Everyone agrees that health care is bankrupting the nation. The prevailing winds have carried the argument that a system that pays per unit of health care delivered and thus favors volume over value is responsible. The problem, you see, was the doctors. They were just incentivized to do too much. This incontrovertible fact was the basis for changes in the healthcare system that favored hospital employment and have made the salaried physician the new normal. Yet, health care costs remain ascendant.
It turns out overutilization in the US healthcare system isn’t what its cracked up to be.
Figure 1. Utilization rates in different health care systems
A recent analysis (Figure 1) by Papanicolas et al., in JAMA demonstrates that while the United States is no slouch with regards to volume of imaging and procedures in a variety of different categories, it does not explain a health care system twice as expensive as its nearest competitor. The problem turns out not to be volume, rather its the unit price of healthcare in the United States.
Health Care Costs and Glass Houses
There are many stones cast by all the various players in healthcare when it comes to cost, and of course, everyone bears some degree of responsibility, but it’s also clear that some folks live in larger glass houses than others. The most beautiful of all the glass houses are those built by hospitals. From 1996 to 2013, it was not population growth, health status, doctors visits, or prescription drugs that drove spending increases. Sixty-three percent of the increase in cost over an almost 20-year time span can be attributed to hospital stays and testing during doctor visits. Consider that the average hospital stay in the US costs $18,142, and lasts 4.9 days compared to other industrialized countries where average hospital stays last 7.7 days, and cost $6,222. But despite these exorbitant prices hospital systems in the United States complain they barely stay afloat.
As doctors, we all took an oath when we graduated from medical school to “do no harm” to patients. It is, therefore, our duty to speak up and take action when there is an opportunity to prevent harm and improve patient care, safety and well-being. On average, the opioid crisis is killing more Americans on a monthly basis than traumatic injuries. It is time for the medical community to raise its voice even more loudly in support of proven technology that helps curb this crisis.
This month, California Governor Jerry Brown became the latest state lawmaker to embrace electronic prescribing for controlled substances (EPCS) — joining nearly a dozen other states that have passed legislation mandating that health care providers and pharmacies use the technology. The Golden State law was signed at the same time the U.S. Senate passed a bill requiring e-prescriptions for any reimbursement under Medicare Part D.
Clearly, EPCS is emerging as a key tool in the fight against opioid abuse. And legislators aren’t alone in driving the trend — corporations are playing a key role as well. Walmart, one of the nation’s largest pharmacy chains, is requiring EPCS by January 1, 2020. In their press release, it was noted that “E-prescriptions are proven to be less prone to errors, they cannot be altered or copied and are electronically trackable.”
Apologies on the hiatus for posting on THCB. As many of you know, I was running around getting Health 2.0 in order this past weekend. Today we are featuring a piece on understanding how machine learning can actually work in health care today-Matthew Holt
By LEONARD D’ AVOLIO, PhD
There’s plenty of coverage on what machine learning may do for healthcare and when. Painfully little has been written for non-technical healthcare leaders whose job it is to successfully execute in the real world with real returns. It’s time to address that gap for two reasons.
First, if you are responsible for improving care, operations, and/or the bottom line in a value-based environment, you will soon be forced to make decisions related to machine learning. Second, the way this stuff actually works is incredibly inconsistent with the way it’s being sold and the way we’re used to using data/information technology in healthcare.
I’ve been fortunate to have spent the past dozen years designing machine learning-powered solutions for healthcare across hundreds of academic medical centers, international public health projects, and health plans as a researcher, consultant, director, and CEO. Here’s a list of what I wish I had known years ago.
The hottest medical school in the country right now is the New York University School of Medicine thanks to the gift of a generous benefactor that promises to make medical school free for all current and future medical students. The news was met with elation from the medical community of physicians that groans frequently about student debt loads routinely north of $200,000 upon matriculation. Not surprisingly, the technocrat class of public health experts and economists did not share in the jubilation. The smarter-than-the-rest-of-us empiricists are, after all, trained to think in terms of social justice and net benefits to society. The needs of medical students are far down the list of priorities when forming this social justice utopia.
