. If hospitals and physicians are sharing lump sum payments, hospitals will be motivated to make sure that a follow-up appointment with a physician is scheduled for every patient before he or she goes home.
The study also revealed all-too-familiar geographic variations in spending. (See map below) “The rehospitalization rate was 45 percent higher in the five states with the highest rates than in the five states with the lowest rates,” Orszag notes, adding that “these rates are calculated in a way that controls for the severity of illness across hospitals, so the difference in rates can’t be explained by the fact that some hospitals have sicker patients than others.” 
Once again we see Medicare forced to spend far more in states like Massachusetts, New York and New Jersey–where readmission rates are much higher– than in the more efficient hospitals of the Northwest where costs are lower, and outcomes are at least as good– often better.
At a time when we are trying to reform health care, the White House is lucky to have a budget director who truly understands the waste in our health care system. “We could significantly reduce costs and improve quality,” Orszag writes, “by moving towards the medical practices adopted in the more efficient parts of the country.”
Granted, it is not easy to change a region’s medical culture. But when hospitals in high-spending regions are compared to benchmark hospitals in regions where costs are lower (and both patient and doctor satisfaction is higher) and Medicare begins using financial carrots and sticks, hospital CEOS are likely to pay attention.
Orszag realizes that if we reduce hospital errors and eliminate unnecessary treatments we can rein in Medicare spending while actually improving patient care. What is important is that the Obama administration has begun to act on that knowledge. The administration’s budget aims to save $300 billion in Medicare/Medicaid costs over the next decade, and $26 billion of those savings would come from “driving down hospital readmission rates for Medicare patients.”
First, hospitals would be given fair warning if their readmission rates are unusually high, and then, beginning in 2012, hospitals with an unusually high number of “bounce backs” would be paid less if patients are re-admitted to the hospital within 30 days. After hospitals have been given a chance to improve their systems, Medicare reformers also plan to begin publishing the names of outlier hospitals..
In addition, the administration proposes “bundling” payments to hospitals and doctors to cover not just hospitalization, but also care from post-acute providers for the 30 days after hospitalization.
While some hospital administrator’s may resist change, UCSF’s Bob Wachter agrees that reform is desperately need. Over at “Wacther’s World” he acknowledges that today“40% of patients are discharged with tests pending, and many of these balls are dropped; 15% of discharged patients have a discrepancy in their medication lists; and only the rarest discharge summary finds its way to the desk of the primary care physician by the time a patient is seem for his or her first post-discharge visit.
“In other words, when it comes to post-discharge care, we suck”
“Powerful literature that shows that simple interventions – like post-discharge phone calls” from hospital pharmacists or the use of a “transitions coach” to assist with continuity of care across settings, arrange home visits after discharge and help train patients and caregivers in self-care methods “can lead to impressive improvements in post-discharge care and decreased readmission and return-to-ED rates,” Wacther adds. But “few hospitals have put these interventions in place. Outside of integrated delivery systems like Kaiser Permanente or the VA, virtually no hospitals have electronically connected themselves to their referring physicians’ offices.” The major “culprit,” he adds, “is lack of an incentive to improve post-discharge care.
Yet, it is worth nothing that, without financial incentives, Kaiser, the VA and some other integrated multi-specialty centers have figured out what they needed to do to lower readmissions and improve patient care. In each case, the provider also is paying the bills—something to keep in mind when overhauling how we deliver care. Payers and providers must share an interest in long-term outcomes for patients.
“Hospitals, of course, moan about all of this new pressure on readmissions,” Wachter adds, “claiming, correctly, that they don’t control much of what happens when a patient leaves the building. ‘How can you blame us,’ goes the lament, ‘if we can’t find a PCP for a patient, or the outpatient doc chooses to readmit the patient.’ Some of this is doubtless true, and the potential for unfairness is real. But some of this bellyaching is a manifestation of learned helplessness, borne of having no incentive to pay any attention whatsoever to filling the post-discharge black hole.”
Medicare plans punishes only those hospitals that show a pattern of excessive readmissions when compared to benchmark hospitals. This seems fair. That said, hospitals should have an opportunity to explain why more of their patients bounce back, and risk adjustments probably will need to be need for hospitals serving more difficult populations.
But, as Wachter warns his colleagues: “An era is dawning in which hospitals will, for the first time, have to think of the post-discharge period as being, at least partly, their responsibility. Luckily, this is an area in which there are tools ready for the taking (for example, those developed by the Society of Hospital M
edicine through its splendid Project Boost, and some early experience to learn from.
“Some of us, suspecting that this train was coming down the tracks, have been working on the discharge process for the last few years (my UCSF hospitalists have focused on this issue as our main quality initiative for the past year).”
Finally, Wachter acknowledges that initially, reform will be expensive: “I, like you, don’t know where the money will come from for all of this. But we do know that readmissions are terribly expensive and just plain bad for patients.”
saying “it is not easy to change a region’s medical culture” is a massive understatement. The question is whether it is possible. So far there’s not a lot of positive evidence. A quarter century after Wennberg first began defining disparities in patterns of practice there’s no evidence I know of where provider behavior has changed. I invite others to update me and prove me wrong.
This is akin to saying that if we could convince people to eat less and exercise more, they’d be fitter and healthier. we’ve known that for years, but behavior keeps moving in the wrong direction. There’s some contrary evidence when it comes to smoking.
Thanks Maggie-
My own take.
Hospitals overestimate what they can do with older patients with multi-system diseases.
I believe that improved post discharge follow up might help but so would a large dose of humility about the value of hospital admissions for older sick people in the first place?
Dr. Rick Lippin
Southampton,Pa
Jim–
In the past, no one has ever given the Dartmouth reserach financial teeth.
Peter Orszag (and President Obama) are willing to do that. See Obama’s budget (i’m writing about it now.)
Inefficient hospitals that can’t approach an efficient hospital benchmark (Mayo, Geisinger,
Intermountain, etc.) in terms of how much it costs them to treat very similiar patients will have
their reimbursements cut. Their names will also be published –warning patients that in these hospitals they are likely to stay longer, undergo more unncessary procedures and tests, and encounter more errors and infections (that keep them in the hospital longer and lead to readmissions.)
Finally, the plan is that they don’t improve over a certain period of time, tey will be closed out of Medicare – Medicare will not pay for any Medicare pateints. This means these hospitals will then close.
Trust me, this will get a hospital CEO’s attention.
Espeically because private insurer’s have made it clear that they will follow Medicare’s reimbrusements (as they do now.) They may pay a little more than Medicare, but they’ll begin using the same carrots and sticks for efficiency.
Events have conspired to make it possible for Medicare to do this: a recession/depression; Orszag and Obama in the White House; a widespread recognition that Medicare is running out of money and that something must be done, a Democratic majority in Congress.
I addition,in the public sphere there is now a general understanding that much of our medical care is overpriced, that even doctors are taking kickbacks, and that too much the care we receive unsafe–so many drugs and devices being withdraw from the market.
Finally, a great many physicians understand and agree with what the Dartmouth research says. Read the healthcare blogs written by regular doctors.
Meanwhile,on a political level, Medicare is willing to make it clear to taxpayers that folks in Iowa (who pay the same percentage of their paychekcs into Medicare as folks in Southern California) are subsidizing overtreatment in Southern California,
New York, etc.
As a matter of simply equity, this isn’t fair.
Some have suggested that people in high-spending states shoudl have to pay higher Medicare taxes. That won’t happen.
But the hospitals in those states will be penalized financially, and this will trickle down and effect doctors. Hospitals will be pressuring them to be more efficient.
