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Suzanne Delbanco on the new Catalyst for Payment Reform

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By MATTHEW HOLT

Catalyst for Payment Reform is a new organization set up by several large employers. The organization’s goal is to pay for health care differently, and make sure that those employers run ahead of any Medicare payment reform coming down the track. Suzanne Delbanco, formerly of Leapfrrog, is now the first Executive Director and Founder of the new organization. Last week I interviewed her about what the organization is going to do, what employers care about, and (despite decades of employers being simple price takers in health care) why this time it’s going to be different.

Keep watching to the very end to see the great view from Suzanne’s office!

Vic Fuchs Speaks!

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By Matthew HoltPicture 7

I was absolutely delighted that after several polite “maybe later” responses I was able to  recently interview Victor Fuchs, the Henry J. Kaiser Professor Emeritus at Stanford University. Vic is best known as the “Father of Health Economics” and perhaps less well known (but more importantly to me!) the professor who taught the first health economics class that I ever took.

Matthew Holt: Victor, thanks so much for agreeing to come on THCB. I must admit Vic when I joined your class I had no idea about your background and reputation in health economics. So, I was just delighted to figure out that I blundered in right at the top. It’s a real pleasure to have you on the line

Victor Fuchs: I think you’re doing a great job and therefore I’m glad to spend some time with you.

Matthew Holt: Fantastic! You’ve, obviously, been observing and commenting on– and more recently sort of promoting ideas around –health reform for quite a while now, so let’s jump into a couple of things that you’ve published very recently, in fact just these past few weeks.

The first is a paper in The New England Journal of Medicine about a conceptual future for new biomedical innovation and I’d be grateful if you could just explain just a little bit what your general concepts are here. You’ve been working on this for quite a while. In fact, back when I was in your class, you were publishing some stuff with Alan Garber about technology assessment and this is sort of a continuation to that in some ways. So, I’d love to hear your thoughts.

Victor Fuchs: Well, I think there were two key elements here, one of them better understood by a larger audience and one of them I think rather new. Let me do the new one first. The new one is that we are going through what I call the second demographic transition.

The first transition was when every country had high mortality and high fertility and then the mortality especially of young people started to drop, but fertility did not drop right away, so you had a divergence there and in some cases it lasted for a couple of decades and during that time the population soared because there was this discrepancy between mortality and fertility.

You see the high fertility made sense when mortality was high because you wanted to have at least a couple of children survive to adulthood, but when mortality dropped it didn’t sink into people’s consciousness right away, so it took quite a bit of period which the historians and the demographers referred to as the demographic transition, okay. I don’t know if you’re familiar with it or not, but —

Matthew Holt: Yeah, I get the concept and there’s been some stuff written about that in terms of the impact on social security and healthcare.

Victor Fuchs: And some of the third world countries are going through it now, but now the second demographic transition is the one that I talk about in the NEJM piece a little bit. It has the following elements.

First is that a very large and increasingly large percentage of the population cohort lives until age 65, whereas at the beginning of the 20th century only a small percentage lived until 65. Now we’re going to 80% and we’ll eventually approach close to a 100% living till 65.

The second element is that life expectancy at 65 is increasing and it’s increasing at a quite brisk pace in recent decades. You put those two things together and you find out a very large and growing percentage of all the additional years that are lived if you have increasing life expectancy will be lived after 65.

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The trifecta: Reform idiocy, Hospital CEOs and the Obesity Problem

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By Matthew Holt

It’s rare that you get such a delicious health care story combining human frailty, blindness and multiple stereotypes, but Julie Rovner of NPR found it. In fact I literally thought she’d been set up but she confirmed to me that it was true and put me in touch with the CMS spokesman who confirmed it. So remember, this really happened.—Matthew

An interim hospital CEO in Ohio Valley Medical Center, in West Virginia “found out” “advanced intelligence” from “word of mouth” sources in Washington DC that the “High Commissioners of the Healthcare Reform Bill” were going deny Medicare payments  to any hospital of which than 5% of employees were 25% overweight.

