Since 1973, when Jack Wennberg published his first paper describing geographic variations in health care, researchers have argued about both the magnitude and the causes of variation. The argument gained greater policy relevance as U.S. health care spending reached 18 percent of GDP and as evidence mounted, largely from researchers at Dartmouth, that higher spending regions were failing to achieve better outcomes. The possibility of substantial savings not only helped to motivate reform but also raised the stakes in what had been largely an academic argument. Some began to raise questions about the Dartmouth research.
Today, the prestigious Institute of Medicine released a committee report, led by Harvard’s Professor Joseph Newhouse and Provost Alan Garber, that weighs in on these issues.
The report, called for by the Affordable Care Act and entitled “Variation in Health Care Spending: Target Decision Making, Not Geography,” deserves a careful read. The committee of 19 distinguished academics and policy experts spent several years documenting the causes and consequences of regional variations and developing solid policy recommendations on what to do about them. (Disclosure: We helped write a background study for the committee).
But for those trying to make health care better and more affordable, whether in Washington or in communities around the country, there are a few areas where the headlines are likely to gloss over important details in the report.
And we believe that the Committee risks throwing out the baby with the bathwater by appearing, through its choice of title, to turn its back on regional initiatives to improve both health and health care.
What the committee found
The report confirmed three core findings of Dartmouth’s research.
First, geographic variations in spending are substantial, pervasive and persistent over time — the variations are not just random noise. Second, adjusting for individuals’ age, sex, income, race, and health status attenuates these variations, but there’s still plenty that remain. Third, there is little or no correlation between spending and health care quality. The report also effectively identifies the puzzling empirical patterns that don’t fit conveniently into the Dartmouth framework, such as a lack of association between spending in commercial insurance and Medicare populations.
Continue reading “Making Sense of Geographic Variations in Health Care: the New IOM Report”
Filed Under: Economics, OP-ED, THCB
Tagged: ACOs, Costs, Dartmouth Atlas Project, Economics, Elliot Fisher, Geographic variation, IOM, Jonathan Skinner, Medicare, Population Health, Quality, The ACA, Triple Aim
Jul 24, 2013
Ensuring that Americans who live in rural areas have access to health care has always been a policy priority. In healthcare, where nearly every policy decision seems contentious and partisan, there has been widespread, bipartisan support for helping providers who work in rural areas. The hallmark of the policy effort has been the Critical Access Hospital (CAH) program– and new evidence from our latest paper in the Journal of the American Medical Association suggests that our approach needs rethinking. In our desire to help providers that care for Americans living in rural areas, we may have forgotten a key lesson: it’s not about access to care. It’s about access to high-quality care. And on that policy goal, we’re not doing a very good job.
A little background will be helpful. In the 1980s and 1990s, a large number of rural hospitals closed as the number of people living in rural areas declined and Medicare’s Prospective Payment System made it more difficult for some hospitals to manage their costs. A series of policy efforts culminated in Congress creating the Critical Access Hospital program as part of the Balanced Budget Act of 1997. The goals of the program were simple: provide cost-based reimbursement so that hospitals that were in isolated areas could become financially stable and provide “critical access” to the millions of Americans living in these areas. Congress created specific criteria to receive a CAH designation: hospitals had to have 25 or fewer acute-care beds and had to be at least 35 miles from the nearest facility (or 15 miles if one needed to cross mountains or rivers). By many accounts, the program was a “success” – rural hospital closures fell as many institutions joined the program. There was widespread consensus that the program had worked.
Despite this success, there were two important problems in the legislation, and the way it was executed, that laid the groundwork for the difficulties of today. Continue reading “How the Best of Intentions Is Hurting Care for Americans Who Live In Rural Areas”
Filed Under: Uncategorized
Tagged: Ashish Jha, CAH, Critical Access Hospital Program, Hospitals, IOM, JAMA, Quality, rural health, Telemedicine
Apr 2, 2013
Conservatives love to apply “cost-benefit analysis” to government programs—except in health care. In fact, working with drug companies and warning of “death panels,” they slipped language into Obamacare banning cost-effectiveness research. Here’s how that happened, and why it can’t stand.
