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Saving Health Care, Saving America

• 47

So far, Congress’ response to the health care crisis has been alarmingly disappointing in three ways. First, by willingly accepting enormous sums from health care special interests, our representatives have obligated themselves to their benefactors’ interests rather than to those of the American people. More than 3,330 health care lobbyists – six for every member of Congress – contributed more than one-quarter of a billion dollars in the first and second quarters of 2009. A nearly equal amount has been contributed on this issue from non-health care organizations. This exchange of money prompted a Public Citizen lobbyist to comment, “A person can reach no other conclusion than this is a quid pro quo [this for that] activity.”

Second, by carefully avoiding reforms of the practices that drive health care’s enormous cost growth, Congress pretends to make meaningful change where little is contemplated. For example, current proposals would not rebuild our failing primary care capabilities, which other developed nations depend upon to maintain healthy people at half the cost of our specialist-dominated approach. They fail to advance the easy availability and understandability of information about care quality and costs, so purchasers still cannot identify which professionals and organizations are high or low performers, essential to allowing health care to finally work as a market. They do little to simplify the onerous burden associated with the administration of billing and collections. The proposals continue to favor fee-for-service reimbursement, which rewards the delivery of more products and services, independent of their appropriateness, rather than rewarding results. Policy makers overlook the importance of bipartisan proposals like the Wyden-Bennett Healthy Americans Act that uses the tax system to incentivize consumers to make wiser insurance purchases. And they all but ignore our unpredictable medical malpractice system, which nearly all doctors and hospital executives tell us unjustly encourages them to practice defensively.

Most distressing, the processes affecting health care reflect all policy-making. By allowing special interests to shape critically important policies, Congress no longer is able to address any of our most important national problems in the common interest – e.g., energy, the environment, education, poverty, productivity.

Over the last four years, a growing percentage of individual and corporate purchasers has become unable to afford coverage, and enrollment in commercial health plans has eroded substantially. Fewer enrollees mean fewer premium dollars available to buy health care products and services. With diminished revenues, the industry is unilaterally advocating for universal coverage. This would provide robust new revenues. But they are opposing changes to the medical profiteering practices that result in excessive costs, and which often are the foundation of their current business models. And these two elements form the troublesome core of the current proposals.

Each proposal so far contemplates additional cost. But we shouldn’t have to spend more to fix health care. Within the industry’s professional community, most experts agree that as much as one-third of all health care spending is wasted, meaning that a portion of at least $800 billion a year could be recovered. There is no mystery about where the most blatant waste is throughout the system, or how to restructure health care business practices to significantly reduce that waste.

Make no mistake. A failure to immediately address the deep drivers of the crisis will force the nation to pay a high price and then revisit the same issues in the near future. It is critical to restructure health care now, without delay, but in ways that serve the interests of the nation, not a particular industry.

Congress ultimately must be accountable to the American people. The American people must prevail on Congress to revise the current proposals, build on the lessons gleaned throughout the industry over the last 25 years, and directly address the structural flaws in our current system. True, most health industry groups will resist these efforts over the short term, but the result would be a more stable and sustainable health system, health care economy and national economy, outcomes that would benefit America’s people, its businesses and even its health care sector.

Finally, the American people should demand that Congress revisit and revise the conflicted lobbying practices that have so corroded policymaking on virtually every important issue. Doing so would revitalize the American people’s confidence in Congress, and would re-empower it to create thoughtful, innovative solutions to our national problems.

Brian Klepper is a health care analyst and industry advisor. David C. Kibbe is a family physician and a technology consultant to the industry. Robert Laszewski is a former senior health insurance executive and a health policy analyst. Alain Enthoven is Professor of Management (Emeritus) at the Stanford University Graduate School of Business.

A Brief History of the R Word

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By BOB WACHTER

Joseph Stalin

Princeton ethicist Peter Singer’s article in this week’s NY Times Sunday Magazine is creating lots of buzz. It is a classic utilitarian description of the case for rationing – QALYs and all – and a plea for a mature national dialogue about the dreaded R-word.Don’t hold your breath. To understand why, remember the words of Joseph Stalin: “A single death is a tragedy, a million deaths is a statistic.”

