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Peter Pronovost is a Liar. He Must Be. Isn’t He?

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By PAUL LEVY

Peter Pronovost and his subversive friends are at it again.  Imagine, first they assert that implementation of a standard protocol and checklist could reduce the rate of central line associated bloodstream infections.

“It wouldn’t work here.  Our patients are sicker.”

Then, to make matters worse, they go and contend that reducing the rate of central line infections saves money.  Here’s the abstract from the American Journal of Medical Quality:

This study calculates the costs and benefits of a patient safety program in intensive care units in 6 hospitals that were part of the Michigan Keystone ICU Patient Safety Program. On average, 29.9 catheter-related bloodstream infections and 18.0 cases of ventilator-associated pneumonia were averted per hospital on an annual basis. The average cost of the intervention is $3375 per infection averted, measured in 2007 dollars. The cost of the intervention is substantially less than estimates of the additional health care costs associated with these infections, which range from $12,208 to $56,167 per infection episode. These results do not take into account the additional effect of the Michigan Keystone program in terms of reducing cases of sepsis or its effects in terms of preventing mortality, improving teamwork, and reducing nurse turnover.

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A Student’s Summer Reflections on Price Transparency

By JEFFREY HERMAN

I can’t think of a single industry that is more inherently personal—more emotional than health care.

Everyone has a story of how the health care system has impacted their lives. My family’s experience with the healthcare system had both positive and negative results. Thankfully, my brother survived a brain tumor as a young child and my father’s heart disease was treated early enough to prevent a heart attack. However, the bills for these procedures were astonishing. Perhaps even more shocking was the complete inability of doctors and insurance companies to give an accurate estimate of what the procedures would cost. There was no more clarity with routine follow-up procedures like MRIs and stress tests. On any given day, a doctor may order the same test several times, so how does uncertainty exist about how much it costs? And if doctors don’t know the cost, how are patients supposed to be informed consumers of health care?

Many insured patients don’t worry about how much a procedure costs—frankly, with third-party payers, they often don’t have to. In fact, if you are sick and diagnostic tests are covered, you might push for your doctor to administer all potentially beneficial services. However, at some point the over-utilization of services at unclear prices results in detrimental care that is ultimately more costly than helpful. In some cases, particularly for patients with high deductibles or loop holes in their insurance plans, these costs may even cause significant financial harm.

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Meaningful Use Requires Meaningless Data

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By DINOSAUR, MD

Race is a medically meaningless concept.

Spare me the few tired cliches about prostate cancer, diabetes, and sarcoidosis being more common in blacks than whites, or even the slightly increased risk of ACEI cough in patients of Asian descent. We screen Jews of Ashkenazi descent for Tay Sachs without any racial labeling. All that information is readily accessible under the Family History section of the medical history. It is no more than custom which dictates the standard introductory format including age, race, and gender. It turns out I’ve blogged about this before at some length (pretty good post, actually). What is new is the advent of electronic medical records.

Much hullabaloo has been made about federal stimulus funds allocated to doctors as payments for adopting EMRs; “up to $44,000!” Here’s the problem with that figure, though, including how it breaks down (source here):

[M]aintaining [an EMR] costs multiple thousands of dollars a year. Bear in mind that they’re not talking about a lump sum payment of $44,000. It’s $18,000 the first year, $12,000 the second year, $8000 the next, $4000 the next, and then $2000, for a total of $44,000 spread over five years. FOR A SYSTEM EXPECTED TO COST AN AVERAGE OF $10,000 PER DOCTOR PER YEAR, not counting the start up costs, which run in the vicinity of $50,000. $44,000 over five years for something that will cost us $90,000 over the same period? And that’s even if they actually get around to giving out the money in the first place! According to this, in order to qualify for “meaningful use,” EMRs must be used for ePrescribing, for communicating with other EMRs like labs and hospitals, and for transmitting information on performance measures (the paternalistic proxy for “quality”) to the government.

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Health Policy Schizophrenia

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By JOHN GOODMAN

The Obama administration has told us how it intends to change Medicare many times and in many places.

It wants to replace fragmented decision making by independent doctors with coordinated care delivered by doctors working in teams, connected to a medical home. It wants Medicare to purchase quality, not quantity. It wants decisions to be evidence-based. It wants electronic records in order to standardize care and reduce errors.

So how does the administration plan to get all this done?  It plans to spend hundreds of millions of dollars on pilot programs to try all these ideas out and then ……

Wait a minute. Aren’t these ideas already being tried out somewhere? Yes. In Medicare, as a matter of fact. How well are they working? As a long-time critic of managed care, I admit the results look pretty good.

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Decision Fatigue. For Doctors, Too?

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By PAUL LEVY

This article by John Tierney in the New York Times suggests that humans suffer from decision fatigue, the tendency to make worse decisions as you make a series of hard decisions as the day goes along.  Here are some pertinent excerpts:

No matter how rational and high-minded you try to be, you can’t make decision after decision without paying a biological price. It’s different from ordinary physical fatigue — you’re not consciously aware of being tired — but you’re low on mental energy. The more choices you make throughout the day, the harder each one becomes for your brain, and eventually it looks for shortcuts, usually in either of two very different ways. One shortcut is to become reckless: to act impulsively instead of expending the energy to first think through the consequences. The other shortcut is the ultimate energy saver: do nothing. Instead of agonizing over decisions, avoid any choice. Ducking a decision often creates bigger problems in the long run, but for the moment, it eases the mental strain. You start to resist any change, any potentially risky move. Once you’re mentally depleted, you become reluctant to make trade-offs, which involve a particularly advanced and taxing form of decision making. Continue reading…

Why Bother With Government?

