Uncategorized

Intermountain – Proof That U.S. Hospitals Can Improve

I urge everyone to read this story by David Leonhardt in this Sunday’s (November 8) New York Times. (Thanks to reader Lisa Lindel for spotting it. )

Leonhardt profiles Intermountain Healthcare, a network of hospitals and clinics in Utah and Idaho that President Obama and others have described as a model for health reform.

Leonhardt concludes:

“If you simply looked at Intermountain’s overall results — the good outcomes and low costs — you might be tempted to dismiss them as a product of the environment. Utah has the youngest population of any state, as well one of the lowest rates of alcohol and tobacco use. More than half of the state’s residents are Mormons. This homogeneity creates a noticeable sense of community, even a sense of mission, among many Intermountain doctors and nurses.

“The places that spend far more on medical care and get worse results — south Texas, south Florida, New York City and its suburbs — don’t have those advantages. They tend to have more diverse populations and a more diverse set of medical needs. None of these places is ever likely to reduce its costs, or raise its life expectancy, to Utah’s levels.

“But once you acknowledge all this, you are still left with some fairly striking facts. There is nothing inherently Mormon about waiting until the 39th week to deliver a baby. Nor is there something unique to Utah that allows doctors there to analyze their results and systematically try to improve them. There is no reason, really, that a hospital anywhere else cannot do the same. Maybe more hospitals will begin to do so on their own, pushed by the same internal forces that remade medicine a century ago. But maybe not. The economic incentives in health care are still pointing in the other direction. As long as doctors and hospitals are paid for each extra test and treatment, they will err on the side of more care and not always better care. No doctor or no single hospital can change that. It requires action by the government.”

Leonhardt then asks: “How much will health care reform do on this front?”

He suggests that we should not scoff the Medicare pilot programs that have made their way into the health-reform bills now being considered by Congress. During President Bush’s tenure, there was little chance that these projects would ever see the light of day. But, Leonhardt points out, under the Obama administration, if they work, it’s likely that they will become mandatory.

Leonhardt describes a few of the Medicare reforms that the legislation calls for: “One is a bundling program, in which Medicare would pay hospitals a set fee for certain operations or chronic illnesses, rather than paying piecemeal for every aspect of the treatment. Hospitals would then have an incentive to avoid complications and readmissions, because they would no longer be automatically reimbursed for them. The hospitals that did the best job of keeping their patients healthy would end up helping their bottom lines. The details are still being fleshed out, but Medicare or private hospital groups would most likely monitor outcomes to make sure the incentives didn’t lead hospitals to skimp on care or turn away the sickest patients.

“These pilot programs have been largely overlooked in the public discussion of health reform, because they start small. At first, they would be voluntary. Places like Intermountain would presumably sign up for them, and high-cost hospitals would not. But the Obama administration is hoping to make the pilot programs national — and mandatory — if they are successful. In that case, the program would suddenly not be so small. It would begin to attack medicine’s most upside-down incentives.”

Maggie Mahar is an award winning journalist and author. A frequent contributor to THCB, her work has appeared in the New York Times, Barron’s and Institutional Investor. She is the author of  “Money-Driven Medicine: The Real Reason Why Healthcare Costs So Much,” an examination of the economic forces driving the health care system. A fellow at the Century Foundation, Maggie is also the author the increasingly influential HealthBeat blog, one of our favorite health care reads, where this piece first appeared.

Livongo’s Post Ad Banner 728*90

Categories: Uncategorized

Tagged as:

28
Leave a Reply

28 Comment threads
0 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
15 Comment authors
maggiemaharGary O.StanMGEnke Recent comment authors
newest oldest most voted
maggiemahar
Guest

Here are some facts about Kaiser. First it is extremely successful Kasier has successfully put down roots in eight regions of the United States, and it is the largestnonprofit integrated health care delivery system in the United States. Kaiser has at minimum 36% of HMO market share in California where about 43% of the population are in an HMO. PacifiCare has 17% of the California market, Foundation Health Systems 15% and California Care has 6%. Kaiser’s market dominance is underscored by the fact that its total assets increased by about $4.3 billion (52%) in only four years. And people do… Read more »

108DAYS
Guest

Nate, who is basing an arguement that costs are unsustainable because of high insurance premiums? Premiums are high because the cost of health care is high. Maybe you should watch “Money Driven Medicine,” it’s free: http://www.moneydrivenmedicine.org/watch-in/watch-now

Nate
Guest
Nate

insurance premium is supposedly to high and “unaffodable”

108DAYS
Guest

Nate: “Further this whole argument about cost being unsustainable is based on the assumption premium needs to be lowered.” What do you mean by premium? The premium of what needs to be lowered?

