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McKinsey weighs in on healthcare reform

Charlie Baker is the president and CEO of Harvard Pilgrim Health Care, Inc., a nonprofit health plan that covers more than 1 million New Englanders. Baker blogs regularly at Let’s Talk Health Care.

Charlie_headshotBack in December, 2008, the folks at McKinsey – one of the world’s most well known consulting firms –  wrote an interesting article on health care reform in the U.S.  What’s striking about it now as we all watch the debate unfold in Washington, DC is how different McKinsey’s approach is to the one being taken in our nation’s capital.  McKinsey focused on three things – personal behavior, cost and quality transparency, and administrative simplification.  The Washington debate is focused mostly on whether or not to create a government run health insurance plan, individual and small group health insurance market reforms, Medicaid and/or Medicare expansions, how much deficit spending is too much, and administrative simplification.

People in DC would argue that doing anything about personal behavior is virtually impossible, so why bother, but McKinsey’s case on this one is pretty compelling.  In fact, McKinsey argues that the whole “40% of individual health care expenses occur in the last year of life” is no longer true – primarily due to the rise in costs associated with managing chronic conditions.  Quote – “…our findings suggest that the management of chronic disease outside of acute-care environments accounts for at least 20 percent of total U.S. health care spending, perhaps more.  That level of expenditure, compounded over decades in many cases, dwarfs the cost of end-of-life care…”  They indicate that end-of-life health care spending – on average – for people who pass away between the ages of 65 and 95 represents less than 10% of the total amount of money they spend on health care during their lifetimes.

McKinsey references obesity as a specific example.  The incidence of clinically defined obesity has doubled in the U.S. since 1980 – to roughly 34% of the adult population.  Clinically obese patients spend almost twice as much as someone with a normal body mass index on health care – every single year.  Put another way, if we were as obese today as we were in 1980, we’d spend $60 billion less on health care.  McKinsey says ignoring the impact personal behavior – and here, I’m mostly referencing diet and exercise – has on the rising cost of health care is a huge missed opportunity, and their data points make a compelling case.

Second, McKinsey points out that the same service provided by two different providers in the same geographic area with the same patient and the same outcome can vary in cost by as much as 40%, and no one knows it.  “In no other industry are service attributes and prices so opaque.”  No kidding.  Some of us having been banging this drum for years, and we are still in the crawl stage in terms of making this sort of information publicly available.  And while I’ve always thought of that as a way to rationalize provider prices, McKinsey thinks it could also rationalize insurance plan design and re-frame the health care conversation generally.  They note that without publicly available information on price and performance, the move from delivery and insurance models that are based on acute episodes of injury or illness to ones that are based on promoting healthy behaviors and managing chronic conditions will take forever to occur.

Third, McKinsey discusses the price of administrative complexity – and while Washington does seem interested in taking this one on, some of McKinsey’s observations about what drives complexity require a more nuanced approach than  the ones currently under discussion.  For example, McKinsey notes that regulation drives complexity, that providers and payors each own a piece of the complexity around claims processing and payment, and that the government as payor has contributed significantly to this conundrum as well.  Are there opportunities here?  Yup, but it’s not as obvious as it seems.  Remember, when someone talks about standardizing processes and rules, they usually standardizing everyone else to the way they do business.

I wonder if the whole diet/exercise question – or the transparency issue – will find their way into the health care reform discussion.  My guess is the answer will be “no.”  They are too beside the point for a discussion that’s primarily about financing and paying for services rendered.  That’s too bad.  McKinsey’s piece makes it pretty clear that reducing the rate of growth in health care spending and improving care quality is about a lot more than whether or not we have a government run plan for the non-Medicare/Medicaid population.

Following the Science To A New Era In Medicine

By WILLIAM BESTERMANN, MD6a00d8341c909d53ef010536ee8138970b-pi

“The current care systems cannot do the job.  Trying harder will not work.  Changing systems of care will.”

Crossing the Quality Chasm, Institute of Medicine, 2001

Medical leadership in the United States has not yet come to grips with the level of structural and systemic change that will be required to produce the dramatic improvements in the management of chronic conditions that are required to reduce disability and mortality while reducing costs.

In this same space, I recently published an article called “The New Science of Vascular Disease.” The take-away message of that article is this: one of the most important products of our medical system is optimal medical therapy for vascular risk factors. As a system, we don’t even come close to achieving conservative goals for global risk management and the latest work from Dr. Steven Nissen tells us that plaque progresses more rapidly when the LDL cholesterol is over 70 and the systolic blood pressure is 120. Most providers are not even shooting at those targets.

