Gawande and Berwick On Why Reform Legislation Cannot Lay Out A “Master Plan”

“Where is the plan to make health care affordable?”

“I want to see the savings.”

“Show me the money: Lay it out in simple language– on one page.”

Critics of health care reform legislation have become increasingly adamant on one point: They want to know how reformers are going to rein in the skyrocketing cost of care. And they want to know now. They’re not interested in “pilot projects,” or proposals that they refer to as “reform lite.” They want a proposal that the Congressional Budget Office can “score,” tallying up the savings the way one might add up the points in a tennis match, neatly, definitively, without argument.

In the most recent New Yorker (December 14), Dr. Atul Gawande faces down the critics. In seemingly effortless prose, he cuts to the heart of the matter: the uncertainty that haunts any human endeavor that aims at changing the culture. While most pundits who talk about health care reform focus on the day-to-day political debate, this Boston surgeon steps back and puts health care reform in a larger context: human history.

“There are, in human affairs,” he tells us, “two kinds of problems: those which are amenable to a technical solution and those which are not.”  When it comes to “reforming the health-care system so that it serves the country’s needs”—and provides affordable, high quality care for all, Gawande warns “there is no one time fix. No nation has escaped the cost problem. Nobody has found a master switch that you can flip to make the problem go away. This cannot happen by fiat. If we want to start solving it, we first need to recognize that there is no technical solution.”

Why can’t we find a single, elegant, rational solution? Because what we are facing is neither a scientific problem, nor a mathematical conundrum. This is not physics. We’re not looking for a breakthrough formula.  What we are attempting is to transform the nation’s medical culture–to change how millions of patients, doctors and others involved in this $2.6 trillion industry think about healthcare and their relationship to the system. Inevitably, this will be messy.

As White House budget director Peter Orszag recently reminded us, the process will take ten years –or longer.

At a time when Washington seems on the verge of handing health care reform over to the private insurance industry, I find this fact oddly comforting. The truth is that what happens in the coming days, weeks, or months will not determine the final shape of health care reform. What happens over the next decade—and beyond—will. (Though I also recognize that if the legislation we pass now is so weak that it implodes, it could set the reform process back by many years.)                                       

The Problem Reformers Face

Many Americans assume that health care costs have been levitating in recent years because the science of medicine has been advancing so rapidly. But, as Gawande points out, that just isn’t true.

Over the past ten years, there have been “no great strides in service” in our health care system, Gawande observes. While health care systems in Europe have managed to “install electronic medical records and offer after-hours care, we have made little progress in either area.”

Moreover, and most importantly— “improvement in demonstrated medical outcomes has been modest in most fields.”

Nevertheless, over the past decade: “The average annual premium for employer-sponsored family insurance coverage rose from $5,800 to $13,400. Those skyrocketing premiums reflect the fact that over the same  span, the amount that private insurers paid out to hospitals, doctors and patients has climbed by an average of 8 percent a year, year after year.  Insurers’ reimbursements have more than doubled.

Yet– we are not safer or healthier.  We are just paying more.

The cost of health care has headed for the heavens because our system is so inefficient, “fragmented, disorganized, and inconsistent,” Gawande explains. “It’s neglectful of low-profit services like mental-health care, geriatrics, and primary care, and almost giddy in its overuse of high-cost technologies such as radiology imaging, brand-name drugs, and many elective procedures.”

Cultural change will involve re-shaping how both patients and doctors view those high-cost technologies. Physicians are just beginning to counsel patients that cutting-edge medicine carries risks as well as benefits. Trimming some of the waste from the system means sharing decision-making with patients, acknowledging the pros and cons of tests and treatment, and admitting that, for many illnesses, we have no definitive answers. Spending more won’t bring the answers. Often, the way forward is to gather, sift and consolidate the medical evidence that we have. Under reform, electronic medical records can help collect the data, and panels of physicians can draw up guidelines (not rules)– but medicine will remain shot through with ambiguities.                                 

The Size of the Problem: A $2.6 Trillion-Dollar Industry

Patients and physicians are only part of an enormous medical-industrial complex that we have built up over the last three decades. “Medicine involves hundreds of thousands of local entities across the country,” Gawande writes “hospitals, clinics, pharmacies, home-health agencies, drug and device suppliers. They provide complex services for the thousands of diseases, conditions, and injuries that afflict us. They want to provide good care, but they also measure their success by the amount of revenue they take in, and, as each pursues its individual interests, the net result has been disastrous.”

That last sentence is key.  More than half a century ago, this nation made the choice to turn medicine into a largely unregulated for-profit industry. Thus, we entrusted health care to the laissez-faire chaos of a fiercely competitive marketplace.

