Op-Ed: A Social Democrat Weighs in on a Government Health Plan


David hansen 09

I was born into a Berkeley family of Social Democrats—my father studied Swedish economic  policies—then I trained in social-democratic Economics in Scandinavia, before cutting my career teeth in a Norwegian Labor Party think tank. I thereby personify the threat trumpeted by Republicans: the sinister spread of Social Democracy.

So I am cheering wildly for establishing a federally owned health plan, right? Wrong.

Not that I’m particular opposed, either: It’s just not a big deal. Either way, new government-run plan or not, there won’t be much impact on our nation’s enormous health care problems.  Our health care dilemmas—high costs, poor access, and mediocre outcomes–stem from much more fundamental issues than who sits on the board of yet another insurance plan.

These include the perverse incentive structures for key decision makers in the industry, including insurers, providers and patients. Insurers earn money by serving the well rather than the ill who need their assistance most, providers don’t become rich by managing care over time but by medically over-treating the critically sick, and consumers are incented to both stay out of the insurance pool until they’re sick and to seek medical help late.

Op-Ed: On Health Reform, Obama Faces a New Foe: Other Democrats


Harris Meyer Democratic Senator Maria Cantwell of Washington is a prime reason President Obama will have a hard time getting health care reform passed this year. Let me explain this seeming oddity. At a news conference on May 27 in Yakima, Wa., the purportedly liberal Cantwell, who represents a state that voted 58 percent for Obama, announced her support for two new, bipartisan bills that would advance a key goal of Obama’s reforms — increasing access to primary care physicians and other doctors who are in short supply. As Massachusetts has discovered, making sure nearly everyone has health insurance doesn’t help if there aren’t enough doctors to take care of them.

The two bills Cantwell endorsed feature provisions that would cost the federal government billions of dollars a year — scholarships and loan forgiveness for medical students who serve in shortage areas, increased funding for the National Health Service Corps, higher Medicare payments to primary care doctors, more Medicare funding for resident physician training, interest-free loans for hospitals starting new residency training programs, etc.

The Road from McAllen to El Paso


Head Shot Dr. Harold S LuftDr. Atul Gawande has provided a chilling description of the problems facing true health reform in his  recent New Yorker article.  In  The Cost Conundrum he describes how medical care is provided in McAllen, Texas, which is second only to Miami as the most expensive healthcare market in the country. McAllen’s per capita expenditures are twice those in El Paso, Texas, a city with similar demographics.

There are no good reasons for the differences. McAllen’s population isn’t demonstrably sicker and the care isn’t measurably better.  There is also little understanding among the participants about what causes the higher spending. What is chilling is how easy the medical care environment in El Paso could become like McAllen’s.

Gawande refers to the accountable care organization (ACO) concept proposed by Elliott Fisher and colleagues at Dartmouth University. They propose that physicians whose practices are focused around a specific hospital be given incentives to lower the overall costs of patient care.

Payer Costs are Provider Revenues

The ACO has merit as a goal, but the challenge is in forming them.  Getting very intelligent people such as physicians and hospital administrators to change their behaviors, especially if such changes may reduce their income, will be difficult. We need ways to encourage voluntary participation of both physicians providing care in the hospital and those who decide who should be hospitalized.

The Dartmouth data show that in areas like McAllen, there is much more interventional work, such as tests, procedures and admissions, than in areas like El Paso.  With more access to, and time with, primary care physicians there is less need for interventional work.  This means redistributing resources from the interventionists to primary care clinicians.

It is hard to imagine a new ACO with interventionists and primary care physicians achieving this redistribution.  The interventionists often wield scalpels and have a ready ally in the hospital that depends on them to keep beds filled.The Answer Lies in Separation, Not Amalgamation

Interventionists should partner with the facility in which they do most of their work. Elsewhere, I describe these new care delivery teams (CDTs) that are effectively the inpatient side of Fisher’s ACOs.  CDTs would be voluntary associations of a facility (usually a hospital) and those physicians whose work depends on the facility.

Unlike Fisher’s ACO, the CDT specifically excludes office-based physicians responsible for the ongoing treatment of patients.  The CDT also need not include all eligible physicians at the hospital, just the voluntary paticpants.

