Did
you know that in the U.S. more people die each year from the
complications of surgery than die in car accidents? This is one of
many stunning facts that Atul Gawande reveals in his most recent
contribution to the New Yorker, “The Cost Conundrum.”
He
elaborates: “In recent years, we doctors have markedly increased the
number of operations we do. In 2006, doctors performed at least sixty
million surgical procedures, one for every five Americans. No other
country does anything like as many operations on its citizens. Are we
better off for it? No one knows for sure, but it seems highly unlikely.”
In Part I of
this post , I described what Gawande discovered when he visited McAllen
Texas, home to the most expensive health care in the world. First, he
asked, why is care in McAllen so costly? The answer: Volume. The
citizens of this poor Rio Grande town receive “more of everything”—more
diagnostic testing, more hospitalizations, more surgery, more home
care.
This is why Medicare spends roughly twice as much per
enrollee in McAllen and the surrounding area than in El Paso County,
eight hundred miles up the border, which has essentially the same
demographics. “Both counties have a population of roughly seven hundred
thousand, similar public-health statistics, and similar percentages of
non-English speakers, illegal immigrants, and the unemployed.” Here’s
the kicker: despite all of the extra medical attention, it turns out
that McAllen’s citizens are no healthier.
What drives
overtreatment in McAllen? Gawande had to do some digging to find out,
but ultimately, doctors in town gave him the answer: “[A] culture of
money.” Since the mid-nineties, more and more doctors in McAllen have
come to view medicine as a business, and patients as profit centers.
Over the years, that attitude has infected the medical community,
physicians confessed. Bad practice drove out good practice.
But
it doesn’t have to be this way, Gawande insists. In some communities
doctors are banding together to “fight for the soul of medicine.” They
are putting their patients first, and holding themselves “accountable”
for making sure that their patients are getting value for their health
care dollars. In most businesses it’s up to the customer to be
vigilant. “Caveat emptor” is the rule of the marketplace. But patients
are not customers shopping for lawn furniture. Eighty percent of our
health care dollars are spent on patients who are very sick, and not in
a position to haggle. I believe that most doctors still recognize that
medicine is a profession, not a business. They realize that it’s up to
them to ensure that their patients are receiving the best care
possible, without being exposed to the needless risks that accompany
overtreatment. The professional’s goal: to provide the right care to
the right patient at the right time. And when they do that, Gawande
observes, the quality of care goes up, and the cost goes down.
Accountable Care
Gawande
holds up the Mayo Clinic as an example: “Mayo’s . . . Medicare
spending is in the lowest fifteen per cent of the country—$6,688 per
enrollee in 2006, which is eight thousand dollars less than the figure
for McAllen.” As I have explained in a post entitled “What Makes the Mayo Clinic Different,”
it costs less when a patient is treated at Mayo than when a very
similar patient is treated at many other institutions because Mayo is
more efficient. The patient undergoes fewer tests, sees fewer
specialists and spends fewer days in the hospital.
Yet doctors
at Mayo do not rush through patient visits, Gawande reports. They spend
time with their patients; they talk to them, and they listen to them.
Since they are on salary, Mayo’s doctors feel no need to hurry. (Today,
self-employed doctors working in many small practices do have to work
harder, and see more patients, just to meet rising overhead. Large
multi-specialty practices like Mayo can take advantage of economies of
scale.)
Gawande describes visiting Mayo a couple of years ago:
“There was no churn—no shuttling patients in and out of rooms while the
doctor bounces from one to the other. I accompanied a colleague while
he saw patients. Most of the patients, like those in my clinic,
required about twenty minutes. But one patient had colon cancer and a
number of other complex issues, including heart disease. The physician
spent an hour with her, sorting things out. He phoned a cardiologist
with a question.
"I’ll be there,’ the cardiologist said.
"Fifteen
minutes later, he was,” Gawande recalls. “They mulled over everything
together. The cardiologist adjusted a medication, and said that no
further testing was needed. He cleared the patient for surgery, and the
operating room gave her a slot the next day.”
“The whole
interaction was astonishing to me,” Gawande admits. “Just having the
cardiologist pop down to see the patient with the surgeon would be
unimaginable at my hospital. The time required wouldn’t pay. The time
required just to organize the system wouldn’t pay.”
But doctors
at Mayo don’t focus on what will or won’t “pay.” The business office
worries about that. Physicians don’t even know how much payers are
billed for their various services. Mayo practices what many call
“patient-centered medicine.” The patient comes first–period. This
means that “the aim is to raise quality and to help doctors and other
staff members work as a team,” Gawande observes. Mayo is not aiming to
provide discounted medicine. “But, almost by happenstance, the result
has been lower costs.”
“’When doctors put their heads together in
a room, when they share expertise, you get more thinking and less
testing,’” Dennis Cortese, Mayo’s CEO, explains. "They arrive at a
diagnosis sooner, without relying on a string of MRIs.”
Some
argue that the Mayo Clinic represents a unique culture that just cannot
be replicated elsewhere. Gawande disagrees. He points to Grand
Junction, Colorado, one the least expensive health care markets in the
country. “Grand Junction is a community of a hundred and twenty
thousand that nonetheless has achieved some of Medicare’s highest
quality-of-care scores,” Gawande writes. “Michael Pramenko is a family
physician and a local medical leader there. Unlike doctors at the Mayo
Clinic, he told me, those in Grand Junction get piecework fees from
insurers. But years ago the doctors agreed among themselves to a system
that paid them a similar fee whether they saw Medicare, Medicaid, or
private-insurance patients, so that there would be little incentive to
cherry-pick patients.”
Pause and think about this. Medicaid
normally pays much lower fees than Medicare—and thus patients on
Medicaid have a much harder time finding doctors. The physicians in
Grand Junction decided to right that wrong themselves. This is another
way in which care in this town is like care at the Mayo Clinic. At
Mayo, physicians don’t know which of their patients are privately
insured, on Medicare, Medicaid or uninsured (Mayo provides a fair
amount of charity care). Physicians receive the same salary, whoever
the patient is. And patients receive the same care.
Gawande
reports that “physicians in Grand Junction also agreed, at the behest
of the main health plan in town, a [non-profit] H.M.O., to meet
regularly on small peer-review committees to go over their patient
charts together. They focused on rooting out problems like poor
prevention practices, unnecessary back operations, and unusual
hospital-complication rates. Problems went down. Quality went up. Then,
in 2004, the doctors’ group and the local H.M.O. jointly created a
regional information network—a community-wide electronic-record system
that shared office notes, test results, and hospital data for patients
across the area. Again, problems went down. Quality went up. And costs
ended up lower than just about anywhere else in the United States.”
This is what happens when, instead of competing, health care providers
collaborate.