What is at stake, after all, is more than $2.5 trillion in health care dollars. But in a nation where more than 16% of the population is uninsured, not everyone can pay their bills. The result, in many cases, is a Hobbesian competition for the well-insured, a war of one against all that pits hospital vs. hospital, hospital vs. doctor, doctor vs. doctor,  doctor vs. hospital, drug-maker vs. drug-maker.

Over the past two decades, we’ve seen turf wars between specialties, and medical arms races among hospitals, all rushing to buy the same exorbitantly expensive equipment–equipment that they might better share. Patients could go to the outpatient clinic at hospital X for the latest in MRI’s,  go another outpatient clinic for a different test. Drug-makers scrambling for customers spend billions on pharmaceutical ads, money that does not add to the value of the product, but does help ratchet up the price of drugs. Those large drug companies do not share research. Too often, even hospitals are reluctant to share patient records.

Meanwhile, patients battle for their right to care at the lowest possible cost. But they are wary of being forced to pay for others.  Some say: “I’m willing to pay for my mother, but I’m not willing to pay for someone else’s mother.”                             

A Competitive System Headed Toward Ruin

Last week, at the Institute for Health Care Improvement’s (IHI) 21st Annual National Forum on Quality and Improvement in Health Care, in Orlando, Florida,  IHI president Don Berwick described how, as each coalition in our health care system pursues its self-interest, we destroy our chances of achieving true health care reform. “Name any stakeholder – hospital, physician, nurse, insurer, pharmaceutical manufac
turer, supplier, even patients’ groups – every single one of them says, 'Oh, we need change! We need change!'” Berwick observed. “But, when it comes to specifics, every single one of them demands to be kept whole or made better off.”

“We are stuck,” he declared, ‘in ‘the Tragedy of the Commons.’”

Berwick briefly recounts the story of the Commons, originally told by Garret Hardin in an article that appeared in Science magazine back in 1968:  “Hardin imagines a pasture that is held in common by the community. Anyone in the community can graze his sheep on that pasture. There is, of course an optimal number of sheep to graze on the commons.”  If too many are loosed on the grass they will destroy the pasture.

Hardin asks:  “What does a rational person do?

Berwick provides the answer: “Add sheep. Everybody adds sheep.” After all, Berwick points out, “Anyone who voluntarily limits his herd is a chump, a sucker—He’s just giving up what everyone else is getting.”

Hardin concludes: “Therein lies the tragedy. Every man is locked into a system that compels him to increase his herd, without limit, in a world that is limited. Ruin is the destination toward which all men rush.” I would add that this is a near-perfect description of how competition destroys value.

Berwick elaborates: “The smart strategy for each person separately is not the best strategy for all people together. What is good for ‘me’ is not good for ‘us.’ Just like the villagers, health care stakeholders are eroding a common good by doing what makes sense for each of them, separately. In the short run, everyone wins. In the long term, everyone loses.”                           

What is Required: Grassroots Collaboration, Trial and Error

Yet, Gawande points out, we have a system designed to separate us. Our fee-for-service system fosters fragmentation and discourages collaboration. By “doling out separate payments for everything and everyone involved in a patient’s care, it has all the wrong incentives. It rewards doing more over doing right. It increases paperwork and the duplication of efforts, and it discourages clinicians from working together for the best possible results. Knowledge diffuses too slowly. Our information systems are primitive…”

And the best way to fix this wildly inefficient system in which everyone pursues his own short-term interest?  “Well, plenty of people have plenty of ideas,” Gawande writes. “It’s just that nobody knows for sure.

“To figure out how to transform medical communities, with all their diversity and complexity, is going to involve trial and error,” he adds. “And this will require pilot programs—a lot of them.”

“Pick up the Senate health-care bill—yes, all 2,074 pages—and leaf through it,” Gawande suggests. “Almost half of it is devoted to programs that would test various ways to curb costs and increase quality. The bill is a hodgepodge. And it should be,” he declares. We cannot expect Congress to lay out a master plan.

In his speech last week, Berwick made a very similar point, noting that “last summer President Obama seemed to shift his wording, from “health care” reform to “health insurance” reform.  Some criticized the president, but Berwick says, “I think he is being accurate.  Congress is aiming for health insurance reform—better coverage, changes in the funding and rules for coverage. Getting everyone covered is right, is moral. We ought to pass that law,” he added.

“But,” Berwick emphasized, “that doesn’t change care. It doesn’t make it any better, or any more valuable, or any more affordable. . . It doesn’t make it better.  We need a new system of care.” In other words, we must change how care is paid for and how it is delivered.

