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An Open Letter to the Obama Health Team

It seems likely that the Obama administration and Congress will spend a significant amount on health IT by attaching it as a first-order priority to the fiscal stimulus package. We take the President-elect at his word when he recently said:

“…we must also ensure that our hospitals are connected to each other through the Internet. That is why the economic recovery plan I’m proposing will help modernize our health care system – and that won’t just save jobs, it will save lives. We will make sure that every doctor’s office and hospital in this country is using cutting edge technology and electronic medical records so that we can cut red tape, prevent medical mistakes, and help save billions of dollars each year.” (December, 6, 2008)

Whether the health IT money is well spent will depend on how it is distributed and what it buys. Most observers suppose that federal health IT investment dollars will be used to help doctors’ offices and hospitals acquire and implement electronic health record systems (EHRs or EMRs). These are commercial software suites for entering, storing and managing patient health data within a practice or health organization.

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The Inevitability of Health Care Reform: This Time, the Politics Have Changed

Rummaging through my extensive files (i.e., drawers of paper), I came across this
January/February 2001 issue of Healthplan, the magazine of the old American Association of Health Plans before it gobbled up the Health Insurance Association of America and became AHIP. It heralds the results of the 2000 election as an opportunity for Republicans and Democrats to work together on health care reform.

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On Health Care Reform Stimulating the Economy: The Massachusetts Example

Recently, a somewhat starry-eyed op-ed in the New York Times suggested that a $100 billion annual investment in universal health care is just the medicine that our economy needs. The goal, declared Jonathan Gruber, a professor of economics at the Massachusetts Institute of Technology: “Covering every American.”

It is an appealing proposition. But let me suggest that we cannot blindly invest billions in an already bloated health care system. We need to think through where we want the reform dollars to go. Which sectors of a $2.3 trillion health care economy should we stimulate to insure that patients receive the safest, most effective care at a price that they can afford?

For example, should we try to create more jobs for those making diagnostic scanning equipment?

Probably not. As Health Beat recently reported, we’re already experiencing what some call an “epidemic of diagnostic imaging.” In too many cases, patients don’t benefit. Across the board, 20 to 50 percent of high-tech diagnostic imaging fails to provide information that improves patient diagnosis and treatment. In some cases, false positives lead to unneeded biopsies and surgeries that harm patients. Recent research suggests that an explosion of MRI scans for breast cancer is leading to unnecessary mastectomies. In other words, women lose a breast for no good reason.

So while GE might like more business making diagnostic imaging equipment, all of the medical research suggests that we already have more MRI units than we need, and that they are being overused. (Keep in mind, the goal of health care is not to create jobs: it is to improve the nation’s health.)

But if we simply open the door and tell insurers we’ll provide subsidies for health care for all, we can be sure that a nice chunk of the $100 billion that we invest annually will buy more testing equipment and more tests. Insurers will continue to pay for unnecessary testing because it is popular among many patients (who believe, falsely, that it provides benefits without risks) and some physicians (diagnostic imaging can be very lucrative.)  If insurers say “no” to a popular procedure, they risk losing market share.  If they say “yes” they can pass the cost along in the form of higher premiums, and taxpayers, in turn, will have to find the money to fund higher subsidies.

The problem is this: too many proposals for health care reform focus solely on universal access and run the risk of sending good money after bad. The question we need to ask is: “access to what”?

As Merrill Goozner pointed out earlier this week while “lack of insurance leads to an estimated 22,000 unnecessary deaths each year, medical errors kill nearly 100,000—and most of those people were undoubtedly well insured.”

How can this be? As regular readers know, while uninsured patients are undertreated, in our money-driven health care system well-insured patients (including Medicare patients) often are over-treated. And overtreatment can be dangerous. Unnecessary hospitalizations lead to hospital-acquired infections and medication mix-ups. Unneeded tests lead to false positives (telling you that you have a disease when you don’t), and treatments that can expose patients to risk without benefit.

