QUALITY: Milstein’s shark

Arnie Milstein from Mercer is probably the smartest “purchaser” in health care on quality. He’s also the only person explicitly linking the inefficiency in health care to the plight of the middle class un- and under insured….as in this story.

What do we know? 1) The low cost regions are 30% cheaper at no worse quality. 2) Within the low spending communities the lowest spending docs with high quality are still 15% below the average cost for the region —  Boeing looked into this in Seattle. And medical errors are still a massive problem (Minnesota health policy adviser was going to have the wrong side of her brain operated on)

But we have the shark (Arnies turn at explaining the increase in spending over incomes) caused by the biomedical miracles. Arnie says that we shouldn’t shut off the shark (i.e. cut off new biomedical miracles). Cutler estimates that every year the shark adds 5 weeks to life expectancy

Answer is to a) rapidly adopt best known delivery methods — b) rapidly incubate cost efficient care delivery innovations so that improvement happens more quickly

So how to do this? a) improve performance measurement, b) increase performance sensitive payments c) faster vetting of cost saving innovations (e.g. no plan had done on ROI on their DM initiatives)

Have to speed up the process knowledge discovery-cycle, by i) expanding role of para-professionals, ii) using engineers to redesign engineer IT-enabled work flows, and then iii) source high end elective care globally. (He’s finding unbelievably cheap prices from JACHO certified hospitals in China)

This has worked elsewhere…on average since mid-90s retail has been gaining efficiency at 2.5% a years, finance at closer to 8%—but they’ve adopted scientific measures. Where this has happened in health care is worked well. Virginia mason is using engineering to reduce unit costs and volume of services, and has just written a letter saying the 50% of dollars are wasted and told its clients that.

He also believes that while not perfect salient public transparency is powerful (Julie Hibbard, Health Aff July 2005), but apparently employers and enrollees support tiering and provider selection preferred 2 to 1 over P4P. He thinks that overall P4P is “medically necessary reset” — but the middle class is not likely to be shielded in time. But it’s not enough to save them unless we really move quickly. I think he’s an optimist.


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8 replies »

  1. The St. Pete Times and Walmart do exactly what Dr. Novack is doing. The Insurance Commissioner says that because these non-licensed HR people have no license that they have no control. They say call the US Dept. of Labor which says that it is legal for non-licensed HR people to say anything they want. Well, it was legal for the NAZIs to kill Jews but that doesn’t make it right. That’s why I say the Justice Dept. should investigate Dr. Novack. Dr. Novack says the employees should know how much their health insurance costs, yet his own HR babe doesn’t know how much it costs. It’s true.
    I’m sorry Dr. Novack if what I say hurts your feelings.

  2. Ron. Keep your insults to politicians and me. I’d better see an apology for that last one very very soon. Matthew

  3. I think David is saying to give tax credits to the healthy to leave over-priced employer-based health insurance programs and leave the sick with Blue Cross; which is a sword in their evil black hearts.
    Also, let’s get the Justice Dept. to investigate Dr. Eric Novack practice for hiring non-licensed HR bimbos that sell uninformed employees dangerous health insurance without Full and Proper Disclosure. Trust me, Dr. Novack should not be choosing the health insurance on your children, get real.

  4. Well, I think I understand David Kern’s remarks.
    He asks:
    > why would disparate competitive entities of any
    > nature strive to develop metrics that would favor
    > others
    To prevent someone else from developing metrics that make everyone look bad, for one reason.
    But I think it is the purchasers/payers who will develop the quality of care metrics, not the providers. And as he says, these metrics won’t address purchaser/payer performance, at least not very well.

  5. If we can concur that people generally behave relative to their perception of self interest, why would disparate competitive entities of any nature strive to develop metrics that would favor others. The value of competition relative to desired behavior is proportional to the competitors compliance as to how we keep score. We might can further agree that if we were to allow each team in a sporting event to determine what constitutes a goal and how many points its worth, the game would be less than compelling. Logically our expected behavior in terms of healthcare quality metrics and scoring would not generate a behavioral aberration in this regard.
    A freely competitive market generates enormous energy for innovation and results consistent with incentives within a defined structure. Without the structure, the fuel for excellence leads to the need for a large number of fire trucks.
    David Kern

  6. I am all in favor of market forces and healthcare quality. But creating a bureaucratic structure to identify ‘quality’ and then expect market forces to apply is impossible.
    Medicare sets prices. It is illegal for doctors to accept fees lower than medicare. It is illegal for doctors to set prices higher than medicare. Medicare is the single largest US payer in healthcare.
    If Congress removed the above rule– and encouraged market competition amongst medicare providers– you would very quickly see that prices and quality data would become more available. This would not just be true for doctors, but also for every other area– from walkers and canes, to oxygen tanks and diabetes supplies.

  7. But Eric – that is precisely the point. We have no way of determining whether what we are getting is “Ferrari” healthcare or “Hyundai” healthcare. So we should either find ways to get the best outcome for the least cost, or find ways for the public to determine what constitutes “Ferrari” healthcare. As long as everyone thinks they are entitled to “Ferrari” healthcare at “Hyundai” prices no market forces will work. The public has no way of making rational decisions about what constitutes a “Hyundai” vs. a “Ferrari”; and whether you make $10,000 a year or $1M a year you think you deserve the same healthcare as everyone else.
    How can we ever expect the market to work in healthcare without some objective way to differentiate the product – both by quality and cost?

  8. Matt- the issues are important, very much so, but to say that, in the aggregate, less spending can result in equal outcomes, is as helpful as saying that, in the aggregate, drivers of a Hyundai get to work in about the same time as drivers of Mercedes, or even Ferraris (ie. less spending on cars gets equal outcomes).