Nate
Guest
Nate

If they don’t lower their rates they won’t get the business. Further this whole argument about cost being unsustainable is based on the assumption premium needs to be lowered. If everyone is fine with today’s cost then we have no need for all this reform. Interesting lesson in HIT, after spending 4 billion besides some cute commercials what does Kaiser have to show? They haven’t gained any meaningful cost advantage over those companies that have not made the investment. As a collection of systems what can we expect from our 20 billion in tax payor dollars…..apparetnly some funny commercials, i.e.… Read more »

Gary O.
Guest
Gary O.

Why should Kaiser lower its rates if it doesn’t have to? All it has to do is meet the competition. As a non-profit, it has no incentive to expand in a rapid fashion, which it would have to do if it lowered rates and attracted more enrollees. State regulators dislike excessive reserves. Excess of revenue over costs from operations has been spent on infrastructure. How many other health care systems have been able to spend four billion dollars to install advanced HIT?

108DAYS
Guest

Sadly the high-quality providers are in the minority.

Stan
Guest
Stan

ANOTHER FATAL FLAW THAT IS UNDETECTED
Anyone with authentic experience in health care (not the janey-come-lately’s) knows that Intermountain, CleveClin, et al.) have VERY HIGH standards.
High standards in union settings in the USA (and UK)?
HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA ..
That’s as funny as Chicago politics being honest.
Start over. Or face defeat.

MG
Guest
MG

Nate – Good posts on Kaiser. Your comments about Kaiser generally mirror what I saw at least while I was living in Northern CA. Their costs were cheaper (usually a couple of percentage points) than other PPO competitors but it wasn’t nearly enough to really overcome the main issue of being in an HMO or not for almost all of their patients. Imagine Kaiser would be much more compelling if they really did have premium costs that were notably cheaper (say at least 10-15% to get HR personnel to really pay attention to them). Kaiser is also very close-fisted with… Read more »

Nate
Guest
Nate

The paradigm of theroy and reality which usually bites academics and politicians in the ass. While on paper Kaiser should blow everyone out of the water with low rates it never manifested. Kaiser appeals to a very small spectrum of people from my experience in open enrollments and quoting groups. People that like to be managed love Kaiser, those that are more independent or self reliant can’t stand it. Kaiser in many ways resembles a cult, I have seen people quit their job becuase they stopped offering kaiser in CA and others that leave if they are forced into it.… Read more »

Barry Carol
Guest
Barry Carol

Nate, Thanks for the clarification on Kaiser. What is the extra perceived value? Lower co-pays or none at all? I thought, as the thrust of the Intermountain article suggests, the sophisticated electronic records would eliminate or at least minimize duplicate testing and adverse drug interactions. They would also make the management of chronic disease easier, more consistent and more effective. The salaried doctors would not have any incentive to order redundant or unnecessary tests and procedures. With a large, well financed organization paying the doctors’ malpractice premiums as well, there should not be as much defensive CYA testing. In short,… Read more »

Nate
Guest
Nate

“my understanding is that its health insurance premiums in CA are basically in line with its major competitors”
From what I see they are higher but people pay a premium for the model and extra perceived value. They could not compete on price as their model cuts out the low cost crappy providers. From CA to OH I have never seen Kaiser purchased on price. They didn’t take well at all in Ohio and sold all their facilities to Cleveland Clinic, I beleive they are doing Ok in GA though.

Yaj
Guest
Yaj

I.B.E.
The guy that points out a design flaw in the Titanic before it’s all-aboard time is still rendering a positive service, whether or not that warning comes embedded in a comprehensive treatise about how to overhaul surface transport in the North Atlantic.

Barry Carol
Guest
Barry Carol

jd, The appeal of integrated delivery systems is the alignment of interest between providers and insurers. The problem, at least in most markets, is that people don’t trust them. Rightly or wrongly, they think that any model based on a capitated payment, even with risk adjustment, creates an incentive to deny care or at least delay it even if that is often the most appropriate thing to do. The other issue, I think, is that even if people are satisfied with the system’s primary care and its management of chronic conditions like diabetes, heart disease and asthma, when they need… Read more »

inchoate but earnest
Guest
inchoate but earnest

Yaj,
Cooper’s got an interesting bug up his butt: it seems to cause him to be all criticism & no prescription. You’ve stepped forward as his champion – does he have, you know, any ideas for busting the poverty/poor health care link he acts like he discovered? All that his blog seems to contain is whining about the attention Wennberg has gotten. What does he offer?