This rumor prompted the said CEO to panic. Now before I tell you what he did, let me tell you a little of his story. To quote the CEO as he tells it:

I am five feet, 10 inches tall. The guidelines (he’s referring to standard BMI guidelines) suggest that I should weigh between 151 and 163 for my medium frame. If you add 25 percent to the upper limit, I would need to be no heavier than 204 pounds. I currently weigh 272 pounds, down from 335. I would have three years to lose 68 pounds

That is indeed some challenge. Not to mention that the hospital is in West Virginia (albeit the northern sliver between Ohio & Pennsylvania) where the obesity rate is among the nations highest—there’s a reason that Jamie Oliver took his childhood obesity crusade there. In fact Ohio County, WV’s obesity rate is 32% according to the rather fun County Sin Rankings site. And as obesity tends to mean a BMI of roughly 25% more than the outer band of the guidelines, it’s a fair bet that somewhere close to 32% of the workforce is obese. So getting that number down to 5% would be a major struggle.

The interim CEO also wanted to promote not only his own weight loss story but the laudable activities of his hospital’s dietitians and its weight-loss programs. Here’s his counsel to hospital employees.

I strongly urge you to take advantage of the programs OVMC and EORH are currently offering employees who are battling with excess weight. Mary Velez is doing a fabulous job with Weight Watchers programs, and in addition, I have also been offering a program known as “Diet and Fitness for Love.”

And who could be against that advice?

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The Dartmouth Team Responds (Again)

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By JONATHAN SKINNER, PhD

Reed Abelson and Gardiner Harris, the authors of the June 4th  New York Times article critical of the Dartmouth Atlas and research, have acknowledged Elliott Fisher and my concerns and clarified the record in their posting on the New York Times webpage.  They originally claimed that we failed to price adjust any of the Atlas measures. They now acknowledge that we do, but they’re hard to find on the Atlas website, a point we concede.  They originally claimed that quality measures were not available on the Atlas website.  They now acknowledge that quality measures are on the website, but they don’t like them.  We agree quality measures can be better – the type of research we do is always open to improvement — and Dr. Fisher has recently co-chaired an NQF committee with precisely this goal.  (See our more detailed response.)

But the primary purpose of this posting is to respond to the attack by Mr. Harris on the professional ethics of the Dartmouth researchers.  The key issue seems to be whether the research in two landmark 2003 Annals of Internal Medicine articles (here and here) were misrepresented by the Dartmouth researchers.  In his posting Mr. Harris asserts:

In an aside, when was the last time you saw researchers so profoundly mischaracterize their own work? How is it possible that they could claim their annals pieces concluded something when they didn’t? I can’t remember ever seeing that happen.

We are disappointed by this accusation. We can understand Mr. Harris’s frustrations in understanding the research, as it is often nuanced and tricky to follow.  This lack of understanding is illustrated by their recent New York Times posting, where they state:

In statistical terms, [the Dartmouth researchers’] claim is referred to as a negative correlation between spending and health outcomes, which means that when spending goes up, the health of patients goes down.

They have confused the idea of a correlation (high spending hospitals on average do slightly worse on quality and outcomes) with causation (if a hospital spends more money, outcomes for those patients will get worse).

The more fundamental point, however, is their claim that we misrepresenting the two 2003 Annals of Internal Medicine studies written by Dr. Fisher and others.  Ms. Abelson and Mr. Harris state that

The Dartmouth work has long been cited as proving that regions and hospitals that spend less on health care provide better care than regions and hospitals that spend more…. As the article noted, [Dr. Fisher] asked in Congressional testimony last year, “Why are access and quality worse in high-spending regions?”

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Commentology: Times Reporters Respond

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New York Times health policy reporter Gardiner Harris responded to THCB founder and publisher Matthew Holt’s comments on the recent series of reports he has authored with business writer Reed Abelson questioning the science behind the Dartmouth Atlas.  Gardiner had this to say in defense of his newspaper’s investigation:

The main point of Reed’s and my pieces about the Dartmouth work is that the data are simply not good enough to guide spending decisions in the government’s $484 billion Medicare program. If the Dartmouth researchers had acknowledged this point, our story would not have been all that interesting. But they cannot bring themselves to do this, and in fact they have repeatedly exaggerated and mischaracterized their own work in public settings to suggest it can be prescriptive.

