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Month: May 2009

Op-Ed: Leave it to Darwin?

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By ROGER COLLIER

Roger collierI’ve been reading some of the testimony on delivery system reforms from the House Ways and Means  Committee meeting earlier this month, in particular the lengthy statements from MedPAC Chairman Glenn Hackbarth and Urban Institute Senior Fellow Dr. Robert Berenson.  Hackbarth and Berenson are each distinguished health care figures, and their remarks are worth careful study. Together, they paint an all too familiar gloomy picture of a system whose costs are out of control, in which quality is often poor, and where there is little correlation between expenditures and outcomes. Few would disagree with the causes that they identify: payment structures that reward volume, lack of coordination among providers, an overemphasis on specialty care, and a system that seems more often driven by supply than demand. The two sets of testimony include several very important recommendations, like more emphasis on public health, dissemination of comparative effectiveness information, and higher payments for primary care (although several years will elapse before this makes a real impact on physician career choices).

Other testimony proposals, however, especially those focused on
Medicare, carry the risk of distracting us from more important changes.
Chronic care coordination (including the medical home model) has not
yet convincingly been demonstrated to cut costs. Accountable care
organizations (this year’s buzz-phrase) require more willingness to
cooperate than many providers have so far shown. Bundled
hospitalization payments make good sense but require the same kind of
willingness to cooperate. Tying payments to quality introduces
questions of data interpretation and validity of guidelines.  

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Connecting value to coverage: a first glimpse

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By MICHAEL PAINTER

MPainterWould you take a virtual walk with me across the Dartmouth Atlas map on RWJF's web site?  Just follow the link.  Now, move your cursor first over, say, anywhere in Minnesota.  There, you'll see that 2006 Medicare reimbursements were roughly $6,700 per beneficiary.  Now, move your cursor across the country, way over to Massachusetts–specifically, Boston, for instance.  There, 2006 Medicare reimbursements were almost a whopping $3,000 per beneficiary higher.  You'd sure think that the quality of care in Massachusetts must be extraordinarily better for that extra $3,000 per person–but, guess what?  It's not–it's roughly the same–maybe even worse in some cases.  Plus, Massachusetts has embarked on its own universal coverage experiment.  First in its class, Massachusetts is providing the rest of us with a real-world unfolding example demonstrating how health care cost, quality, value, and coverage intersect.  If Massachusetts could figure out how to pay for high-quality care at the level of, say, Minnesota, their coverage experiment might just get exponentially easier.

So, are our national leaders taking this unfolding lesson to heart?  We're beginning to learn.  Last week the Senate Finance Committee released a set of policy options on transforming the health care delivery system.  Their statement is really the first glimpse we've had at how our national leaders might (or might not) be linking value and coverage.

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The Two Trillion Dollar Promise: Can We Trust It?

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By BILL KRAMER

President Obama described it as a “watershed” in the journey toward comprehensive health reform – and it might very well be.  But many people are suspicious of the health industry leaders who promised to slow the trend in health care costs and save $2 trillion over the next ten years.  Should we be hopeful or skeptical?  The answer is both.

The joint statement by health insurers, hospitals, physicians, drug and medical device manufacturers on May 11 was very encouraging.  At no time in recent history has this group agreed on a savings target and specific steps to achieve it.  In the 1990’s, most of these industry groups made the cold, rational decision that they were better off with the status quo than under a Clinton-style reform plan.  Now, all of them know that the current path is unsustainable, and they believe that the mainstream reform proposals by President Obama and Sen. Baucus are much better for them than the other options (do nothing or single payer).  They also know that these savings are achievable; for the last 15+ years, academic experts and consultants have been pointing out opportunities for improvements in affordability and quality.  There is plenty of “low hanging fruit”.

But there are plenty of reasons to be skeptical.  In the past, no one ever lost a bet that health care costs would continue to increase rapidly.   The title of Altman & Levitt’s 2002 article in Health Affair says it all: The Sad History of Health Care Cost Containment as Told in One Chart. 

