Jess Parks co-founded VISICU, Inc, was a partner at Accenture, and most recently was COO of Aveta, Inc., a Medicare Advantage plan. Jess thinks that, if he hasn’t solved it, he’s at least figured out the problem of irrational technology adoption in health care. See if you agree:
This past week I read two interesting articles that, when taken together, illustrate one of the most fundamental problems in today’s US health system. The first article was Ron Winslow’s piece in the Wall Street Journal: “The Case against Stents: New Studies Hint at Overuse”. Winslow writes that the explosive market adoption of drug-eluding cardiac stents has been well out in front of hard scientific evidence supporting stents’ efficacy for large swaths of the population with cardiac disease. The second article was by David Leonhardt in the New York Times: “What’s a Pound of Prevention Really Worth?” Leonhardt chronicles the experience of Dr. Arthur Agatston, the South Beach Diet doctor. Dr. Agatston has built a medical practice that focuses on prevention of heart attacks in patients with cardiac disease, and has achieved some remarkable outcomes.
So what’s the “fundamental problem”? Our medical system has delivered billions in profits to the providers of stent treatment for cardiac disease (with suppliers, hospitals, and cardiologists all benefiting), while Dr. Agatston’s practice is virtually the only one of its kind, and loses money because the preventive medicine he delivers is inadequately reimbursed. The two articles illustrate the powerful and pervasive incentives for our healthcare system to allocate resources aggressively and disproportionately to profit-making activities. They also highlight the sub-optimal alignment between the potential for profits and the potential to drive the key outcome we all desire for our healthcare system – namely a healthier life lived for all.
Now don’t get me wrong, we need the profit motive in health care. Profits drive innovation, change, and operational discipline – there is no substitute and we would not have our system’s continuing stream of life-saving advances in treatment were it not for the profit motive. In fact, I’d argue that all the world’s nations benefit from the profit motive in US healthcare (yes, they are free riders!). And our system does make significant efforts to align profitability and desired societal outcomes through regulation, e.g. the FDA, provider licensure, underwriting regulations, the orphan drug act, etc., etc., not to mention the Hippocratic Oath. However, the alignment we have achieved falls short of what we need: insurers still cancel policies, the poor still have markedly reduced access to services, information exchange standards still do not exist, and we still suffer from countless wrong-headed resource allocations – paying more for amputation of feet than for regular preventive podiatric examinations of diabetics who are at high risk, more for invasive end-of-life heroics than for preventive community or home-based monitoring of at-risk elderly with chronic disease. I could go on.
There are major opportunities all around us to improve health outcomes, and these opportunities are obvious to all market participants. However, they will continue to sit latent and unfunded – because activities that do not increase insurance profits (today) or provider/supplier reimbursement (today) simply do not get funded and/or adopted by our healthcare markets, no matter how efficacious they might be. I know that many feel that the growth of so-called “disease management” programs sponsored by insurers are an example of how markets are working to align profit and outcomes. Sadly, I disagree, but that is another topic.
If we consider a list of key contributing factors to greater health for our society, the misalignment becomes very evident. Here is the list:
1. Risk identification (that is, identifying risks while there is still time to mitigate them)
2. Behavior modification (patient behavior)
3. Affordable access to healthcare delivery services
4. Identification of best practice in healthcare delivery operations (e.g. medical research, public health research, health services research)
5. Consistent adherence to acknowledged best practice operations within the clinical AND non-clinical components of healthcare delivery
6. Development of superior healthcare treatments (diagnostics, drugs, devices, supplies, procedures).
So I will ask the rhetorical question: in which category will an innovation be rapidly adopted by the healthcare market? The answer is clearly #6 – new healthcare treatments – because suppliers and providers can easily and directly make profits from introduction of superior treatments. And since all industry participants compete for resources, those that offer a clear and rapid return on investment command the majority of the healthcare market’s discretionary capital resources. If you were a venture fund with $1 million to invest, would you put it to work researching a new breakthrough treatment for breast cancer, or would you fund health services research on reducing nosocomial infections in hospitals via improvements in nursing assistant hygiene? Even non-profit charitable organizations (taken collectively) tend to allocate resources disproportionately to treatment R & D, primarily because this is where the greatest and loudest demand is coming from.
To make matters worse, success has driven industry behavior into a rut (albeit a well-greased one). Because the profits available from new treatments are so significant, the supplier / provider industry has over years invested billions to develop an industry-wide infrastructure for promoting and adopting new treatments. From the IRB to FDA approval to physician detailing to payer reimbursement the path to adoption is so well-tread that alternative promotion efforts for other types of solutions seem “unofficial”. If you are competing with this market adoption engine for physician or institutional attention, you have a very hard road ahead of you, even if your solution has good profits to offer.
For example, take #4 or #5 on my list. There are many operational process modifications – in many cases enabled by technology – that can make profits and improve outcomes for hospitals or home health providers or any other provider under PPS reimbursement. However the barriers to development and widespread, consistent adoption of these modifications are very high:
There is in most cases no entity, let alone industry segment, that directly or significantly profits by market adoption of operational process improvements (some consulting firms promoting the change process may profit indirectly), so there is no investment in a cross-industry scaffolding for market adoption (despite their incredible value, I don’t consider organizations like the Institute for Healthcare Improvement or NCQA to be very effective in promoting adoption). As a result, every institution has to mount its own internally developed and internally funded effort for promoting and implementing the solution.