Patients in high-spending states who don’t understand that waste isn’t good for them will be upset. But in the next few years, people are going to be upset about a lot of belt-tightening everywhere.
And they won’t be able to blame “the government” or “socialized medicine” because private insurers will be following
Medicare’s lead.
They just want Medicare to go first.
“Give me a doctor, short and stout, with warm hands, a warm heart, and with a twinkle in his eye, who tells me kindly it is my time to die”
Dr. Rick Lippin
Southampton,Pa
please tell me the longer version of that poem re the short and stour dr with the glint in his eye! Who wrote it
Does the data show that hospitals with longer hospital stays also have higher bounce back rates? If so, there is really something wrong. To some degree one might logically expect that hospitals with shorter hospital stays might have higher bounce back rates. Long stay and high readmission rates is a problem.
How exactly do they correct for clinical severity? Do they correct for social factors like living alone vs in a family, poverty, obesity, follow-up visits? Are there internal controls? To what extent is the variance explained by co-morbidity? What is the effect of over admission? If a worried well person is admitted, he will have a short stay and he is unlikely to be readmitted, padding the metric.
VA Hospitals have a unique culture, which transcends geography. I wonder if regional variation was seen among VA Hospitals?
I suppose it’s only a small piece of the issue, but a very substantial number of the children I admit to the pediatric intensive care unit don’t even have a regular doctor. When it’s time to leave the hospital we do the best we can to connect them with one, but that’s often a tough thing to do for a child on Medicaid with a chronic problem like asthma, diabetes, or epilepsy. We see the results of this problem in the form of frequent readmissions when these kids bounce back multiple times.
This is not the hospital’s fault — it’s our non-system’s fault. It can only get worse until we find ways to get poor kids good primary care. And, of course, you can buy a lifetime’s worth of asthma medications and office visits to control it with just one PICU admission. Crazy indeed.
All these things mentioned that could improve post discharge follow up and re-admission rates are things that are not payed for. Primary care is not reimbursed well and they are the main pitch to point from the hospital. All these people to do post discharge follow up calls are a nice idea with no way to pay for them. What is being suggested is to incentivise the hospital to provide these services with a carrot or a stick if they don’t in the form of decreased or bonus payments. How about just giveng primary care docs enough resources and incentivising them to keep the patients from ending up back in the hospital, or even better yet, landing there in the first place. I cannot tell you how many times I struggle to get things done in the outpatient setting to save the system some bucks, only to be rewarded with my meeasly reimbursement from Medicare or any other insurer for that matter. Try to do things cost efficiently in this screwy system and end up on the sort side of the medical economic ladder. Is there any clearer reason why we are in the medical mess we are?
Under a bundled payment system for an entire episode of care, staff PCP’s could be transformed from money losers under the current FFS system to money savers if they can significantly lower the number of preventable readmissions.
Barry,
Sounds good assuming there are any of us left by the time this all happens. Also, more and more of this sounds like good old managed care where we used to get a fixed per member per month payment. Our wonderful insurance companies used this concept to off load their risk in the past and the result was alot of IPAs that were forced into bankruptcy and a lot of docs that lost money on the deal. I am obviously very suspicious of such arrangements, since they always seemed to be structured so it is difficult to meet the marks to make a profit or to receive bonus money. We jumped through all the hoops previously in terms of quality reviews under these plans and what did it get us? Increased costs on our end (more vaccines and screening exams) but in the end, it did not translate into better reimbursement.
“saying “it is not easy to change a region’s medical culture” is a massive understatement. The question is whether it is possible.”
I tend to agree that it is not easy to change medical culture, but disagree that it is impossible.
Although doctors are often not as logical as we might hope in their approach to management problems, or as well informed as might be ideal, or are more dependent for information on sources that have a financial stake in various management approaches, doctors are trained to be willing to change if evidence and circumstances push them.
There are many examples of doctors changing their whole cultures.
The most recent that springs to mind is the hospitalist revolution. Back in the late 90’s, when I worked for a large regional health system, the system decided to adopt the use of hospitalists because they believed it would be more efficient and provide better care. They gave their general internists a choice: be a hospitalist and never see any office patients, or be an office specialist and never work in hospital. The internists screamed in agony. The change represented a major shift from the way they were used to operating, and in particular disrupted the classic doctor-patient relationship whereby patients had the same primary care doctor in sickness and in health. The system persisted, and 11 general internists left the organization in protest and founded their own independent group.
Today, use of hospitalists is pretty much standard in systems large enough to do so. The internists working for the system I worked for are happy with the system. Ironically, the runaway 11 have now joined another hospital based regional system and – you guessed it – use hospitalists for their hospitalized patients.
Major cultural change in medicine is often shocking and upsetting, is often resisted by some physicians, but happens more often than you might think. By virtue of their training and professional philosophy, doctors are more prepared for cultural change than most people. As Maggie points out, the cycle of the information provided by the Dartmouth studies has not yet gotten to the point where the changes it suggests are backed by more aggressive attempts at implementation. I would also say that practicing doctors are less will informed about the Dartmouth data than would seem logical. Doctors are often overwhelmed by the information they need to review, and select out only what they feel they must know to function.
Getting doctors to adopt better, more scientific practice standards is more like getting people to buy newer and better electronic equipment than getting people to eat a better diet. It requires some level of coercion, but does not involve attacks on basis lifestyle.
Meanwhile, I agree with comments pointing out that a lot of the things that are important in implementing better, more cost effective management are not compensated for under our current reimbursement system. I also agree that for this approach to work, patients need a primary care doctor who has the time and incentive to take the steps needed to keep people out of hospital, and that many people, including large numbers of children, do not have doctors. Studies on medical home approaches have shown that aggressive use of low tech outpatient care can keep people from being readmitted, but for that to work people must have a medical home first.
One of the underrated aspects of health care reform’s ability to save money is the potential for the system to provide more people with regular primary care and to make that care function better in terms of keeping people healthy and out of hospitals and ER’s. That is a significant part of the secret of lower costs in Europe – having more people see primary care doctors more frequently on an outpatient basis doesn’t cost money, it saves.
Keith,
I appreciate what you say. I always thought that the biggest weakness of capitation, whether for IPA’s or hospitals, is that it is extremely difficult, if not impossible, to forecast your costs for the next year with sufficient accuracy, especially if your patient base is fewer than 100,000 or so. Incentives to deny or withhold care are a separate issue. Even the largest insurers with many millions of members sometimes blow their medical trend estimate, though they’ve gotten better in recent years.
I think bundled payments make sense when there is a definitive diagnosis requiring an expensive surgical procedure – patient needs a CABG or hip or knee replacement, etc. Factors like age, co-morbidities, obesity and the like should be able to be factored into a risk adjustment mechanism. Since so much of what I, for lack of a better term, call core medical spending (hospital and physician charges plus the cost of drugs and devices which account for about 65% of our total medical spend) are associated with an episode of care that includes a hospital stay, either inpatient or outpatient, we need to focus a lot of attention here in the short term. Other care, including long term care, home health care, dental and vision care require either different cost control approaches or, at least in the case of dental care, are not spiraling out of control. Interestingly, the latter grouping, for the most part, doesn’t require a doctor’s order or prescription to drive utilization which presumably eliminates defensive medicine as an issue. Moreover, most people (including myself) either don’t have dental insurance, or, if they do, it doesn’t pay for very much. Maybe that partly explains why dental costs haven’t experienced the same explosive cost growth as hospital charges.