Why are you reading this when you could be doing jumping jacks?
And how come you’ve gone on to read this sentence when you could be having a colonoscopy?
You and I could be doing all sorts of things right now that we have reason to believe would improve our health and life expectancy. We could be working out at the gym, or waiting in a doctor’s office to have our bodies scanned and probed for tumors and polyps. We could be using this time to eat a steaming plate of broccoli, or attending a support group to help us overcome some unhealthy habit.
Yet you are not doing those things right now, and the chances are very strong that I am not either. Why not?
Continue reading “The Republican Case For Waste In Health Care”
Filed Under: OP-ED, THCB
Tagged: Comparative Effectiveness Research, Cost effectiveness research, Costs, Dartmouth Atlas Project, GOP, Health care spending, IOM, IPAB, Medicare, NEJM, PCORI, Phillip Longman, Politics, QALY, The ACA
Mar 8, 2013
A report published by the Institute of Medicine (IOM) on high-value health care attracted attention when it was issued last June. Authored by a group of eleven leading hospital executives, A CEO Checklist for High-Value Health Care describes programs at various hospitals that resulted in quality improvements and lowered costs. The report has a section called “Yield,” quantifying the extent of these improvements. These programs sound notable, and in fact I know some of the executives and hospitals involved, and would vouch that many significantly improved patient care.
But the report is less impressive when it tackles the cost side of the value equation, especially when it names cost control outcomes like: “days cash on hand increased from 180 to 202,” and “multiple years of 4-5 percent [hospital] margin.” Clearly, the hospitals improved their own bottom lines, but by how much did patient bills decrease? The hospital executives don’t account for that in the “yield.”
It seems this report defines “high-value” to mean highly valuable to hospital CEOs. Strikingly, though, the authors do not find it necessary to explicitly say so anywhere within the report. Perhaps they simply assume that a high-value checklist for hospital CEOs is automatically high-value to CEOs in other industries that are paying for services from hospitals. No offense to these well-meaning and highly accomplished hospital executives, but that is not always the case. Purchasers don’t see high-value health care in hospital cash flow or profit margins. They see value when they get the best service at the best price.
Continue reading “Why Employers Should Stop Worrying About Health Costs”
Filed Under: THCB, The Business of Health Care
Tagged: Catalyst for Payment Reform, Costs, David Goldhill, Employees, Employers, Health Plans, Hospitals, HSA, IOM, John Torinus, Lead Binder, Quality, Serigraph, The ACA, The Leapfrog Group, Transparency, Value-based Purchasing
Jan 23, 2013
It has become accepted economic wisdom, uttered with deadpan certainty by policy pundits and budget scolds on both sides of the aisle, that the only way to get control over America’s looming deficits is to “reform entitlements.”
But the accepted wisdom is wrong.
Start with the statistics Republicans trot out at the slightest provocation — federal budget data showing a huge spike in direct payments to individuals since the start of 2009, shooting up by almost $600 billion, a 32 percent increase.
And Census data showing 49 percent of Americans living in homes where at least one person is collecting a federal benefit – food stamps, unemployment insurance, worker’s compensation, or subsidized housing — up from 44 percent in 2008.
But these expenditures aren’t driving the federal budget deficit in future years. They’re temporary. The reason for the spike is Americans got clobbered in 2008 with the worst economic catastrophe since the Great Depression. They and their families have needed whatever helping hands they could get.
If anything, America’s safety nets have been too small and shot through with holes. That’s why the number and percentage of Americans in poverty has increased dramatically, including 22 percent of our children.
What about Social Security and Medicare (along with Medicare’s poor step-child, Medicaid)?
