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QUALITY/TECH: Brailer on IT in P4P

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David “Stalin” Brailer likes being on the west coast, so is happy to come out here and give talks.

He says it’s obvious. Health care IT needs P4P.  And you can’t recoup the benefits of an EMR unless it’s aligned with the direction that the health care market’s going. So the market has to change. But 1.5% of the revenue (a typical P4P bonus) is not enough, although it might be enough on the margins for a few.

Meanwhile, Brailer’s office is now certifying what is a “valid” certified health record (CCIT) and wants P4P programs to help encourage that. And he like everyone else thinks that P4P requires health care IT.

But as there is no agreement on what we’re measuring, none of this works. The industry (public and private) needs to come together to agree what the hell it is we’re measuring. Brailer thinks that  American Health Information community (AHIC) is doing that.

But we also need to commit to changing the way we pay doctors and help them along. No one knows if it’s IT that helps or management or what.

BUT he notices that health IT works better among bigger practices. His mission is not to drive everyone into big groups. This has to be made bite size for smaller practices. As the tools are much further along for the bigger groups, which tracks with the ability to do pay-for-performance. So we have a big investment to make to bring along everyone. We have to bring along the little guys too.

(I’m hearing more about this from Brailer than I was year ago)

Both health IT and P4P favor standalone rather than integrated care. Normal course of health IT can’t be followed which is why interoperability is important, and they will guarantee that certified records will be backwards compatible and be interoperable. So he wants not to reward silos, but instead to reward “interoperability” for P4P — not to create optimal activity in a sub-optimal place.

Finally he wants P4P to be long term, not to die on the vine like capitation because it’s a new name for dumping the risk on someone else!

I asked Brailer about consumerism, HDHPs, and whether that is in conflict with integrated systems. He thinks that those integrated systems will find other solutions and they will integrate with other pieces of the system. Most other industries have moved away from “integration”… He believes IDS are closer to that end point in operation versus where they are psychologically. And closed systems are not totally closed. No one is an island. So they require interoperability, but he hopes those big systems can export their knowledge. So they need interoperability too. (he didn’t really touch on whether the HDHP will destroy the HMO movement before those consumer measures are created.

His final point? This is inevitable as doctors going into practice now will not tolerate paper in their practice. He wants the process of having this happen cleanly and not have it happen as islands.

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QUALITY: P4P Round table

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So there was a round table. You can get the transcript much later, but here’s the shorter and more biased version:

Shorter Sam Nussbaum, Chief Med officer, Wellpoint — it’s 6 fold different in different places. We’ve got to measure it and tell people about it, and we can fund the good stuff by cutting out the bad. If you damn doctors would only let us….

Shorter Jack Lewin, Calif Med Association — need the information first, before you go to incentives, but the CMA is way out in front of those recalcitrant other doctors from those backwards states

Shorter Suzzane DelBanco, Leapfrog — get me more efficiency! but reward improvements, but not with any more money

Michael Cannon, thinking man’s libertarian, Cato — need to get consumers to buy with their own dollars and everyone else will change by magic

Bob Margolis, CEO Healthcare Partners — socialism is good for provider groups internally…but if we do it all according to guidelines we’ll spend more money not less

Adams Dudley, UCSF —  It’s very very complex, and you have to be very smart to figure it out

Shorter John Nelson, ObGYN from Utah and the AMA — you can’t measure being a good doc, as the idiots doing the measurement don’t understand what they’re measuring. Anyway this trend is just another one like managed care and HMOs. People will game the reporting, so lets be translucent only. Anyway I’d rather reform malpractice and eliminate disease ….you fools can discuss this all you like, but lets stop Medicare cutting docs fees any more

QUALITY: Francois de Brantes from GE, runs Bridges to Excellence

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He has three keys to make changes in the health care system

1) Accountability — Everyone needs to account for their performance, and feel that they’re accountable for where their dollars flow. And they find that 25% of their employees are going to the top performing systems. Think that they should put incentives into benefit design.

So you should a) share data in a public forum, which forces organization to improve. b) develop health information exchanges with clinical data in them (claims are not enough) which is why B2E does so much chart extract, and is encouraging IT adoption, and c) measuring how well internal medicine works.