Making payment decisions based on “belief based” plausible theories is fine for small test populations as an experiment. Does this improve care? Lots of plausible ideas don’t actually work. We need to submit “quality inititives” to the same clinical trials we subject new drugs to. Evidence based, remember?
Doing it nationnally, without evidence that the idea has the desired results is just a stealth pay cut. (I am not opposed to a paycut for hospitals; the waste is eye-popping. Let’s do it explicitly though, unalloyed with quality..but the Medicare/Insurance fueled bubble in hospitals is a whole other topic.)
There is great variance in readmission rates; we already knew that. Whether this or that initiative will have the desired effect is a matter for a clinical trial. Why not test a few programs and see which, if any, actually WORKS best.
In reality, there are a number of unenumerated variables at play for readmission, which may or my not respond to heavy handed management.
Remember when giving the poor money was going to end poverty? That sounded logical, also.
ALSO:
Overhead costs are a gigantic driver of total costs and never explicitly enumerated in full. Enlightened overlords never come cheap!
Overhead at the hospital, in the clinic, in the doctor’s office, laboratory, in the administration, in drug/device companies, and and on.. has been added continuously over the last thirty years.
US Health Care 2009:Doctor Smith, We’re discharging a pt with Medicaid from the hospital and he has no doctor, and we want you to see him. If you don’t, we’ll take away your hospital privileges. He has CAD, diabetes, depression, PVD, COPD, and he can’t read. Will you take him?
No, and no one else in this town will either. But if we did take him, we’d put his records into the fancy EMR the government just made us buy. And take my privileges–please!
I agree with the need to run pilot programs and collect and evaluate data before lurching off on pathways that are not well understood.
However, right now there is a body of data showing ability to cut down on readmission significantly for some conditions. Those include congestive heart failure, chronic lung disease, asthma, pneumonia, other infections, coronary artery disease, diabetes, and joint replacement surgery.
The dominant regional health care system in my area did a study on CHF based on aggressive application of the medical home model — they contacted the patients by phone every day, and gave them scales that hooked up to telemetry to monitor their weight. They cut admissions/readmissions from a minimum of 4 a year (the guideline required to enter the study) by 80% and ER visits by 75%.
There have been a number of studies showing similar success with the other conditions.
The nice thing about the conditions with good supporting evidence is that they account for a huge percentage of admissions and readmissions. As the old saying in medicine goes, common things occur commonly.
The three largest barriers I see to application of these principles are a lack of coordination between hospitals and providers outside the hospital, the absence of financial incentives to do the work needed, and a lack of available primary care providers — both doctors and others.
Practice patterns are changing, with more and more physicians and other providers going to work for networks that include hospitals in response to the disadvantages and costs of doing business in solo or very small group settings, so that may help deal with that problem. Financial incentives/disincentives may help with that as well.
Patterns of payment, especially if there is evidence that changes could save large amounts of money for the whole system, can be changed fairly easily by third party payers, especially very powerful payers like Medicare, including a proposed Medicare Part E.
The third problem is harder. We have talked a lot here about how to create incentives for more young doctors to choose primary care. Britain has solved this problem with money — primary care doctors can earn more there (about $200,000 a year) than many specialists. Shifting compensation to emphasize the type of services we are discussing here rather than procedures would be hard to do in the face of the united opposition of specialty groups, their allies in hospitals, and equipment and drug manufacturers. However, I don’t think it is impossible.
JRossi —
“Doctor Smith, would you take the patient if we paid you $500 a month extra for every month he spends out of the hospital? Plus paid you a fair price for all the time you and your staff is going to have to spend talking to him to accomplish that?”
Dr. Rick, Chris, Geoffrey,
Keith,Geoffrey, Keith (2nd comment), Pat S., jrossi,
Christopher, Pat S. (second comment)
Thanks for your contributions–
Dr. Rick–
Often it is the family that wants the patient back in the hospital, and the family doctor, cardiologist or whoever obliges.
Sometimes a sick, frightened patient feels “safer” in the hospital.
Families just don’t know what to do with these patients. Often they can’t find or can’t afford a nursing home, but Medicare will cover hospitalization, for a while.
This is not a good use of expensive hospital care.
I would vote for paying more for well-trained home health aides.
Chris–
One big problem is the fact that we pay providers so much less to care for Medicaid patients.
I’m hopeful, that as part of reform, we will raise Medicaid rates to equal Medicare rates, and raise
primary care rates at least 10% above what Medicare pays now for both Medicaid and Medicare patients.
We’ll still have a shortage of primary care doctors, but hopefully more of them will take Medicaid patients.
Would doctors still shun poor patietns because they tend to be more difficult cases? Perhaps they would.
If so we need legislation prohibiting a doctor who takes Medicare patients from cherry-picking wealthier patients–who are easier to care for. If we are going to have equal, universal access to care, then we have to make sure that doctors are not avoiding minorities or the poor.
Of course a doctor should be able to refuse to take an individual as a patient–but if his practice shows a pattern of discrimination, that would be seen as a violation of
equal access– much like discrimination in housing.
Geoffrey–
No you don’t see the same kind of regional variation in VA hopsitals.
Excess capacity (too many hospital beds or specialists) is rarely a problem.
More importantly, all VA hospitals follow the same guidelines and doctors who work for the VA understand that they have to do things the VA way.
And, yes the study adjusts for different patient pools in different hospitals, adjusting for
“the patient’s DRG, race (black or nonblack), use or nonuse of dialysis, presence or absence of disability, sex, Supplemental Security Income (SSI) status, length of stay as compared with the national average for the DRG, number of hospitalizations in the preceding 6 months, and age group. We included the hospital’s ratio of observed to expected hospitalizations as a covariate so that differences among hospitals would not obscure the effects of other predictors. ”
Like the DArtmouth reserachers, reserachers doing these studies have gotten quite good at making these adjustements.
Also, the studies using Medicare data are very large.
Unfortuantely, hospitals that have more readmissions tend to be less efficient hopsitals where patients receive more care (which includes longer stays) etc., with no better outcomes.
Keith–
Obama has made it clear that Medicare plans to raise fees for primary care, and provide bonsues for qualtiy (chronic disease management, etc.)
Will the payments still be too low?
I suspect that for primary care providers running a very small or solo practice in an expensive region, the answer will be yes.
The cost of real estate, labor, taxes, etc.
in a place like Manhattan make it very difficut to make it as a solo practioner providing primary care.
Moreover, it’s inefficient to have thousands of solo
practioners and small practicies with tiny back offices, traking down reimubrsements from insuers, duplicating equipment, trying to purchase EMRS, making less than idea use of space, technology, etc.
It’s insane to try to run a healthcare as a cottage industry–this is one reason why administrative costs are so much higher in the U.S.–and why quality varies so widely.
I think that all physicians are going to have to recognize that 21st century medicine is a
team sport which requires
that doctors take advantage of the economies of scale and the support systems that come with very large multi-specialty practices.
This is one reason why so many internists have become hospitalists, where they work in an environment where the have support are not trying to run a small business by themselves. As Dr. Don Berwick,president of IHI
puts it, “Doctors should not be alone.”
Obviously, in rural areas, we need small practices. But typically, over head is not nearly as high as it is in expensive cities.
Meanwhile hospitals have taken a real interset in trying to reduce readmission. They are the people within the hosptial who are in the best position to make sure that a patient gets clear instructions when discharged, that he has a doctor’s visit scheduled, and whatever else is need for follow-up.
Of course, if there isn’t a primary doctor on the outside willing to see the patient, the hospitalist can’t create one. But my guess is that it’s much easer to find someone to follow up with the patient at Kaiser in Northern California than it is in Manhattan . ..