Continue reading “The Hoax of Entitlement Reform”
Filed Under: Economics, THCB
Tagged: Costs, Economics, entitlement reform, federal budget deficit, Hospitals, Insurers, IOM, Medicaid, Medicare, Physicians, Robert Reich, Social Security, spending waste
Jan 8, 2013
A little more than 13 years ago, the Institute of Medicine (IOM) released its seminal report on patient safety, To Err is Human.
You can say that again. We humans sure do err. It seems to be in our very nature. We err individually and in groups — with or without technology. We also do some incredible things together. Like flying jets across continents and building vast networks of communication and learning — and like devising and delivering nothing- short-of-miraculous health care that can embrace the ill and fragile among us, cure them, and send them back to their loved ones. Those same amazing, complex accomplishments, though, are at their core, human endeavors. As such, they are inherently vulnerable to our errors and mistakes. As we know, in high-stakes fields, like aviation and health care, those mistakes can compound into catastrophically horrible results.
The IOM report highlighted how the human error known in health care adds up to some mindboggling numbers of injured and dead patients—obviously a monstrous result that nobody intends.
The IOM safety report also didn’t just sound the alarm; it recommended a number of sensible things the nation should do to help manage human error. It included things like urging leaders to foster a national focus on patient safety, develop a public mandatory reporting system for medical errors, encourage complementary voluntary reporting systems, raise performance expectations and standards, and, importantly, promote a culture of safety in the health care workforce.
How are we doing with those sensible recommendations? Apparently to delay is human too.
Continue reading “Doctor, I’m Not Comfortable with That Order”
Filed Under: The Business of Health Care
Tagged: AHRQ, aviation industry, culture of safety, IOM, Medical errors, Michael Painter, Patient Safety, Patient Safety Organizations
Dec 6, 2012
The US healthcare system’s myriad of problems again seized the headlines recently with the release of an Institute of Medicine report, which found that 30 percent of healthcare spending in 2009 – around $750 billion – was wasted. Citing the “urgent need for a system-wide transformation,” the report blamed the lack of coordination at every point in the system for the massive amount of money wasted in healthcare each year.
One critical area in particular need of transformation is the business and operating model that drives healthcare in the US. There is broad-based agreement across the healthcare industry that the current fee-for-service model does not work, and needs to be changed. The sweeping health reform law enacted in 2010 included a range of more holistic, value-based payment structures that are now being referred to as “population health.”
Population health is an integrated care model that incentivizes the healthcare system to keep patients healthy, thus lowering costs and increasing quality. In this value-based healthcare approach, patient care is better coordinated and shared between different providers. Key population health models include:
· Bundled/Episodic Payments – This is where provider groups are reimbursed based on an expected cost for a clinically defined episode of care.
· Accountable Care Organizations (ACOs) – This new model ties provider reimbursement to quality and reduction in the total cost of care for a population of patients.
Continue reading “How Using a ‘Scorecard’ Can Smooth Your Hospital’s Transition to a Population Health-based Reimbursement Model”
Filed Under: Uncategorized
Tagged: ACOs, avoidable readmissions, bundled payments, coordinated care, Data, Fee-for-service, IOM, Population Health, reimbursements, Russ Richmond, Scorecards, The ACA
Dec 4, 2012
A recent report issued by the Institute of Medicine – titled “Best Care at Lower Cost” – calls for a dramatic transformation in health care delivery, saying “America’s health care system has become far too complex and costly to continue business as usual.” Its first recommendation (“The Digital Infrastructure”) focuses on the importance of health information systems and highlights a crucial aspect of their development that is too often overlooked – the issue of interoperability. Will the individual systems that are created be able to work together efficiently?
It’s an enormously important issue for health care broadly, and it will determine how effective those systems can be on a national level. At present, health care providers across the country are creating or enhancing their health information systems. In some cases, like ours at Intermountain Healthcare, those systems have a long history; we began instituting electronic medical records 40 years ago. Others are early in the journey. But all are being developed essentially for their own internal needs. Interoperability is low on the priority list.