Grand Junction’s medical community was not trying
to Xerox Mayo. “But,” Gwande reports, “like Mayo, it created what
Elliott Fisher, of Dartmouth, calls an accountable-care organization.
The leading doctors and the hospital system adopted measures to blunt
harmful financial incentives, and they took collective responsibility
for improving the sum total of patient care.
Gawande then goes on
to list other places that have taken the same approach: “the Geisinger
Health System, in Danville, Pennsylvania; the Marshfield Clinic, in
Marshfield, Wisconsin; Intermountain Healthcare, in Salt Lake City;
Kaiser Permanente, in Northern California.” All of them function on
similar principles,” he notes. “All are not-for-profit institutions.
And all have produced enviably higher quality and lower costs than the
average American town enjoys.”
“When you look across the spectrum
from Grand Junction to McAllen,” he concludes, “and the almost
threefold difference in the costs of care—you come to realize that we
are witnessing a battle for the soul of American medicine. Somewhere in
the United States at this moment, a patient with chest pain, or a
tumor, or a cough is seeing a doctor. And the damning question we have
to ask is whether the doctor is set up to meet the needs of the
patient, first and foremost, or to maximize revenue.”
Who Will “Take Charge”?
Gawande
acknowledges that the battle will not end soon. “Dramatic improvements
and savings will take at least a decade. But a choice must be made.
Whom do we want in charge of managing the full complexity of medical
care?” he asks. “We can turn to insurers (whether public or private),
which have proved repeatedly that they can’t do it. Or we can turn to
the local medical communities, which have proved that they can. But we
have to choose someone—because, in much of the country, no one is in
charge. And the result is the most wasteful and the least sustainable
health-care system in the world.”
Gawande is right that one of
the major problems in our health care system is that we run it as an
enormous cottage industry: “No one is in charge.” But to suggest that
insurers have “proved repeatedly that they can’t manage care while
local medical communities have proved that they can” contradicts what
he has just told us. All of the accountable care organizations that he
lists are affiliated with non-profit insurers—non profit insurers have
shown that they can achieve dramatic improvement in care along with
savings. Very few physician groups have done this on their own. They
need a payer who helps organize the framework for accountable medicine.
This
isn’t to say that physicians don’t need to be in the vanguard of
reform. If they are not personally committed to collaborative,
efficient care, the payer cannot make the difference. Financial carrots
and sticks alone will not restore the “soul” of medicine. But a payer
can realign incentives to encourage best practice, and help gather the
evidence needed to know which treatments and delivery systems work best
for which patients.
Non-profit insurers are not the only ones who
have succeeded in this area. As Gawande argued in an earlier New Yorker
piece, one of the best health care systems in the country is run by the
government: the Veterans’ Administration hospitals boast “low costs,
one of the nation’s best technology systems for health care, and
quality that (despite what you’ve heard), has, in recent years, come to
exceed the private sector’s on numerous measures.”
Why It Matters Who Writes the Checks
Yet
in this newest New Yorker article, Gawande argues that it doesn’t
matter who pays for health care: “Activists and policymakers spend an
inordinate amount of time arguing about whether the solution to high
medical costs is to have government or private insurance companies
write the checks . . . ” he writes. “These arguments miss the main
issue. When it comes to making care better and cheaper, changing who
pays the doctor makes no difference.”In other words, he is saying, it
just isn’t important whether we have a public-sector insurance plan
competing with private sector insurers.
But “who writes the
checks” determines, in a very real way, who is “in charge.” This is why
we need public-sector insurer standards. As doctors know, all too well,
in most cases, the payer sets the rules. And for-profit insurers set
the rules with their eye on one target; profits for shareholders. This
is not because they are evil. It is because they are for-profit
corporations, and by law, are required to put their shareholders’
interests first. They are not supposed to cheat their customers, but if
they can persuade their customers to pay more for less coverage, so be
it. They are not expected to find the very best doctors and hospitals
–not if those doctors and hospitals are, from the insurers’ point of
view, too expensive.
“Too expensive” may mean that health care
providers are taking the long view, and pouring money and resources
into preventive care and chronic disease management. But few for-profit
insurance companies take the long view; their shareholders are
interested in profit growth next quarter. Many insurers pay lip service
to chronic disease management, but they are not willing to cut their
profits to make it happen. Few, if any, have made major investments in
studying how to manage chronic diseases, just as few, if any have
financed health care IT for their providers. When it comes to taking
the long view, these insurers know that in four or five years, the
customer will probably have switched to a new job and a new insurer.
Let that insurer worry about whether his diabetes has been managed. By
contrast, patients stick with the best non-profits for the long haul,
and those non-profits put an emphasis on preventive care.
Finally,
private insurers don’t try to protect patients against overtreatment.
If customers are willing to pay more for policies that cover back
surgeries, for-profit insurers will sell them, evenif those back surgeries
provide no benefit.
In a word, for-profit insurers are not held
accountable for the quality of care patients receive, or the value
they receive for their premium dollars. In accountable care
organizations, on the other hand, physicians hold themselves
accountable—and the non-profit payer helps organize a system that makes
that happen, by removing the perverse financial incentives that
encourage over-treatment. At Mayo and Geisinger, doctors are on salary,
and, like the VA, they use evidence-based guidelines and drug
formularies to avoid unnecessarily aggressive and potentially risky
treatments.
Gawande argues that doctors must take responsibility
for insuring that patients are receiving effective, efficient care, and
on this point he is absolutely right. But doctors need someone to
help. Non-profit insurers have set up successful accountable care
organizations, and the public sector plan that some call Medicare E
(for everyone) could follow their lead. Already, Medicare reformers are
studying how accountable care works in an ongoing Medicare Physician
Group Practice demonstration.
Medicare Studies “Accountable Care”
Dartmouth’s
Dr. Elliott Fisher has been in the vanguard of designing ideas for
Medicare reform—including “accountable care organizations.” (ACOs) As
he recently explained on the Robert Wood Johnson HealthCare blog ,
ACOs “are not envisioned as an approach to reform that depends upon the
heavy hand of the government payer to compress costs through price
controls.” On the contrary, they are intended to set a performance
framework within which providers have maximum flexibility to improve
quality and reduce overall costs by moving away from the traditional
focus on specific reimbursed services. Many important aspects of
innovative care that are not generally reimbursed today, like using
nurses and electronic systems to help coordinate care, or even
physician time to educate a patient, get new financial support in ACOs
if they lead to better health and cost saving.
