This year marks the 15th anniversary of the Institute of Medicine (IOM)’s To Err is Humanreport, which famously declared that from 44,000 to 98,000 Americans died each year from preventable mistakes in hospitals and another one million were injured. That blunt conclusion from a prestigious medical organization shocked the public and marked the arrival of patient safety as a durable and important public policy issue.
Alas, when it comes to providing the exact date of this medical mistakes milestone, the IOM itself is confused and, in a painful piece of irony, sometimes just plain wrong. That’s unfortunate, because the date of the report’s release is an important part of the story of its continued influence.
There’s no question among those of us who’d long been involved in patient safety that the report’s immediate and powerful impact took health policy insiders by surprise.
Last week, Dr. Bob Kocher and I took to the pages of the New York Times to detail a health care success story in Southern Texas. In a region once featured for its extreme health care costs and poor health outcomes, a group of physicians motivated by new incentives in the Affordable Care Act has started to change the equation. The Rio Grande Valley ACO Health Providers achieved eye-popping savings in their first year – coming in $20 million below its Medicare baseline and receiving reimbursements totaling over $11 million while also achieving better health outcomes for its patient population.
The savings number made for an impressive headline.
But as is often the case, other information had to be left on the cutting room floor. We dive a little deeper into the RGV ACO below:
The Central Role of Information Technology
Dr. Jose Pena, Chief Medical Director of the Rio Grande Valley ACO, emphasizes that one of the first and most difficult tasks for the newly-formed organization was developing an IT infrastructure that would serve their needs. “Using what was there wasn’t really an option,” says Dr. Pena, “so we built our own infrastructure.”
Forgoing a single EHR solution, the Rio Grande Valley now operates on a mix of cloud and office-based systems. The ACO developed software to identify metrics from various EHR systems, migrate that information to the cloud, and view real-time performance of providers. “IT accounted for 40% of our costs,” says Dr. Pena, “but the importance of proper reporting – to our leadership team, and to CMS – was at the top of our list.” The ACO identifies its customized IT system as foundational to its success.
In the New York Times on Thursday, October 17, Topher Spiro wrote an important op-ed expressing why we need to hold onto the medical device tax that helps pay for parts of the Affordable Care Act. Spiro backs up his argument by pointing out how profitable the device industry is. To his argument I would also add the fact that this will provide the industry with more paying customers. Certainly it can afford to pay the taxes.
But I diverge from Spiro on a proposal he floated near the end of his piece:
“To complement these efforts, the new Patient-Centered Outcomes Research Institute [PCORI], a non-governmental body created by the Affordable Care Act, should pay for research that compares the effectiveness of devices so physicians can make informed choices. (Three years into its existence, the institute has initiated few, if any, studies of medical devices.”
Listen to me PCORI. Don’t follow this advice, unless you plan not to survive to celebrate your fourth birthday.
Consider what happened to the Agency for Healthcare Policy Research (AHCPR), when it tried to help physicians figure out the best way to treat low back pain. AHCPR was created as a stand-alone research institute, akin to the NIH, but one that would focus not on the basic science of treating disease, but instead on evaluating how well existing treatments worked.
Welcome, students, to our special combined 9th grade math and civics class. Today, we’re going to look at the “Cadillac tax” in the Affordable Care Act.
Yes, Mitt, you have a question already? No, no, “Cadillac tax” is just an expression. No one is going to tax your family’s cars, Mitt, I promise.
Paul, you also have a question? I’m sorry, Paul, but if you had done the reading, you would know that the “Affordable Care Act” and “Obamacare” are the same thing. And yes, it is still the law, as I must have told you and your friends 40 times. Now can we get on with the class?
As those of you who did do the reading know, most American workers get their health insurance through their employer. The company, in turn, is allowed to deduct the cost of that insurance from its taxes. If the insurance for workers is very generous, it can encourage people to use too much medical care. This not only drives up costs, but we all pay for it a second time through the tax code. The Affordable Care Act addresses that problem by placing an excise tax on rich benefit plans starting in 2018, which is informally known as the “Cadillac tax.”
Economists of all viewpoints generally agree that an open-ended tax deduction for health insurance encourages overconsumption. What do we call that kind of agreement? Michelle?
No, Michelle, I’m afraid, “liberal conspiracy” is not the answer I was looking for. “Bipartisan consensus” was the correct response.
Rand, you seem quite agitated. Yes? “Government intervention in markets is never the right answer.” OK. Well, Rand, let’s talk about that another time and move on from civics to the mathematics part of today’s lesson. We’ll start with a word problem from the New York Times.
The Times quoted a study from a health policy journal as saying that 75 percent of health plans could be affected by the Cadillac tax over the next decade. That’s a big number, isn’t it? And the tax itself is 40 percent – another big number. No wonder the story was on the first page of the Business section.
But here are a few other numbers from the same study: just 16 percent of plans are likely be affected by the tax when it starts in 2018 – a much smaller number. And the “next decade” the study is talking about starts in 2018. What the study actually says is that by 2029 the tax could reduce benefits for affected plans by 3.1 percent. That’s an even smaller number and even further away.
Class, why would the New York Times emphasize the biggest numbers they could find?