The CDT may be a single entity with physician employees or a loose collaboration of independent physicians and a facility, collectively deciding its own governance rules.  The key is that the CDT takes responsibility for an episode of care at a fixed price.  Physicians might be compensated by salary, fee-for-time, or fee-for-service and may share in the gains or losses of the CDT.

CDTs will focus on how to provide inpatient care more efficiently and at higher quality.  (Quality measurement is critical in any reform; see my overall proposal. Savings will be achieved not through lower net provider income, but through better management and clinical decisions.  For example, instead of routinely repeating imaging, radiologists may review well-done MRI and CAT scans done elsewhere.  Orthopedists can agree on the necessary implants, allowing the hospital to strike better deals with suppliers.  Nurses may be empowered to implement routine procedures reducing infection rates.  Lowering Interventional Costs and Rewarding High Quality Care

CDTs by themselves will not solve the key problem identified by Gawande — the overuse of interventional services.  To address that problem, we need to redirect patients toward those physicians who provide high quality care at lower overall cost.  This can be achieved by combining (1) a mechanism shifting resources from interventional care to effective outpatient management with (2) a way to identify those physicians who provide such effective care.

A  comprehensive realignment of the payment system can accomplish this, but in the interim, a  voluntary major risk pool (MRP) can move us in the right direction.  The MRP covers hospitalizations and chronic illness.  This coverage for insurers eliminates costly underwriting.  The MRP, however, is not simply reimbursing plans for expenses incurred; it directly offers attractive bundled payments to CDTs.  These episode-based payments allow CDTs to do what they do best—high intensity acute care—and reap increased income.   Higher provider incomes within CDTs are not inconsistent with lower costs to the MRP as the CDT reduces the resources needed from suppliers outside the CDT.

The MRP obtains electronic copies of claims from the insurers who are its clients and from Medicare, more information than the Dartmouth group has.  After linking all the data and substituting coded identifiers, the MRP will make available the data under arrangements ensuring patient confidentiality.

The Power of the Electronic Matchmaker

Insurers and others accessing the MRP data will see there are local providers with efficient practice patterns, but not their names.  An intermediary trusted by physicians will serve as an electronic “matchmaker,” transmitting messages from insurers seeking efficient physicians.   By remaining anonymous until a “deal is struck,” efficient physicians will negotiate better remuneration—probably not just higher fees, but payment for ongoing patient management, telephone and e-mail consultations, and other innovations.  Some physicians may band together, perhaps by sharing electronic medical records, forming real or virtual group practices—the outpatient component of the ACO.

The major risk pool is the mechanism reallocating dollars.  More effective chronic illness management will lower admission rates and the MRP will transfer more dollars to those health plans directing more patients to efficient ambulatory care providers.  To find those providers, health plans will negotiate better payment arrangements.  To steer patients towards those providers, plans will provide new incentives and sources of information.  We can create what Fisher and Gawande have in mind, as long as we think about how to manage the transition.

McAllen and El Paso are almost 800 miles apart—a long day’s drive.  To move away from the expensive McAllen model of care, we need not just a destination but a plan how to get there.  The self-interest of the players is currently driving us in the wrong direction. By harnessing that self-interest with realigned incentives we can reform the system.  Without taking account of the incentives, we will never get to where we need to go.

Harold S. Luft is Professor Emeritus in health policy at University of California, San Francisco, and author of Total Cure:  The Antidote to the Health Care Crisis (Harvard University Press, 2008).  More information is available at  www.haroldluft.com.

Op-Ed: How I’ve Missed the AMA….


6a00d8341c909d53ef0105371fd47b970b-320wi Over at Dr Val’s Get Better Health site Evan Falchuk from Best Doctors is very grumpy about Steve Pearlstein’s column in the WaPo. Pearlstein rewrites Gawande’s rewrite of Shannon Brownlee’s Overtreated. Not much surprise here—everyone is doing it and despite my cynicism Gawande’s piece in The New Yorker has hit a nerve, not least because Obama told everyone to read it—showing that he’s way more influential than Orszag in the White House despite what we wonks all think. Orszag by the way has been hammering on about the Dartmouth stuff for years and even dragged me into his office at CBO back in 2007 to suggest THCB kept plugging away about practice variation. But obviously no one in the White House was heeding his back reading of THCB, until the boss came and told them all to read Gawande.