An ancillary point was to warn those on capitol hill, the administration and journalists to be wary of those highly popular maps from the Atlas. You have scoffed that it’s a small thing that the Dartmouth researchers fail to adjust their online data for price and illness. But misunderstandings about this are widespread. That landmark piece by Dr. Gawande that you cited used the Atlas’s unadjusted data. Dozens of stories in newspapers and magazines around the country have used the unadjusted data to criticize health institutions. Even David Cutler, among the top health economists in the country, was unaware that the atlas offered largely unadjusted data.

Accuracy may seem a small point to you. It is not to us.

Our Friday piece also pointed out that Dr. Elliott Fisher and Mr. Jon Skinner claimed that their 2003 Annals pieces had found a negative correlation between spending and outcomes. In fact, the pieces found no correlation between spending and outcomes. This is not a small distinction. If there’s a negative correlation, cuts in spending will actually improve health. If no correlation has been found, then cuts become far harder and perhaps more painful. We cannot go into reforms of our healthcare system believing that the work will be easy. But that is what the Dartmouth researchers have suggested, and this siren song has had an enormous impact on Capitol Hill.

In an aside, when was the last time you saw researchers so profoundly mischaracterize their own work? How is it possible that they could claim their annals pieces concluded something when they didn’t? I can’t remember ever seeing that happen.

–Gardiner Harris

Dartmouth Analysis Again In the Cross Hairs

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By MERRILL GOOZNERGoozner

Reed Abelson and Gardiner Harris in the New York Times are questioning some of the key assumptions behind the Dartmouth Atlas of Health, which for twenty years has documented wide variations in Medicare utilization rates across the country and used that to claim huge savings could be obtained by rooting out waste in high-spending regions. In February, Harris reported on a commentary by Sloan-Kettering’s Peter Bach in the New England Journal of Medicine that argued the Dartmouth analysis failed to adjust for illness severity. I reported on the Medicare Payments Advisory Commission’s similar analysis here.

This time, the Times’ two most thoughtful health care reporters bring quality into the discussion. After describing a map in Office of Management and Budget director Peter Oszag’s office that divided the nation into low-spending beige regions and high-spending brown regions, they write:

For all anyone knows, patients could be dying in far greater numbers in hospitals in the beige regions than hospitals in the brown ones, and Dartmouth’s maps would not pick up that difference. As any shopper knows, cheaper does not always mean better. . . The debate about the Dartmouth work is important because a growing number of health policy researchers are finding that overhauling the nation’s health care system will be far harder and more painful than the Dartmouth work has long suggested. Cuts, if not made carefully, could cost lives.

For documentation, the reporters used quality data generated by the Wisconsin Collaborative on Healthcare Quality, which I wrote about a month ago for The Fiscal Times.

This is an important debate. But as is often the case in journalism, the attempt to reduce complex realities into a single-factor analysis that can be summarized in a headline or a single “why this story is important” paragraph can leave a mistaken impression. Regional variation in Medicare spending is one indicator of gross overutilization. Something is happening when a hospital in McAllen, Texas does twice as many knee implants per Medicare beneficiary as a hospital in Baton Rouge, Louisiana. (An earlier version of this post compared McAllen to Rochester, MN, which actually has a slightly higher rate of knee implants per 1,000 Medicare enrollees.)

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The NY Times, dogs, sores & Dartmouth critics

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By Matthew Holt
Matthew Holt

Today’s NY Times has a confused, woffly attack on Dartmouth from Reed Abelson & Gardiner Harris. This is a dreadful article. Period.

That the NY Times printed it is remarkable given the turnaround in thinking by David Leonhart in the Economix blog on the NY Times over the years to being a thoughtful Dartmouth proponent. It’s end even more remarkable that they didn’t even quote Buzz Cooper, probably the leading thoughtful Dartmouth critic. Longtime THCB readers will expecting me to start writing about dogs licking their sores….

Dartmouth has pretty much immediately refuted their article (and I suspect it didn’t take too much research). But what they really missed was the big announcement yesterday that HHS is now releasing a whole lot of datasets that researchers can use to put these and other data together and are encouraging the private payers to add to the mix (FD The Health 2.0 Developer Challenge is helping convene tech developers to work on this). Is it really true that Sacramento is cheap according to Dartmouth but expensive to private payers. And why?