Rather than “adding” an element of care delivery, technology and process changes often focus on avoiding waste, redundancy, and/or inappropriate utilization, raising the burden of proof for efficacy and ROI significantly higher and making the solutions a target for patients, advocates, lawyers and physicians
Return on investment is complex, hard to measure, and usually delayed; in comparison to the ROI of learning/equipping to do a new procedure, doing it, and getting paid, or replacing a supply item that costs $10 per use with one that costs $8.
Imagine if stents were presented to the market this way: “Hey, Mr. Hospital Medical Director, IHI says you really ought to convince your cardiologists to use drug-coated stents instead of referring their patients for bypass; they do have better outcomes for some patients… oh, there’s no payment for them, and you may lose some bypass volume, but we think it’s best practice…and almost forgot, you have to buy a two years’ supply of them and train the cardiologists before you get started.” Absurd, right? But that’s the message that many promoters of technology and process innovations are delivering today!
of the items on my list except #6, I could elaborate on the challenges
of market adoption (examples include CHINs and RHIOs, EMRs, EHRs,
telemedicine and home monitoring, community-based medical management
that is integrated with local providers, clinical guidelines, CPOE,
etc.) but I want to communicate some ideas for solutions. There are two
considerations for solving the market adoption problem. The first is to
understand what factors and forces drive adoption. That’s easy:
>The market’s primary
participants (providers and/or payers) have to make good profits (or,
second-best: avoid bad losses). Cash is king.
> An existing
infrastructure for disseminating information and education must be
tapped or built (note: if each solution has to build its own
infrastructure, we will spend a LOT of money and have dubious results –
new start-up biotech, drug and supply companies do not attempt to build
a national sales and marketing infrastructure nowadays; they license an
existing distribution channel).
>Improve patient outcomes, or at least don’t hurt them…
consideration is to develop a close approximation for these factors and
forces where they might not naturally exist, because as I’ve pointed
out they don’t naturally exist for many of the items on my “contributes
to greater health” list. I don’t have the answer, but I do have a
“Market Adoption Solution” list with a few opinions and ideas.
1. Codify best practice
in areas where it really makes a difference. Sorry, but this is a role
for the federal government. CMS, as the nation’s largest healthcare
payer and the payer of last resort, has a moral responsibility (and by
extension we all do) to LEAD in evaluating the research and determining
the major interventions where health can be improved and lives can be
saved. They need to follow the example of the Leapfrog Group. Just
identify a few things – technology, process, treatment, guidelines,
etc., that really make a difference. Where regional variation just
can’t ethically be tolerated. Yes it will be politically hard, but we
are all paying, CMS is our pooling agent, and who else can possibly
attract and devote the resources to make these important, informed,
objective determinations? This will go a long way towards solving the
promotion infrastructure problem for the big solutions.
2. Pay for performance
and penalize for not performing. CMS needs go beyond the little baby
steps it is taking now and show that where it believes variation is not
tolerable, it will disproportionately reward those who conform to
standard and penalize those who do not. This needs to be a large-impact
change, but could be phased in like risk adjustment. This type of
discriminating payment behavior could also fund new reimbursement
streams for desired behaviors and offset them not just by savings but
by penalties in other areas for non-conforming providers and
payers. This cannot be something where we measure every single care
delivery process and tweak payment up or down. CMS must be focused in
promoting only the solutions with most impact. Big solutions like EMR
could be rewarded and subsidized this way, with CMS driving adoption of
key standards. I have always been pessimistic about the viability of
health IT vendors because the market can’t / won’t spend enough to
support a portfolio of vendors and products that can keep pace with
changing customer needs. CMS could solve this by rewarding providers
and payers that actually make the right investments in their
information future and penalizing those who don’t.
3. Build and fund a
national, or even state-level, infrastructure for in-the-field,
in-the-market promotion of high-impact interventions and
solutions. Sort of like academic detailing. Governments would choose
the solutions – they could be the same big impact ideas that CMS is
identifying and rewarding, or it could be other smaller breakthroughs.
Solutions would have to compete to gain access to the promotion
infrastructure, because the budget would be limited. A way to think
about it is to have a government-funded “IHI on steroids”. This is
something the government(s) could contract out to existing
suppliers/distributors that have research infrastructure and/or
promotion know-how in place. An example of this model is the classic
governmental anti-smoking campaign, except that this approach would be
focused on the provider community, not on individual consumers.
realize that all this government-sponsored initiative is frightening to
many. However, the industry has demonstrated an inability to overcome
the adoption problem. Having the government coordinate and fund,
through its many auspices (HHS, NIH, IOM, CDC, etc.) the policies that
will drive adoption is much less scary that having a single national
payer, and it would fix many more problems. CMS is already a big enough
payer to drive most of the agenda outlined above. Yes it is possible
that the government decisions on what solutions have the most merit
could be wrong, or could lag the marketplace. However, rather than
stifle competition, the ideas I outline above could actually accelerate
innovation, because if implemented successfully they would lower one of
the biggest barriers we have to new solutions – the inability to “cross
the chasm” because there are no immediate profits to offset the
transaction costs of market adoption.