Op-Ed: It’s the Waste, Stupid.


-5 A recent Wall Street Journal editorial strongly challenged the notion that there is enormous waste in American health care.  In the article the editors acknowledge that dramatic variation in health care spending exists across the country–but point out that the precise reason for that variation remains uncertain.  They also note that much of the data about regional variation comes from the Dartmouth Atlas–and that work, they point out, is limited in that it only examines Medicare data.  And they cite work from Richard Cooper at the Wharton School that directly challenges some of the Dartmouth Atlas conclusions–essentially arguing that the Dartmouth observed regional variation is actually simply an artifact of Medicare.   They conclude that “Dr. Cooper’s assault on the Dartmouth Atlas is controversial but compelling. He argues that the less-is-more theory is based on the flawed premise that when a region’s outcomes did not improve as spending increased, the difference is simply classified as ‘waste’ – even if it isn’t.”

Michael Porter–seduced, converted, or bludgeoned into accepting reality?


6a00d8341c909d53ef0105371fd47b970b-320wi What a difference a few years makes. Michael Porter is the Harvard Business School prof who charged into health care a few years back. He (with Elizabeth Teisberg) wrote a book called Redefining Health Care which suggested how all kinds of changes on the delivery side of health care would solve all of our problems. Those changes were not exactly secrets to people who, say, read Michael Millenson’s Demanding Medical Excellence—a much better book written ten years earlier which explained why radical change on the delivery system side wasn’t going to happen. The answer?

It’s the Incentives, stupid.

Hostility Towards Scientists And Jenny McCarthy’s Latest Video


Val Jones, M.D., is the President and CEO of Better Health, LLC. Most recently she was the Senior Medical Director of Revolution Health, a consumer health portal with over 120 million page views per month in its network. Prior to her work with Revolution Health, Dr. Jones served as the founding editor of Clinical Nutrition & Obesity, a peer-reviewed e-section of the online Medscape medical journal. She currently blogs at Get Better Health, where this post first appeared.

I’ve been fairly quiet about Jenny McCarthy’s campaign against childhood vaccinations, partly because Dr. David Gorski has covered the issue so thoroughly already, and partly because of my “do not engage” policy relating to the deeply irrational (i.e. there’s no winning an argument with “crazy.”) But this week I was filled with a renewed sense of urgency regarding the anti-vaccinationist movement for two reasons: 1) I received a personal email from a woman who is being treated with hostility by her peers for her pro-science views on vaccines and 2) a friend forwarded me a video of Jenny McCarthy speaking directly to moms, instructing them to avoid vaccinating their kids or giving them milk or wheat because of their supposed marijuana-like addictive properties.

Anti-Vaccination Views Are A Status Symbol?

I was surprised to discover that some pro-science moms are being mocked by peers who are uninterested in evidence, choosing to believe any dubious source of health information that questions the “medical establishment.” This concerned mom writes:

I am the mother of two young children, and I live in the trenches of the anti-vax woo.  In my circle of about 14 mothers, my anecdotal analysis is that the rate of complete vaccination hovers around 60%.  The mothers in this group are all very well educated, middle-class or affluent, predominantly stay-home mothers. One problem is what they consider reliable sources of information.  They rely on anecdotes and dismiss scientific evidence in part because they are very anti-medical establishment.  The group is self-validating and many shared values (and myths) increase in intensity over time.

Many of the mothers practice “Natural Family Living” which has some appealing aspects, but also harbors elements of a cult.  In this environment, anti-vaccination becomes a very powerful status symbol… I have lost friendships and been partially ousted from this circle because of my views.

This note struck a chord with me, since I experienced similar hostility in the past for voicing my concern about pseudoscience and misleading consumer health information. I was accused of being “paternalistic, narrow-minded, a dinosaur – part of a dying breed, a racist against complementary and alternative medicine, and a Bible school teacher, preaching evidence-based medicine,” insulted for my desire to be accurate about what was known and not known about treatment options, and my expertise, training, and academic credentials were called into question publicly on many occasions. I endured all of this primarily at the hands of someone who supposedly believed in “natural healing” and the “art of kindness” as an integral part of patient care.