Finally, yes if Medicare pays for quality, it will be “managing care”–but, unlike a for-profit insurer, Medicare has a long-term interest in making sure the patient is truly getting high quality care. That patient is going to be with Medicare as long as he or she lives. By contrast for-profit insurers “managed care” with an eye to making money in the short term.
Pat S.-
The growth of the hospitalist movement is a good example of a huge
cultural change.
AT first, the movement was very controversial; now it’s widely accepted and appears to be working well.
Moreover, as you say,
many doctors simply don’t know about the Dartmouth reserach, (I find this when I give talks) and when they hear about it,
a few bristle, but many are intersted and begin to nod.They may not feel that they personally are overtreating patients, but they know that others in their specialty are.
Many are very open to the idea of guidelines, and comparative effectivenss reserach –if it’s done well.
Meanwhiile, I think med schools will begin teaching about regional variations and the hazards of overteatment.
Barry —
I, too, like “bundled payemtns” where all doctors and hospital involved in a single episode of care are paid a lump sum–which is higher if the patient received good efficient care (outcomes divided by dollar) and a lower payment if care was ineffecient and outcomes not as good.
But figuring out how to divide up those lump sums wont’ be easy. So bundled paymetns won’t be widespread for quite a while.
This is an area where we will need many pilot projects.
This is why the intergrated mutli-specialty model–where the doctors are on salary– is a simpler way to do it. There can still be bonsues for quality, but most of a doctors’income would be salary.
jrossi– as I noted above, I think reform will raise Medicaid rates to equal Medicare rates, and that both will be raised for primary care.
At the same time, I think that it inefficient to have the majority of hte country’s primary care docs working in small or solo practices. Doctors could be better compensated in large multi-specialty centers where the doctors work on salary, take no financial risk, and the medical center enjoys economies of scale.
Christopher–
Medicare is already doing pilot projects in many of these areas, adn will continue to do so. (Medicare can embark on a pilot project without getting permission from Congress.)
There will be many pilot projects; this is another reason why reform cannot happen all at once.
Pat S.–
It’s very interesting ot hear that, in the UK
primary care docs are paid more than some sub-specialists, and earn roughly $200,000 a year.
Here primary care doctors average $110,00 to roughly $160,000. . . .
A substantial hike in their incomes would mean slicing the incomes of some very well-paid subspecialists, but MedPac
(the Medicare Payment ADvisory Commission) has already suggested that we do that.
When Medicare adjusts the fee schedule this year (the administration is very focused on this) I am told that the committee that makes these adjustments understands that it will have to slice at the top.
And with the new emphasis on comparative effectiveness it’s likely that people will have what we already know about coparative effectiveness in the back of their minds when deciding to make cuts.
In other words, we should be paying less for treatments that we know are marginally effective–at best (for example, MRI
breast scans for average risk women, angioplasties for a great many patients –unless they meet a specific medical profile, etc. etc.
Yes, both the doctors in these specialites adn drug-makers will howl. But when it’s a choice between letting Medicare go broke or cutting the incomes of people who are earnign more than $500,000 a year, Congress will know who to fear–both seniors and baby-boomers who have been paying into Medicare for years and will demand that Congress make sure it is on a sound financial footing.
Lobbyists are powerful, but all of the campaign contributions in the world won’t help you if your constituency has decided to vote the bumb out of office.
We have a discharge clinic attached to hospital that follows patients who have no PCP until they can transition. It is interesting to note how things go into hibernation Friday evening to Monday. No social workers or case managers, covering M.D who is reluctant to discharge,harder to get echos,other tests and everything stagnates. Was this aspect ever looked at?
“Britain has solved this problem with money — primary care doctors can earn more there (about $200,000 a year) than many specialists.”
Pat,
I remember reading in Health Affairs awhile back that, several years ago, the UK devised a system that would measure PCP’s on no fewer than 146 separate metrics. Points were assigned to each with a maximum possible score of 1,050 points. Electronic medical records were absolutely critical to collecting the data to which the metrics applied. Under certain specific circumstances, doctors were also able to exclude some patients among their panel population from being measured. The NHS was surprised that doctors overall performed far better on the measured metrics than expected and paid out something like 25% more in bonus compensation in the first year than it had budgeted for. There also remained some opportunities for doctors to “game the system.”
I don’t know to what extent, if any, the system was refined since it was first implemented or how large the opportunity for bonus compensation is now vs. the first year of the program. It’s certainly clear that such an approach would probably be impossible without extensive use of electronic records to collect and analyze the data. I also wonder if difference in how medical disputes are resolved as well as the grounds for bringing them in the first place would affect the feasibility of trying the UK’s approach here.
I like their approach conceptually. Assuming the metrics are sensible and will help to improve both care quality and efficiency, as a taxpayer, I feel more comfortable rewarding doctors (and others) on quantifiable criteria to the extent possible. If doctors perceive the criteria as sensible and the performance benchmarks as fair and reasonable, they should find the UK approach acceptable as well, at least in theory. What do you think?
Ray & Barry
Thanks for your comments–
Ray-
The idea of having a clinic attached to the hospital where patients who don’t have a P4P can
“transition” sounds brilliant.
I haven’t heard of any solutions for the week-ened problem you describe,
but if the organization were large enough (Kaiser, Cleveland Clinic?) it would seem that social workers and other support staff could be found you would be willing to work one or both week-end days and have two week-days off, perhpaps with a small bonus in the form of more vacation time. . .
Barry,
When Pat talked about primary care docs in the UK earning $200,000, he didn’t say anything about measuring quality.
It was my impression that NHS simply decided that it wanted patients to have more primary care, less specialists care, so raised salaries of primary care to make it more appealing than some subspecialties.
When it comes to rating or “grading” individual doctors, we’ve had this before. Health care reformers here have pretty much decided that it’s impossible to measure the quality of an individual doctor because
a) more than one person is usually responsible for a patient’s outcome since many patients are treated by several different doctors. . .
b) the pool of patients one doctor sees is too small and too easily skewed by non-compliant and other difficult patients.
With electronic medical records, it would be possible to “pay for performance”– i.e. pay
individual doctors for doing certain things, but reforrmers who have studied quality have deccided that P4P encourages doctors to focus on the “list” of things they are supoosed to do, and neglect other, equally important aspects of care..
This is why reformers now are focusing on paying for outcomes (rather than performance) and bundling payments to all of the doctors (and hospital if the patient is hospitalized) involved in a single episode of care.
Maggie,
According to the article at http://www.telegraph.co.uk/health/3223309/Doctors-paid-thousands-not-to-send-patients-to-hospital-for-treatment.html, there seems to be quite a number of pay for performance schemes targeted to PCP’s in the UK.
Separately, compensation for PCP’s in the UK is not nearly as good as it sounds. In most of the country, ₤1 buys about the equivalent of what $1 buys in the U.S., especially in the more urban areas.
Barry is right, in that to earn $200,000 the doctors must meet a set of standards. The NHS wants both to encourage interest in primary care and to encourage primary care doctors to practice effectively — to do well be doing good.
I don’t know how many total standards there are, since many seem to be disease or condition specific. The main set of standards involves getting patients to conform with appropriate management and stay well. Making sure your patients with diabetes, hypertension, asthma, and congestive failure follow appropriate care, take their medications, and stay out of the hospital and ER earns incentive salary above the base for the specialty. Failing to get patients to comply stops the potential bonuses. I saw one program where a doctor indicated that he saw some patients as often as once a week, but that that was how he got them to stay in compliance and he didn’t mind the work since it contributed to earning more — he was making the $200,000 I talked about.