The objective observer today could make a better case that medical rather than military intelligence was an oxymoron. The US military and medical systems share many common features. The scientific and industrial revolutions have changed both endeavors at a pace that can barely be digested. The tools that we use have improved dramatically and properly applied can achieve results that were unthinkable 100 years ago.

When my son was studying at West Point, I learned that they spent what seemed an inordinate amount of time studying the American Civil War and I asked him “Why do you do that?” He said, “Generals get their soldiers killed by fighting the current war with tactics that were appropriate for the last conflict.” I have been haunted by that statement ever since. By any objective standard, the US military has done a much better job than our medical system of adjusting their structure and practice to the new technology that is available to them.

Translation is a major emphasis – perhaps the major emphasis – in all military education. All army enlisted and officers are trained as generalists and the infantry, the organization of generalists, is the “Queen of Battle.” All of the specialty arms in the army serve the infantry as the main focus of army operations. The leaders of the army are required to attend sophisticated schools at each stage of promotion in part to prepare them to incorporate new technology..All of this has developed out of that concern that the stakes are enormous and leaders get their soldiers killed by not translating new technology into practice.

Unteroffizier Paul Scheytt could not believe his eyes. During the week leading up to this moment, July 1, 1914, he and his troops had endured artillery barrages so vicious that the British high command was quite sure that all German forces in that section of trench had been annihilated. Indeed, he was just peering over the wall of his fortification after a final savage artillery bombardment, and there before him were thousands of British soldiers, so heavily laden with equipment that they could barely walk, moving deliberately toward his position. He and his fellow soldiers thought the British were insane. He was watching the beginning of the Somme offensive.

In that single day Scheytt and his fellow German troops would shoot down 60,000 young British men. These attacking troops had come at the Germans shoulder to shoulder and were annihilated in a murderous hail of fire from machine guns, repeating rifles, mortars, and breach-loading artillery.

How could such madness happen? The English generals did not change the tactics of the assault to take into account the tremendous changes in weapon technology. They did not translate new technology into practice. The British general Haig, who ordered the attack, was bright, well-trained and conscientious, but he caused thousands of young men to die because they were fighting with tactics appropriate 100 years before that day. The technical paradigm and science had changed, but the leaders had not adjusted structure and tactics to address those realities.

The British forces attacked across a broad front as western armies had done for thousands of years. Even as the American Civil War began, the broad frontal assault was still a reasonable strategy. The musket that was far and away the main weapon in use was only accurate at 40 yards. In the first battles of the Civil War, lining up in parade formation with the regimental colors leading the way and the band playing was completely appropriate. The armies would line up across a front two or three miles wide, march to within 40 yards of each other and fire by volley. There were casualties, but losses were reasonable and the tactics and technology were fairly well matched.

By 1863, when the battle of Gettysburg was fought, the dominant infantry weapon was no longer the musket but the rifle, which could reliably kill a man at 300 yards. When General Pickett led his infamous charge, his troops were crossing nearly a mile of open field and the Union defenders were protected by a stone wall. Pickett’s division had no chance and evaporated before it got anywhere close to the Union position.

The Union generals observed this slaughter first-hand, but in May of 1864, General Grant ordered one frontal assault after another against Confederates in trenches armed with rifles. None of these assaults had the remotest chance of success, and the Union Army of the Potomac suffered 60,000 casualties in that one month – a loss equal to the entire strength of the Army of Northern Virginia.

The paradigm had changed, the solution existed, but leaders of the Civil War and even of WWI did not change the tactics of the assault. Millions died as a result.

The solution to the changes in warfare really fairly simple. The method of attack had to change radically, and once that change was made, the impregnable defense paradigm changed to one in which the irresistible assault was the reality of the day. In a moment, we went from a world where the attack seldom succeeded, to a world where the well-designed and executed attack seldom failed.

Our tactics in dealing with chronic diseases lag the available technology to a similar extent and with similar casualties. Multiple major paradigm shifts have occurred in the new science of vascular disease. Heart attack is not a plumbing problem. It is not a problem of a progressive fixed blockage that can be fixed with a stent. Stents do not prevent myocardial infarction in stable patients.