“At our recent
Brookings-Dartmouth conference,” Fisher continued, “we learned from
leaders of systems participating in the current Medicare Physician
Group Practice demonstration that implementing an ACO-based shared
savings payment framework can lead to a virtuous cycle of quality
improvement and cost reduction. One of the health systems in the
Medicare demonstration also had a shared savings payment model in place
[that it extended to] its under 65 (non-Medicare) population. They
responded to the opportunity by investing in primary care and improving
care coordination. Importantly, they reduced hospital admissions and
then closed several hospital wards – achieving real and sustained
savings.”
As the payer, Medicare can do what for-profit insurers
rarely do—invest in pilot demonstrations so that, together with
doctors, they can learn how to rein in spending and lift quality.
For-profit insurers are much less interested in reducing total spending
because this would mean reducing their total revenues, and profits.
Like others in the for-profit health care industry, these insurers want
healthcare to be a growth industry. If the amount of money in the game
shrinks, so does their business.
Industry representatives may talk about curbing health care inflation—as they have recently– but Commonwealth Fund President Karen Davis points out,
as we shape plans for reform, “it will be important to remember that
voluntary efforts [by the health care industry] have failed in the
past. For example, the hospital industry’s “voluntary effort” response
to President Jimmy Carter’s cost containment proposal dissipated within
three years of its initial roll-out in 1978 and had no lasting impact
on rising hospital expenditures.”
The 28-page letter that industry representatives sent to President Obama
yesterday only confirms Davis’ skepticism. While it purports to show
how the industry will do its part to help the president shave $2
trillion from health care spending over the next ten years, in fact
most of the letter lays out proposals for how the government should
invest in improving care. As Bob Laszewski notes on HealthCare Policy
and Marketplace Review, “In the end, they have not once offered to put
their money where their mouths are!”
Davis emphasizes the need for a
public-sector insurance plan that could “foster the growth of
integrated delivery systems with accountability for prudent use of
resources.” The public plan would compete with private plans, and “they
could learn from each other during this process,” Davis suggests. “The
consumer would benefit.” Such a plan should not be hamstrung with rules
designed simply to make it easier for private sector plans to compete.
All regulations should be centered on what is best for patients—and
taxpayers.
Medicare E should be allowed to set a high bar for private
insurers; I believe that many non-profits would be up to the
challenge. If for-profits cannot provide equally affordable effective
care, then ultimately, we just can’t afford them in our health care
system. President Obama’s plan would let the market decide.
Steve Ballmer: Only Government Has the Size and Clout to Organize Medicine
What
is interesting is that Gawande’s own story suggests that government
should be involved. “McAllen and other cities like it have to be weaned
away from their untenably fragmented, quantity-driven systems of health
care, step by step,” he writes. ‘ And that will mean rewarding doctors
and hospitals if they band together to form Grand Junction-like
accountable-care organizations . Under one approach, insurers—whether
public or private—would allow clinicians who formed such organizations
and met quality goals to keep half the savings they generate.
Government could also shift regulatory burdens, and even malpractice
liability, from the doctors to the organization.” For-profit insurers
cannot re-write the rules for malpractice liability. And it is hard to
imagine many of them agreeing to share half of savings with providers.
Medicare reformers, on the other hand, are already talking about
splitting savings with providers.
“This will by necessity be
an experiment,” Gawande writes. “ We will need to do in-depth research
on what makes the best systems successful—the peer-review committees?
recruiting more primary-care doctors and nurses? putting doctors on
salary?—and disseminate what we learn.” He acknowledges the role of
government: Congress has provided vital funding for research that
compares the effectiveness of different treatments, and this should
help reduce uncertainty about which treatments are best. But we also
need to fund research that compares the effectiveness of different
systems of care—to reduce our uncertainty about which systems work best
for communities. These are empirical, not ideological, questions.
“And
we would do well to form a national institute for health-care delivery,
bringing together clinicians, hospitals, insurers, employers, and
citizens to assess, regularly, the quality and the cost of our care,
review the strategies that produce good results, and make clear
recommendations for local systems.” Again , Gawande seems to be
underlining the need for Washington’s help in solving the problems of
health-care delivery.
Who has the size, and the clout to do all
of this? The federal government. I am reminded of a recent
conversation with a friend who had asked Microsoft CEO Steve Ballmer
why Microsoft was not more involved in developing heathcare IT. “We’re
waiting for the government to set standards,” Ballmer replied.
Microsoft itself “set standards” when it developed Windows. “But
health IT is too big, too important” my friend explained. “Even
Microsoft feels that only government can do it.”
Dartmouth’s Jack
Wennberg often points out that what the U.S. needs is medicine that is
truly “organized”– around the best interests of the patient. We cannot
count on grassroot groups of physicians to spring up, spontaneously,
and persuade their colleagues to reverse the cultural trends of the
past 30 years.
As Gawande warns, “In the war over the culture of
medicine—the war over whether our country’s anchor model will be Mayo
or McAllen—the Mayo model is losing. In the sharpest economic downturn
that our health system has faced in half a century, many people in
medicine don’t see why they should do the hard work of organizing
themselvs in ways that reduce waste and improve quality if it means
sacrificing revenue.
“In El Paso,” he continues, “ the for-profit
health-care executive told me, a few leading physicians recently
followed McAllen’s lead and opened their own centers for surgery and
imaging. When I was in Tulsa a few months ago, a fellow-surgeon
explained how he had made up for lost revenue by shifting his
operations for well-insured patients to a specialty hospital that he
partially owned while keeping his poor and uninsured patients at a
nonprofit hospital in town. Even in Grand Junction, Michael Pramenko
told me, some of the doctors are beginning to complain about ‘leaving
money on the table.’”
“As America struggles to extend health-care
coverage while curbing health-care costs, we face a decision that is
more important than whether we have a public-insurance option, more
important than whether we will have a single-payer system in the long
run or a mixture of public and private insurance, as we do now. The
decision is whether we are going to reward the leaders who are trying
to build a new generation of Mayos and Grand Junctions. If we don’t,
McAllen won’t be an outlier. It will be our future.”
I would
argue that, unless we have a public-insurance option that integreates
what non-profit insurers have learned about accountable care,
for-profit insurers will continue to reward waste and raise premiums,
just as they have in the past. Yes, physicians have to be on the front
lines of the accountable care revolution. But we cannot expect them to
do this by themselves. They are not organized. The many private sector
physicians who understand what is at stake need a good government, to
work with them and “reward them for trying to build a new generation
of Mayos and Grand Junctions.”
Today, we have an intelligent
government; leaders in Washington truly understand what Dr. Gawande is
saying. In the past he has been asked to testify before Congress. Thursday, White House Budget director Peter Orszag wrote about Gawande’s latest piece on his blog.
Physicians should seize the moment and take part in whatever pilot
projects Medicare (or non-profits) offer that aim at putting patients
ahead of dollars. Understand that some of these experiments will fail.
But if Gawande is right, over ten years we should be within sight of
the goal—assuming that physicians, the best non-profit payers, and
government, join forces in that war for the soul of medicine.
