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POLICY: WHCC-McLellan and Reinhardt

Now we’re getting into some meat. Mark McLellan head of CMS is on the same panel as Uwe Reinhardt. Bob Galvin from GE is the moderator. Two main issues are whether price controls work, and how we determine coverage…

Mclellan—Price controls aren’t working well in Medicare, and its no good just setting prices, as the level of the price doesn’t matter when you see massive differences in utilization

Uwe agrees. He thinks that at the moment we’re not ready for price controls. Pharm might force up prices using its political power, OR the Congress facing up to budget realities might price below marginal cost.

The audience here, not too surprisingly felt that there shouldn’t be price controls on pharma and medical products. (77% to 22%).

But now the harder question. How do we deal with coverage?

Ask the audience….If a new treatment extended life for 6 weeks, should it be covered 8%? Not Covered at all 22% or not covered but available for people to pay if they can afford it 68% 

Uwe says that he offered Manhattan Inst, and the WSJ Editorial Board the same choice.  They haven’t answered him, because they won’t put their name to it so far! Other countries do it the other way; it’s not covered, (I guess you can pay retail).

Mark says, those drugs are covered under part B in Medicare, and we’re going to move to performance….but essentially he can’t really answer the question. Uwe says that at some point there has to be a price for a life. In England a QALY is 50,000 GBP.

Question—How do we continue to encourage innovations in new technologies such as new equipment and devices and yet address the current irrational situation in which sales commissions and physician ‘incentives’ can and often do exceed equipment actual cost and physician payments for installing said devices?

Mark—At the moment we are paying for volume. We need to change the way that we pay like the Medicare demos to pay based on quality, and that changes incentives. Then you’ll see investment in EMR, and avoid the incentives that are a consequence of the payment system we have set up.

Uwe—one idea is to treat based on probability of paying for likelihood to getting sick over a life cycle. It doesn’t pay an insurer to invest money for long term pay-off. We need to think how that sort of health maintenance to be financed. At the moment Duke is trying it but no insurer is prepared to fund it.

Mark—need to learn more about the value of treatments when they’re on the market. As genomics comes down the track we’ll need to know more and more about this. To do that we need better data systems of real life clinical use.  Now we’re seeing some movement from private sector to find out more about that.

Uwe—that information must be publicly funded and supported; But at the moment there’s almost no government funding of that information in health services research. Doesn’t make sense for all private sector to reinvent the wheel. Government has to help fund this. Government has to spend more, especially on IT.

Mark—well we are spending “some” more. And there is some collective private (plans and employers) efforts on looking into this

Uwe—what have the private employers done?

Bob G—Not enough (and that from the head of this at GE!). We need to do more, but for some populations (the elderly) the government must do more….

Uwe—Mark, how can we get more money for IT? Who’s rear end do we have to kick?

Mark— most potential for supporting IT comes from those initiatives that pay for more lower cost of care. Want to identify what constitutes high value health care and paying more for it. That’s the best avenue. Most IT investment he sees is in software to maximize billing in Medicare. He wishes that there was relatively more put into clinical information systems.

Mark’s question to Uwe—What are we not thinking about? What’s new that we should be looking at?

Uwe—we need to make up what’s after this! You know there’s something after consumer care!  Perhaps the answer is figuring out via psychology how people make health care decisions. What do they use to judge those decisions

Mark—Now have some 20 measures in Medicare. But that might be a universe of hundreds of dimensions…how do we turn that into information that consumers can use….

Despite some obvious political differences with McLellan, he is a very, very polished presenter, and very bright. And Uwe is of course great…..at TCHB we ♥ him.

 

TECH–WHCC: Personal health records

An interesting session on personal health records…with a Taiwanese and Silicon Valley flavor……..

Taiwan has a single payer system, with some copay. Was 41% uninsured, and then March 1 1995 went to 92% coverage, now it’s universal. Have a standardized IT system, and as a single payer can profile doctors, hospitals and even more granular.  Moved to smart cards in 2001. moving to a PACS system within a year or two and want to have full EMR 2008.