Patients endure surgery when physical therapy, a change of diet, medication and exercise might have done as much good. In the best-case scenarios, these surgeries lead to pointless stress and wear and tear on the body. In the worst- case scenarios, gruesome surgical site infections, medication mix-ups, and errors in the OR can prove fatal. That’s how misdiagnosis, unnecessary treatments and hospitalizations lead to 100,000 deaths per year—almost five times the number of Americans who die because they don’t have health insurance.

Let me be clear: no one in this country should die because they are uninsured. This is one reason why I, like Gruber, favor an immediate investment in expanding Medicaid and SCHIP, the programs that cover our poorest and youngest citizens.  Premature death is closely tied to poverty. As we’ve discussed on Health Beat, low-income individuals stand the greatest risk of dying prematurely.

Moreover, if the federal government provides additional funding for Medicaid and SCHIP, this will take a burden off the states, which in turn, will leave the states in a better position to fund public works programs that can create jobs.

But when it comes pouring billions into Health Care for All — posthaste — we should do our best to make sure that we are not funding hazardous waste. This means making the structural reforms that will steer patients toward the most effective treatments and reward health care providers who reduce medical errors, avoid unneeded high-risk treatments, and deliver what patients need most.

This will involve adjusting co-pays and reimbursements in ways that will enrage the many in our health care industry who profit most from ineffective, over-priced treatments. They feel entitled to these profits. Gird for a lengthy battle with the lobbyists.

Alternatively, one could leave decisions about co-pays and reimbursements to the insurance companies. But do we really want them making coverage decisions based on what will increase their market share? Or hiking deductibles and co-pays, not to steer patients toward the best care, but to discourage them from seeking any care? In the past, that hasn’t worked out very well.

Will Universal Coverage Create More Nurses?

Gruber cheerfully assumes that if we just invest $100 billion a year in universal coverage, the money will quite naturally flow where it is needed to create “high-paying, rewarding jobs in health services” that will add value to the economy.  “Most reform proposals emphasize primary care” he explains, “much of which can be provided by nurse practitioners, registered nurses and physician’s assistants. These jobs could provide a landing spot for workers who have lost jobs in other sectors of the economy.”

Here, he ignores two realities. First, the guy who loses a job in Detroit—or on Wall Street—is not going to be in a position to become a nurse without a few years of training, if then.  Nursing is a demanding profession that requires a keen intelligence, a cool head, physical stamina, and empathy. Not every former investment banker would make the grade.

Secondly, and more importantly, because the pay for U.S. nurses is relatively low—and working conditions in our chaotic health care system are poor—we have a very hard time filling the nursing positions that we have today.

As I reported not long ago, while the U.S. lays out substantially more for doctors, drugs, devices, and medical procedures than every other developed country in the world, there is one exception to our medical largesse: the “salaries of [U.S.] nurses are roughly equal to salaries in other countries.” In addition, salaries for nursing school professors are often lower than the salaries we pay nurses. As a result, nursing schools have had great difficulty recruiting teachers.

Meanwhile, given the high rate of medical errors in our hectic health care system, nurses find the job exceptionally stressful. “I was just too afraid that I would kill someone,” one former New York City nurse told me.

As Dr. Val points out over at “getbetterhealth.com,” nurses are not lining up to provide primary care services in our health care system  “for the same reasons that physicians aren’t too keen on it: the pay is low, the workload is grueling, and there are other career options that offer better lifestyle and salary benefits.”

So while universal coverage would create greater demand for skilled nurses able and willing to provide primary care, it would not create greater supply. One would think that, given the fact that  Gruber is a board member of the Massachusetts Health Insurance Connector Authority overseeing Massachusetts effort to provide universal coverage he would be aware of the shortage of registered nurses in that state.

As of 2006, federal government estimates show that Massachusetts had 5,000 fewer nurses than it needed.   In 2010 it is projected that 10,000 positions will be empty, and five years after that Massachusetts will be looking for 16,000 nurses.

In other words, health care reform in Massachusetts has not magically conjured up the influx of nurses that Gruber envisions.

The Massachusetts Example

Instead, Massachusetts’ heroic effort has unmasked the primary care shortage that the Commonwealth shares with the rest of the country. Until we reform our delivery system, we can promise everyone access, but we cannot deliver care.