“Congress hasn’t led us to a new system of care. And I don’t think it will,” Berwick declared.  “Congress won’t give America even a vague prescription, let alone a detailed set of rules.”

Why not? Because, as I have suggested in the past, legislators are not physicians, they are not nurses, they are not medical researchers. And only someone with hands-on experience can appreciate the diversity of patient needs in different parts of the country. Health care should not be organized around “doctors’ druthers” or “this is the way we have always done it here.” But if it is going to be patient-centered, it does need to respond to differences in the patients’ cultures.

“How could Congress possibly know enough to specify for every community, the exact design for care that is safe, effective, timely, patient-centered, equitable and sustainable?” Berwick asked.

The legislation does contain long sections “focusing on quality,” Berwick acknowledges, and there legislators lay out possibilities. But it is up to health care communities to test, adapt and perfect these strategies in real world.

Gawande offers examples: “The bills suggest testing a number of ways that federal insurers could pay for care. Medicare and Medicaid currently pay clinicians the same amount regardless of results. But there is a pilot program to increase payments for doctors who deliver high-quality care at lower cost, while reducing payments for those who deliver low-quality care at higher cost. There’s a program that would pay bonuses to hospitals that improve patient results after heart failure, pneumonia, and surgery. There’s a program that would impose financial penalties on institutions with high rates of infections transmitted by health-care workers. Still another would test a system of penalties and rewards scaled to the quality of home health and rehabilitation care.

“Other experiments try moving medicine away from fee-for-service payment altogether. A bundled-payment provision would pay medical teams just one thirty-day fee for all the outpatient and inpatient services related to, say, an operation. This would give clinicians an incentive to work together to smooth care and reduce complications. One pilot would go even further, encouraging clinicians to band together into ‘Accountable Care Organizations’ that take responsibility for all their patients’ needs, including prevention—so that fewer patients need operations in the first place. These groups would be permitted to keep part of the savings they generate, as long as they meet quality and service thresholds.”

“I believe that most of these are excellent ideas,” Gawande adds. “But I must admit, I don’t know which will succeed, or fail.”

In part 2 of this post, I explain why no one can know which ideas will succeed, explore Gawande’s argument that healthcare reform could be compared the way we transformed U.S agriculture, and consider Don Berwick’s challenge to his audience: “Prove Garret Hardin wrong.” 

8 thoughts on “Gawande and Berwick On Why Reform Legislation Cannot Lay Out A “Master Plan”

  1. Maggie – well written, and insightful as usual.
    I’d suggest that the problem with the current legislation is not that there are not enough ideas, it is that they will take forever to ‘prove out’, will be subjected to the same level of misinformed reporting that has led to death panels and rationing dominating the discussion, and the condemnation of the breast cancer screening recommendations, and because the ones that ‘work’ will gore someone’s beloved ox, will have little impact.
    Couple that with the legislative sleight of hand that refuses to acknowledge the cost of Medicare physician reimbursement, note that Medicare costs will be cut and as a result providers will be sorely tempted to shift costs to private payers, and recall we are competing in a global economy.
    The net is we don’t have time to wait while this plays out. If the current legislation passes, or if it doesn’t, in ten years the average premium for a family policy will be around $30,000.
    That is, if any families can still afford health insurance.
    Joe Paduda

  2. It takes a certain tortured brilliance to argue that the problem with the Commons is not that it is common, but that it is…competitive?
    Utterly bizarre.
    You don’t understand the Tragedy of the Commons. It is the explanation for why collectivist structures go to hell over time. The problem is that the field is not owned by anyone in particular; it is owned by the collective. Property that is owned by the collective is always gamed by the individuals with access to it, because they externalize their costs. They always act to maximize their own extraction and minimize their own contribution.
    By the way, the American founders understood this, and knew that the public treasury would function like a Commons, and so should be kept small as possible.
    The parable is not an argument against competition; it is an argument for private property and against collective property.
    Competition can destroy value (as can collectivism, and everything else for that matter.) — but does not need to. The post-industrial West is a fruit of competition, not of collectivism.
    The constant reaction from the Left to the wasted field in the middle of the village is to decide the smart people have not yet been put in charge of it, and it isn’t big enough. So they make it bigger, then notice it is not working right. Eventually, the village collapses under the weight of their “management”.
    Maggie, Marx has been discredited.

