Five “Shovel-Ready” Health Care Reforms

Microsoft Health Vault’s leader Peter Neupert has a wonderful blog post that makes two important points really well. One message is that health care reform is about the outcomes, not the technology. We should think expansively about which technologies to invest in, based on the results we want to get.

The other message is the economic stimulus package is different than the reform effort. It is moving at hyper-speed through Congress, and it may be difficult for staffers and other advisors to sort through and incorporate what may seem like opposing Health IT views against a backdrop of traditional ideology and extremely forceful special interest lobbying.

Even so, there’s consistency among the health care professionals who worry about these issues all the time. Peter unexpectedly discovered that the messages of his fellow panelists from the Health Leadership Council, the National Quality Forum, the Permanente Federation and the General Accounting Office were remarkably in sync with his own testimony to the Senate Health, Education, Labor and Pensions Committee.

Congress is about to make some big moves in health care that will require immense resource expenditures but, depending on what we pay for, may or may not bear the fruits we hope for. They should move carefully. Not all health care reform has to be labyrinthine. Not all ideas must require huge cost or take years to come to fruition and gain market traction. There are relatively simple actions that are available now, and that the Obama Health Team could tackle to effect tremendously positive, immediate impacts on the system.

Of course, right now the Health IT industry is focused on the promise of a huge stimulus windfall that would be dedicated to their products. But the opportunities we describe below follow principles that have broad support among students of the health care crisis. Two would change the way we pay for health care services, tying payments to documented results. Three are based on how we pull together and make use of the data that can drive clinical and financial decisions, and they overlap, though not perfectly, in their potential. Still, if any system adjustments can be passed through policy initiatives that focus on what’s best for the common rather than the special interests, these should be among the most straightforward.

Re-Empower Primary Care
There is general agreement that primary care is in crisis, the result of years of abuse and neglect by the medical establishment and by CMS. In simple terms, the primary care/specialist ratio in the US is 30/70. In all other developed nations, its about 70/30. And our costs are roughly double theirs.

We should allow primary care physicians to do the jobs they were trained for, changing their roles from “gatekeepers” to “patient advocates and guides.” We should immediately start financially rewarding them for collaborating with specialists to manage patients throughout the full continuum of care. Keep in mind that, as the Dartmouth Atlas and other studies have made clear, most health care waste is concentrated in the sub-specialties and in inpatient settings, incentivized by a fee-for-service reimbursement system that rewards more procedures, independent of their utility.  One very thoughtful approach to invigorating primary care has been advanced by Norbert Goldfield MD and colleagues.

Of course, truly re-empowering primary care will require more than just paying primary care physicians more. Higher reimbursements will help them afford to spend more time with each patient, yes, but PCPs also need help acquiring tools that can help them better manage those patients. And they need the authority to work collaboratively with specialists. Challenging, but certainly doable and important!

Changing America’s current imbalance between primary and specialty care should drive significant downstream waste from the system, dramatically improving quality and reducing cost.

Increase the Incentives For Programs That Tie Payment To Outcomes
Projects like the CMS/Premier Hospital Quality Incentive Demonstration (HQID), in which 250 participating hospitals got 1-2 percent bonuses for achieving quality improvements, have clearly demonstrated that incentives work. The hospitals that pursued the incentives made greater strides in quality improvements than their peers who did not work toward the incentives.

But we need to make the financial incentives large enough to drive real paradigmatic change. Too many programs offer incentives that are trivial in the minds of providers. Does it make sense for physicians in small, busy practices to rework their office flows to try to meet the challenges associated with hitting targets in exchange for a 1 or 2 percent financial bump, tied to a fraction of their patient population?

Now that there’s no question that incentives work, we could easily give these programs teeth by raising the incentive antes to 15 or 20 percent, while also demanding commensurate levels of savings. And we should go in, understanding that the goal is to drive out unnecessary care, and create expectations that,  by managing better upfront, the total spend will be lower.


Establish a National All-Payers Database
Data sets, including those comprised of health care claims, must be large to generate credibly useful information.

But health care is financed through many different payer streams and by many players within each stream.  Nearly all treat their data as proprietary, and information remains fragmented. So, for example, physicians rarely receive useful information on their complete pool of diabetic patients: instead, they get small slices of data from each payer, each analyzed using a different proprietary methodology. Or, we fail to accumulate adequate sample sizes to identify which treatments, interventions, drugs, devices, health plans, physicians or facility services provide the best value.