A society of grown-ups would read Singer’s article and say,

“Gosh, he’s absolutely right. If we don’t make some hard choices about whether to cover $50,000 palliative chemotherapy to extend a life of an 80-year-old by a few months, then we are choosing not to have enough money to provide universal health insurance, or to ensure that everybody has their pap smears and generic Lipitor (or, while we’re at it, to house the homeless, provide decent public education, or have viable auto companies).”
Rationing is inevitable – as I recently mentioned, talking about whether we should ration is like talking about whether we should obey the laws of gravity. The only question is how we do it. And what better time than now to have this difficult national conversation, being that we’re in the middle of retooling our entire healthcare economy, the fundamental obstacle is finding the money to pay the bill, and we have a president who truly understands the dilemma and is smart and mature enough to lead the discussion.

Yet rationing remains a political Third Rail, the Lord Voldemort of the healthcare policy debate.

The issue is not new, nor are its political trappings. It’s worth understanding a bit of this history to frame today’s debate – and lack thereof.

In 1984, Colorado Governor Richard Lamm famously opined that the elderly had a “duty to die” in order to free up resources for the young. He was vilified.

In 1987, Oregon stepped into the mess that is healthcare rationing, and spent much of the next decade scraping off its metaphorical shoe. In the face of exploding Medicaid costs, the state legislature decided not to fund transplants (including bone marrow transplants) in order to preserve limited funds to cover other services.

This was in the early years of bone marrow transplant, when BMT had a 50-50 success rate for certain types of childhood leukemias (it’s better now), and cost about $100,000. The state did the math, and found that for the same $100K, several lives could be saved by plowing the money into other healthcare needs, including prenatal care. And so BMT became an uncovered service. A perfectly rational decision if you live in Utilitarian, Most-Good-for-the-Most-People, World.

But that’s not the world we live in.

What happened next was utterly predictable. A 7-year-old boy named Coby Howard developed acute leukemia, Oregon denied his BMT coverage under Medicaid, and his mom went ballistic (any parent, including this one, would have done precisely the same thing). The only question was which megaphone she would grab first to make her case: the media, her local congressman, or a lawyer (ultimately, of course, she used all three). Here’s how it sounded on ABC’s Nightline:

[Ted Koppel] began the program with footage of Coby Howard and said: “When the State of Oregon decided to stop funding organ transplants, it allowed this boy to die.” Koppel later asked: “Is the cost of modern medical technology forcing public officials to play God?”

In the end, Coby received his BMT, paid for by private donations, but sadly died later that year. Under the leadership of state senate president (later governor) John Kitzhaber, a former ER doc, and in the face of withering post-Coby criticism, Oregon developed a more explicit rationing plan – of course, it covered BMT. Kitzhaber and his staff later described the pressures they felt after they took on healthcare rationing,

“Our detractors consist mainly of uninformed members of threatened interest groups who delight in comparing the Oregon plan to a perfect world.”

Stalin could have predicted this, of course. The Oregon rationing plan (both the ad hoc decision to deny BMTs and the more explicit “prioritized list” that followed) depended on a hard-boiled tradeoff between a single identifiable life – in this case, a cute child with a determined mother – and many unidentified lives. We’ll never know which kids were saved by better prenatal care, or whose strokes were averted by primary care and hypertension control. These statistical lives make for a pretty dull interview on Nightline – and they don’t blog.

Where do docs fit into all of this? Our ethical model is to do everything we can for the patient in front of us – we are socialized from the first day of med school to believe that the single death is indeed a tragedy (the late Norman Levinsky made this point in a wonderful piece in the NEJM called “The Doctor’s Master”). Although as responsible citizens, we care about society and the unidentified lives outside our office or our ICU, it is not our job to weigh the impact of our choices on them. And, of course, we won’t be sued by society for plundering its resources, but might well be sued by the family of an individual patient who feels that we didn’t do everything possible to save their loved one.

I just finished a couple of weeks on the wards, and once again cared for several patients – cachectic, bedbound, sometimes stuck on ventilators – in the late stages of severe and unfixable chronic illnesses whose families wanted to “do everything.” As I wrote last year, there are limits (like chest compressions) on what I am willing to do in these circumstances, but they are mostly symbolic – basically, I am a bit player in this crazy house, with no choice but to flog the helpless patient at a cost of $10,000 a day in a system that is nearly broke and whose burn rate threatens to ruin our country. Go figure.

