As health reform evolves, I’ve been watching multihospital systems grow in size and power and speculating what their gigantic size means.
Here, as of 2008, were the 10 largest systems in revenue size
1. Veterans Administration Hospitals, $40.7 billion
2. Hospital Corporation of America, $28.4 billion
3. Ascension Health, $12.7 billion
4. Community Health, $10.8 billion
5. New York Presbyterian, $8.4 billion
6. Tenet Health, $8.3 billion
7. Catholic Health Initiatives, $7.8 billon
8. Catholic Health West, $7.6 billion
9. Sutter Health, $6.9 billion
10. Mayo, $6.1 billion
What strikes me about this list are that such giant systems like Kaiser, the Cleveland Clinic, Johns Hopkins, Duke, and Health Partners in Boston don’t even appear, and the large number of Catholic multisystem chains. The revenues of multihospital systems has undoubtedly grown since 2008. In 2011, hospital mergers and acquisitions hit an all time high.
A new study on Patient Centered Medical Homes has been published in Health Affairs and we have a new, but predictable, indictment against small independent primary care practice. The study authored by Rittenhouse, Casalino, Shortell et all, is descriptively titled“Small And Medium-Size Physician Practices Use Few Patient-Centered Medical Home Processes”, and follows an earlier 2008 studythat surveyed large medical groups. The study is surveying practices with 1 to 19 physicians, and in a nutshell, small practices, particularly those owned by physicians, are less likely to have medical home processes incorporated in their workflows. On average, the bigger the practice, the more likely it is that medical home processes are used, and the likelihood increases if the practice is owned by a hospital or an HMO. Hardly surprising, but the enlightenment is, as usual, in the details.
The patient centered medical home model is based on the seven joint principles stated by the various primary care associations as follows: personal physician, whole person orientation, physician led care team, coordinated care, quality and safety focus, increased access and payment reform. Both studies quoted above were restricted to measurement of processes indicative of only four out of the seven principles. Personal physician for each patient and whole person orientation were left out, and so was the payment reform principle, although some measures of external incentives in support of medical home processes were considered.
The existence of physician led care teams was ascertained based on the existence of “a group of physicians and other staff who meet with each other regularly to discuss the care of a defined group of patients and who share responsibility for their care”. Not sure why, but solo and 2 doc practices were not even asked this particular question.
Patient-Centered Medical Homes in statewide populations have unstoppable momentum and major constituencies in support of them, so valid analysis of their outcomes is probably as futile as it will be unwelcome. However, the math speaks for itself, at least in the mother of all statewide medical homes, North Carolina Medicaid’s Community Care Access Model.
I write this after having analyzed the actual data from this project’s outcomes report, rather than the stated conclusion of the report, a conclusion that continues to be cited in support of the many states considering or implementing medical home models for their Medicaid populations.
The conclusion makes North Carolina looks like a huge win for PCMH: $300-million in reported savings. However, readers should have (but largely didn’t) observe a number of curiosities about the data in support of that conclusion:
(1) Every element of resource use declined. People have to be getting their care from somewhere, but inpatient, ER, outpatient, physician, drug, and other expenses somehow all declined vs. trend.
(2) The decline in physician practice expense is especially counterintuitive: Why are the doctors so supportive if they are working harder but making less money?
(3) Even though somehow savings were shown in physician expense, per capita doctor visits did indeed increase. More concerning was that specialist visits –which are supposed to decline in a PCMH model – also increased.
(4) Inpatient expense fell 47%. This was achieved despite the fact that all the AHRQ’s “Ambulatory Care –Sensitive Conditions” total to about 20% of admissions in most populations.
(5) The evaluators (William M. Mercer) are on record as saying that “choice [emphasis mine] of trend has a large impact on estimates of financial savings.” Perhaps it is possible that Mercer, having given themselves this latitude, “chose” a trend that would make the study look good.
Those observations merely suggest that the study was done wrong. But one other “finding” invalidates the entire study: the 54% reduction in spending on babies under one year of age, accounting for the majority of the entire $300-milllion in spending. (Any nontrivial savings whatsoever in this category should have raised eyebrows since PCMH is mostly about managing chronically ill patients.) The components of spending in that category include physician expense, which should rise since doctors get paid more to be more accessible, and drug expense, which should rise for the same reason. This means that the entire 54% savings across the category must be concentrated in neonatal expense. Since neonatal expense is about half of total spending in the age category, it would have to decline by a mathematically impossible 100%+ in order for the category to average a 54% reduction.Continue reading…