I am troubled by the mounting antagonism towards those of us who’d like to use critical thinking and scientific reasoning to learn what we can about medicine and our health. I’m not sure what to do about it except to encourage one another to stand strong for science and reason – to expect all manner of attacks and insults, and to be firmly committed to the objective quest for truth. It shall set us free.

Jenny McCarthy – Inaccurate, Unhelpful And Dangerous Advice

Although I find Jenny McCarthy’s advice and opinions painful to watch, I committed myself to viewing her recent video at my friend’s request. In order to spare you similar discomfort, let me simply summarize what she said so you can get a high level overview of the sort of bizarre and misinformed claims she promotes (feel free to check out the video for yourself).

“Autism is not primarily a genetic disorder, but caused by vaccine-related toxins (including mercury, aluminum, ether, anti-freeze ,and human aborted fetal tissue) and pesticides.”

“Kids get ‘stoned’ by wheat and dairy toxins. Giving them wheat or dairy proteins is like giving children marijuana.”

  • There is currently no evidence that any diet improves or worsens the symptoms of autism spectrum disorders.  In fact, whole grains and dairy products are an important part of a healthy diet for most children.

“Food allergies are like Iran and Iraq. Glial cells (they’re like chef cell) provide food to the neuron kings. Glial cells can turn into Rambo to fight Iran and Iraq. If a child is allergic to everything, the Rambo cells stop feeding the neurons and the neurons starve. That causes the symptoms of autism.”

  • I don’t know what to say about this strange analogy – clearly no science-based information here.

“To treat autism, you need to give your child supplements to fight off the yeast in their bodies. I recommend Super Nathera, Culturelle, Cod Liver Oil, Caprylic Acid, CoQ10, Calcium, Vitamin C, Selenium, Zinc, Vitamin B12, B6, and Magnesium.”

  • There is no evidence of efficacy for any of these supplements in the treatment of autism.

“You need to consult with a DAN! Practitioner.”

  • DAN! Practitioners recommend chelation therapy for the treatment of autism. There is no evidence that chelation therapy has any benefit for children with autism, and in fact, can be fatal.

“Whatever you think becomes your reality. Imagine your child going to his/her prom and he’ll be cured.”

I think it’s pretty clear that Jenny McCarthy’s recommendations range from ineffective (imaginary healing) to harmful (malnutrition related to absent dairy and wheat in the diet, excessive levels of vitamins) to deadly (chelation therapy with DAN! Practitioners). Will mothers watching her new show on Oprah fall for her pseudoscience and poor advice?

I was pleased to see this open letter to Oprah from one concerned mom. Here’s an excerpt:

To me, it is clear that a significant number of people look up to you, and trust your advice and judgment. That is why it is such a huge mistake for you to endorse Jenny McCarthy with her own show on your network.
Surely you must realize that McCarthy is neither a medical professional nor a scientist. And yet she acts as a spokesperson for the anti-vaccination movement, a movement that directly impacts people’s health. Claims that vaccines are unsafe and cause autism have been refuted time after time, but their allure persists in part because of high-profile champions for ignorance like McCarthy. In fact, ten of the thirteen authors of the paper that sparked the modern anti-vaccination movement retracted the explosive conclusions they made due to insufficient evidence. Furthermore, it is now clear that the study’s main author, Andrew Wakefield, falsified data to support these shaky conclusions.

We have come close to eradicating life-threatening and crippling illnesses because of vaccines, but are now struggling to prevent outbreaks because of parents’ philosophical beliefs that vaccines are harmful. Realize this: when someone chooses not to vaccinate their child, they aren’t just putting their own child at risk, they are putting everyone else around them at risk. Diseases with vaccines should normally be of little concern even to unprotected individuals due to herd immunity – with the majority of the population immune, unprotected individuals are less likely to come into contact with the pathogen. Unfortunately, herd immunity disintegrates as fewer people are vaccinated, putting everyone who hasn’t yet been vaccinated at greater risk for infection. Now, the rates of infection by diseases for which we have safe and effective vaccines are climbing, thanks to anti-vaccination activists like Jenny McCarthy.