Primary care people in Britain who do well under this program do apparently make quite a bit more than the average US primary care doctor. Meanwhile, specialists make considerably less than here, often less than a successful British primary care doctor who does a good job of keeping patients well.
This program has existed for about 6-8 years, and I do know that the British were talking about making modifications in the system about five years in, possibly with some concerns about “gaming,” but the system was largely intact as recently as about 3 years ago, and the British do seem happy with the idea of paying primary care people who do a good job more than specialists.
In a lot of ways, the model resembles what HMO’s originally claimed to be doing — getting paid for keeping you healthy, not for taking care of you when you are sick. As I said in another post, one of the big HMO’s out here used to have a program that channeled patients with complex health problems to doctors who were interested in spending more time with difficult patients and had shown a talent for establishing a raport that got patients to work to comply with appropriate care. Unfortunately, they dropped the program in the late 80’s when financial pressures started to make them more concerned about how many patients a doctor could see.
If you were a risk manager for a health plan, the program I suggested for JRossi’s hypothetical Dr. Smith would be a good deal. The extra $6000 a year you would pay if the patient stayed out of hospital for a year would be about what a day or two of hospitalization costs. Saving a single day of ICU would pay for two patients in the program.
In general, specialists tend to make less and primary care people relatively more in many countries. In the first place, in many European countries, specialists — radiologists, orthopedists,vascular surgeons, cardiologists, neurosurgeons, and so on –are often employed directly by hospitals on a salaried basis.
Barry,
The link didn’t work. You’re right that $200,000 for primary care (called GP in U.K) is not a lot compared U.S but it noteworthy to see that their income Gap is not as glaring between speciality and primary care which is the primary reason our medical students shun primary care for other lucrative fields like Derm. My dad was an anaesthetist in U.K and his salary was higher but certainly not double and triple of GP. Private GPs made more though.
Pat S, Damn straight I’d take that patient, but I’d have to fight the other docs for him. But if that kind of deal is on the table, I haven’t heard about it.
I am off topic. I posted to the wrong blog topic. Opps. Also, wonder should be wander.
JRossi —
That’s not on the table now except as a proposal by people like George Halvorson, but resembles the approach being used in Britain for complex patients that is helping British primary care folks to earn more than many of their specialist collegues, and is almost exactly like the pilot program I mentioned that was done for congestive failure.
Your two posts on Dr.Smith and his patient highlight two things that are problems in US health care:
1.) Medicaid and all its works and all its pomps is a terrible program. Terrible for patients, terrible for doctors, terrible for the governments that run and pay for it, and terrible for society. It should be abolished, federalized, and should be rolled into Medicare — part of Part E.
2.) Many of the incentives in US health care are perverse. We are incenting behaviors that are unproductive, ineffective, very costly, and sometimes actually unhealthy. We are failing to incent behaviors that we need if the health care system is to work right in terms of health results and cost effectiveness.
One of the things we need to do is start giving doctors, especially primary care doctors, financial incentives to engage in efforts that improve health results and save money for the system. Getting doctors to provide high intensity/low tech interventions for people with existing chronic illnesses to keep them healthy and out of ER’s, hospitals, and ICU’s is one of them.
As I said in a previous post on this thread, the program I proposed for Dr. Smith and his patient would be a win/win/win situation. The doctor would win because his income would rise if he was able to meet the criteria for the incentive; the patient would win by being more healthy and having better quality of life; and the third party payer would win by paying a few thousand dollars a year for more intensive outpatient care but saving tens of thousands in preventable charges for hospital and ICU.
“As I said in a previous post on this thread, the program I proposed for Dr. Smith and his patient would be a win/win/win situation.”
Pat,
Perhaps you could clarify your proposal as it relates to diabetics. We all know that a comparatively small percentage of patients drive a disproportionate percentage of healthcare spending. In the Medicare population, for example, there are probably millions of diabetics who, in any given year, don’t access the system for much beyond their routine checkups while a small number incur very high costs, some of which might be preventable with more intensive low tech care. If we pay doctors a significant amount more each year to carefully monitor every diabetic, including providing staff support as needed, we could wind up spending more than we do now even if we reduce the number of hospital admissions and ER visits among diabetics because such a large number them would have made minimal claims on the healthcare system anyway. It seems that if it were such an obvious win/win/win, we would have adopted this approach a long time ago.
The proposals for more intense monitoring do not apply to every diabetic. They apply to people who have failed to do well with conventional management. I know many people with diabetes who have been in excellent control since diagnosis and don’t need intense management to stay healthy.
As I indicated, the threshold for admission to the pilot program for congestive failure here was four admissions in 12 months. Many of these admissions involved at least some ICU or stepdown care, and frequently began in the ER and with ambulance transport. The approach, as well as similar approaches in Britain and other countries, saves money by identifying the high risk patients and increasing the level of intensity of outpatient care but decreasing use of hospitals, ICU’s, and ER’s.
This thread is about patients who “bounce” following discharge — 20% of discharges. Over half had received no contact from health providers in the time between discharge and readmission. I suspect that many if not most of the others were not in compliance with management.
Many or most patients are compliant with management of their conditions. It is the ones who are not compliant or who have conditions that make compliance difficult – like JRossi’s hypothetical patient with diabetes, CHF, coronary disease, peripheral vascular disease, depression, and illiteracy — who benefit from the more intense management. These same patients are the ones who account for a large number of repeat admissions and failure of outpatient management, and for a large amount of the cost of health care in this country.
As far as why we haven’t adopted this win/win/win strategy, it is because it doesn’t fit with our current biases about how health care works. It is a throwback to the past, before high tech health care. Our current policies seem to be “billions for surgery, imaging, ICU, and labs, but not one cent for providers calling people on the phone.”
Ptt S., Ray, Barry, J Rossi
Thsnks for your comments —
I find the program in the UK very intersting. Though as you descirbe it, if doctors are rewarded for keeping patients “well” then they are rewarded for outcomes, rather than being rewarded for doing the 20 things on a list.
Here, I’m not talking a out checklists,but rather P4P (pay for performance) Don Berwick (pres of IHI) among others, argues that in order to raise quality, we should reward for outcomes, not P4P
People who study quality also argue that we should not be rating and rewarding individual doctors, but rather groups of doctors. We don’t want individual doctors to COMPETE with each other but rather to COLLABORATE in groups. (Also, competition tends to lead to chearing, or “gaming the system.”)
Though I can see, if we are talknig about non-compliant patients, it makes sense to pay a doctor (or doctors) more if they are willing to specialize in nnon-compliant patients much the way we pay special- ed teachers more.
And it makes sense that some doctors would be talented in this area, and have the patience to do it.
As to whether $200,000 is a lot of money– it really depends on what the people around you earn. If you’re a writr, $200,000 seems an enormous salary.
Certainly, one can live very comfortably on $200,000. The fact is that a Household that earns $200,000 (Joint Income) is in the top 2%-3% of all households in the U.S.,So an Individual
who earns $200,000 and thinks it’s “not that much” is living in a very elite world, with a skewed vision of what it means to be “well off.”
Of course the value of money depends on where you live. But I’ve lived in a
great neighborhood
Manhattan for more than 20 years,and can say that one can live very well on significantly less than $200,000..