I continue to be a big fan of government-managed health care. How this gets funded seems secondary as the examples of other countries illustrate.
There is one danger that liberals need to address and this is regulatory capture. This has been a real problem with many agencies over the past several decades, in the most outrageous examples we saw a revolving door between the CEO’s of the regulated industries and the agency heads.
Or, there is the example of Thatcher whose opposition to the NHS led to a starvation of funds from which it has never fully recovered.
It is clear that there are ways to prevent this, SS for all the attacks on its benefit schedule, has remained mostly unaffected. With healthcare the situation will be more fraught, there will need to be many more rules created and the possibilities for mischief much greater.
I don’t have a solution, but I don’t think we can wait until a specific plan has become the only option to begin to discuss this. Perhaps a non-governmental body similar to the Federal Reserve (although not run by the industry it is supposed to supervise) might work.
Whatever the solution, it won’t happen if the issue isn’t raised now.
Excellent discussion, Maggie. To me, everything flows from first principles. If medicine is seen as just another profit-driven endeavor, then everything will conspire to figure out ways to maximize that profit. On the other hand, if medicine is seen as a social good, then the goal becomes figuring out the best way to organize and deliver that social good. That is the struggle for the soul of medicine.
The Dartmouth Atlas of Health Study has demonstrated tremendous variations in quality and cost of care throughout the country. Even hospitals in the same city can have very different health statistics. Unnecessary surgeries is a symptom of our medical culture of excess. Excessive and unneeded medical interventions harm patients and cost money. The public has been taught by doctors for several generations that more medicine means better care. It may take another generation for doctors to teach their patients that less medicine means more healing. http://www.MDWhistleblower.blogspot.com
If we continue to keep in place the capitalistic healthcare system of the U.S. then everyone will go broke seeking healthcare. The following story illustrates this.
http://rxvette.blogspot.com/2009/05/healthcare-reform-touches-home.html
Maggie:
Standing ovation, or Colbert “tip of that hat” for Gawande’s continued excellent exploration as to the root nature of the healthcare dilemma; he nails it in “the Healthcare Cost Conundrum”.
And what better visual to frame the debate, and intrinsic value proposition, than a “Mc Allen or Mayo – who you gonna choose offer?”
I posted this on twitter today: “absent healthcare cost re-engineering, health reform = a head on collision of two garbage trucks, aka ‘single payor’ v. ‘patient’s choice act’.”
@2healthguru
There seems to be progress on my concern about oversight of medical best practices.
This from Sen. Jay Rockefeller.
“On May 20, 2009, Senator Rockefeller introduced the Medicare Payment Advisory Commission (MedPAC) Reform Act of 2009 (S.1110), which would make MedPAC an executive branch agency and provide MedPAC with new authority to implement Medicare payment policy.
In fact, S.1110 would rename MedPAC as the Medicare Payment and Access Commission and give MedPAC the authority to implement its recommendations for Medicare provider payment policies. According to a related Press Release, Senator Rockefeller believes that S.1110 would help move Medicare payment policies away from the influence of special interests. ”
The full announcement is here:
http://medicareupdate.typepad.com/medicare_update/2009/05/medpacreformact2009.html
Excellent discussion. In the interest of full disclosure, I work with the Mayo Clinic Health Policy Center.
While coordinated care and creating value for patients are the foundation of Mayo Clinic, the ability to continue to provide this kind of care will errode if the payment system is not changed. As the Dartmouth Atlas, and Dr. Gawande, point out, the providers who currently provide the worst care at the highest cost are reimbursed more under Medicare than providers who provide efficient care with better outcomes. If Medicare alone changed the payment equation to pay more for better outcomes, better safety and better service for a lower cost over time, and less to providers that demonstrate poor outcomes at high cost, health care expenditures would go down. And, private insurers would follow suit.
There must be financial incentives in the system to reward providers who “do the right thing.”
Changing the Medicare reimbursement formula to pay for value is one small step, but an important one.
Learn more about the Mayo Clinic Health Policy Center at: http://www.mayoclinic.org/healthpolicycenter .
for Jane Jacobs– but wouldn’t Mayo and other similar efficient operations make out like bandits (you should pardon the politically incorrect phrase) in Medicare Advantage. That was the initial idea behind capitating HMOs. Didn’t work the first time because payment was deemed too low, but that certainly isn’t true now. even in the unlikely event it was dropped to 100% of average, seems like mayo-like institutions should thrive. what am I missing?
Jim Jaffe —
I think your observation is right as to the advantages that Mayo and other providers of highly cost effective excellent care would gain from this approach, and by contrast, the disadvantages for inefficient providers.
That is, in fact, the point. By rewarding the effective providers, the system will put pressure on ineffective and expensive providers to wake up and reform their own systems. The system of financial payments will be used to encourage responsible, not irresponsible, management standards.
Thirty years of Dartmouth Data has shown that merely knowing what works and what doesn’t is not enough. As the old joke about the farmer and the mule says, “sometimes you just have to get their attention.”
A great thread–
I’ll weigh in tomorrow.
Today I was writing all day about abortion and Obmama’s suppport for Rockefeeler’s bill.
(For thos who might be interested in teh aboriton post—- see www. politico.com and then click on Arena. I linked Naomia’s posts on aortion, quoting her, and adding some of my thoughts about the politics of it all.
Then, this afternoon, I began writing a post about the news about Obama, MedPac, and the president’s leter to Kennedy & Baucus today.
See the post that went up about an hour ago. Another longer post on this subject should go up tonight or tomorrow morning.
This is indeed shocking to know that still in this age of medical advancement people die from the complications of surgery. I wonder whether we are lacking in competency or infrastructure.
Maggie-
Everything written here makes enormous sense except for your argument that for-profit insurers have no interest in limiting costs because their profits are proportional to their volume of revenues. This would only make sense if they could freely increase premiums to match rapidly escalating costs without fear of competition. However the one place where there is considerable price competition in the health care system is in premiums. Even the most virulent critics of for-profit health insurance have never accused companies of collusion in raising premiums. For-profit insurers may have failed to do much to improve quality and efficiency but it isn’t because of their economic interest, at least not in the simplistic way you describe it.
The most important point in Maggie’s post is this line: “All of the accountable care organizations that he lists are affiliated with non-profit insurers.”
Kaiser, Geisinger, Mayo, etc. work so well because they integrate finance and delivery in a single organization. By being at risk for the cost of care in addition to the provision of care, these organizations no longer have an incentive to practice piecemeal medicine that includes lots of specialist visits, lots of tests and procedures, and needless costs.
As it is unlikely that this model will spread quickly throughout the country (after all, it hasn’t yet), we have to do a better job of incenting the behaviors we want through the payment system.