You reach millions of people everyday and your words and endorsements carry an incredible amount of weight. If you say to buy a certain book, people will buy it. If you do a segment on a certain charity, people will contribute. And if you say that what Jenny McCarthy is saying has merit, people will believe you…


A certain segment of society appears to be emotionally invested in medical beliefs that are not based on science, but rather anecdotes, conspiracy theories, and magical thinking. Those who recommend a more objective method of inquiry may be subject to ridicule and hostility by that segment. Nonetheless, it is important (for public health and safety purposes and the advancement of science) for critical thinking to be promoted and defended. While some celebrities, like Jenny McCarthy, are committed to misinforming the public about their children’s health – parents who recognize the deception are speaking out against it. Perhaps the best way to combat Jenny’s propaganda is to boycott Oprah. Refusing to support the promotion of dangerous pseudoscience may be our best defense.

Op-Ed: Leave it to Darwin?


Roger collierI’ve been reading some of the testimony on delivery system reforms from the House Ways and Means  Committee meeting earlier this month, in particular the lengthy statements from MedPAC Chairman Glenn Hackbarth and Urban Institute Senior Fellow Dr. Robert Berenson.  Hackbarth and Berenson are each distinguished health care figures, and their remarks are worth careful study. Together, they paint an all too familiar gloomy picture of a system whose costs are out of control, in which quality is often poor, and where there is little correlation between expenditures and outcomes. Few would disagree with the causes that they identify: payment structures that reward volume, lack of coordination among providers, an overemphasis on specialty care, and a system that seems more often driven by supply than demand. The two sets of testimony include several very important recommendations, like more emphasis on public health, dissemination of comparative effectiveness information, and higher payments for primary care (although several years will elapse before this makes a real impact on physician career choices).

Other testimony proposals, however, especially those focused on
Medicare, carry the risk of distracting us from more important changes.
Chronic care coordination (including the medical home model) has not
yet convincingly been demonstrated to cut costs. Accountable care
organizations (this year’s buzz-phrase) require more willingness to
cooperate than many providers have so far shown. Bundled
hospitalization payments make good sense but require the same kind of
willingness to cooperate. Tying payments to quality introduces
questions of data interpretation and validity of guidelines.  

Beware the Bursting of the Health Care Bubble


George Lundberg The good news is that if and when the American healthcare bubble bursts, some value will remain. The bad news is that the annual appropriate value could actually be only about 60% of the current expenditure.

The turn of the 21st Century has been marked by the creation, expansion, and im/explosion of at least 3 significant economic “bubbles”: the huge company Enron, plus the fields of dotcom and real estate/finance. A “bubble” comes to pass when a commodity of great promise and wide applicability entices many to participate and grows at a pace that reflects hope, excitement, sometimes greed, but does not have sufficient underlying  substance to support its continuing growth.

The demise of the fraudulently inflated Enron forecast much of this decade’s  financial  collapse.  A once successful oil and gas distribution company, Enron enjoyed accelerated growth in an essential field. But it came acropper by fakery, derivatives, and manipulation, out of synch with sound principles for sustaining value. When the trickery was exposed, little remained . Enron had become a “bubble” company with a top stock price of $90 in 2000 that shrunk to pennies.  This emperor had no clothes. It was a house built of Texas sand.

Op-Ed: Cost-Reduction Strategies Help Hospitals Weather Economic Uncertainty


David Markoski In today’s current economic climate, many hospitals are reducing staff to cut costs and balance their budgets. An even greater number are trying to reduce administrative costs to save money for the difficult days ahead and retain their employees.While reducing staff may help the bottom line, it may threaten a hospital’s long-term success by jeopardizing quality patient care and its reputation. Cutting non-salary costs, meanwhile, may save as much—or more—while kick-starting organizational recovery when the economy improves. Since these cost reductions do not compromise patient care or the level of support hospitals provide to their physicians, they create long-term efficiencies that will serve the hospitals into the future.Employee compensation accounts for the single largest item on a hospital’s budget, but the aggregated costs of goods and services are greater. These costs represent dozens of money-saving opportunities—from supply chain management and physician-preference items to service contracts and pharmacy—that can impact the bottom line without affecting patient care.