The problem with U.S. salaries is that a small group of people who earn , say, $400,000 to $3 million or more seem to have made everyne else feel that
no civilized family could possibly live on less than–you name it, $200,000 $250,00 $400,000.If this is how you perceive the world, the necessities of life expand to include more than one large, brand-new, gas-guzzling car, a piece of very expensive jewelry “required” each year as an anniversary present; 5,000 -8,000 foot homes for a family of three; a “designer” to tell you have to furnish your living room etc. etc.
This skews everyone’s priorities, and explains why the U.S. consumes so much more than it produces.
The solution is to bring down those salaries at the top that are setting a false standard for what it takes to be comfortable.
What Ray says about the much narrower gaps in the UK is very interesting . .
Among doctors, this means that ultimately no one really needs to earn more than, say $300,000. (I’m picking a number out of the air, but iknow a family can live very, very well in Manhattan on $300,000 and if you can live well here, you can live well anywhere.)
This can’t happen next year, but over time, as we revise how we pay, and what we pay for, basing pay not just on what it Costs the Doctor in terms of years of traning, physical strength, mental stress etc. (which is how we pay now) but also how much Benefit the Patient derives we should be able to bring top salaries for specialists down to $300,000.
If primary care docs with good outcomes earned $200,000-$225,000 and if specialists earned $200,000 to $300,000 (with the top-paid earning 50% more than primary care docs, reflecting extra yaers of training or special skills that provide great benefit to patients,I think med students would probably be happy to go into primary care.
By contrast, today, specialists make 4 and 5 times as much as primary care docs, which makes everyone feel that primary care is an inferior profession.
It’s the disparities that create problems in our society, and in our economy.
Finally, Pat S. is right we are so enamored of high-tech care in this country (eve when it is marginally effective) that we throw billions at it and underrate the importance of low-tech care.
One further thoguht– if we want more primary care docs, a number of the members of the Medicare Working Group believe tha Medicare should begin telling academic medical centers how many residency slots they can have in each specaility. (Medicare now determines how many slots they have, but not the specialty. As a result, we have too many sub-specialists in many areas, which leads, in turn to too many high-tech diagnostic tests, too many inveasive heart procedures,too many hip and knee replacements (when a low-tech soluton like medication and physical therapy might work just as well. Incrase the number of palliative care slots, primary care slots, pediatric slots, family practice slots– particularly at institutions in very desirable locations, while simultaneously raising salaries, while cutting some sub-specialts salaries. and you’ll wind up with more doctors in those areas.
Apparently the National Health Service in the UK
is not entirely happy with the experiment we’ve been talking about. It feels it is paying too much-either because it set the bar too low, or because doctors are “gaming” the system–which too often happens with P4P schemes
This from the New England Journal of Medicine:
The high level of performance, which has contributed to the National Health Service deficit,2 suggests that the targets were set too low or that British physicians improved their practices or their documentation of care to meet the new standards or gamed the system by excluding patients whose care did not meet the performance criteria. Although available data preclude a determination of which, if any, of these explanations is most responsible for the findings of Doran et al., future studies to assess changes in performance over time and the inclusion of new auditing procedures should shed more light on this question.”
This doesn’t mean that some primary care docs shouldn’t be paid $200,000, but does suggest that too many are being paid bonuses and that they need a better way of measuring quality.
As I have said before, measuring quality for indiviual doctors is very hard: too often they simply avoid difficult patients to raise their scores.
http://content.nejm.org/cgi/content/full/355/4/375
Maggie,
I think the issue you raised about compensation at the top of the income distribution and its affect on others is fair as far as it goes, but I think it’s a lot more complicated than that. I think there has been a secular increase in expectations throughout most of our middle class and upper middle class society and it’s been going on for at least several decades.
Back in the 1950’s and 1960’s, middle class life, at least in the suburbs, generally meant a house with one bathroom and a one car garage. Families typically owned one car. Most women didn’t work outside the home. They raised their children and took care of the home. They didn’t need housekeepers or nannies. Children played (usually unsupervised) with friends in the neighborhood. Now, it’s more typical to expect to live in a home with at least two or three bathrooms. Most people have at least two cars. Most children go to preschool and/or spend time in expensive daycare facilities while both parents work. Children participate in lots of activities sponsored by either the school or the community, many of which cost money to participate in.
On top of all this, elementary and secondary spending per pupil has increased far faster than general inflation since the late 1960’s. College tuition and fees increased just as fast if not faster. As we all know, healthcare costs have been spiraling out of control leading to higher out of pocket costs for premiums, deductibles and co-pays as well as more people who lack health insurance altogether. The combined federal, state and local tax burden, much of which pays for education and healthcare, increased relative to income for much of the middle class and upper middle class wage earning population.
The combination of increasing expectations and the rising tax burden has nothing to do with compensation at the top, in my opinion. However, the favorable tax treatment given to income derived from capital gains and qualified dividends, most of which is captured by the top 10% or so of the income distribution, contributes to a sense of injustice and resentment among the middle class. Attempting to drive down compensation at the top of the medical profession and the financial sector might make some people feel better, but I don’t think it will do much to reduce the forces that I’ve described that pressure the middle class financially.
Finally, regarding the cost of living in Manhattan, it depends on where you’re coming from. I think you mentioned that you bought your apartment in the middle 1980’s. If you had to buy it today, I’m sure the mortgage payment would be a lot higher. If you had school age children that you thought needed to be sent to private school, tuition could easily cost $30K per year per child. If you’re earning $300K, all of it from salary and bonus, you would probably pay close to half of it in federal, state and local taxes and you still need to save for college educations and your own retirement. While it would be plenty of money in Dallas or Detroit, NYC is a different story unless you have your housing costs locked in at much lower levels and your children are grown with their education costs behind them (and you).
Maggie –
As we have discussed often, the US health care system already contains financial incentives for all sorts of behavior by doctors. Unfortunately, the incentives do not correlate very well with behaviors we would like to see doctors follow if we could create an ideal system – they encourage use of procedures and tests that pay well but are sometimes of questionable utility.
The British seem to be engaged in an attempt to incentivize behavior that results in clear cut improvement of care. One of the complaints seems to be that it works too well.
The distinction between P4P and rewards for outcomes is very hard to make, since there are not clear definitions.
The NEJM article lists a number of the benchmarks that the British are using. The ones they list fall into two categories. Some of them – half of those listed – are clearly outcome based: specific targets for blood sugar, blood pressure, seizure free intervals, and cholesterol. The other half are behavior based: documentation of specific activities by doctors, most of which arguably should lead to better results but are not specifically evaluated by results.
In interviews I have seen, British doctors and administrators emphasize incentive pay is for keeping patients “well.” In the absence of the full list of targets and of the revised benchmarks now in effect, that seems at least partly true.
Bear in mind that the article reports results from just the first year. This is a work in progress.
I can see why the NHS decided to revise the benchmarks, since some of them seem a bit amorphous and since they may set the bar too low. However, last I heard – about two years ago – the program, with revisions, was still running. Doctors remained happy with it and continued to be able to supplement their incomes considerably. T.R. Reid talks about this program in his film “Sick Around the World.”
In general, I would favor models that stressed outcomes that fit with clear endpoints. Lab values are fine for some conditions, but I tend to favor the idea that the best yardstick is keeping patients out of hospitals, ICU’s, and ER’s.
I know one of the organizers of the local program for management of severe congestive failure patients. They used hospital admissions and hospital days as the main benchmark for their program, although they also report improvements in some tests. Interestingly, they say that the idea for the project came from similar efforts in Britain. Whether that was part of the British incentive program or part of a separate project, I don’t know. I got the impression that it was part of the outcomes program for British doctors.