Five health care providers who have been in the forefront of using electronic medical records have been collaborating on the creation of a Care Connectivity Consortium to pioneer the effective connectivity of electronic patient information across their systems. Those five are Intermountain Healthcare (based in Utah), Geisinger Health System (Pennsylvania), Group Health Cooperative (Washington), Kaiser Permanente (California), and Mayo Clinic (Minnesota). But even that ground-breaking effort, in which I’m heavily involved, will result in a multi-provider network, not a national one.
Continue reading “Set National Standards for Health Information Systems”
Filed Under: THCB, The Business of Health Care
Tagged: Care Connectivity Consortium, Digital Infrastructure, health information systems, Intermountain Healthcare, Interoperability, IOM, Marc Probst
Nov 12, 2012
Most tools used in medicine require knowledge and skills of both those who develop them and use them. Even tools that are themselves innocuous can lead to patient harm.
For example, while it is difficult to directly harm a patient with a stethoscope, patients can be harmed when improper use of the stethoscope leads to them having tests and/or treatments they do not need (or not having tests and treatments they do need). More directly harmful interventions, such as invasive tests and treatments, can harm patients through their use as well.
To this end, health information technology (HIT) can harm patients. The direct harm from computer use in the care of patients is minimal, but the indirect harm can potentially be extraordinary. HIT usage can, for example, store results in an electronic health record (EHR) incompletely or incorrectly. Clinical decision support may lead clinician astray or may distract them with unnecessary excessive information. Medical imaging may improperly render findings.
Search engines may lead clinicians or patients to incorrect information. The informatics professionals who oversee implementation of HIT may not follow best practices to maximize successful use and minimize negative consequences. All of these harms and more were well-documented in the Institute of Medicine (IOM) report published last year on HIT and patient safety .
One aspect of HIT safety was brought to our attention when a critical care physician at our medical center, Dr. Jeffery Gold, noted that clinical trainees were increasingly not seeing the big picture of a patient’s care due to information being “hidden in plain sight,” i.e., behind a myriad of computer screens and not easily aggregated into a single picture. This is especially problematic where he works, in the intensive care unit (ICU), where the generation of data is vast, i.e., found to average about 1300 data points per 24 hours . This led us to perform an experiment where physicians in training were provided a sample case and asked to review an ICU case for sign-out to another physician . Our results found that for 14 clinical issues, only an average of 41% of issues (range 16-68% for individual issues) were uncovered.
Continue reading “Improving Patient Safety Through Electronic Health Record Simulation”
Filed Under: Uncategorized
Tagged: AHRQ, EHR, HIT, Informatics, IOM, Jeffrey Gold, OHSU, Patient Safety, William Hersh
Oct 31, 2012
Although healthcare providers are making progress in adopting health IT, Americans seem to be resistant to change to Electronic Health Records (EHRs). In fact, only 26 percent of Americans want their medical records to be digital, according to findings from the third annual EHR online survey of 2,147 U.S. adults, conducted for Xerox by Harris Interactive in May 2012.
Last month the Institute of Medicine issued a seminal report entitled “Best Care at Lower Cost: The Path to Continuously Learning Health in America.” The report estimates the American healthcare system suffered a $750 billion loss in 2009 from inefficient services and administrative expenditures. The report is grounded on the principle that effective, real-time insights for providers and patients which result in collaborative and efficient care depend on the adoption and use of digital records.
As people are naturally resistant to change, education will be key in gaining support among Americans for the transition to EHRs. If providers can help patients understand “what’s in it for me,” that will likely go a long way in making Americans feel more comfortable with the switch to digital.
Let’s take a look at five ways EHRs directly impact the patient. For these examples, we’ll use a fictitious patient named “Joe”:
Filed Under: THCB
Tagged: caregivers, e-Prescribing, EHR, HIEs, IOM, Midas+Live Software, Predictive analytics, Security, Will Saunders, Xerox
Oct 2, 2012