Care is so good that 80% of Taiwanese would go back home if they were in China even for acute appendicitis.

There are some doctor shoppers. One war veteran had 1543 visits per year, by taking his Rx back to his home village in China.  Plenty of waste in the system, and lack of continuity of care. So they used 2 approaches to rein in consumers. One is IT, the other is P4P. Took 5 procedures/diseases for P4P and are seeing changes. Smart cards are the other approach. Spent less than $200 million  for all the 23m Taiwanese smart card. Good tool for moving to electronic health records.—card holds some information but also acts as an access key via reader. Links to other information in the doctors office. Some

Scott Cook, Intuit

Thinks that health care is complex, but taxes are too! Replaces complexity with Turbo tax, which hides (allegedly) the complexity behind a questionnaire. But now brings in the information from banks, payroll providers, mutual funds, etc. Now 21m using Turbotax. Those customers are loyal, so many institutions embed that in their links

Quicken has simplified financial life. Now 15m households use quicken, connecting to back end financial institutions.

What caused these high levels of consumer adoption? Attention to the customer?  Study them carefully. Deck the halls with findings of customers. Do lots of P&G type follow up, Cook learned his trade at P&G and it shows.

Now they’re moving into health care. I asked Scott who he thought his biggest competitors in the PHR business would be. But he didn’t want to answer…but I suspect that WebMD is at least somewhere on that list. Intuit has agreements with Ingenix, Sentara and various other players.  Expect a product launch next year. Few details but think about a version of Quicken that integrates claims the way that Quicken integrates banking info (my guess).

But no question that they’re going to be a major player.

TECH/INTERNATIONAL: Health care globally (mostly about the NHS)

Quick session notes from one on Global care, amusingly chaired by Humphrey Taylor my old boss from Harris

Pfizer thinks that integrated care looking at all the costs and benefits should  be counted. Prevention and DM does work.

Dr Reddy CEO Apollo Hospitals 

His hospitals can do heart surgery as well for 1/10th the US price, and wants to become a global HC destination. Not only do they give the same level of care, but they also have all kinds of eastern therapy that helps recovery. He calls this global access to health care.

Richard Granger, Director IT, NHS UK

He wanted to take the opportunity to “purvey some facts” to those of us who read newspapers. He thinks its fascinating that in the US most primary care is delivered in paper. 200K users of NHS system; mass roll-out has commenced. He finds that the supply chain is immature, and most IP is on a jurisdictional basis, with little ability to transfer. That works on a country by country basis, unlike any other software market. Some of the risks are put on suppliers, and you’ve seen the result (he forecast that some would get in trouble 2 years ago and said he would hold them to their contracts).

Now putting risk to patients, and he thinks that consumer pressure will overcome provider resistance. In addition there’s a grey market across jurisdiction (similar to Amazon) and that will happen in pharmaceuticals in Europe and globally. Many professionals in healthcare have been careful to constrain information “liquidity”

No more than 80m emails sent in last year—messages that weren’t sent before. Now information will start to move and question will be how to accredit that information.

PACS-over 50% adoption in southern region is digital Xray, now available everywhere in the system. Digitizing a hospital a week — he thinks that as a consequence of this there’ll be much more remote reporting eliminating the barriers for craft guilds. Money from NHS will therefore start moving to the expertise and leaving it in India.

Connectivity—NHS will have biggest VPN in world next year.

99% of PCP records exist digitally but only just started having that information move around the country. That will save costs and breakdown the providers guild mentality.

WHCC: Wiring the nation

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David Brailer gave an update on standards, government process. No one in charge means no standards….now we’ve got them and that will give the private industry a basis to build from.

Robbie Pearl, Permanente Medical Group— We need to change the financing of care. Technology gives us the option, but I think that we’re going piece-meal and may miss the opportunity.

Glen Steele, Geisenger—If you get paid piece work then you’ll design your system to fit that. Once you get that forcing function then you need the data. Also got to have the culture where the providers think about the common good. That has to be there before the EMR will magically do what everyone thinks that it’s going to do. They’re experimenting with reaching out to non-Geisenger physicians to see if they can provide them with EMRs via a portal.