Physicians, like most everyone else, respond to financial incentives. As long as the incentives are for more volume, and physicians largely control the demand for services, we’ll continue to get more tests, more procedures, and more costs.
Private insurers have rarely been at the forefront of payment reform. So Medicare, as usual, will have to lead the way. Although this has been evident for decades, the political will to pull it off hasn’t been there. Until now, perhaps.
Let’s not lose this opportunity. We can create the high quality, cost effective delivery system we want if we pay the providers to give it to us (and stop paying them for what we don’t want – high volume and high cost, with little concern for quality).
Marc Stone–
I understand how private insurers think because I covered the industry when I was at Barron’s. (See quotes at the end of this comment from the Wall Street Journal. They are eye-opening, but in keeping with everything I learned at Barron’s)
Depending on the size and clout of the insurer they can “freely increase premiums” and they have.
Ask employers.
Consolidation has given insurers greater power.
Weiss Ratsings, a frim that assesses the financial strength of both banks and insurance companies wrote this in 2003: “Profitability continues to improve as insurers raise premiums and restructure policies to reduce costs . . .While this bodes well for the industry’s overall health, rising premiums have forced many consumers to select more restrictive health plans or opt not to purchase insurance entirely.”
Consumers buying individual policies and small companies have had little power to push back against rising premiums. (Larger companies self-insure. )
In 2005, Wellpoint told investors it expected profits to continue to levitate by 15 percent a year, on average, for the next 5 years. That same week WellPOint announced its plan to boost average premiums by 16.7 percent in 2006.
(In other countries, government regulation would prevent such sharp hikes in premiums. We don’t have govt regulation of for-profit insurers, and the market has Not worked to keep premiums at affordable levels.)
Insurers have been raising premiums at will. It is only recently, as more and more employers drop health benefits, that insurers have begun to hit a wall. Many are now in trouble financially. (See the stocks).
In the 1990s, for a few years, insurers were trying to limit costs and “manage care.”
By 1999, the backlash against managed care convinced them to loosen the purse-strings, say “yes” to most things the FDA approved, and pass the cost along in the form of higher premiums.
They even paid fraudulent claims. A Wall STreet Journal story quotes Robert Stuckey, the former medical director of a unit at one of NME’s hospitals in New Jersey telling government investigators that “when he informed Prudential Insurance Company of possible insurance fruad, company executives merely laughed, saying that for them large bills meant large premiums and big bonuses.”
The same story quotes Louis Parisi, director of the New Jersey insurance fraud division saying “It appears that health insurance companies, with some exceptions, are content to pass teh cost associated with fruad alon gto their customers in the form of higher premiums.”
1. It should surprise no one that increased medical spending does not show improved results. This is the law of Diminishing Return. Hopefully, the most effective things are being performed everywhere, and the ineffective procedures just run up the bill with little if any benefit. It would be much worse for us, economically, if spending three times as much money got better results.
2. The Mayo Clinic and the Cleveland Clinic have very large, very well insured patients in addition to their Medicare patients.( Good payer mix.) This really shouldn’t effect the amount spent on Medicare patients that much, but it does cover the enormous fixed costs making it easier to provide the incremental patient with a lower cost. Always assuming that you want to, which is not always, regrettably, the case.
3. Infleuence peddling, enurement, strong arming is criminal. Obviously. Getting the government involved doesn’t always solve the problem. In several New England states, Certificate of Need organizations gave preferencial treatment to politician insiders who became fabulously rich.
4. Adverse selection is going to to be a very difficult nut to crack. Because patients that are poor and sick do worse, we need to reward treating these patients. We need to reward adherance to a best practice guideline primarily and to good results secondarily. If the guideline is correct, one should follow the other.
5. If you really want specialists to do less surgery, you can’t reduce volume and pay them less for each procedure as well. Salary or fee for service.
6. Malpractice savings rebated to the medical group? Is this another bad food/small portions momment? I thought the dogma held that malpractice was not a component of overutilization.
7. Guidelines hopefully coming for the medicial effectiveness researsh will be very helpful. Especially, if there are a number of tiers..standard, extra-compulsive, and downright wasteful. The standard practice would come with tort protection in a perfect (or an enlightened European)world, but would be a dead letter here.
8. As you have pointed out elsewhere, many organizations that would employ doctors have no real interest in controling costs. Some are simply ‘money driven’.
“Kaiser, Geisinger, Mayo, etc. work so well because they integrate finance and delivery in a single organization.”
Not true.
Although Mayo does have contract arrangements with some companies to provide executive health care for them, Mayo is almost entirely a fee for service provider. It collects from insurance companies, Medicare, and Medicaid just like any other provider, albeit with a great deal of power to negotiate with private insurers. Although in its home state insurance regulations mean that it deals mostly with non-profit insurers, it deals with many for -profit insurers when it accepts patients from other states.
Kaiser is an HMO, of course, and as such does integrate insurance and providing health care services in a single entity.
I have the impression that Geisenger is a multi-specialty clinic and health care system much like Mayo, and is also predominantly fee for service.
In fact, one of the most interesting things about the Dartmouth data is that they demonstrate that the ability to provide excellent health care efficiently is independent of the underlying model. Kaiser and Group Health Puget Sound are HMO’s, the VA is a wholly owned government health care system, Mayo and Marshfield are fee for service providers. And while all of these organization are non-profits that pay doctors either straight salary or salary plus incentives, the Dartmouth data show that private practice groups working in the upper Midwest in the shadow of Mayo and other large systems do operate with great efficiency as well — IMO at least partly because the Mayo model has had such a strong influence in the area, both because of its role as a training center and because of its role in setting the standards for practice in the area.
Patrick, Christopher, Sheldon, Marc, Pat S. (2nd comment), Jim, Jane, Gregg, Michael, Chris, Robert (2nd comment.)
Thanks for your comments.
This is a very good thread.
Patrick I didn’t mean to put Mayo in that list–of course, it isn’t an insurer.
But Geisinger is an insurer, though it also treats patients who have other insurance. (On Geisinger as insurer see http://www.thehealthplan.com/
And while Mayo charges fee-for-service, its doctors are on salary. That’s the point. Fee for service leads to overtreatment when doctors are paid more when they do more.
In general, care in Minnesota is more efficient, in part because of Mayo. But there’s a larger storoy here. From the civil war to WW II Minnesota had a history of establishing “cooperatives”” Grange cooperatives, township mutual fire insurance companies, cooperative creameries, Farmers’ Alliance co-ops, crossroads creamery stores, independent farmers’ elevators, township telephone companies, Finnish cooperative stores, and rural electric co-ops.”
See “Cooperative Commonwealth: Co-ops in Rural Minnesota.”