“It is a fundamental truth—which we are learning the hard way in Massachusetts—that comprehensive health care reform cannot work without appropriate access to primary care physicians and providers,” Dr. Bruce Auerbach, the president-elect of the Massachusetts Medical Society, told Congress in February.

Just as an investment in health care for All will not suddenly produce more nurses, it will not magically summon up more medical students eager to go into the very demanding specialties at the lowest end of the physician income ladder: primary care, family medicine, palliative care, geriatric care or pediatric care.

The need to pay off medical school debt, which averages $120,000 at public schools and $160,000 at private schools, is one major reason that graduates gravitate to higher-paying specialties and hospitalist jobs.

Primary care physicians (PCPs) typically fall at the bottom of the medical income scale, with average salaries in the range of $160,000 to $175,000 (compared with $410,000 for orthopedic surgeons and $380,000 for radiologists). According to the New York Times, in rural Massachusetts, where reimbursement rates are relatively low, some physicians are earning as little as $70,000 after 20 years of practice.

But is not just low pay that discourages medical students. As Dr. Christine Cassel, president of the American Board of Internal Medicine, told me in a recent interview:  “Academic medical centers undervalue primary care. They put students [who are trying to learn the art] in the most dysfunctional, least well organized part of the hospital. Residents are down in the basement—with no records, no support’’ seeing the poorest patients.  “This is not how to mentor primary care doctors,” she adds. “The best models are in the large salaried multi-specialty groups—Kaiser Permanente, Henry Ford, Mayo, the Cleveland Clinic. They understand the value of primary care. There, you have a critical mass of doctors; you can share coverage. You don’t have to be on call all of the time; you can go home at 6 o’clock.”

Reformers who talk of universal coverage that promotes preventive care should ask themselves: who, exactly, is going to provide this care? Before imagining an ideal system of chronic care management, call Boston and try making an appointment with a primary care doctor. As I have reported on Health Beat, even physicians cannot get an appointment with a family care doc in that city.  Mass General, for example, is no longer taking new primary care patients.

Dr. Patricia A. Sereno, Massachusetts president of the American Academy of Family Physicians, reports that patients who want to schedule an exam with her office must wait three months for an appointment.

The New York Times reports that the share of internists in Massachusetts who accept new patients has dropped to barely half of what it was not long ago. State-wide, the average wait by a new patient for an appointment with an internist rose to 52 days in 2007 from 33 days in 2006.

This is not to say that health care reform in Massachusetts has caused the dearth of primary care providers. Boston is hardly alone. Nationwide some 56 million Americans do not have a regular health care provider, even though many of them are insured. The problem: a shortage of family doctors, internists and PCPs.

Before promising coverage that we cannot deliver, we need to address this shortage. To expand the supply primary care providers we should create medical loan forgiveness programs. We also need incentives for academic medical centers to invest in better PCP training programs.  In Massachusetts, legislative leaders have belatedly proposed bills to forgive medical school debt for those willing to practice primary care in underserved areas. This is a step in the right direction—but it will be years before the programs funnel new family doctors into the marketplace.

In the meantime, what will patients do?  In Massachusetts “Thousands of newly insured patients have figured out that the fastest way to see a physician is to go to the Emergency Room,” notes Dr. Stanley Feld over at “Repairing the Health Care System.”

“Citizens in Massachusetts are going to the emergency room at a 40% higher rate than the national average at a 20% higher rate than before the present universal health care system.”

This of course, only hikes the total cost of health care, pushing insurance premiums heavenward. The average charge for treating a non-emergency illness in the ER is $976, according to the state Division of Health Care Finance and Policy. By contrast it costs between $84 and $164 to treat a typical ailment such as strep throat in a primary care doctor’s office, according to Blue Cross Blue Shield of Massachusetts, the state’s largest private insurer.

The Rising Cost of Care Under the Massachusetts Plan

Since the Massachusetts reform became law in 2006, 439,000 people have gained coverage.  The update issued by the state last month reveals that the share of state residents who are “going naked” has dropped from a high of 7.4 percent in 2004 to 5.7 percent in 2007. This is only a slight improvement on 2000, when 5.9 percent lacked insurance. Nevertheless, on the face of it, this is an impressive achievement in just three years.