There’s lots more work to be done here, but this article doesn’t help.

If you want a deep deep dive into this problem, here’s the article Daniel Gilden wrote on my blog last year. With lots of intelligent back and forth in the comments (including one from a Nobel Prize winner!).

Should We Let The Death Issue Die?

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By PAUL LEVY

Paul levy

Did you read yesterday’s New York Times article by Anemona Hartocollis, entitled “Helping Patients Face Death, She Fought to Live“?

It was about a palliative care doctor who faced her own end-of-life issues in a very different manner from the way she would have advised many of her patients.

An excerpt:

[A]s the doctors began to understand the extent of her underlying cancer, “they asked me if I wanted palliative care to come and see me.”

She angrily refused. She had been telling other people to let go. But faced with that thought herself, at the age of 40, she wanted to fight on.

While she and her colleagues had been trained to talk about accepting death, and making it as comfortable as possible, she wanted to try treatments even if they were painful and offered only a 2 percent chance of survival.

It is never right to be judgmental about these matters. Each person faces this kind of situation in his or her unique way, and we have no right to dispute the choices people make.

But I was struck by how this doctor personified the public policy debate that surrounds terminally ill patients. Here’s a an example of that kind of discussion from Canada (single payer, government run system!):

The high cost of dying has more to do with soaring health care costs than the aging population does, according to the Canadian Institute of Actuaries. In its submission to the Romanow commission on the future of health care, the institute said that 30 to 50 per cent of total lifetime health care expenditures occur in the last six months of life. Noting the sensitivity of the subject, the group suggested greater use of less expensive palliative care and living wills.

Dr. Pardi’s experience shows how hard it is to go from a policy-level discussion of such matters to the decisions made by individual patients and their families. Without giving credence to the nasty and politically inspired debate about “death panels,” the ambiguity in such situations suggests the difficulty in adopting formulistic approaches to the decisions around end-of-life care.

Besides abortion, it is hard to think of a part of medical practice that is more likely to be politically divisive and personally uncomfortable. Given that, is it worth the debate? Alternatively, how can we best have a productive discussion about it?

Are The Attorneys General’s Constitutional Claims Bogus?

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By MARK HALL, Wake Forest University School of Law

6a00d8341c909d53ef012876544c5e970c-320wi Immediately after passage of health care reform, over a dozen state A.G.s sued to declare it unconstitutional, as violating states’ rights. The Florida complaint is here, and Virginia’s here. Reminiscent of southern governors in the 1960s blocking their state universities’ gates, these legal officers in effect are saying “not on our sovereign soil.” Since the constitutional issues have already been hashed through so thoroughly, what’s new to talk about?

First, the Florida complaint, which a dozen other states joined (AL, CO, ID, LA, MI, NE, PA,SC, SD, TX, UT, WA), focuses mainly on the financial burdens of expanding Medicaid. This is challenged under the “commandeering” principle, as requiring states to devote sovereign resources to achieve federal aims. But, as we know, states are free to withdraw from Medicaid, so the argument seems to fall entirely flat. The complaint makes a bait-and-switch type of estoppel argument , that states got into Medicaid without any expectation of this expansion, and now it’s too damaging for them to withdraw. So, in effect, states argue that the Constitution allows them to keep the federal carrot but refuse the federal stick. Good luck selling that to an appellate court.Continue reading…

A Tribute to Austin Ross

By GARY S. KAPLAN, MD, Chairman and CEO Virginia Mason Medical Center

The selection of Austin Ross for the Modern Healthcare Hall of Fame is fitting. His ideas on leading and managing in health care – which he’s written about extensively in books and articles dating back to 1959 – laid the foundation for successful health care administration nationwide.  His leadership has guided me and countless other health care leaders and administrators across the country.

Virginia Mason was privileged to benefit from Austin’s expertise for most of his 36 year career. He came to what was then Virginia Mason Hospital and Clinic in Seattle as an administrative resident in 1955 after completing his MPH degree from the University of California, Berkeley. By 1968 he was the hospital administrator and in 1977 he became executive administrator, a position he held until his retirement in 1991. Austin’s leadership is credited with putting Virginia Mason in the national spotlight as a foremost example of how to integrate a multi-specialty group practice with a hospital.Continue reading…

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