The culture of Minnesota was grounded in a collective rather than an individual point of view. This carried over into medicine and helps explain why small practices are as efficient as they are. My guess is that doctors in these practices consult with each other.
But Jack Wennberg and the others at Dartmouth have come to the conclusion that the delivery system does matter. They point out that, throughout the nation, you consistently find the best care multispecialty centers where doctors collaborate with each other–and are not paid fee-for service
This doesn’t mean that doctors in small practices cannot provide good care. But it is harder. They have to make a real effort to reach out to other small practices and work together–as they have in Grand Junction.
These days, no single doctor–or small group– can know everything they need to know. And with so many patients suffering from 3 to 5 chronic diseases, and seeing 3 to 5 different doctors, those doctors need to know what the others are doing.
In a place like Manhattan, they often don’t. I can’t tell you how many times I, my husband, or my daughter have gone for an appointment only to find that the radiologist didn’t send the x-ray he was supposed to send, or a second doctor hasn’t returned the first doctors calls and so she still doesn’t know x, y, or z.
One of my sources –a doctor at Kaiser in California– told me about his elderly father, who sees 7 or 8 specialists in N.Y. In an effort to co-ordinate his care, his son calls these doctors himself, only to discover that they never talk to each other, and have no idea what medications the others have prescribed for his dad.
His father was suffering from deep muscle pain for quite a while, and not one of the doctors had suggested that this might be caused by the cholesterol-lowering drug that he was taking.
His son suggested he go off the drug; the deep muscle pain went away.
Finally, from a practical point of view, a small practice is a very expensive way to practice medicine, except in rural areas where the overhead is much lower.
Large multi-specialty centers enjoy economies of scale that lower administrative costs and make investments in health care IT much more practical.
Christopher–
I agree with many of your points.
But regarding patient mix at the Mayo clinic: Mayo seems many of the low-income immigrants who have come to Minneosta from Asia and elsehwere. (Religious groups in Minnesota have welcomed these immigrants, helping them find jobs etc. So the state has become a magnet.)
One doctor who practiced at Mayo and also practiced at Columbia-Presbyterian in upper Manhattan (which treats a large number of minorities) told me that he saw an equal number of low-income patients at the two medical centers.
Researhers who specialize in measuring quality generally agree that we need to look at outcomes–and that as long as the group of patients is large enough, it is perfectly possible to adjust for risk (i.e. to adjust for the fact that some pools of patients include many more low-income patients who, on average, are always sicker.
All of the Dartmouth reserach adjusts for race, sex and the underlying health of the population. They’ve been doing this for more than two decades and have gotten very good at it.
Sheldon–
You’re right. When you ” integrate finance and delivery in a single organization” the results can be oustanding.
And we do need to pay for quality, not quantity.
For-profit insurers have done little to reward quality. They focus on “efficiency” only in the sense that they give higher ratings to doctors who submit lower bills, but they don’t examine whether these doctors are providing high quality efficient care, or whether they are simply skimping on patient care.
But some non-profits private insurers have done a good job, in many cases, of actually looking at quality. So while Medicare will lead the way, it can learn from some of the non-profits.
Marc– I’ve replied to you above.
Pat S.– Yes, we “have to get their attention” and financial carrots and sticks will do that. But doctors also will have to have the will to change . . .
Jim–
Mayo isn’t interested in gouging Medicare. The advantage insurers insist on being paid more than Medicare would spend providing the same services.
Mayo accepts Medicare’s regular payments, and probably makes a profit on them–because it is efficient.
MedPac (the Medicare Payment Advisory Commission) points out that many hospitals make a
profit on Medicare’s payments.
Recently, I met the CEO of the Henry Ford Medical Center in Detroit. He told me that they make a profit on Medicare’s payments.
MedPac notes that for-profit insurers generally pay hospitals more than Medicare–and that in many cases these insurers are simply rewarding hospitals for inefficency.
The first time the governmetn tried to hand Medicare business over to private insurers they paid regular Medicare rates. The notion that this “wasn’t enough money” is false.
Peugot Sound, among others, did perfectly well, and never dropped the program. Other insurers couldn’t hack it because they didn’t focus on quality. As Mayo has shown, if you put quality first, and concentrate on
providing collaborative patient-centerd care, costs fall.
For-profit insurers focus first on costs– . . .
Jane–
You are absolutely right. Medicare shouldn’t reward inefficiency–it shoudl pay for value. This is why President Obama wants to put MedPac in charge of Medicare. MedPac understand this perfectly.
Robert–
Yes, as I say in my post on MedPac on Steroids, this is the best news yet.
My only concern is that some in Congres will want to replace the people who are currently on the MedPac commission with
people who have vested interests . . I very much hope that the president will ask Congress to confirmi the people who are now on the advisory panel. They have done excellent work adn have managed to stay above the political fray . . .
Gregg– Yes, McAllen vs. Mayo does frame the issue very well.
Michael–
Yes the notion that “more” is always better is grounded in our culture of excess.
Both corporate America and Wall STreet became hooked on the idea of growth–that every quarter revenues and profits should grow higher–in the 1980s and that put us on a path that led directly to the current economic collapse.
The notion that every company had to constantly grow –or die– led to corruption, fraud and short-sighted management.
CEOs began looking at things in terms of what they could do to jack profits up the next quarter, rather than what they could do to make the company better over the long term.
Warren Buffett has been pointing this out for a long time.
Chris–
Yes, it is all about first principles. IF you begin with the recognition that medicine is a social good, not a business, then you concentrate on the quality of care–and costs automatically begin to come down because more efficient care is also better care for the patient.
Robert–
I totally agree. And this is why Obama is endorsing Rockefeller’s plan to put MedPac in charge of Medicare. The rules MedPac makes for Medicare would become the rules of the game for everyone–private insurers as well as a public-insurance option.
A lot depends on who picks the members of the MedPac commission and how they are confirmed.
Up until now, the comptroller-general has picked the people for the MedPac commission, and it seems that the comptrolelr-general’s office is somehow fairly insulated from Washington politics-or maybe it’s just ignored.
Most Cognressmen have probably never read MedPac’s reports. But people now in the White House had.
Anyway, MedPac is widely seen as apolitical. To keep it that way, we shoudl start with the people now on the comission, and the White House (in this case, Zeke Emanuel and Obama) need to do whatever it takes to get Congress to confirm them.
Then I would suggest getting them out of town.
I’m serious.Here, I would put to FASB –the Financial Accounting Standards Board that is charged with setting accoutnign standards for U.S. corporations.
FASB is located in Norwalk Connecticut. The accoutnants who sit on the board are often called “the gnomes of Norwalk)
FASB has stood up to Congress –with backing from people like Warren Buffet–on very sensitive issues like the stock options corporations give to CEOs. The corporatoins didn’t want to admit how much these options are worth; FASB insisted that they must.