2) Better payment models; need a better model—currently wasting a huge amount of resources and getting a mediocre results. They believe that bonuses through shared savings gives a counter incentive to FFS. He thinks docs should be paid with a bonus on top of salary. So B2E is experimenting with 5–10% physician revenue as an incentive (below 5% is not meaningful). Incentives need to be meaningful enough to drive the majority. Plus needs independent review — accountability starts with self-awareness.

The result is that physicians adopt the B2E program are inclined to join in if the incentives are bigger, and now BTE is showing that episode of care costs are lower with recognized docs in the program versus the others…because they have better processes.

Process is important, but you need clinical measures too.  Just knowing that a lipid test was done is not enough. Need also to know what the result was! Because not everyone reacts to the test.  So claims data isn’t enough.

Finally they are trying to develop a new payments system called PROMETHEUS, which is basically evidence based case rates (severity adjusted) with a withhold

3) Consumer activation—they must be incented too, to do the right thing and do self-care and DM, etc and take the right meds….must be told to do so. He wants to charge smokers more, and thinks health plans should all do that. Need to send the message that adding risks to your self will add financial consequences to themselves. Part of that activation is linking individual consumer level that’s relevant to them which he thinks is the physician. How does my guy do?

One last thought: Given that he’s trying to eventually drive costs out of the health care system, and that GE thinks it’s going to make even more money out of health care in the future, how long will it be until Jeff Immelt notices and has him fed to the sharks?

QUALITY: Brent James on Financial incentives for quality improvement

I’m at a pay for performance meeting in Los Angeles…but no wi-fi in the room so only occasional postings..

The best known name in clinical process improvement is Intermountain’s Brent James. He discovered Deming in 1986; ended up at a 4 day conference that Deming taught and had to translate the words out of manufacturing into health care. Deming said track cost outcomes as well as clinical ones. Luckily Intermountain had built-in activity based cost activity. And they used it for a study on post-operative infection. They measured using antibiotics pre-operative at optimal time, and found that they were there at 40% at right time,.  with an infection rate way better than their peers.  But they were only good copared to everyone else.  By 2001 they were at 96% given at optimal time infection rates down from 1.6% to 0.4%, and they saved $714,000 per year in health care costs they never had.

The criticism of IHC is that for 10 years they knew about how to do it, but they didn’t implement it system wide till 2001. Quality improvement is just process management and improvement. A typical hospital has around 1,000 different processes. They all have physical (clinical), satisfaction and cost outcomes — all of which are a result of those processes. Analytically Brent can’t tell the three apart.

Currently reprising Anderson’s study on the % of “quality waste” in US healthcare — was thought to be 25–40%. Now they think may be 40%-50%. Then there’s “inefficiency waste” (the use of more resources to create the same outcome) which they think may be more like another 50%.

In 1995 he could identify more than 65 processes where they were saving money. He found $30m in savings. But how to spread that? Building on some work of family docs on pheumonia, implementing the correct compliance of anit-biotics for pneumonia. Again went from 22% to 90%. Complication rate down, mortality rates down 26% (around 100 deaths per year), and costs down about 10–12% (depending on how you measure it).

But the hospital adminstrators wanted to know where these showed up in their budgets. So he tracked the per-case revenues, and found that their costs had fallen, but their revenues had fallen more — because their DRG did not “creep”. And the more expensive DRGs were more profitable, and they were still losing money on the less complicated DRG. So there was actual incentive to do it wrong.

(For InterMountain about 85% was either FFS or DRG/per case based). So they were going to lose out every time they moved patients to better DRGs.

What do they do now? They use these in contract negotiations to try to keep more of the share by improvements and reduce costs too. Final strategy is to try to move everyone into shared risk. Brent’s reason that California groups got pounded because they didnt have the mechanism to measure it (no IT systems). Now they try to get their partners to split the savings three way (hosp, docs, insurers). Of course they can’t yet do this with the Federal government. He hopes for P4P from the Feds.

There are 2 main models A) paying bonus on ranking—bonus doesnt cover the added revenue drop, B) Use shared savings

BUT several issues — 1)  P4P needs sophisticated data, 2) needs to look at all care (to avoid shifting from one category to another) 3) Lead time: major costsavings from many programs are 2–3 years down the track (example is mental health counselling)

Brent James says that P4P is here to stay and that we know how to close that gap. Getting 30% savings is realistic.

Jack Lewin asks if they are getting anywhere to get Medicare to pay on admission not discharge diagnosis.