Contemporary arguments for social justice in some form or the other trace their roots to the philosopher John Rawls and his 1971 magnum opus – “A Theory of Justice”. In words that would infuse liberal thought for a generation, Rawls laid out a blueprint for a just society by proposing a thought experiment called “the original position”. This was a hypothetical scenario where a group of people are asked to form the rules of a society which they will then occupy. The catch is that the people making the decision do so behind a ‘veil of ignorance’ not knowing the disadvantages conferred by any number of attributes (age, sex, gender, intelligence, beauty, etc. ) they may be reincarnated with. Rawls posited that under conditions in which there was a possibility of being born as a disadvantaged member of society, social and economic inequalities would be arranged to be of greatest benefit to the least advantaged members of society.
At first glance, it would seem that the objections to tuition-free medical school rest on a social justice framework that does not seem to comport with gifts to the soon-to-be-wealthy. After all, the $200,000 investment for medical school pales in comparison to the lifetime earnings of the average physician who is assured at least a six-figure income in seeming perpetuity. But it is not entirely clear that one has to even combat Rawlsian ideals to rebut the social justice do-gooders with strong opinions on how other people should spend their money. A Rawlsian framework never intended that everyone in society would be able to achieve the same outcome regardless of starting position. Rawls actually went out of his way to argue that inequalities were justified in society as long as the operating rules served to raise the position of those worst off in society. A rising tide should lift all boats – the rich may become richer, as long as the poor become richer as well.
The absence of burnout does not equal wellness. While the focus on physician burnout as an epidemic is finally gaining more attention, we may be missing a larger issue. Most physicians are not burned out. We are able to function. We get through our days, make it to some of our kids’ activities and even manage to go out to dinner on the weekends. We survive the work week as we look forward to our next vacation. We do this because that is what we have always done. We put our heads down and do our work. We often project ourselves past the next exam or to the next stage of our lives to help us get through the stress. We become masters of delayed gratification. We develop the mindset of “I’ll be happy when…” I get into medical school or match into a good residency spot or make partner or have enough money to retire etc…Along the way, we may have some bright spots – falling in love, having kids, taking great vacations. We may even reward ourselves for our hard work with a new car or nicer house. We deserve it. But deep inside, “something is missing”. We have achieved most, if not all of the goals we have set for ourselves. Yet despite our hard work, many of us remain unfulfilled with our careers and often with our lives. What is it that we need? A better job with more money? A different car? A different title? Better vacations?
I have struggled with these questions and many more. How do I stop wanting what I don’t have and start wanting what I do have? How can I fully enjoy the present while also preparing for a better future? How can I spend quality time with my kids while they are still around? How can I have a career that uses all of my potentials? Of all the questions that I’ve asked myself, the most important one was this – How can I learn to flourish and not just function?
Fortunately, I found answers in the relatively new field of Positive Psychology which is the scientific study of human flourishing. Unlike traditional psychology which alleviates distress and moves a patient from a -8 to a 0 or +1 (if they are lucky), positive psychology focuses on a patient that is functioning at a +1 and tries to move them to a +8 on the flourishing scale. We need both areas of focus. There are many people that are functioning well by most standards but are nowhere near their potential level of fulfillment.
In July 2009, the family of Massachusetts teenager Yarushka Rivera went to their local Walgreens to pick up Topomax, an anti-seizure drug that had been keeping her epilepsy in check for years. Rivera had insurance coverage through MassHealth, the state’s Medicaid insurance program for low-income children, and never ran into obstacles obtaining this life-saving medication. But in July of 2009, she turned 19, and when, shortly after her birthday, her family went to pick up the medicine, the pharmacist told them they’d either have to shell out $399.99 to purchase Topomax out-of-pocket or obtain a so-called “prior authorization” in order to have the prescription filled.
Prior authorizations, or PAs as they are often referred to, are bureaucratic hoops that insurance companies require doctors to jump through before pharmacists can fulfill prescriptions for certain drugs. Basically, they boil down to yet another risky cost-cutting measure created by insurance companies, in keeping with their tried-and-true penny-pinching logic: The more hurdles the insurance companies places between patients and their care, the more people who will give up along the way, and the better the insurers’ bottom line.
PAs have been a fixture of our health care system for a while, but the number of drugs that require one seems to be escalating exponentially. Insurance companies claim that PAs are fast and easy. They say pharmacists can electronically forward physicians the necessary paperwork with the click of a mouse, and that doctors shouldn’t need more than 10 minutes to complete the approval process.
In most other human activities there are two speeds, fast and slow. Usually, one dominates. Think firefighting versus bridge design. Healthcare spans from one extreme to the other. Think Code Blue versus diabetes care.