DontHaveHealthInsruance-firstgraph

But, as “the Center for Health System Change (CHSC) pointed out in a brief on Massachusetts reform just two months ago, “Little has been done to address escalating health care costs. Yet, both [coverage and costs] must be addressed, otherwise the long-term viability of Massachusetts’ coverage initiative is questionable.”

This helps explain why Massachusetts version of “universal coverage” isn’t quite universal.  Last year Massachusetts “exempted” 62,000 of the state’s citizens from the mandate that everyone buy insurance on the grounds that these families could not  afford the state’s climbing insurance premiums—premiums that are trying to keep up with those ER bills, not to mention a diagnostic imaging industry that continues to grow.  The exemptions are based on affordability schedules established by the state

Too poor to afford the insurance, but not poor enough to be eligible for subsidies, these families remain locked out of the system.

Because health care remains so pricey, Massachusetts has not been able help many a struggling middle class family. An editorial on Boston.com offers this example:  “A couple in their late 50s faces a minimum premium of $8,638 annually, for a policy with no drug coverage at all and a $2,000 deductible per person before insurance even kicks in. Such skimpy yet costly coverage is, in many cases, worse than no coverage at all. Illness will still bring crippling medical bills—but the $8,638 annual premium will empty their bank accounts even before the bills start arriving.

The editorial notes that, according to the Census Bureau “only 28 percent of Massachusetts uninsured have incomes low enough to qualify for free coverage. Thirty-four percent more can get partial subsidies—but the premiums and co-payments remain a barrier for many in this near-poor group…And 244,000 of Massachusetts uninsured get zero assistance—just a stiff fine if they don’t buy coverage.”

Employers, too, are squeezed by the rising cost of care. The CHSC brief notes: “Massachusetts employers continue to experience large premium increases, which for some small employers are reportedly in the double digits. Respondents largely attributed rising premiums to the escalating costs of Massachusetts characteristically expensive health care system. Many expressed concern that unless the state seriously addresses the underlying factors driving costs, the current trajectory of the reform is financially unsustainable.”

Many of Massachusetts’ Insured Cannot Afford to Use the Insurance

With deductibles that run as high as $2,000, plus 20 percent co-pays  that can bring an individual’s out-of-pocket expenses to $5,000 a year, the state acknowledges that many of the newly insured cannot afford to use their insurance. The chart below comes from  last month’s update:

NeededCarebutCostWasanObstacle-secondgraph

The share of insured patients who didn’t go for treatment because “cost was an obstacle” has risen since the Massachusetts law was passed in 2006. This illustrates what those who focus on “Healthcare for All Now” fail to understand:  Universal Coverage does not equal Universal Access to Care.  If 37 percent of insured families cannot afford to the deductible and co-pays, what good is the insurance?

What Went Wrong?

The problem, says Dr. Feld, is that the Massachusetts health care plan was not thought out. This is what happens when reformers focus on covering everyone now—without thinking about how to contain costs while delivering more effective care.

We cannot blithely assume that increasing the demand for primary care will boost supply. That doesn’t mean we have to wait years for more primary care docs to emerge from medical schools. Some thoughtful investments could provide solutions: more community health centers, particularly in inner cities, would alleviate overcrowding in ERs. We could pay doctors to communicate with patients who have only a minor problem by e-mail or by phone, increasing the number of patients that they can see quickly. And if we provided financial incentives for PCPs to hire nurse practitioners, pay them well, and improve their working conditions, we could bring some nurses back from retirement, expanding primary care coverage.

But if want affordable care, when we invest more in one part of the system, we have to save somewhere else. This means facing down lobbyists, and cutting the very high fees for certain services that some specialists provide—especially when these services are only marginally effective.

In his New York Times op-ed, Gruber claims that we just don’t know how to rein in health care spending.  “Experts have yet to figure out how to restrain cost increases without sacrificing the quality of care that Americans demand.” This simply is not true.