Is there anything we can do? The favored solution, a board resembling the UK’s National Institute for Health and Clinical Excellence (NICE) with the teeth to limit certain new drugs and technologies, is hard enough. But even if we were able to get a NICE-like organization in place (doubtful), that doesn’t really address the brutally tough issue: is our ethical model one in which we do everything possible, irrespective of cost, for every patient when there is any chance of benefit, or one in which we place limits on what we’ll do in order to do the most good for the most people. An American “NICE” isn’t going to limit ICU care for 80-year-olds with metastatic cancer. That will require a much broader public discussion, and even harder choices – since they will need to be made at the bedside.

As Singer notes, every society that rations provides a safety valve for the wealthy disaffected. In the UK, you can buy private insurance that allows you to jump the queue for your hip replacement. Canada’s safety valve is called the Cleveland Clinic. We don’t talk about the percent of our GNP we are spending on Starbucks lattes, or on iPods, or on vacations. People pay for these things out of pocket, and receive no tax advantages when doing so. Given the American ethos of self-determination and consumerism, any rationing plan will need to allow people who can afford care that isn’t covered by standard insurance to buy it with their own money (with absolutely no tax advantage). Two-tiered medicine, sure, but I see little problem with this as long as we are using the money in the communal pool to provide a reasonable set of benefits to the entire population.

How might a thoughtful structure to support rationing be organized in the U.S.? When considering new technologies and drugs, it will probably entail an independent board empowered to make coverage recommendations based on cost-effectiveness, just as NICE has done in the UK. But just as importantly, at the level of individual hospitals or healthcare organizations, there will need to be committees of providers, administrators, and patient advocates that can set and defend limits on care. Such decisions would not automatically mean that grandpa can’t stay on the ventilator, but would mean that ongoing care would no longer be fully covered by insurance. Of course, these decisions would have to be all-but-immune from litigation threat.

Will this happen? Probably not. Twenty years ago, the great Princeton healthcare economist Uwe Reinhardt observed that there are two kinds of rationing: “civics lesson rationing” and “muddling through elegantly.” In the former, a NICE-like federal board, or local panels such as the one I’ve described above, weighs the evidence and makes these tough rationing decisions algorithmically and prospectively. The muddling through option, which Reinhardt felt was far more likely, involves limiting the resources available – the number of ICU beds, or MRI scanners, or CT surgeons – and allowing docs, patients and administrators to duke it out at the bedside. The evidence is that they do a decent job at triaging to provide the most good for the most people.

Of course, these limits are naturally present when resources are truly scarce – like livers for transplantation – and in these circumstances we have developed thoughtful rationing approaches. The point is that health care dollars increasingly resemble livers.

I’m pleased Peter Singer and others have dared to speak of the R-word in public, because it is so central to today’s healthcare policy debate. But will the society that brings you Rush Limbaugh and Glenn Beck (or, I’m beginning to think, some of our Democratic representatives) deal with it in an effective, mature way? I truly doubt it.

Why not?

Joseph Stalin would know.

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Good grief! Will this derail the latest reform push?

• 4

By Matthew Holt

Daschle failed to pay $128,000 in taxes

Didn’t he complete that ridiculously long form about his past that the Obamanations wanted? Daschle may not have had a drunken picture of himself on Facebook but answering away not paying over $100K in tax is going to be tough. Did he think it wouldn’t come up? Now I know it was  only a free car & driver, but apparently Daschle took three years to notice that he wasn’t paying for it, and that it counted as income.

On the other hand, if Daschle doesn’t get past this, maybe we’ll get someone to run health care reform who has some slightly better ideas than Daschle’s somewhat sophomorific effort—even if not his political connections.

Consumer-Driven Health Care: Promise and Performance

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By ROBERT LASZEWSKI

I am always struck by the difference between the salesmanship of health plans offering consumer-driven health products and the reality of the data.

James Robinson and Paul Ginsburg have an article in the January 27th edition of Health Affairs with an objective review of the consumer-driven movement of recent years.

Here is the central point of the article:

The performance of consumer-driven health care has fallen short of both the aspirations of its proponents and the fears of its critics. Growth of the favored organizational forms, including HDHPs and individually purchased insurance, has been anemic. The forms of insurance and sponsorship originally embodied in the consumer-driven vision have mutated into forms far from those originally envisaged. This process is not unique to consumerism, but one well known to managed care, where the original group-/staff-model HMO was diluted into the loosely structured independent practice association (IPA)-model plan and the sponsorship framework of managed competition into the “total replacement” purchasing format of self-insured employers.