He was asked if there is possible change without major changes to the payment system—the AMGA-outpatient payment demo is interesting because it’s a shared savings model. But the bigger issue is getting the information systems into the field to do this. Last year in InterMountain a $3m investment in management systems and data created a $15m variable cost on the bottom line.

 

PHARMA/POLICY: Suggestions for advancing beyond indignation & conventional wisdom, by The Industry Veteran

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Today I’m off to a meeting on Pay for Performance, so I hope I’ll have something riveting for you all later. Meanwhile, as I’ve overblogged (and been over-exposed) in the past week or so, I thought that this morning I’d leave you all with the dulcet tones of The Industry Veteran. As the scandal of pharma and med device companies bribing doctors has got serious enough that even the New York Times has noticed, today the Veteran’s thoughts turn to the issue of how big Pharma might be made to keep to the letter and spirit of whatever new guidelines eventually get suggested to them regarding physician “incentives”—and not simply ignored as the previous many go-rounds have been. As you may have guessed, the Veteran’s suggestions are a little, shall we say, unusual:

I guess the symbiotic corruption of Big Pharma and physicians has become part of the conventional wisdom if the staid editorial column of the NYTimes issues an admonitory tsk-tsk. Well a dog does have four legs and the sun rises in the east, so in good Times-Democratic Party fashion, it’s worth deploring this state of affairs and mentioning that, together, we can do better. Meanwhile Billy Joe Tauzin and the AMA’s Babbitts will again confirm Lincoln Steffan’s opinion concerning muckraking’s futility by showing the crooks how to avoid getting caught next time.

 

Beyond exposing corruption and pointing out contradictions within the American system of political economy, Steffans, Ida Tarbell and their colleagues provided negligible help in showing a way out. Your note on HSAs in South Africa reminded me that it was Steffans who visited collective farms in the Soviet Union and returned to say, “I have seen the future and it works.” Upton Sinclair turned to health foods and crackpot schemes in California before running a feckless campaign for governor.

 

To avoid a perpetuation of same-old, same-old in health care, allow me to offer some guidelines for regulation and punishment meant to guide the life-diminishing hands of lawyers and legislators.

 

First, let’s deal with the manufacturers. Capitalism works by essentially outsourcing the regulatory oversight function to the same private concerns whose activity requires such monitoring. This is true even in a so-called “regulated” industry such as health care. That’s not necessarily bad because the latitude it permits businessmen and their hirelings in science, law and elsewhere facilitates innovation and attention to consumer demands. Unfortunately, since the pursuit of unconscionable profits also beats ethical constraint every time (and “twice on Sunday,” as my barber on Sixth Avenue used to say), this outsourcing usually becomes a license to steal, maim and kill.

 

Now despite the many shortcomings of the Sarbannes-Oxley law (it was, after all, intended to make up the revenue shortfalls of big accounting firms in the wake of the Enron/Arthur Andersen auditing scandal), I do admire the fact that it recognizes corporations are not shapeless forces of nature. To the contrary these institutions represent the lengthened shadows of a few greedy bastards at the top and, accordingly, the law requires that these officers sign to the veracity of Sarbannes-Oxley statements under liability for criminal penalties. It is thus in pharmaceuticals as well. The CEOs in that industry generally made their abbreviated, Bush-like journeys from birth on third base to home plate by functioning as the most effectively devious, unscrupulous, alpha-males within their various launching milieus. For that reason legislation prohibiting manufacturers from bribing, improperly inducing or influencing physicians should be directed principally toward the fiduciary officers rather than shareholders’ earnings. Any agreements between the companies and their officers related to indemnifying or otherwise reimbursing executives for these financial penalties should be construed as efforts to defeat the statutes and held for naught.

 

Legislation on this matter should also recognize that in cases of the culturally middle class, a little shame administered in front of the country club peers, the trophy wives and the compliant secretaries goes a long way. In other words degradation rituals should be made integral parts of regulatory penalties. We’re talking more than just mandatory perp walks here. The executives who derive enormous satisfaction from preening around as the dominant males within their respective companies should literally have their pants pulled down. This means mandatory Internet publication of their three-sided, nude photos: front view, side view (to show the paunch beneath the $2,000 suits) and rear bent-over view (to be advertised as previews for other inmates).

 

Legislation drafters must also deal with the greed and narcissistic egotism of physicians on this matter. I believe remediation here is a far more pedestrian matter. Physicians generally regard the advance of damnation as consisting of more work, less pay, less discretion in their professional decision making, more clerical duties and less deference from their support staffs. For this reason penalties should make even casual transgressors realize their Dantean fantasies. They must receive sentences that oblige them to practice medicine in circumstances that turn to ashes every reason that led them to medical school and their residencies.