If MedPac were located a good distance from DC that would help insulate it from lobbyists and politicians.
Maggie —
Having been both in private practice and group settings, I agree with you. Groups are better able to form a culture that leads to more efficient care than private practice, especially in moving into areas where efficiency is not the norm. The example of Mayo Scottsdale is a good one.
Groups have an advantage for delivering care because of the interaction between providers within the group, both structured and unstructured, and because of the culture of cooperation.
Unfortunately, not all groups are created equal. I have heard stories about some groups outside the Midwest that do not seem to follow the pattern pioneered by Mayo and adopted at so many other fine places. The Dartmouth Data show that not all groups and not all HMO’s are able to attain the same level of success. In fact, in some cases geographic divisions of systems that perform very well on their home turf do much less well elsewhere. Some of the Kaiser divisions outside the Bay Area and Oregon are examples.
Private practice tends to succeed in approaching the success of the best groups to the extent that they behave like groups. I have worked in private practice settings where there was a great deal of cooperation and interaction, to the benefit of patients, but also have been in settings where the feeling was every man for himself.
One of the big advantages of groups is that they do income shifting to benefit providers whose work is not as well compensated or compensated at all. I worked in a private setting where there was an infectious disease specialist. He told me that at least 60% of his work was uncompensated — informal “curbside” consults about drug choices and diagnostic considerations without ever sending the patients to him for a formal consult. He did it because he was a great guy, but his income certainly suffered. In group practice, the ID specialists and other people in similar situations got an extra bump on their salary because the group realized that they were making contributions that never led to billable encounters.
I would say that your observations about Minnesota are largely correct, partly due to cultural history in the state, and partly due to the fact that so many doctors in the state train at Mayo and bring the culture with them when they leave. Also, I will say that most doctors that I know in MN have very little awareness of which patients and procedures are most lucrative and which are not.
I was not impuning the charitable intentions of the Mayo. Though, in Cleveland, (unfairly in my view) the CC is not does not always get the best local notice. Cleveland has an underclass of poverty that rural MN does not.(No one in Rochester, MN ever gets shot at 3am, either, for that matter.) Kings County (is it still called that?) has no paying patients, to a first approximation. That is a tough nut to crack.
I would echo your thoughts, and also Pat’s, about culture which was inchoate in my mind as well. Cleveland has a medical tradition which affects all the practices there. In my experience, a much better medical enviornment than Boston. Baltimore, also excellent, but DC predatory. Some insects sing, some don’t.
Putting the guidelines ahead of the results does a few things:
1. Don’t penalize the follower for unforseen problems with the guidelines.. unknown variables, etc.
2. The data collected from the guideline followers can be used to compare various guidelines without the usual overhead of a clinical study.
3. In spite of decades of experience, I still bet all the as-yet-to-be-discovered variables tend to degrade the poverty tranche outcomes.
4. I don’t think I am alone, regarding point #3.
Christopher & Pat
Thanks for your comments.
Christopher you note that “the Cleveland clinic does not always get the best local notice.”
You’ll be interested to know that last week, a reporter from Cleveland interviewed me about the Dartmouth research.
Dartmouth gives the Cleveland Clinic high marks for providing “value” for the healthcare dollar– very good outcomes at a lower cost than at many places because CC is more efficient.
This reporter’s editor didn’t believe it. He insisted that the Cleveland Clinic was more expensive than most hospitals–that it didn’t give better “value.”
She came to me asking “what should I say to my editor.”
I explained that her editor was probably looking at what CC charges for a particular procedure or DRG– not the total bill.
Because patients at CC spend fewer days in hospital, undergoes fewer tests before diagnosis, probably suffer fewer complications, etc., the total bill woudl be lower, even if CC charges more for a particular service.
Dartmouth has tables showing that indeed it takes fewer doctors to care for patients at CC than at many other hospitals.
But I wonder why local opinion of CC isn’t better.
Perhaps (and I have no way of knowing) there is a culture of arrogance at CC that turns people off? It could be that they give very good care, but not in a caring way??
Or perhaps it is a hospital that makes poor people feel unwelcome?
There are hospitals in Manhattan where the poor know they are welcome–and hospitals where they are not. The same is true of doctors’ offices.
Look around the waiting room of a doctors’ office–or the ER- and you’ll see the difference.
I agree about medical culture. I really don’t like the medical culture of Manhattan–though I have found individual doctors who I like very much, it isn’t easy. NYC is all about $$$$$.
Dartmouth, on the other hand, is great. And I’ve been very impressed by doctors I have interviewed from UCSF.
I see what you are saying about guidelines. Certainly a doctor can do everything right–folllow the guidelines–and have a bad outcome. So many variables, surprises and uncertainties in medicine.
But while I deinitely think that doctors shoudl follow guidelines most of the time–and that gudidelines should be stresed in medical training–I’m not sure doctors should be given a bonus for following the guidelines.
That seems like giving someone a bonus for merely doing the right thing.
MOroever, if a doctor follows guidelines, I would think that, on average, his outcomes would be better.
So if given a bonus for good outcomes, in the end, he would make more money if his practice tended toward better than average outocmes. . .
The problem with paying for performance (doing particular things) rather than outcomes is that people then tend to get too focused on the list of things they are supposed to do to get the bonus–and as a result neglect other things that are hard to measure (many the patient feel comfortable and respected, listening to the patient, etc.)
Paying for outcomes capture the whole result of medical care– the measurable and what can’t be measured.
On risk-adjustment, my feeling is that if the pool of patients is big enough (and it must be very, very large) you can adjust. But I don’t think
risk-adjustment is good enough to allow us to measure the quality of an individual doctors’ work– or the work of a small practice.
Pat S.
Yes, I agree–not all groups are created equal.
And the point you make about groups compensating doctors who otherwise would not be well-paid for their contribution they make to the group is a good one.
I think it is a hangover from the Clinic’s takeover of a huge neighborhood during the seventies that displaced a lot of poor people. I would also put in a good word for MetroHealth, and of course, the University Hospitals system, as well!
On the other hand, you can hardly hold individual doctors responsible for following a guideline which is inadvertently poorly structured. Also, compliance, mental health, life stability have to be accounted for in a way that does not penalize the good samaritan. Or split the baby… reward both good outcomes and fidelity to a clinical pathway.
One final comment regarding Dr. Gawande’s article. If we doctors really are Marxists, big rats in a Skinner box, as you assume … responsive primarily to money… one still has to account for the (neglected) advantages of fee for service and the unintended consequences of a salary model. To some exstent, one must always trade one set of problems for another set of problems. The former, well known, the later, known only latter.