Anyone who has read my work knows that articles like the one written in the New York Times on Sunday by Elisabeth Rosenthal will immediately get a response out of me. If you haven’t read it, here’s the link.
Where do I start with this??? I’m going to let Ms. Rosenthal tell you about how many unnecessary colonoscopies we do. I’ll let her tell you how much more it costs here than anywhere else. I will address the anesthesia bit. Let me tell you a little story. When I was a baby anesthesiologist my hospital sent anesthesiologists “downstairs” to do anesthesia for GI procedures maybe once a week for a few hours.
This was in 2004 or so. Now we send three board certified anesthesiologists to various GI units every day all day. We do maybe 25 cases a day on average. Now, some of this is due to the aggressive expansion of the advanced GI procedures unit as well as the addition of an outside private group that was recently folded into the greater hospital system. It’s also because we’re there. It’s no accident that as soon as we committed troops to the GI battle all of a sudden everybody needed anesthesia.
The NYT article uses Dierdre Yapalater as an example, a healthy 60-something. Putting aside the ridiculous cost for the overall procedure, she was billed $2,400 for anesthesia. But she didn’t need anesthesia. There is absolutely no reason for her to have an anesthesiologist involved for that case. None.
Anesthesia care used to be limited to very sick patients, not because they are harder to sedate (they’re actually often easier) but to monitor them closely because of their tenuous physiologic status. Now everybody is getting it. Why did she get anesthesia, why did the anesthesiologist give it, why does insurance pay for it?
Early this week Greg Masters and Pat Salber chatted with me for a fun convo about EMRs, NOLA, HIMSS, and alot more. It’s part of their overall series for the HIBCtv (Health Innovation Broadcast Network Consortium). And be warned they are giving me keys to the car for 90 minutes at HIMSS next Weds! You should be able to click on the player above to hear. If not click to this.
I’m well aware that a good fraction of the people in this country – let’s call them Rush fans – spend their lives furious at the New York Times. I am not one of them. I love the Grey Lady; it would be high on my list of things to bring to a desert island. But every now and then, the paper screws up, and it did so in a big way in its recent piece on the federal program to promote healthcare information technology (HIT).
Let’s stipulate that the Federal government’s $20 billion incentive program (called “HITECH”), designed to drive the adoption of electronic health records, is not perfect. Medicare’s “Meaningful Use” rules – the standards that hospitals’ and clinics’ EHRs must meet to qualify for bonus payments – have been criticized as both too soft and too restrictive. (You know the rules are probably about right when the critiques come from both directions.) Interoperability remains a Holy Grail. And everybody appreciates that today’s healthcare information technology (HIT) systems remain clunky and relatively user-unfriendly. Even Epic, the Golden Child among electronic medical record systems, has been characterized as the “Cream of the Crap.”
The topic was covered more than 2 years ago. “Cloned documentation” is the widespread practice of copying, pasting past documentation in an EHR into the current encounter record to inflate the recorded patient evaluation to primarily justify a higher payment. Thanks to this OIG report, the Feds have figured out that the true value proposition for an EHR is not “meaningful use” but wasteful abuse.
In addition to congratulating the Times for their crack cutting-edge reporting, here is a prediction…
1. The mere threat of payment denials and the possibility of sanctions will prompt health administrators everywhere to announce at medical staff meetings that “cloned” notes are verboten.
2. Until the “templated note” functionality is deleted in future EHR software updates, physicians will respond to this latest edict from their administrators in the traditional manner: they’ll ignore it.
“It is a measure of how dysfunctional the system has become,” says the editorial, “that these successful experiments — based on medical sense, sound research and efficiencies — seem so revolutionary.” It goes on to describe several of the kinds of new ventures in efficiency and effectiveness that make up the core of Healthcare Beyond Reform, in different healthcare systems and health insurers across the country.
The news here is not that these things are happening, or that they are so widespread that they can be called a “grass-roots movement.” The real news here is that the movement has gained such momentum that big, mainstream media organizations outside of healthcare, well beyond the policy wonk orbit, have begun to surface what may turn out to be the biggest story of our times: The largest sector of our economy turning inside out, like some movie transformer, on the way toward providing all of us with far better care for far less than we could possibly imagine. Better healthcare for half the cost.
So Paul Krugman, the NY Times Nobel Prize winning lefty columnist, says this (and echoes what I’ve been saying for a while)
So where in America is there serious consideration of moving away from fee-for-service to a more comprehensive, integrated approach to health care? The answer is: Massachusetts — which introduced a health-care plan three years ago that was, in some respects, a dress rehearsal for national health reform, and is now looking for ways to help control costs.
Why does meaningful action on medical costs go along with compassion? One answer is that compassion means not closing your eyes to the human consequences of rising costs. When health insurance premiums doubled during the Bush years, our health care system “controlled costs” by dropping coverage for many workers — but as far as the Bush administration was concerned, that wasn’t a problem. If you believe in universal coverage, on the other hand, it is a problem, and demands a solution.
So universal coverage systems find that they can’t just let the health care system increase costs because there is no safety valve of the uninsured to dump out of the system. We’re all in it.
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