Brailer—Can’t legislate good will. Mandates are not off the table, but all we can do is force doctors to put in technology. If we just try to mandate it, it doesn’t lead to the process change that we need. Plus what we mandate will not be compatible with what they’ve already got in place. Secondly. small practices couldn’t deal with an imposition. Thirdly, standards in HIPAA were factually incorrect and cannot be kept up to date. Government action cannot be the answer to a technologically evolving situation. When we get to 65–70% adoption then there’ll be a mandate then. Mandates don’t work on the front end of an adoption curve.

Steele—perhaps we should think that HIT is non proprietary, should it be like the Interstate highway.

Pearl—technology is not the issue-it will keep getting better. The key issue is transformation of care. 20–30 years ago patients had episodic disease. Now chronic care that needs constant supervision and can be solved by technology easily, so long as the care is transformed.

Brailer—Now about a year away from figuring out what is and isn’t happening. We do have a lot to learn from other countries. Already spending $20bn a year on health IT in US.  We should learn from them and make sure that we don’t block their future development. Most of those countries are actively buying technology.

Audience Poll results—biggest barrier to IT adoption? 34% standards, 25% no incentive, 20% inadequate support for implementation.

Steele—we need to pay for results to move this adoption very quickly.

Pearl—Health care cannot be practiced in high quality without these IT systems. there is a cost involved but there is a cost in all care. The overall issue is to change overall care and seize the moment.

 

POLICY/INDUSTRY: WHCC2006 Employers and plans

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I’m at the WHCC as the official blogger! First up is a session with big employers and their vendors from the plan world (although apparently George Halvorson from Kaiser had a minor heart attack and has been replaced by Jay Crosson from Permanente)

Ivan Seidenberg, CEO Verizon, wants portable affordable insurance, and more IT use in healthcare. Broadband will save the day! (In Virginia, Inova is using their broadband to run its eICU), and this will end up in the home, in his vision. And we should have EMRs for all, personally managed but available to all providers. Verizon is going to provide a PHR for its employees, with coaching et al.

The senate has passed legislation to help promote EMRs, and he wants more from the government on this! And he applauds those who have looked “beyond” employer mandates, and he thinks that consumers will demand the information and disrupt the marketplace.

Michael Critelli, CEO Pitney Bowes, heads a company that’s (somewhat famously) looked closely at chronic care. They have avoided cost shifting by changing the infrastructure costs. They created on site medical clinics for routine needs of employees. Services and Rx are free. The average costs of those in the clinics is lower than the rest. Their spend was 20% lower than those they benchmark. In 2000 they got a big rate increase, and so then tried to figure out what was happening? The biggest problem was people not taking their meds because of cost. So they moved to expanded coverage for generics, and lowered the cost for first line Rx, and got rid of costs for preventive services. Added costs are the main reason for people skipping coverage, plus high health costs are hitting earnings in Corporate America. So we still need to do more.

Critelli: The workplace is not necessarily the best place to reach people…perhaps the broadband approach might work (as Seidenberg said)

Jay Crosson thinks that high deductibles have incentives in the wrong way. 1%  of Kaiser patients run up 40% of the costs. He likes the Pitney Bowes concept.

H Edward Hanway: Worried that the perception that CDHP is just a cost shift. Corporate CEOs may be interested in behavior change and are interested in spending their money in different ways. A perception that they’ll have to work hard to dispel!

Jay Crosson; Financial responsibility is OK, but just imposing large deductibles is a blunt tool.. KP trying to create a clinically driven high deductible plan

Seidenberg—verizon supports a mandate to change something. Current system has run its course. Verizon wants to participate in that redesign, but wants to get out of the health care business. We don’t buy houses, buy cars, why should we be in the business of buying health care? We need to get out the language of shifting cost, to that of “shifting responsibility”. America must be ready to tackle the overall issue.

Hanway–Information and health coaching works no matter what the financial incentives, so far based on what they see from their data, even if their financial responsibility increases. But it cant just be “stick a HDHP on them”.