Primary Care was once a place where you treated things like earaches and unexplained weight loss in appointments of different length with documentation of different complexity. By doing both in the same clinic over the lifespan of patients, an aggregate picture of each patient was created and curated.
A patient with an earache used to be in and out in less than five minutes. That doesn’t happen anymore. Not that doctors and clinics wouldn’t love to work that way, but we are severely penalized for providing quick access and focused care for our well-established patients.
The train sped along from Seattle to Portland on a spectacular summer morning, following the track along the waterways of the lower Puget Sound. One of my daughters lived in Portland at the time, so I found myself on the train frequently. Like most of us, I don’t seek out conversations with strangers while traveling, which is unfortunate, as I have had transformative moments when I decide to engage and treat fellow passengers as fellow humans.
That day the train was crowded, and I didn’t have the option of keeping my distance. I found myself at a table with two women—both physicians and both of whom had left the conventional healthcare system because the chaos had disgusted and beaten them down. They didn’t know one another before that crowded train ride but weren’t surprised when they’d so quickly found common ground.
I asked them what piece of our healthcare system was most broken? They both immediately answered, speaking at the same time: “How we die. End of Life.” This was in 2012, and how we die in America was not front-page news. (Atul Gawande’s Being
Mortal wasn’t published until two years later.) I was taken aback and asked for more information. I quickly learned two devastating statistics: that end-of-life care is the number-one factor in American bankruptcies and that although 80 percent of Americans want to die at home, only 20 percent do.
As healthcare gradually tilts from volume to value, physicians and hospitals fear the instability of straddling “two canoes.” Value-based contracts demand very different business practices and clinical habits from those which maximize fee-for-service revenue, but with most income still anchored on volume, providers often cannot afford a wholesale pivot towards cost-conscious care. That financial pressure shapes investment and procurement budgets, creating a downstream version of the two-canoe problem for digital health products geared toward outcomes or efficiency. Value-based care is still the much smaller canoe, so buyers de-prioritize these tools, or expect slim returns on such investment. That, in turn, creates an odd disconnect. Frustrated clinicians struggle to implement new care models while wrestling with outdated technology and processes built to capture codes and boost fee-for-service revenue. Meanwhile, products focused on cost-effectiveness and quality face unexpectedly weak demand and protracted sales cycles. That can short-circuit further investment and ultimately slow the transition to value.
To skirt these shoals, most successful innovators have clustered around three primary strategies. Each aims to establish a foothold in a predominantly fee-for-service ecosystem, while building technology and services suited for value-based care, as the latter expands. A better understanding of these models – and how they address different payment incentives – could help clinicians shape implementation priorities within their organizations, and guide new ventures trying to craft a viable commercial strategy.
A mere two decades ago, the headlines were filled with stories about the “HMO backlash.” HMOs (which in the popular media meant most insurance companies) were the subject of cartoons, the butt of jokes by comedians, and the target of numerous critical stories in the media. They were even the bad guys in some movies and novels. Some defenders of the insurance industry claimed the cause of the backlash was the negative publicity and doctors whispering falsehoods about managed care into the ears of their patients. That was nonsense. The industry had itself to blame.
The primary cause of the backlash was the heavy-handed use of utilization review in all its forms –prior, concurrent, and retrospective. There were other irritants, including limitations on choice of doctor and hospital, the occasional killing or injuring of patients by forcing them to seek treatment from in-network hospitals, and attempts by insurance companies to get doctors not to tell patients about all available treatments. But utilization review was far and away the most visible irritant.
The insurance industry understood this and, in the early 2000s, with the encouragement of the health policy establishment, rolled out an ostensibly kinder and gentler version of managed care, a version I and a few others call Managed Care 2.0. What distinguished Managed Care 2.0 from Managed Care 1.0 was less reliance on utilization review and greater reliance on methods of controlling doctors and hospitals that patients and reporters couldn’t see. “Pay for performance” was the first of these methods out of the chute. By 2004 the phrase had become so ubiquitous in the health policy literature it had its own acronym – P4P. By the late 2000s, the invisible “accountable care organization” and “medical home” had replaced the HMO as the entities that were expected to achieve what HMOs had failed to achieve, and “value-based payment” had supplanted “managed care” as the managed care movement’s favorite label for MC 2.0.