Rather, “Experts have yet to figure out how to restrain cost increases” without sacrificing the amount of over-treatment that well-insured Americans have been persuaded that they need.

But as both the mainstream press and the blogosphere focuses on excesses in our health care system in the form of an “epidemic” of diagnostic imaging; angioplasties that expose patients to risks without benefits, and over-priced not fully tested drugs and devices that have to be withdrawn from the market (after killing many patients), Americans are beginning to understand that more care is not necessarily better care. We need a health care system that delivers the right care to the right patient at the right time.”

Who decides what is the right care? Medical evidence should be our guide. As Peter Orszag’s Congressional Budget Office (CBO) pointed out in December of 2007, we know where much of the waste is. We already have comparative effectiveness research on a wide range of treatments, pitting angioplasties against drug regimens for heart patients, for example, and gauging the effectiveness of surgery for patients with emphysema.

Moreover, CBO notes, the Cochrane Collaboration—an international nonprofit organization that has a network of volunteers who conduct unbiased systematic reviews of treatments—maintains an accessible database that now contains more than 4,500 reviews.  We currently have legislation in Congress poised to create a Comparative Effectiveness Institute that could draw upon Cochrane’s findings, adapting them to our priorities and issuing guidelines (not rules) for best practice.

Admittedly, we will have to make some tough decisions: How far do we go in regulating insurers to insist that they cover the most effective care? Should we insist on “community rating”—which means that insurers cannot charge older or sicker patients higher premiums? (So far insurers are adamantly opposed to this idea. But the fact that, in Massachusetts, older patients pay significantly more is one reason why some are “exempted” from coverage, at just the time in life when they need it most. )

Should health care reform mean paying more to health care providers who follow guidelines?  Consider, for example, the National Cancer Institute’s recommendation that the risks of mammograms outweigh the benefits for average-risk women over 70.  Should we reimburse the health care provider for the time it takes to explain to an elderly woman why she may not want a mammogram?  Should we require that women over 70 who, nevertheless, insist, pay more out-of-pocket? These are questions we need to address before handing insurers a blank check to cover all Americans.

Keep in mind: insurers are not going to try to excise waste from the system if it means losing market share.  Few insurers discourage mammograms because the treatments are popular. If they did, customers and employers might switch to a different insurer.

We don’t have to make thousands of separate decisions about individual treatments before embarking on universal coverage. But we do need structural reforms that will begin to squeeze the waste out of the system. We should put systems in place that begin to address questions about coverage and reimbursement based on how much a treatment benefits the patient. Can we “think through” those structural reforms, and win the inevitable battles with the lobbyists who will oppose any form of cost-containment in the next 120 days?

No. But before rushing blindly forward, we should remember Massachusetts. Despite the best of intentions, the Commonwealth’s reform shows that “universal coverage” does not mean “universal access” to sustainable, affordable care. In Massachusetts,

  • Co-pays and deductibles are so high that the share of insured citizens who cannot afford to use their insurance has climbed since reform began.
  • The number  of uninsured has dropped from its high—but the share of Massachusetts citizens who lack insurance remains over 5.5 percent—roughly  where it was eight years ago, in part because the state doesn’t have enough money to provide subsidies for everyone who, the state agrees, simply  cannot afford the premiums. These citizens are left out in the cold: “exempted” from universal coverage.
  • Meanwhile both the state and its employers are going broke trying to keep up the cost of covering the rest of the population.

And Massachusetts is a wealthy state. Imagine if we had Massachusetts-style healthcare reform nationwide. Do you really think this would help the economy?

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.

Slicing the health reform pie

I doubt anyone would disagree with the statement that America’s health care costs are too high, continue to grow at an unsustainable rate, and reform is critical to control costs, get everyone covered, and improve quality.

In the wake of the election, I see one positive and magnanimous press release after another coming from the health care special interests. The press is full of daily stories touting the coming health care reform efforts as different this time. The stakeholders understand things are different, know we have to do something, and are ready to cooperate, goes the reasoning. Really?