But merging those data across payers and making the aggregated set freely available would create the basis to identify true evidence-based best clinical and administrative results. Based on hundreds of millions or billions of records, we might be able to credibly identify which professionals, services or approaches most consistently produce the best results within value parameters. The data set would always be building, providing an always slightly-new base for answering our most difficult questions. Together with the analytical tools that are also becoming stronger and more refined, the potential is vast.

Of course, health plans, always politically formidable, might fight tooth and nail to maintain the competitive advantage they believe is inherent in their data. But health care is a special enterprise, with objectives that are ultimately rooted in the common interest, so they have no real excuse to refuse this. And health plans, like the rest of us, would gain access to much larger data sets that can be mined to advantage.

There also are precedents here. Several states have already begun to establish all-payer databases. At a June 2008 meeting, a presentation on Maine’s experience highlighted 3 fundamental, telling principles that are challenges to any effort.

1. Nobody wants to pay to develop and manage the database.
2. Nobody wants to contribute their data to the database.
3. Everyone wants the aggregated data that develops in the database.

The solution: make it a national effort, paid for by CMS, and with mandatory participation, user fees, and open access to the data.

Create Uniform Nationally Accessible Disease Registries

Many physicians have come to appreciate the value of disease registries. Registries allow clinicians to count all active patients with distinct conditions, e.g. hypertension or diabetes. They can track characteristics within a patient subset, e.g. diabetic patients on a particular medicine. They can monitor and stratify patient status and progress within each group, and generate reminders and alerts to assure guideline level care. And they can identify trends in performance and, with relative ease, get a sense of what works and what doesn’t.

Even so, many registries are still in silos, meaning that the sample sizes remain small and that the parameters that define the registries’ characteristics often vary between implementations.

What we need are freely available, Web-based registries with easy data entry and easy querying capabilities. The impact on our management of patients with chronic illness, who consume 70 percent of our health resources, would almost certainly be powerfully positive.

Release Medicare’s Physician Data
Nearly a year and a half ago, the consumer advocacy organization Consumer Checkbook sued the US. Department of Health and Human Services (HHS) for the Medicare physician data in four states and DC. HHS argued that physicians have a right to privacy, even though, in the case of Medicare and Medicaid, they are vendors taking public dollars, and even though hospitals do not enjoy the same protection from scrutiny. In August 2007, the court held with Checkbook, and on the AMA’s “advice,” HHS promptly appealed, locking up the data for the duration of the Bush Administration.

The large commercial health plans have traditionally considered their claims data proprietary and so have not made their data sets publicly available. Self-funded health plans, administered by Third Party Administrators (TPAs), develop sizable data sets but have resisted collaborating, and have also not expressed an interest in making their data available.

So for those outside the health plan community, there are few, if any, data sources with sample sizes large enough to accurately evaluate and profile physician performance. This is significant, since studies have shown that there can be profound differences, 6x-8x, in resource consumption (i.e., cost) between the least and most expensive physician (within a specialty and market) to obtain the identical outcome.

In other words, not all doctors perform equally. While more patients are paying out-of-pocket for a larger portion of care, there is still virtually no credible information to guide their physician choices.

The American people could quickly learn which physicians within a specialty and a market consistently get the best outcomes at the lowest costs if Medicare physician data were made publicly available. Releasing these data would also put pressure on physicians everywhere to understand their own numbers, and to improve if their performance values are lacking.  We see this as beneficial to the great majority of physicians who seek excellence in their work.

Smoothing the Way

American health care is a vast enterprise in which millions of professionals and hundreds of thousands of organizations vie for an ever larger portion of what has historically been an always growing resource pool. The chaos and dysfunction that has developed in health care is largely due to two system characteristics. One is the fee-for-service reimbursement system that has rewarded more rather than the right care. The other is a lack of transparency that prevents us from knowing and understanding performance, even when that performance is dangerous: what works and what does not, which approaches are high and low value, who does a good job and who does not.

The five action steps outlined above would allow us to better identify the problems and opportunities in our health system, as well as the strongest solutions to drive decision-making. Then they would leverage that information to create strong incentives for the right care, organically changing the dynamics of care and reimbursement and, to the degree possible, smoothing the transition required to heal the way we supply, deliver and finance care in America.