  3. I read Atul Gawande’s article last week. And I’ve been following Joe Paduda for some time now (btw loved “If private health insurance worked, we wouldn’t need health reform”) This reform is actually a three phase process. Phase I is to disrupt the current status quo and focus on expanding coverage to those who need it and can’t get it. Then as Joe points out, the true cost will rear its ugly head. Phase II will focus on effectiveness, start doing those things that work the best. But on a voluntary basis. Those who embrace it, do better not only with their patients, but financially. And this will be a grass root effort. Phase III will be enforcement. And this will come from the federal programs.
    But this will be a very long process. It took a good 35 years from the publication of “Silent Spring” until being green was cool. I think we will get to where we need to be in 15-20 years. But we have to start doing, trying, failing, redoing, and stop analyzing. We have enough data.

  4. Isn’t the VA right now proving most of what Gwande and others are saying? I worry when the gov’t acts like we have to reinvent the wheel here. I get especially worried whenever I read about electronic medical records b/c I’m afraid that that’s just another way to pour money into some companys’ bank accounts with poor results – just as the Help America Vote Act did with electronic voting machines. The VA is using VistA – it’s tested, proven, essentially free and the American people already own it.
    My goal for 2010 is to have people read three books:
    Best Care Anywhere by Philip Longman
    Money Driven Medicine by Maggie
    The Medical Malpractice Myth by Tom Baker

  5. I would like to pose this question to any Senator worth their salt (assuming the senator is not a attorney). Why is TORT REFORM not a major component of this bill? Studies performed by and that liability insurance costs are approaching nearly one third of the operating expenses for specialty care physicians, units and facilities. Aside from medical provider costs, insurance carriers such as Humana Health Plans state that their costs of medical liability and defensive medicine accounts for nearly 10 cents out of every premium dollar collected (verified). Compare that to Humana’s reported pharmaceutical claims of 15 cents out of every premium dollar collected. Or better yet, 21 cents out of every premium dollar collected is paid back to physicians for physician treatments. Without TORT REFORM, medical provider costs will never drop.

  6. Tim & Joe-
    Thanks for your comments.
    Tim– I have heard your
    interpretation of the “traged of the commons” many times.
    This is Don Berwick’s interpretation — (which I also have heard in the past.)
    Berwick is hardly a Marxist He is widely respected by doctors and hospitals throughout the U.S.
    Berwick is one of the most brilliant thinkers and speakers in the healthcare world.
    He understands that, when it comes to healthcare, we do not want competition. It doesn’t lower prices or lift quality–because the consumer doesn’t have the same leverage he has in other markets. (The vast majority of health care economists agree on this. To my knowledge, none of them are Marxists.)
    We want hospitals, doctors, etc. sharing information with one goal–to provide better, more affordable care for patients.
    You write “property that is owned by the commons is always gamed by the individauls with acccess to it . . the Founders understood this.”
    What you don’t understand is that human beings– and societies– are able to change. The founders also thought that there would always be slavery in the U.S.–the economy depended on it.
    As for who will tend and care for collective property, have you ever been to Germany?
    Train stations are so clean that you would feel comfortable eating your lunch while sitting down by the tracks waiting for your train. (In fact people do just that.)
    Streets are clean. Parks are well-tended.
    Throughout most of Europe public spaces are much better tended than they are here. People are willing ot pay tax to tend public (i.e. “collective’ spaces.
    In the U.S., by contrast, we spend millions on our private homes and condos, and then step outside onto a littered, dirty, pot-holed street.
    I guess everyone else is wrong and we have our priorities straight . . .??
    Thanks for the kind words.
    You write: “it is that they will take forever to ‘prove out’, will be subjected to the same level of misinformed reporting that has led to death panels and rationing dominating the discussion, and the condemnation of the breast cancer screening recommendations, and because the ones that ‘work’ will gore someone’s beloved ox, will have little impact.”
    I agree with everything you say about the terrible reporting, which has muddled the issues while going for sensational headlines.
    But I believe that the recommendations that gore someone’s beloved ox could work IF–and only IF– we have a Medicare panel made up of medical experts that is protected from Congress– as Obama and Jay Rockefeller suggested.
    Two weeks ago I was hopeful that this would happen.
    I believe that Medicare does need to cut reimbursements to many specialists, while raising payments to doctors who provide cognitive care (primary care docs, geriatricians, palliative care specialists etc. etc. )
    Private insurers tend to over-pays many specailists as well as “brand-name” hospitals just because they want them in their network.
    The AHA has admitted that most hospitals make a profit on Medicare patients most of the time.
    Private insurers reward hospitals that are inefficient and prone to errors.
    You are absolutely right that if we don’t do something very aggressive to rein in costs, in ten years a family policy will cost $30,000.
    Middle-class families won’t be able to afford it. Many upper-middle-class families won’t be able to afford it.
    Instead of joining the rest of the developed world–changing what we pay for, how we pay for it, how much we pay, and how health care is delivered,– we will have joined the developing world where only the very, very rich receive good care.
    And I agree, that we don’t have much time. (As Berwick also says.)
    Medicare is going to have to become very aggressive in refusing to over-pay and refusing to pay for unncessary tests and treatments.
    People (patients and many physicians) won’t like this. It will take great political will to pull it off.
    But Orszag, at least, recognizes that the alternative is that our economy tumbles. The U.S. standard of living falls.
    Our overspending on healthcare is the single greatest threat to the economy—Orszag is right about this.
    But private insurers have said that if Medicare goes first, and provides political cover, they will follow in cutting fees and refusing to pay for unncessary treatments.
    The only other hope: what is happening on the ground in the communities where docs and hosptials have gotten together to lower costs and lift quality by moving away from fee-for-service, pooling fees, hospitals pooling resources etc.
    Berwick et. al. talked about this at their “How Did They Do That” conference last summer.
    And success stories at Intermountain, Geisinger, etc. are real.
    So perhaps enough like-minded peopled will get together in enough communities around the nation to being to reform healthcare at a grass-roots level.
    Unfortunately, I don’t think this will ever happen in the Boston to D.C. corridor without government regulation.
    But it might happen in many parts of the NOrthwest, upper-mid-West, upper New England, and Southwest (some parts. )
    Then I guess we could all move to those places . . .
    Suddenly Minnesota becomes the most populous state in the nation.
    Btw, I have little faith in the states achieving reform. But perhaps health care professionals who understand the problems will begin to reform the system from within.