What about Romney care? The audience mostly think it’s a good start (only 25% think it’s terrible and 1% think its a real solution)

Jay Crosson—hopes that employers won’t leave health care coverage. But we’re in a lifeboat and everyone’s got to pull on the oar, or we run the risk of all this going in the wrong way.

Seidenberg—we want to get out of the business of wholesale subsidies. We found that people were buying drugs and not taking them. Should there be financial incentives to providers to make them do that. Also he supports vouchers and ways to buy into the system. But he thinks that competition across plans will help

Hanway—Mass will prevent insurers from creating affordable insurance, but the direction is encouraging.

Crosson-individual mandate is one way to get everyone in the game, which we need.  But will there be insurance available to buy? Where will the money to come from to subsidize care for those who cant afford it? Where’s the mechanism for restricting costs?

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This is my first notes of an interview with Michael Critelli, CEO Pitney Bowes. Definitely one of the CEOs in America who’s thought most about this topic. Most of the questions were submitted from the audience in rather interesting system from VisionTree.

What about the cost that are from the most significantly disabled/sick people?

By the time that they become disabled, no choice but to manage their condition in conjunction with them. CDHC is a long term investment to prevent significant disabilities, it’s a piece of a solution but not so appropriate when you get to significantly disabled people. At that point you are trying to get them to take charge of their conditions… but there are many things they can do even then (diet, exercise, following treatment)

What about the role of insurers?

Insurers are working to improve the outreach, but some more enlightened than others.  Some do better than others. some are better at collecting data, others better at identifying high quality providers, but overall a mixed result…

Why cant health insurers push harder to get transparency?

There’s a range of behaviors by consumers. Some prefer simplified pricing, others like to buy a la carte…saying that everyone wants standard pricing ignores the fact that restaurants don’t all offer prix fixed meals. The best solution would be a combination of simpler and more complex pricing.

Why is PB an outlier in its health strategy?

Too many employers looks at this as a cost item year to years rather than a long term investment-when you’re cost driven you have the perverse outcome. There has been a lack of leadership in benefit and HR functions. Could we have had this ten years ago? Yeah and there were equally stupid business leaders then (direct quote!)….in their own business (mail services) procurement people don’t look at life cycle costs over procurement. People are very scared of factoring in real consequences of decisions. When PB built the clinics they took a leap of faith that it would save on absenteeism, but they couldn’t precisely quantify that, and the people running health care internally wouldn’t give it credence but he overruled them…luckily

Are PBMs a help or hindrance?

Can be used for positive or negative results. If they monitor usage for compliance or drug reactions it’s a positive. PBMs also a source of information as to whether they’re using rescue drugs rather than preventative drugs. In the wrong hands can just be a tool for cost shifting.

Are the major PBMs saving employers money?

Given their growth I assume that there must be doing something right. The people who run them are pretty sharp

Is it too much to ask that employers partner with employees?

Employer/employee partnerships improve outcomes, productivity, quality. Always a benefit to the employer doing that for the spin-off effects….even if not providing health insurance there is still be a benefit to doing that partnership

Is health care IT going to save money?

The portable PHR is going to be a significant part of the solution. To get physicians online needs a comprehensive IT program that is top down driven. Providers are not going to invest in IT unless there’s a network effect. Providers don’t want to put a lot of money into supporting the systems, needs to be some part of a larger universe. Government and industry (tech vendors) have to come together on common data standards (need UPC equivalent) Will take a long time. PB has been at it in  postal reform for 11 years. If 10 years from now we had PHR standards that would be a success.

Health plan profits are at record highs—are they providing value?

Employers not happy. Got to have the sense that the money they’re paying in is being reinvested to improve outcomes. Some plans are doing better than others, but overall the position is mixed. The one area that more needs to be done is to use traditional marketing segmentation tools to identify the diverse populations that they cover and see what works

 

 

TECH/QUALITY/PHARMA: Active Health used by Mariott

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Interesting brief presentation — Mariott uses Active Health Mangement to change its formulary

Integrates pharmacy, medical and labs data from one place—inluding diagnosis and runs it against the medical literature based algoritms. They then communicate information to both providers and consumers (in consumer friendly langauge).