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After Twenty-five years of dedicated service, my Sunbeam Mixmaster gave out. While I replaced it with another the same product, When I learned that they just don’t produce items like they used to! So I purchased a kitchenaid, like everybody else. This has been a few years ago now and I still dislike that Kitchen Aid! I really don’t enjoy that you can not put ingredients effortlessly while mixing with out placing the training collar and chute to the bowl, you can’t clean the bowl while the beater is working, it is extremely sloppy (some thing always seems to fly… Read more »


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Margalit, “Medicare, by contrast operates at a 3% overhead” This is one of, if not the largest, myths in healthcare reform. The first fallacy is performing the comparison in percentages to start with. You can’t compare the administrative efficiency of two systems when one has a $3500 base and the other well over $6000. When I mail a letter it cost me $0.42, the post office charges Medicare the same. If we where both to mail 1000 letters it would cost each of us $420.00 That equates to me spending 12% of my revenue on mailings but Medicare only spending… Read more »

Margalit Gur-Arie

Well, Nate as you can imagine I do not have a solution to this mess that just needs some holes filled in. No one person does. It will take many experts, credible research and lots of planning to achieve that. However, here are some points for thought: 1) Our healthcare system has tremendous bureaucracy expenditures. Some evaluations go as high as 30%. Most of this overhead is due to the thousands of different insurance plans, each with its own marketing, paperwork, enrollment, premiums, and rules and regulations. In addition there are CEO salaries (some with 8 digits), and profits of… Read more »


What do providers pay for EDI? I have looked for reliable data and only see discussions about pricing not what they actually are charged. I have had numerous clearing houses say they eithr give it to physicians for free or heavily discounted so they can build outgoing volume. I have seen a number of doctors and adminsitrators on here anyone care to share what you pay for outgoing EDI? CMS was hitting us for $0.75 I believe for Medicare Secondary claims and Emdeon was about $0.40 I think. This came up when discussing our liability for claims that aren’t ours.… Read more »

Margalit Gur-Arie

Hello Nate, Everybody makes mistakes; your statement that providers do not pay for EDI was a mistake. I did not see a need to challenge your knowledge and/or integrity. I assumed it was an honest mistake and just pointed it out to you. I know you represent the commercial payors and I am a believer in universal healthcare. I believe health care is a right, not a commodity. So we disagree…. People disagree all the time. That’s what makes discussions interesting. I never said that recovering the commercial payors profits will solve all our problems, but the several Billion dollars… Read more »


Point taken and I guess it never hurts to give someone a second or third chance to acknowledge their mistake, then make them cry if they fail to. I would disagree on peoples responce to correction, I use to be much more even keeled about debate, it was years of watching the same people make the same claims and never admitting they where wrong when I came to the conculsion a strong slap works better then a kind request. I am also highly disappointed that inteligent people are so lazy about debate and the issue in general. I feel this… Read more »

Brian Klepper

Nate, Many people visit this site. They have wide differences in ideology as well as different depths of knowledge about differnet health care disciplines. (My guess is that you’re a lot less fluent about, say, health care supply chain, care delivery and IT issues than you are about coverage.) As you are well aware, health care is vast, most of us have deep knowledge about our home areas, while we may be less so in other areas. In my experience in this forum, people may be misinformed from time to time, but deceit is rare. When someone does misrepresent the… Read more »

Stephen Motew

Regarding “Re-empower primary care”. I certainly agree that emphasizing and retraining primary care physicians to accept a broader ‘wellness patient advocate’ role should be rewarded. Some of the current physician imbalance and ‘gatekeeper’ mentality however has arisen due to the lifestyle and protectionism pursuits of primary care practitioners. In our community for example the motivation for re-assuming the ‘master of my patient’ role for primary care physicians is greatly diminished. Many offices close early with messages to go to the ED for problems, inpatients are managed by hospitalists and easy access to competent specialists and imaging now allows their use… Read more »


Opinions are to be respected, misinformation does not deserve the same. I respectively reply to opinions. When someone makes claims that are patently false that is a different story. What is the correct response when a group of people perpetrate a lie in order to mislead the public into supporting their political cause? When people claim Insurance companies are making double digit profits or, as Margalit said, eliminating them could fund the solution to all of our problems they are not sharing an opinion they are telling a lie. This information is not obscure or hard to find, you can… Read more »


Well said, BK