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Electronic Medical Records and Obama’s Economic Plan

On Dec. 6, President-elect Obama announced the
three major pillars of his economic recovery plan: rebuild our
roads/bridges, enhance our schools including broadband, and deploy
electronic health records for every clinician and hospital in the U.S.

I can summarize all my advice to the new administration in one sentence: Allocate
Federal funds of $50,000 per clinician to states, which will be held
accountable (use it or lose it) for rapid, successful implementation of
interoperable CCHIT certified electronic records with built in decision
support, clinical data exchange, and quality reporting.

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Plus Ca change.gov. . .

I’ve previously whined that it’s going to be a lot harder for President Obama to take advantage of social media than it was for the Obama campaign to do so.

I’m afraid to report that proof is beginning to emerge.

Over at change.gov, the web outpost of the Obama/Biden Provisional Gover. . .I mean, Privately Funded Transition Operation, there was an earnest public solicitation of ideas about healthcare. Over 3,700 comments came in.

On the change.gov blog, you will find a 3-minute video hosted by Tom Daschle, incoming Health Care Reform Tsar [I prefer the retro spelling; it adds a certain monarchic je ne sais quois].

In the segment, the former Senator summarizes some of the extremely
valuable citizen input that came in. [He presumably read all the
comments over the holiday weekend. Someone smarter than I [[sorry, I
can’t find the link]] determined that this task would consume 29 hours.
Knock yourself out, Senator!]

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Presidential Rx for Health

Capital_2
Past U.S. presidents have provided innovative leadership that shaped the landscape for our national health and science institutions.

President Lincoln established the National Academy of Sciences. President Truman’s foreign policies inspired the creation of the United States Agency for International Development (USAID). President Lyndon Johnson signed legislation that established Medicaid and Medicare. And President Clinton signed legislation that created the State Children’s Health Insurance Program (SCHIP).

Currently, our country faces significant health challenges including skyrocketing health-care costs, declining funding for medical and scientific research, and a lack of effective coordination and innovation in the government’s response to emerging health threats such as obesity and pandemic flu. Addressing these issues must be a top national and foreign policy priority for the next administration. With transformational leadership, President-elect Barack Obama has the opportunity to build upon his predecessors’ legacies and write a new national prescription for improving the health of Americans.

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Open Wide: Here comes the change you thought would never happen

The morning after the election, I posted a speculative blog in Health Affairs on three possible scenarios for President-elect Obama’s implementing health reform: folding it into a bold, ambitious emergency legislative package (Complete the New Deal), carving funding out of the current $2.5 trillion national health spend (Braveheart), and postponing implementation until the economy recovers but taking steps now to prepare for it (Wait/Lay the Groundwork).

At the time, the Wait/Lay the Groundwork option seemed 70 percent likely. But with economic conditions worsening, I’m now convinced Obama will probably opt instead for the Complete the New Deal option, and try to implement health reform in the first 120 days of his Presidency, before the health care industry “dragon” can even stir from its cave.

Let’s call Obama’s program The Real Deal. We can already see its contours: an economic stimulus program including highway construction and other state-directed public works, a green energy spending initiative, emergency housing assistance including a foreclosure prevention measure, an auto industry bailout, labor law reform and income supports through tax credits for low income people.

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Despite Democratic control, major health reform still unlikely

With 258 House and 57 Senate Democrats, it’s almost certain that major health
reform will be passed, right?

Actually, that was the number of Democrats Bill Clinton started off with in 1993 and we know what happened to health care reform in that Congress.

With similar Democratic majorities, I do not expect a major health care reform bill like the one President-Elect Barack Obama called for during the campaign–in 2009 or 2010.

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Health care information technology in an early Obama Administration

When Obama takes office in January, the economy will be his first
priority, followed by the war in Iraq. Health care will follow as his
next major issue to address.

What will he do?

I imagine
he’ll take a phased approach to ensuring all Americans have access to
health care. Given the change management needed to accomplish this, it
will take a while.

However, Health care Information Technology
has broad bipartisan support and is his best strategy to reduce
health care costs, reimburse providers for quality instead of quantity,
and to ensure coordination of care. Here are my predictions for
health care IT in the first year of the Obama administration:

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