Still, our system practically functions as if it is all about the blockage. Heart attacks are prevented by stopping smoking, diet, exercise, and a coordinated, integrated pharmaceutical protocol aimed at preventing plaque rupture by aggressively treating hypertension, high cholesterol and type 2 diabetes. Today, a carefully designed program of 6 four dollar prescriptions from WalMart can make an enormous difference. Multiple clinical trials have demonstrated the effectiveness of optimal medical therapy and that is clearly our challenge – to produce best medical treatment for risk factors consistently. Our current system of care has no more chance of success than the British attack at the Somme.

We require the same drastic reorganization required of the military after WWI. We are currently organized as if hypertension, type 2 diabetes, high cholesterol, high triglycerides and gout were separate conditions. They are not.

For the majority of patients, these conditions are part of the metabolic syndrome, a single condition that is the result of a diet rich in fat, sugar and processed carbohydrates, coupled with inactivity, resulting in increased abdominal weight. The metabolic syndrome and its later stages of pre-diabetes and diabetes are the leading cause of heart attack, stroke, and other serious vascular complications.

“Changing systems of care” is not just something for the worker bees. From top to bottom our system functions as if the science of the last 20 years never happened. Even our major academic centers are still organized as if these are unrelated conditions. Most medical schools have hypertension clinics, lipid clinics, and diabetes clinics. The professionals who man these clinics organize meetings sponsored by the American Society of Hypertension, the National Lipid Association, and the American Diabetes Association respectively. Then, when these anachronistic systems fail to produce optimal medical therapy and these patients experience a plaque rupture in a coronary artery and a resultant heart attack, the patient is referred to a cardiologist. When they develop a clot in a neck artery, they see a neurologist and when they develop gout we send them to a rheumatologist.

The whole arrangement is an anachronism based on decades-old science. Until we address these fundamental realities and make the adjustments in our systems of care demanded by new technical developments, optimal medical therapy will remain an elusive dream. Until we seriously attack these structural issues, we cannot produce patient centered care.

And so, the obvious question becomes: “What changes in structure and practice would be the medical equivalent of a mechanized infantry division in the management of cardio-metabolic conditions?” The best answer today would come from a combination of “Crossing the Quality Chasm” from the Institute of Medicine (IOM) and the Advanced Medical Home from the American College of Physicians (ACP).

The IOM recommended that focused programs be developed for 15 priority conditions that included diabetes, high cholesterol, hypertension, ischemic heart disease, and stroke. Peripheral arterial disease and congestive heart failure are strongly related conditions and the whole could be managed by internal medicine and family practice providers with a special interest in these conditions. A special focused effort to address all of these conditions in a coordinated integrated way could be housed in a cardio-metabolic center of excellence within a larger practice.

That cardio-metabolic center-of-excellence team would assure that the IOM system for producing optimal medical therapy was consistently implemented along four key principles:

  • Organize evidence-based care protocols consistent with best practices
  • Organize major prevention programs to target key health risk behaviors associated with the onset or progression of these conditions.
  • Develop the information infrastructure to support the provision of care and measurement of care processes and outcomes.
  • Align the incentives inherent in payment and accountability processes with the goal of quality improvement.

The ACP document on the advanced medical home describes a number of models:

“In the advanced medical home model, patients will have a personal physician working with a team of health care professionals in a practice that is organized according to the principles of the advanced medical home. For most patients, the personal physician would most appropriately be a primary care physician, but it could be a specialist or sub-specialist for patients requiring ongoing care for certain conditions, e. g. severe asthma, complex diabetes, complicated cardiovascular disease, rheumatologic disorders and malignancies…Principal care, that is, the predominant source of care for a patient based on his or her needs could be provided by a primary care physician or a medical specialist..”

This is a great new opportunity for primary care to rise out of the ashes, to produce a very high value product and to be paid fairly for it. Current systems and practice do not  produce optimal medical therapy consistently. The cardio-metabolic centers of excellence proposed here would be manned by generalists assembled in a kind of medical special operations unit, bringing together just the right mix of assets to accomplish the reliable production of optimal medical therapy for large numbers of patients. The expectation would be that the providers would train and retrain to continually improve their practices as the science and technology continue to change.

We could train generalists to become part of special teams that change with the science and technology. They would not practice primary care in the usual sense; they would not attempt to be everything to everyone. They would be the ideal principal physicians for patients with vascular risk factors and a history of vascular events. Half the population dies of these conditions and they produce nearly half the cost of care. Effectively addressing this single collection of chronic conditions offers the most impact for the cost and effort of any that I have seen proposed.