One more point: the NEJM article shows that one of the British criteria resulted in the British system outperforming every US health sector – both private and HMO based – except for the VA. I wonder if the VA has some incentive or monitoring system in place as well to facilitate the excellent performance the NEJM documents.
Pat S.–
I can’t find much about financial incentives in the VA. There may be some, but the main thing is top-down management and a sense of mission.
When Ken Kizner reformed the VA, the slogan was “put the Vets first” and it caught on, creating a real sense of
“mission. The vets came ahead of “programs.” The focus was on finding what works.
The emphasis was on evidence-based medicine. The various VA networks compared notes, and when one network found something that worked, everyone adopted it.
In a military culture (as at Mayo)people are not encourage to do things “my way.” Though a VA doctor can prescribe outside the formulary, he must document why he is doing so.
I share Don Berwick’s
concern about our emphasis on financial incentives. Certainly, we need to avoid dis-incentives–low pay for primary care doctors and poor working conditions. Medicaid fees must be hiked.
And I think that hospitals that perform poorly should be penalized financially–these days, this is the only thing that the majority of hosptial CEO’s seem to understand–the bottom line.
But I don’t think that most doctors need to have a prize dangled in front of their noses to want to practice the best medicine possible. They do need a change in the culture, education, and a feeling that they are working in collaboration with others who share the same goal: contuuous improvemnt.
If you haven’t read it, read Berwick’s collection of essays: “Escape Fire”.
It make you realize how much of reform depends creating a culture of excellence that will raise morale.
Giving a srugeon who now makes $500,000 an extra $50,000 isn’t going to do it. You need to change the way he thinks.
,
Barry–
I raised my children in
Manhattan from the late 80s through the 90s. Things were pretty expensive then.
When I bought my apartment, interst rates on a one-year variable were 9 1/2%, adjusted yearly. I took it thinking that rates were destined to slide. I bought close to the top of the market, so the price was high.
As a result, I took an enormous mortgage, no income,, no asset verification.
The deduction for the interset on the mortgage took care of any worries about pay huge taxes.
I was able to buy an apt. with great light, and wonderful views, in a neighborhood that I thought was on its way up (the upper west side) because the apartment “showed” horribly. It had been on the market for 1 1/2 years in a boom market, and the owner kept slicing the price.
It needed a complete renovation. I hired two twenty-somethign Yugloslavians who were craftsment but also had done heavy construction in Germany. (They were recommended by a friend–now my husband–who had used them to renovate a building in Soho.) They had excellent taste and did fine work.
One of to them spoke some English, the other very little. The Yugolavian friend who they brought in to completely wire the apartment spoke no English.
I acted as my own architect and designer. (I had renovated two houses in Ct., acting as my own architect an designer). Typically, they would sketch something on a piece of paper–a staircase, a new sliding glass door to the terrace,
cabinets, etc. and I would say “how much?”
We bought all of the materials– wood, marble, tiles, fixtues directly, going to marble yards, etc. No mark-ups.
If I were coming to NY with young children today I would do the same thing–though I would probably rent for two years, waiting for the market to bottom. Interest rates would be much lower than in the late 80s, and by the time this market bottoms, prices would not be that much higher–as long as I bought something that needed complete renovation. Which I would. I love creating something.
I’d take the huge mortgage (solving the problem of high taxes) and find talented, affordable people to do the work. (In NY there are always New immigrants).
I could easily raise two kids, and live very well in NY today on far, far less than $300,000.
No one needs to send their children to private school. When I was looking for an apt. I targeted neighborhoods with great public schools. (The kids went to excellent colleges, and college tuition worked out.)
Many (most) of my friends sent their children to private schools, often because they felt social pressure to do so.
This is what I mean by a very wealthy upper class creating false values regarding the need for private schools, large cars, etc. So much compulsive consumption makes other people feel that they need these things because others have them.
Barry:
I agree with you when you wrote that people need more amenities today, which would have been luxuries in the past.
I cannot verify the cost of public education below college increasing faster than wages, although I am in agreement with you regarding the cost of college education, public or private, being much higher than wages.
In regards to higher taxation, I think your premise is questionable, at least when it comes to income taxes.
As you probably know, FICA taxes exceed income taxes for the vast majority of the population. That figure alone attests to the lowering of income tax rates, and the regressive burden inposed on lower wage earners for FICA taxes.
In regards to earning power, we now have more 2 wage earning couples than 30 years ago, and fewer children.
What else need I say, when comparing earning power today to that of yesteryear?
Don Levit
Maggie —
Sounds like the answer to the question “does the VA have an incentive or monitoring system?” that encourages doctors to obtain hemoglobin H1C testing in their diabetic patients is that they have a monitoring system. That is not an inappropriate approach, especially in organizations where monitoring performance is part of the culture.
I agree that doctors should not require cash incentives to practice good medicine. However, if we are suggesting that income for primary care providers needs to be increased in order to encourage people to enter and stay in primary care, then I think the idea of making that income available in the form of incentives to practice well might prove more useful than making the income available by just increasing fees for primary care. That seems to be what the British did, and although it is costing them more money than they thought it would, it has resulted in better care and has increased the income for primary care people to levels that compete with British specialist incomes.
JRossi’s hypothetical patient for Dr. Smith is a good example of this — his first response was there was no way that he would want to take on a complex patient likely to absorb a lot of time and pay poorly, and would give up his hospital privileges to avoid it. When I suggested an incentive system that would pay to keep that very sick patient out of the hospital, paying an incentive that was far less than the costs of using the hospital to manage the patient, his response was that he would have to “fight other doctors for the patient.”
I will have a bit more to say about primary care and finances on another occasion, but I do think that we need to think seriously and to try some different approaches to getting that done. Meanwhile, I would like to see any changes in primary care to be cost neutral, with the money coming from cuts for high paid specialties.
Maggie —
Re-reading your response, I want to be clear that I am not in any way suggesting that financial incentives be offered to highly paid specialists. I anticipate that the high paid specialties will see incomes decrease.
Should doctors like me move to Europe now?? is this the kind of medical system we encourage??? I still have some hope…
So, what if it turns out that the places with the low re-admission rates have longer hospital stays? Isn’t this just a judgement call then? VA hospital stays are very long, I would guess, compared with other hospitals.
Christopher George —
Actually, patients who had longer stays on initial admission were more likely to be re-admitted than those with shorter stays, according to the NEJM article by Jencks, Williams, and Coleman that is the basis of this discussion.
The most common causes of readmission? Our old friends congestive failure, pneumonia, chronic obstructive lung disease, and psychosis. Medical admits were three times as likely to be re-admitted than surgical admits, and among surgical admits congestive failure was the most frequent cause of re-admission.
We keep coming back to the question of how to handle very common illnesses effectively.
Christopher-
You write:
“VA hospital stays are very long, I would guess, compared with other hospitals.”
Christopher– Guesses are good; evidence is better.
The reserach shows that since Ken Kizer reformed the VA system in the 1990s, the length of hospital stays has been cut in half–they are shorter than in most hospitals.
Pat S.
I agree that highly-paid specialists don’t need pay hikes in the form of financial incentives to
persuade them to do their jobs well.
Regarding primary care physicians (PCPs). . . As I think about it . . . it strikes me that we should give all of them a 10% to 15% pay hike now, probably more later.
They are all underpaid and we really don’t have the tools to figure out which PCP’s are doing a better job. Their patient pools are too small, non-compliant patients skew result, and our tools for measuring qualtiy outocmes are still in their infancy.