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Vaccine refusal, or Jenny McCarthy, better with fewer clothes on

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By Matthew Holt

Kaiser Permanente has released a study from its EMR database looking at use of vaccines in its Colorado region. KP in Colorado has data on about 480,000 members dating back to the mid-1990s from when they started implementing the first EMR. After that system was retired and they moved to Epic the old data is in PDF format for current records, but is also in a database for research use. I spoke to the researchers Jason Glanz & Ted Palen from the KP Colorado Institute for Health Research late last week.

Essentially the problem is that several studies have shown vaccines to be safe but some parents are really concerned, prompted in large part by certain celebrities (with former Playboy model Jenny McCarthy being among the most vociferous claiming that vaccines cause autism), and partly because they don't believe the diseases the vaccine prevents are serious.

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TV stardom (well, sorta…)

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By Matthew HoltPicture 25

It’s just possible that you weren’t glued to the France24 cable channel (yes there is a French 24 hour news  & chat channel broadcast in English). Well yesterday they had a “debate” about healthcare hosted by the very smooth Francois Picard.

Jean-Jacques Zambrowski, a professor at Paris Descartes University got to talk about Bismarkcian and Beveridge-type systems (and why Michael Moore was wrong to call French & UK care as being the same). I was sitting in a dark studio in front of a DVD showing the Golden Gate Bridge. On the phone was Tevi Troy from the Hudson Institute (yes those right wingers) who basically spent most of his time agreeing with me—which I found pretty worrying!

Incidentally for a TV novice, I could barely hear the conversation, and couldn’t see anything, which meant that I never knew when I was on camera or not—so hopefully they don’t catch me picking my nose or something on screen!  Here’s the “debate” and here’s part 2.

Beware the Bursting of the Health Care Bubble

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By GEORGE LUNDBERG

George Lundberg The good news is that if and when the American healthcare bubble bursts, some value will remain. The bad news is that the annual appropriate value could actually be only about 60% of the current expenditure.

The turn of the 21st Century has been marked by the creation, expansion, and im/explosion of at least 3 significant economic “bubbles”: the huge company Enron, plus the fields of dotcom and real estate/finance. A “bubble” comes to pass when a commodity of great promise and wide applicability entices many to participate and grows at a pace that reflects hope, excitement, sometimes greed, but does not have sufficient underlying  substance to support its continuing growth.

The demise of the fraudulently inflated Enron forecast much of this decade’s  financial  collapse.  A once successful oil and gas distribution company, Enron enjoyed accelerated growth in an essential field. But it came acropper by fakery, derivatives, and manipulation, out of synch with sound principles for sustaining value. When the trickery was exposed, little remained . Enron had become a “bubble” company with a top stock price of $90 in 2000 that shrunk to pennies.  This emperor had no clothes. It was a house built of Texas sand.

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Humor: Voluntary Cost Control? Never Mind!

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By MICHAEL MILLENSON

Michael Millenson

Health Care Stocks Hurt as “Promise” Spooks InvestorsNEW YORK – Major health care stocks plunged today as investors worried that a series of voluntary actions the industry pledged in order to control costs represented a serious threat to profits.“Leaders of drug, device and health insurance companies gave their solemn word to the president of the United States that they will cut costs,” said Pinocchio Paparazzi, an analyst with Bear, Bulle and Morbull.  “Simple math says if you trim two trillion dollars from spending, that’s two trillion dollars lower revenue. That reality should be reflected in stock prices.”Merck and Edwards Lifesciences, two companies whose CEOs personally attended a White House briefing announcing the coalition’s goals, led the decline with double-digit drops. Health insurance giants Wellpoint and UnitedHealth Group also slumped, as did the for-profit hospital sector, as investors decided that making the health care system “more affordable and effective for patients and purchasers” might be good politics but was bad for the bottom line.

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Me & Mr Jones, (Jr.)