 

Instead of providing scientific interest, the work of bribe-taking physicians must become mind-numbing drudgery. Their well-being must be placed into the hands of bulldog secretaries, each lacking the ability to add a column of four numbers. Far from receiving the fawning deference of women or the respect of men, they must be made to work in post office surroundings that all but brand large L’s on their foreheads.

 

Legislation can achieve a general deterrent effect from these punishments by requiring that once offenders are released, they must discuss their experiences with colleagues in detail after resuming private practice.

 

I offer the above suggestions in the interest of enlightened penology, which as it turns out, is equivalent in policy terms to better health care.

THCB: Thanks for coming!

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According to my sitemeter, January was my most trafficked month ever, and this current week is shaping up to be my busiest ever — other than the one when the WSJ linked to me.

So thanks for coming, and please go get the free magazines, and other links, and if you want to hear more in your organization, remember that I give talks for food.

And tomorrow I’m going to be on the radio in St Luis Obispo on the Dr Scott Robertson Show at 12 noon. That’s KVEC 920 am on the California central coast or on the web here some time later in the week. Apparently Scott is calling me a "bloggist"!

POLICY/HOSPITALS: Outsourcing West Virginia’s Health Care

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THCB can’t claim to focus much on health policy (or anything else going on) in West Virginia. Bob Coffield, who writes the Health Law Blog, does a bit more, probably because he lives there. And he picked up this very interesting one. Apparently there’s a bill in the legislature that will allow (and presumably eventually if it’s going to have an impact, force) state employees to go overseas to get elective care. Pretty interesting stuff, and it means that hospitals there may have to compete with those in Thailand and India on price. Gulp.

PHARMA/POLICY: Anyone know about best price?

This is pretty interesting, and it relates to real wonkery AND to more stretching of the truth by my favorite health plan lobbyist, Karen Ignagni. In the article Drug firms to get profits windfall, a Univ of Minnesota Professor estimates that because the dual eligibles are no longer in Medicaid — they’re the ones that have been automatically moved to Medicare — and therefore they don’t have to offer "best price", they can charge higher prices to the taxpayer for their drugs.

The boost in profits comes from a shift in the drug coverage of 6.4 million poor and elderly people from Medicaid to the new Medicare drug benefit. Unlike Medicaid, which requires drug companies to charge their lowest or "best price" for medications, the Medicare program relies on competition among private drug plans to keep prices low.By eliminating the need to discount drugs for the government, the industry can now pocket the savings. "The net effect over 10 years is probably closer to $40 billion in extra profit," said Stephen Schondelmeyer, a pharmaceutical economics professor at the University of Minnesota. A little-known study by the Prudential Equity Group from June 2005 estimated that the makers of three anti-psychotic medications stand to benefit most from the change, taking in roughly $1.1 billion in new profits on products used by the 6.4 million who are Medicare’s most poor and frail patients.Experts say drug prices in the Medicare program will be higher this year than prices under Medicaid because the private Medicare drug plans won’t likely match the price discounts achieved by Medicaid, the joint state and federal health program for the poor.

Now hang on a second. This raises two key points. Not one week ago, Karen Ignagni said that the exact opposite was true. State medicaid directors were apparently telling her that they were getting worse deals than the private plans she represents. So which is true?  Well guess who I’m more likely to believe. After all, did PhRMA pay all those political contributions to end up losing money

And then one thing that I just don’t know. Suspend your disbelief and pretend that at least in some cases for some drugs, Ignagni is telling the truth. Presumably best price still applies to the rest of the Medicaid program. Are deals between Pharma and Medicare Part D PDPs exempt from Medicaid best price? Anyone know?

POLICY: From the country that loves the HSA

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The future of American health insurance, South African style — Patients bleed hospitals dry

Hospitals in Limpopo are owed about R146m by patients whose medical aid companies haven’t settled their bills and those who lied about being poor. Limpopo has 43 state hospitals that provide private wards for financially well-off patients who prefer to use their own doctors, instead of state doctors.Provincial health spokesperson Phuthi Seloba said on Tuesday that the department was seeking tenders from debt collection companies to collect the outstanding money, starting in March.

On the other hand, we know it’s a future that’s already here.

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