  7. Great dialogue.
    But what occurs to me is… How can we fix anything unless we’ve got data to show how good or bad it is?
    What’s been missing for too long and what so many lobbyists have successfully fought to supress is healthcare outcome data that is publicly reported.
    Give consumers the real data on the variations in mortality (risk adjusted), out-of-control MRSA rates, death rates from sepsis (which are under-reported), medical errors,etc, etc, and we’ll have something concrete to critically analyze.
    We’d also have something that would give us reason to pause before we have that next test, elective surgery, cesarean, or high risk surgery at local community hospitals that are opening up cardiac surgery centers on every street corner, but don’t even have 24 hour physicians in the building for when a patient develop complications.
    The costs and true outcomes of healthcare continue to be hidden behind a veil of secrecy. Healthcare consumer literacy is a big missing piece. We want it but we can’t seem to shake it loose from the grip of those in charge.
    I’d like to see more dialogue about how the quality (or lack thereof) adds to skyrocketing costs. Hospital MRSA rates alone are driving up the costs by billions and yet we don’t even have a mandate for SCREENING patients for MRSA before surgery so patients can be decolonized and/or isolated from other patients.
    Hospitla RN staffing levels have a direct link to morbidity, mortality, and skyrocketing costs but when was the last time you saw that mentioned in healthcare reform?
    If we continue to dance around the issue of quality and fail to speak about it openly and honestly, we will fail to address a major driver of escalating costs, unnecessary harm and death.

  8. Lori–
    Thanks for your comment.
    (Sorry it took me so long to respond; I just saw it.)
    You wrote: “Give consumers the real data on the variations in mortality (risk adjusted), out-of-control MRSA rates, death rates from sepsis (which are under-reported), medical errors,etc, etc, and we’ll have something concrete to critically analyze.”
    I agree that we need to be couning death rates from sepsis, though I’m not sure how useful the informaiton will be to consumers.
    For one, consumers tend to ignore data like this; you can publish mortality rates at various hospitals following cardiac surgery, as we have in N.Y., and patients continue going to the same hospitals.
    Not long ago, patietns who were polled in California said they were more interested in the food and amenitites at a hospital than infection rates.
    The other problem with trying to gather data to present to consumers is that we’re still learning how to risk-adjust . .
    So my feeling is that we should be collecting this data and presenting it to the hospitals themselves–showing where they stand compared to other hospitals.
    This would get their attention.
    I also think Medicare should use financial carrots and sticks to reward and punish hospitals on safety issues.
    Finally, if hospitals don’t improve, then the data should be made public. (By then we would have had a few years to refine it and make it more transparent.)
    You’re absolutely right that mortality rates are linked to RN staffing, and we rarely read about that.
    There should be more general newspaper stories, TV stories and pieces online making patients aware of nursing shortages, rate of errors and infections, and the other risks that should make one pause before choosing surgery when less
    aggressive treatments are available.
    It think the media has been loathe to talk aobut how hospitals are dangerous places because this is not something the public wants to hear.
    People like to feel that medical care is always safe–but that’s one reason we have so much over-treatment.
    Patients need to be aware that there are always risks–even with a test– as well as potential benfits.