By Matthew Holt

I met Leroy Jones at Health 2.0 Meets Ix in Boston. He runs the Technical Jones web site, and is a veteran of both sides of DC politics (inside and outside of Capitol Hill and the White House). We’re definitely kindred spirits in that we both like technology, politics and health care, we both like explaining stuff and we both like talking! The results of our long and enjoyable conversation (he was sort of interviewing me) are over at his web site — Talking Technology with Leroy Jones, Jr.

Healthcare as a Complex Adaptive System – Part 2: Eight Points

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By JOE FLOWER

6a00d8341c909d53ef01157023e340970b-pi We can actually say what a better healthcare system would look like, if we look at healthcare in the United States as a complex adaptive system stuck in a Nash equilibrium.  The ideal reformed healthcare system would be universal, possible, understandable, cheaper, better, market savvy, incremental, and self-reinforcing.

  1. Universal: Giving everyone secure access to the system.
  2. Possible: Politically possible and financially workable.
  3. Understandable: Simple enough for people to understand, simple enough to sell politically.
  4. Cheaper: Aimed at (and with mechanisms for) lowering the cost of healthcare – for each of us as individuals and for all of us as a nation
  5. Better: Aimed at (and with mechanisms for) improving the quality of healthcare for each and for all
  6. Market savvy: Using smart market mechanisms to achieve these goals
  7. Incremental: Able to arise piecemeal, and improve as time goes on
  8. Self-reinforcing: Each element of the system rewarding improvement in each other element

Universal: Is healthcare a right? Getting good and timely medical care stands between you and death or a life of misery. So it is certainly a necessity, arguably one of the three “inalienable rights” set out in the Declaration of Independence, not arbitrarily afforded to some and not to others by race, class, age, location, or other division.

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Health Care Stakeholders to Pledge $2 Trillion in Reductions

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By ROBERT LASZEWSKI

This from the Wall Street Journal on Sunday:

Major health-care providers are planning to pledge Monday to President Barack Obama that they will work to reduce cost increases in the nation’s health-care system by $2 trillion over the next decade, officials said…

Groups representing hospitals, health-insurance companies, doctors, drug makers, medical-device makers and labor are joining in Monday’s announcement. According to a letter from the groups, reviewed by The Wall Street Journal, they will promise to help reduce the growth of national health-care spending by 1.5 percentage points in each of the next 10 years. “The times demand and the nation expects that we, as health care leaders, work with you to reform the health care system,” the letter says.

Is it possible for these stakeholders to find $2 trillion in excess health care costs over the next ten years?

Are there ice cubes in Antarctica?

During the next ten years, we are on track to spend something approaching $40 trillion on health care in America. The stakeholders need to be proposing something that is more than a rounding error–it needs to actually make a difference toward making entitlements and private health insurance affordable.

According to CMS, the U.S. is projected to spend over $2.5 trillion on health are in 2009—or 17.6% of GDP.

In 1970, U.S. health care spending was about $75 billion—7.2% of GDP.

Health care costs have risen about 2.4 percentage points faster than GDP since 1970.

In 2018, CMS projects that we will spend more than $4.3 trillion on health care—20.3% of GDP.

So, these key stakeholders are going to visit the White House tomorrow and tell us that after 39 straight years of blowing the lid off of GDP they are now going to control costs?

That is if the President and the Congress mandate that everybody buy their health insurance products and therefore get funding to visit their doctors offices and hospitals as well as buy their drugs and devices.

OK.

But I would suggest some hard questions:

  1. What measurable and verifiable benchmarks are the stakeholders willing to set?
  2. What consequences are they going to suffer if they don’t make a real difference in controlling costs?

I think Ronald Reagan had it right when he was negotiating disarmament with the Soviets—“Trust but verify.”

Is this $2 trillion offer a big deal?

Is it more than just a rounding error in the grand scheme of things?

Is it is measurable, verifiable, and are there are consequences for falling short.

If the answer is “Yes” to each of these elements, then it is scorable.

If the answer is “No” it’s just good PR.

One other thing is clear–the pressure is building on the Congressional Budget Office to agree on some health care reform savings. Recent post: An Open Letter to the Men and Women Over at the CBO–Hang In There!

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