They also point out that:

  • Enrollment in HDHP/HSA plans grew from 400,000 in September 2004 to 6.1 million in January 2008–“a large absolute increase but still small in relation to overall enrollment in private insurance.” By comparison, HMOs continue to hold 20 percent of the employer market and POS plans 12 percent.
  • “The consumer-driven health care movement has been obliged to dilute its principles in light of the overuse of inappropriate services and underuse of appropriate services in the real world. HDHPs now incorporate elements of disease management for enrollees with chronic conditions; case management for enrollees with complex or comorbid conditions; and utilization management for patients using particularly costly drugs, devices, or procedures. Most of these medical management programs are obtained from the same diversified insurers that offer HMO and PPO products. Indeed, the potential for integration with claims databases is leading insurers to acquire many formerly independent medical management vendors.”
  • “The blind spot in the consumer-driven analysis of market performance concerns the importance of coordination in insurance, delivery, and sponsorship. The obdurate insistence on á la carte choice and retail purchasing pushed the theorists of consumerism into positing organizational and market dynamics that have not been observed in the real world.”

Consumer-driven principles have clearly impacted the design of mainstream health insurance plans for the better.

But consumer-driven principles have not changed the fundamental dynamics of our health insurance system nor have they turned out to be a silver-bullet solution.

In my mind, the fundamental fault with the logic that they would be was the belief that consumers could do what insurance companies, employer benefit managers, and even providers could not.

Robert Laszweski has been a fixture in Washington health policy circles for the better part of three decades. He currently serves as the president of Health Policy and Strategy Associates of Alexandria, Virginia. Before forming HPSA in 1992, Robert served as the COO, Group Markets, for the Liberty Mutual Insurance Company. You can read more of his thoughtful analysis of healthcare industry trends at Health Policy and Marketplace Blog, where this post first appeared.

Report Shines Light on Long-Term Care Spending in Medicare

• 17

By Anne Tumlinson

Several contributors to THCB have commented that long-term care tends to get short shrift in healthcare discussions. New research might help to make a case for why we can no longer afford to demote this critical issue as we contemplate overarching healthcare financing strategies.

In the report, researchers looked at beneficiaries ages 65 and older who receive help with three or more activities of daily living (ADLs) — longhand for people who need long-term care — and found that, even though these individuals represent only 7% of the Medicare population, they account for nearly 25% of spending in Medicare Part A and B.

This is interesting because Medicare doesn't actually pay for extended nursing home stays, which is where long-term care is usually delivered, but it does pay for limited post-acute care. The implication here is that Medicare services that transition patients from acute to long-term settings might actually be filling a gap for long-term needs. And, given the size of the gap, it is equating to staggering levels of spending.

Continue reading…

Commentology

Intermountain CIO Marc Probst had this response to John Halamka's post "Five reasons for Hope"

"As a CIO in an integrated delivery system I have had my eyes opened to see the wisdom and benefit of following proven informatics principles.  Although we may not be perfect, our organization has achieved some amazing results by using data and knowledge.  HIT will not save healthcare, but as an integral component with operations and organizational leadership, HIT can help in this transformation. 

Please let's not waste this
opportunity.  $20 billion properly spent will provide great
improvements.  $20 billion spent as it appears it may be spent will
just raise costs and make getting to where we need to be harder."

Tcoyote wrote in on the same post:

"Agree on the quality of the people.  Can you please tell us where the 200 thousand new jobs estimate you gave NPR for $20 billion in healthcare IT spending came from?"

Virginia Mason CEO Gary Kaplan, the author of "An Urgent Shared Commitment to Change," had this reply to commenters who asked a number of tough questions.

"It's very important for me to chime in about a few comments here on the role of a not-for-profit board. Let me be the first to say our board and executive team are very focused on fulfilling our mission and vision on behalf of our patients and our community. This is our primary fiduciary responsibility.

Also, profitability is not the goal, but a net margin is an essential ingredient. Our patients and community count on us to provide high-quality care; stay up-to-date with treatment and technology; employ smart, skilled medical professionals; and keep our doors open. We simply cannot do any of these things without diligence and prudence — and a net margin allows us to invest in our mission to improve the health and well being of the people we serve and our vision to be the quality leader in health care."