Over the last two years, our group has run a cardio-metabolic center of excellence. In providing coordinated integrated care for these conditions we have been able to show dramatic results in patients referred by the 140 clinicians in our larger practice. The entire practice has a quality culture and good outcomes. Even so, these patients have realized average reductions in the LDL of 60, A1c of 1.8, triglycerides of 200, BP of 11/9 and weight loss that averaged 9 pounds.

Good relationships and high provider satisfaction come as we attain good referral volumes from a doctor. Patient satisfaction and persistence with the program is very high. Still, most physicians in the group do not yet refer to the program.

Medical leadership has not begun to produce the level of structural change to adapt to new technology. We are in a time that will precipitate great change. Following the science, we can restructure medicine in ways that will improve lives and save enormous dollars.

William Bestermann, MD, is a Preventive Cardiologist and Medical Director for Integrative Services at the Holston Medical Group in Kingsport, TN.

Interview with Fred Goldstein, US Preventive Medicine

Last year US Preventive  Medicine (USPM) caused a little splash with some full page ads in the Wall Street Journal proclaiming itself the future of preventative care. Since then the company, which has raised a significant chunk of private capital, has been diversifying into various aspects of prevention–including what looks more like disease management.

About a year ago USPM acquired Fred Goldstein’s company Specialty Disease Management Services. And since then it’s been marketing The Prevention Plan to employers–including a recent deal with AON–and also putting out a very neat online service that was shown at Health 2.0 in October.

Prevention is getting some lofty rhetoric, including Prez2Be Obama suggesting that it’s a major key to cutting health care costs. But many people in health care think that it doesn’t have an ROI. Fred disagrees and told me why in a wide-ranging conversation about the company, the concept of prevention and whether it’s really the wave of the future. Click here to listen

Can Health Plans Explain Why They Aren’t Re-Empowering Primary Care?

Mh_counseling

Sometimes a whisper is more powerful than a shout. Here’s a cartoon from Modern Medicine that shows a Medical Home counseling session between a primary care physician (PCP), a specialist and the health plan. The PCP looks forlorn, while the specialist and the insurer have their backs turned, fuming. It is perfectly true.

Along with changing the way we pay for all health care and creating far greater pricing and performance transparency, we need to turn around the primary care crisis if we hope to substantively improve quality and cost.

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Merck’s Marketing for HPV Vaccine Trumps Science

I first wrote about Gardasil on The American Prospect online in the summer of 2006, just weeks before the Merck vaccine designed to protect against cervical cancer went to market.

There, I noted that “the hullabaloo began in June when the FDA approved Gardasil, a vaccine widely described as ‘100 percent effective’ in preventing cervical cancer, a disease that kills some 233,000 women worldwide each year. The drumbeat grew louder last month when a federal panel recommended that all American girls and women ages 11 to 26 should be inoculated. And now there is talk that states may mandate the vaccine for all school-age children.

“But before prescribing for the entire population,” I suggested, “it’s worth asking a few questions: Why does the vaccine cost $360 for a three-shot regimen? How much do we know about the new product? And is this a cost-effective use of health-care dollars?”

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Reports on Gardasil study offer varying interprations

Merck’s HPV vaccine, Gardasil, has received significant press in recent days, following a cost-effectiveness study published in the current issue of the New England Journal of Medicine.

Depending on where Americans get their news, they received different summaries and interpretations of the study. No wonder consumers are confused. Here are four examples:

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Herd immunity — vaccinations protect us all

I’m currently in the masters in public health program at Johns Hopkins University and am taking my first course in epidemiology. I have my first midterm tomorrow and among the many concepts the professors want me to understand is herd immunity.Herd_2

Herd immunity is the ability to resist an attack of a disease because the majority of the members are immune to it. Disease passes from person to person so when a large portion of the population is immune — most likely through immunizations — this protects those who aren’t immune by decreasing the likelihood a susceptible person will come in contact with the disease.

I hope that was review for the clinicians. But for me, though I had been reporting on health care for four years, this was a new concept. It helps put the importance of mass vaccinations into context. Immunizations don’t only protect those who receive them, but the entire population.

That’s why this seemingly growing movement by parents not to immunize their children is so worrisome. I want to know why public health experts have not taken a stronger, more public position about the importance of immunization.

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