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By EDWARD D. KLEINBARD

On Friday, a federal Court of Appeals held unconstitutional a central feature of the new healthcare law-its requirement that almost all Americans obtain healthcare insurance through private insurance markets. This ruling came only days after the debt-ceiling debacle — a “tempest in a tea party” — during which our country’s credibility for honoring its debts was held hostage to the conviction that tax revenues should regularly ratchet down, but never up. Both the subtext of the majority’s opinion in the healthcare case and the anti-tax fervor evident in the debt-ceiling debate share a common underlying philosophy: the belief that government activity is largely hostile to prosperity and the pursuit of happiness, and therefore the less of it, the better. But this view of government is incorrect.

Government, to paraphrase Congressman Barney Frank, is just the name we give for the things we the people decide to do together. And taxes in turn are just the amounts we chip into the collective pot to buy whatever package of goods and services that we have agreed to purchase collectively.

In ordinary commercial settings, the private sector is more efficient at allocating scarce resources than is the government, which is why the United States relies so heavily on private markets. So why should we bother to do things together through the mechanism of government? One answer is that only government can address an “incomplete” market, which occurs when the private sector cannot or does not provide a market solution to an economic problem. Healthcare insurance is a classic case of an incomplete market that results in real economic burdens.

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Medicare Musings

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By DAVID DRANOVE

I have been thinking about the connection between healthcare cost growth and the budget crisis. Many pundits have pointed out that rising Medicare costs are one of the biggest contributors to our budget mess. Republicans want deep cuts in future Medicare spending while Democrats are sensitive to constituents who demand the Congress keeps its hands off “their Medicare.” Current Medicare spending growth trends are unsustainable – at some point the math will trump the politics.

There are several options for putting Medicare on a much lower cost trajectory. Here is what I have come up with:

1) Do nothing but pray. Projections of future spending growth are mostly guesswork. Maybe the guesses are wrong. Consider that technological change has been a major driver of cost growth. (It is interesting to ask why medical technology nearly always seems to cause spending to increase, but I will save that for another blog.) Perhaps medical science has reached the bottom of the well and that output of costly new technologies will slow to a trickle. Of course, this will also mean that a century of advances in medical care will come to an end. I don’t know if we will really be better off; we will spend less on medical care than we projected, but we will also receive fewer benefits than we projected. Besides, the head-in-the-sand approach to cost cutting hasn’t worked yet. (Note to readers. Please do not comment that we can save the system through prevention. The Committee on the Cost of Medical Care already made the same point – in 1932.)

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HIT Trends Summary for July 2011

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By MICHAEL LAKE

This is a summary of the HIT Trends report for July 2011.  You can get the current issue or subscribe here.

Specialty EMRs. There is a market for EMRs that specialize by practice type.  This month, the ophthalmologists tell us what’s required to help them.  They have specialized vital signs, testing and measurement devices.  It is likely all specialties would benefit if EMRs get more specialty-specific.  Some specialty EMR solutions have found a successful niche markets in cardiology, oncology and other segments.  This could be another.

Medscape reports that AAFP’s smaller practice members like EMRs that focus on them.  This report is focused on user satisfaction.  The combination of easy-to-use software and physician involvement is leading to high satisfaction with products from vendors focused on small practices.  And yet, we have also heard from prior KLAS reports that many practices (30%) are abandoning current vendors for market leaders.

A national study also reports that smaller practices are interested in new care models, but may lag implementation because they tend to underutilize needed technology.  The study included 1,344 practices with fewer than 20 physicians each.  The EMR is central to success of emerging collaborative and more accountable care models.  Using registries to help manage patient populations is a core element as is medication management through e-prescribing.   This study confirms that it will take a while for smaller practices to get the utilization required to be effective in the new model.

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WhiteGlove Health’s Growth Fueled by Technology

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By DAVE CHASE


Bob Fabbio is a tech industry veteran most known for founding systems management company Tivoli which went public in 1995 and a year later sold to IBM for $743 million. He’s been a part of other successful exits such as selling Dazel Corp., which was acquired by HP in 1999. His latest venture is WhiteGlove Health’s which now has 500,000 members primarily in its home state of Texas.

An enterprise software veteran isn’t the obvious person to lead a healthcare provider. However, as outlined in Healthcare Disruption: Healthcare Providers Repeating Newspaper Industry Mistakes, it’s frequently not the obvious competitors that create the greatest disruption in the marketplace.

The legacy healthcare payment model for primary care is a Gordian Knot designed by Rube Goldberg. Consider the legacy model versus WhiteGlove’s model in the tables below.

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(Some) Illinois Hospitals Losing Tax-exempt Status

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By HAROLD POLLACK

From the Chicago Tribune and AP.

The decisions were announced to the hospitals Tuesday morning, Revenue Department officials told The Associated Press. They follow last year’s Illinois Supreme Court ruling that found a central Illinois hospital wasn’t doing enough free or discounted treatment of the poor to qualify for an exemption, costing it $1.2 million in local property tax payments per year.

In addition to Prentice Women’s Hospital [a Northwestern facility] in Chicago’s Gold Coast neighborhood, the revenue department now has decided that Edward Hospital in Naperville and Decatur Memorial Hospital in Decatur don’t quality for property tax exemptions. The hospitals have 60 days to ask an administrative law judge to review the decisions. In Illinois, property taxes are collected by county governments, and the Department of Revenue decides which institutions are eligible for tax exemptions.

In a written statement, Illinois Hospital Association President Maryjane A. Wurth said she was disappointed and “deeply concerned” by the Revenue Department’s preliminary rulings, and worries that the hospitals will be forced to reduce services and increase costs for patients and employers.

It’s neither surprising nor inappropriate that state policymakers are holding hospitals to account.

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