Moving forward on SCHIP

• 11

By Jocelyn Guyer

The Senate passed its version of legislation to renew the State Children’s Health Insurance Program (SCHIP) Thursday, bringing the bill very close to its long overdue White House signing ceremony. The new bill is expected to cover an additional 4.1 million uninsured children by 2013.

Most importantly, the new bill – like the old ones vetoed by President Bush – gives states new funding to sustain and strengthen their SCHIP programs. This will occur just in time, as families hit by the economic downturn look for affordable coverage options. It also gives states new tools to reach already-eligible, uninsured children and provides them with performance-based incentives to enroll them.

I’m thrilled about this bill. Not because I think it will solve everything, but because it will offer concrete help to many kids who need it now and can’t wait until we figure out comprehensive health reform.

It is fair to say, however, that not everyone shares my joy.

Continue reading…

And in today’s scuttlebutt–Sutter pay grades

• 4

By Matthew Holt

A little birdie contacted me leading me to wonder, what did the former CEO of Sutter Health Van Johnson do to get paid $5.6 million for working for a “part year” in 2006? (See page 100 of this PDF). It may go somewhat to explaining why a) Sutter is the most expensive hospital system in Northern California, and b) why the unions hate it so much! On the other hand we’re entitled to wonder when the web site says things like this :

Unlike investor-owned health care systems, Sutter Health is a not-for-profit organization. As such, any money left over after employees and bills have been paid is reinvested in health care.

On the other hand in 2005 Johnson didn’t make the top 5 list dominated by CEOs of individual Sutter hospitals all earning what typical hospital CEOs make—500K and up!) (page 59 here). Neither did current CEO Patrick Fry make the top 5 in 2007 (page 99 here). Perhaps the key is that they only pay the big boss after he quits?

Anyway, anyone who can elucidate please comment away.

Five Reasons For Hope

• 17

By JOHN HALAMKA, MD

Over the past decade as a CIO, I’ve had successes and failures. I’ve learned about leadership in a crisis , how to resolve disputes, and how to serve my customers/employees/superiors . As I watch the first few days of the Obama administration, I have a great deal of respect for the initial activity, as seen through the lens of my own leadership experience. Here are five reasons I have great optimism for the new administration:

1. Smart People – Obama is surrounding himself with smart people, regardless of party affiliation or ideology. In my experience, A-level leaders surround themselves with A-level staff, since they are not intimidated by people who are smarter or more experienced. However, B-level leaders surround themselves with C-level staff who do not question the ideas and actions of their leader, resulting in sycophants rather than a strong leadership team. Of course, as we learned from Jimmy Carter’s presidency (he’s been a great post-president), the smartest people are not always the most successful people, but I have great faith in the new team!

2. Listening – As I’ve described in my blog about leading change , the most important part of Kotter’s principles is to build a guiding coalition. By engaging the stakeholders and listening to their priorities for change, Obama has created powerful grass roots momentum.

3. Doing the right thing – A wise person once said “When one bases his life on principle, 99 percent of his decisions are already made.” Should we drill for oil in the Arctic? Should government decide what therapeutic options doctors and their female patients can talk about? Should government decide science policy based on religious beliefs? The answers to these questions should be clear if we objectively ask ourselves what seems like the right thing to do based on the best objective evidence. The Obama administration is doing that.

4. Let the ideas flow – The web “democratizes data”. Ideas need to flow freely and as country we need to come to consensus about our priorities based on open and transparent communications. The Obama team, with the able assistance of Blue State Digital and other technology partners, has created Change.gov and Whitehouse.gov to reduce information silos.

5. Embrace technology – Obama is the first president to have a computer on his desk. Obama will keep his Blackberry. The communication systems in the Whitehouse will be upgraded to Web 2.0 technologies. Working with better technology will result in better,faster decisions and more enlightened management.

Will the Obama administration be perfect? No. Will the change management ahead be easy? No. Will we get to the right decisions faster and regain the respect of the world. Absolutely.

Have hope.

John Halamka is the CIO at Beth Israel Deconess Medical Center and the author of the popular Life as a Healthcare CIO blog, where he writes about technology, the business of healthcare and the issues he faces as the leader of the IT department of a major hospital system. He is a frequent contributor to THCB.

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