I would rather give PCPs
incenives for: a) joining large multi-specialty organizations (where other doctors will be looking over their shoulders, and setting standards) and b) moving to places where they are most needed (rural areas, inner cities) where they are taking on poor, very complicated patients.
I am sure that is what the studies say. But I have worked in VA hospitals, and there were always a large number of patients who in-patients for social rather than medical reasons.
Do the VA hospital stays have the same regionality that other hospital stays do? If there is one culture which has been exported to an entire system it is the VA Hospital culture.
At our hospital last year we found about 30 unsuspected breast cancers with MR. That makes MR a lot more effective than a lot of things we do as a routine, like yearly physicals, PSA’s, ER back x-rays or brain CT scans in the ER.
I guess it comes down to who do we want to make these decisions. The bureaucratic record is very poor on this matter…DRGs, HMOs, pay for performance, bendectin, breast implants, CONs for CT scanners, tight glucose control for ICU patients, never events..etc. so central control people like to stress the potential improvement of perfect reform, not the dismal record of past failed reforms.
We will have to eventually say no to people, and what we say no to will be a political decision not a medical one, the way we are going. So get ready for a host of un-intended or unadvertised consequences.
I am all for evidence, but I don’t think reformers are really interested in evidence as much as they are in control. I say this as someone who believes that radical cuts in utilization are necessary in federal medicine to remain viable.
It is bad now, but after (presumably well intentioned)reform, it will be a lot worse.
Christopher–
The entire VA system underwent a radical change in the late 1990s.
Don’t know if you were there then. IF you were you
would know how efficient care has become.
A great many studies published in JAMA, NEJM, etc., comparing VA care to fee-for-service care outside the system found VA outcomes much better and a better value for the dollar than care outside the system.
And no, the VA hospitals don’t reflect tje regional differences that we see in fee-for-service medicine.
As for those 30 unsuspected breast cancers,
how many of them would have disappeared–or never spread– if not detected?
How many were in patients over 70 who would probably die of something else before the breast cancer killed them?
How many of those women had an unnecessary lumpectomy, mastectomy and radiation?
Finally, and most importantly, did your hospital take those 30 women through the entire “shared-decision-making” protocol? (There are international standards: as I’ve written in the past, shared-decision-making means giving the patient a video, a pamphlet explaining risks and benefits when deciding whether or not to have an MRI scan, and when deciding whether to have a lumpectomy or mastectomy if cancer that is spreading is discovered.
After viewing the video and reading the pamphlet at home, the patient comes back and has a long discussoin with the coach or doctor, expressing her prioritites while weighing benefits and risks.
If you’re detecting undetected breast cancers and treating women without taking them through this process, I am afraid that you are doing them a great disservice.
I am all for shared decision making. But I do this full time, and there are plenty of thorny issues to consider. It is very merky and new data appears all the time. Lots of people don’t see the same data the same way. I don’t know how realistic that really is.
Regarding Breast Cancer: Invasive cancer is dangerous…DCIS I agree is not worth the fabulous efforts we put into it. As I have pointed out before, surgery for DCIS has treated local recurrances but mortality is not improved. So, do I make the decision for you..do the reformers make the decision for everyone? Don’t you have any worry that this plan will blow up like so many other supposedly well meaning ideas. Is there never a point where second guessing, monitoring, regulating, credentialing goes too far? Doesn’t efficiency apply to reform at all?
Imagine..the VA works. I still can’t get my mind around that part..but whatever… It is interesting that the regional differences aren’t seen there.
I know it is hard for some to believe, but most doctor behavior is not primarily motivated by money. The doctors I see try to do right by the patient, as they see it, without spending too much time talking to lawyers. The reason that people like working at the Cleveland Clinic is that the place is designed around the practice of medicine. If you want to replicate that, you need to value doctors. This is not popular among the reform crowd. The typical hospital has a schizophrenic attitude toward its doctors..contemptuous of those they control and obsequious toward those who can send business their way.
At Partners, which by the way is the most expensive care in the world, the researchers and the policy wonks are the main event and actual medicine is a sideline. You can find better, but you can’t pay more is their motto. These are the well connected people that will make our national policy. Do as I pontificate, not as my institution does. Doesn’t it worry you at all that theirs is the most expensive system in the world?
I don’t know why doctor income gets so much more attention that the dozens of other players making a much better living than we do — inside or outside medicine. Try limiting everyone in healthcare to the income a specialist makes and tie that to a primary care doctors salary. It won’t be the doctors that are howling the loudest. At the real upper income group in healthcare, there are no practicing doctors.
Believe it or not, but the doctor is usually the only person looking out for the interests of the patient. This is not true when you talk to your contractor or lawyer or practically anyone.
Lowering fees has made it very difficult for many important specialties to stay in business, especially general surgery. After a certain point it is conterproductive.
Christopher thanks for your comments.
Responding to your most recent (April 15 post),you write:
“The typical hospital has a schizophrenic attitude toward its doctors:.contemptuous of those they control and obsequious toward those who can send business their way.”
I am afraid that this is true of many hospitals–not all, but certainly true of many.
“At Partners, which by the way is the most expensive care in the world, the researchers and the policy wonks are the main event and actual medicine is a sideline.”
I agree this is true of many academic medical centers. .
But I disagree when you write: “These are the well connected people that will make our national policy.”
No– this is not true. I do know who the Obama administration talks to, and it is people like Jack Wennberg and Elliot Fishe and Jim Weinstein at Dartmouth (White House budget director Peter Orszag often quotes them on the work they have done on over-treatment); people at hospitals like University of California, San Francisco (which I think of as “Dartmouth West”). Check out Bob Wachter’s blog– Wachter’s World. This is not the old guard of academic medicine.
Orszag reads HealthBeat (or at least did when he was head of CBO).
Google what he has written about healthcare and said in testimony in Congress (He didnt’ learn what he says from HealthBeat– he learned it by reading the Dartmouth Research–all of it–plus a great many articles in peer-reviewed medical journals.)
Another way to appreciate what Orszag and the White House knows:
Google my name and Orszag and read what I have written about what he has said. He understands the real problems as well as I do. And he doesn’t do healthcare full-time.)
You also write: “The doctors I see try to do right by the patient, as they see it, without spending too much time talking to lawyers. The reason that people like working at the Cleveland Clinic is that the place is designed around the practice of medicine. If you want to replicate that, you need to value doctors. This is not popular among the reform crowd.
I agree with the first part of this, but disagree about the “reform crowd.”
There are, of course, many differnt groups within the “reform crowd.”
But the group I identify with are reformers who have power and have had a great impact on how people with power in this administration think:
people like the DArtmouth researchers (Wennberg, Fisher, Weinstein, Welch, Woloshin, Schwartz) , Orszag, ZEke Emmnanuel, Don Berwick, Bob Wachter, Diane Meier, etc. etc. etc. (See the people I have quoted in my blog).
Responding to yoru Arpil 13 comment:
I don’t agree that people “need” more amenities in the past.
They see people on televions, in movies, int he cities and suburbs where they live with more amentiies, and say- I should have that too!
Reduce vast wealth at the top of the ladder, and expectations about what one “needs” to live well would fall–from the upper-class down through the middle-class. (What people think they “need” often has to do with keeping up with neighbors who, in turn, are striving to keep up with a brother-in-law who earns high sic figures– and is is trying to keep up with millionaire neighbors, who in turn are trying to keep up with . .
So many of the things we buy (and I have been guilty of this, particuarly with regard to shoes!) really aren’t things we need, just things that strike one’s fancy at the moment . . ,
And then they wind up sitting in a closet.