“The former, well known, the latter, known only later.”
We need to stop pretending that certain types of potential changes in US health care are risky, new, and strange.
Doctors on salary are not uncommon at all in the US or in the world. As Maggie has pointed out repeatedly, most of the best performing health care systems in America feature doctors on salary. These include several different practice structures, including HMO’s, the VA, some university centers, and of course the giant health care systems like Mayo, Cleveland, and their smaller cousins.
These not only work, they work very well. They are the centers of excellence that Dartmouth, Obama, and others point to whenever they want to talk about effective and efficient care.
As I have pointed out, I think it is possible to do excellent health care in private fee for service settings — practices in the upper Midwest are my reference, but Gawande gives the example of the medical practices in Grand Junction, CO. However, I think it is much less common to see that happening, much more common to see flaws leading to higher costs and poorer outcomes, and much harder to make a transition to better operation.
I think that large systems are the wave of the future, but expect the transition to go slowly in a lot of places unless the government intervenes. The “accountable care organizations” Obama highlights in his letter to Kennedy and Baucus would be one such intervention, and may push many doctors, both PCP’s and specialists, in that direction.
Perhaps a better way for me to say this is: Capitation failed because small groups and, in the final analysis, individual doctors did not want to assume the risk. This was a defect in HMO design, not in the, in this case, rational physician response. The Law of Small Numbers means the smaller the group assuming risk in capitation, the more likely financial disaster, and the higher the capitation rate must be to “rationally” accept it. This is just actuarial fact. ( Nate, help me out, here.) Besides, doctors don’t want to be little insurance companies. The same analysis works for “pay for performance” or “no patient left behind” or however you want to designate outcome based fees. The smaller the patient group, the more likely their observed outcome is not typical for method of treatment which the doctor group employed. (Can you tell, by the number of posts, I am on-call, with no marginally effective, potentially dangerous procedures to inflict on a pliant public?)
“I agree about medical culture. I really don’t like the medical culture of Manhattan–though I have found individual doctors who I like very much, it isn’t easy. NYC is all about $$$$$.”
Maggie,
Perhaps you have better data, but I’m told that of the roughly 18,000 MD’s trained each year in the U.S., approximately 8,000 are trained in NYC. Throw in doctors trained in Boston, DC, Miami, Houston and LA, combined with NYC, and we’re probably talking about 75% of more of the country’s doctors trained in cities (and cultures) where costs are high and overtreatment is the norm.
Regarding Accountable Care Organizations (ACO’s), according to Paul Levy, CEO of BIDMC in Boston, the closest thing in Boston to an ACO is the Partners Healthcare System, and they are about as high cost as it gets. For large HMO’s, Kaiser does a fine job in Northern CA, but it hasn’t been able to replicate its culture in Southern CA. Part of the reason may be that Southern CA patients, who may have their own culture, are not as willing to accept the restrictive staff HMO model that Kaiser exemplifies.
Given how difficult it is to change cultures, both good and bad, whether we’re talking about a small practice, a large multi-specialty practice, ACO, hospital or even a geographic region, I think we need to attack the healthcare cost issue primarily via payment policy reform. That includes everything from tiered drug formularies, which are well established, to not paying at all for treatments that are not cost-effective to bundled payments for expensive surgical procedures and courses of cancer treatment to capitation for the management of chronic disease. The problem with capitation is the difficulty of estimating costs a year in advance and issue that some patients fear that providers are rewarded for withholding necessary treatment under a capitated model.
I also wonder what the experts think about how large a patient pool is necessary to adopt pay for performance and risk adjustment metrics for provider organizations. If capitated payments are part of the mix as well, I heard some suggest that it might require a pool of at least 100,000 patients to make it work for doctors and hospitals.
Finally, I’ve heard lots of talk in Washington about guaranteed issue, community rating, public insurance options, simplified claims processes, evidence based medicine and putting MedPAC in charge of setting payment policy. However, I’ve heard precious little about tort reform including insulating doctors from lawsuits if they follow evidence based protocols and taking medical disputes away from juries of lay people and moving them to specialized health courts. The doctors keep pounding away about the need for substantive tort reform as a key part of the equation if we want them to reduce defensive medicine. Democrats in Congress need to step up on this one even if it means taking on the trial lawyers.
The idea that we can make people trained in Boston and NYC practice more like people trained at Mayo by using a payment pattern that rewards health systems (and training programs) for behaving more like Mayo and discourages behaving more like Mass General is a powerful argument for making those changes in the payment system.
Patterns of practice in training programs do influence patterns of practice after training, which is why there is a focus on trying to change patterns at training programs. Since training programs are very dependent on income from payments for patient services, reform in patterns of payment, as suggested lower in this thread, would have a positive effect on training program practice patterns, and as a result on post training practice patterns.
Meanwhile:
“18,000 MD’s trained each year in the U.S., approximately 8,000 are trained in NYC.”
No.
There were 16,139 graduates from accredited Med Schools in 2007. NY State had 1633 graduates, and that counts several large programs upstate (Buffalo, Syracuse, Rochester, and Albany.)
Here’s the link:
http://www.statehealthfacts.org/comparemaptable.jsp?ind=434&cat=8
Distribution of residency programs is similar, with more doctors in residency than in med school because of foreign grads and because many programs last more than four years, causing some accumulation of people in training programs.
Although there are more residents in NYC than med students, there are also numerous residency programs in cities too small for four year med schools. For example, there are residency programs in Duluth, La Crosse, Des Moines, Fargo, and many other Midwest cities. Rochester, MN, has a very large number of residents in training, of course, although Mayo also has a four year med school. The med school is much smaller than the residency program, however.
Most doctors are trained in larger cities, simply because they need patients to work on and larger cities have more patients. In addition, many medical schools date from the time before Medicare and Medicaid, when “charity” hospitals were the largest focus of medical training. There are many exceptions to that rule, however.
Pat,
Thanks for the link and the correction regarding the number and distribution of medical school graduates and residents. The larger point that I was trying to make, which you seem to agree with, is that we have a much better chance of changing training programs and physician behavior for the better through changes in payment policy than by just publishing data about regional practice pattern variations and imploring doctors and hospitals in the high cost regions to change their behavior and shrink their income in the process just because the system needs to reduce costs. Cultures are darn hard to change without either new leadership or different incentives or both.
Barry —
We seem to agree — and Maggie, Obama, and the Mayo administration do too — that just knowing the facts about how to run more efficient and effective management programs is not enough, but that we need incentives — and in this case we are talking financial incentives and disincentives through the payment system — to accomplish change.
The data about efficient and effective care has been on the shelf for 30 years, and the inefficient systems not only continue to be inefficient, but they are paid a premium to be inefficient.
Again, the old joke about the farmer and the mule pertains.