They found that sometimes “care considerations” has been presented to doctors and they’ve reported back that the script was written but the patient counldn’t afford it. So some medications (what they called essential rather than non-essential drugs)they’ve selectively changed the formulary to a lower copay, or none for generics, for those that have the relevant disease. Care engine can both identify those on the drugs and those who are not but should be, and communicates that information back to doctors and patients.

They’re doing a pre & post compare study with another Active Health Client who is not varying copays to see what that does to adherence and cost outcomes. The program is great reminder for docs and patients. Trying to ensure that the essential drugs are acessible.

 

TECH: Just another EMR puff piece….on Cerner?

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Anyone who’s ever read Fast Company won’t be surprised at the slightly breathless tones used in one of their typical "business gets new process, struggles a little at first, then succeeds beyond its wildest dreams" plot line. After all this was the magazine that was aped by a certain not quite so polite web-site also ending in "company", and beginning with an F.

What’s a little different is that this article, Record Time, is about a simple ObGYN adopting an ambulatory EMR, and then having all the usual crises of seeing his practice more or less collapse because of the extra time it took to figure out how to use it.

But apparently in this case the vendor sent donuts, and someone who built him templates and showed him how to use it. Repeat with me–a practice barely alive, but we can rebuild it, we have the technology, we can create the world’s first bionic physician’s office….it will be gooder than it was before…and all for slightly less than $6 million! (Look here if you’re too young to get it…)

Given that the vendor in question is Cerner, notorious for its not always quite as smooth as silk implementations, you’d be entitled to a little cynicism here. (and if you think I’m just relaying industry tattle here from HISTalk, you are of course right!). However, last year a very sharp IT consultant told me that his shop had done a real life performance comparison of the major ambulatory EMRs and Cerner’s Powerchart product (which was new and had little market penetration) had actually beaten out the big boys. So better product, with better customer service? Can it be true? Or is this just more "pie in the face for Neal Patterson" ammo?

Of course it would be nice if the article told us a little more about exactly how the physician got from near chaos to everything running as smooth as silk without avoiding total financial collapse. Several of his colleagues reported on in Medical Economics recently weren’t so lucky.

POLICY/PHYSICIANS: Another crazy doc in favor of single payer

Yet another crazy doctor decides that the hassle of dealing with 301 separate insurers is just too much and that he, was well as everyone else but the insurance industry, would be better off with a national single payer system. Nothing that hasn’t been heard before from a minority of docs.

The only noteworthy thing about this one is that the doc in question is Benjamin Brewer, who writes The Doctor’s Office column in that filthy commie rag The Wall Street Journal. Wonder how long he keeps that job?!

POLICY/THE INDUSTRY: Ethics 101, we’ve failed

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Fred Goldstein, a health care veteran who believes in the free market, calls a spade a spade in a hard hitting call for ethical improvement in health care over at HealthLeaders. Go read his list of transgressions which we all know about individually but are hard hitting when read together. Bonus points if you can name the guilty. His point is that it’s pervasive because we’ve collectively let it happen. Here’s his conclusion.

Unethical behavior exists among healthcare organizations and professionals of all types. Organizations that try to do the right thing are often outmaneuvered by those that do not. Self-interest is often hidden behind a facade of patient concern. “We do this for the patient. If you withhold our services, you will hurt the patient.”Worse, these self serving behaviors have become so common that professional outrage has been dulled. But to save healthcare, we can’t just take these acts for granted. The prevalence of inappropriate actions in healthcare drives additional margins in the industry’s supply, delivery and financing sectors. It is at the root of our cost explosion and our healthcare crisis. And, it is based on an ingrained acceptance of unethical behaviors.The recent movement toward transparency and quality reporting will shine a bright light on some of these practices, and should tone down the environment of opportunism. But many of these behaviors have been well known for years. I have little faith that, with so much money at stake, any reforms can be substantial enough to turn around the industry. This is especially true if change does not support and engage much more participation from payers and consumers.

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