. . . to truly reform U.S. healthcare?  This is somewhat of a rhetorical question, meaning it requires no answer because there is no answer.  At least not a simple one.  First you have to decide what the problem is that you’re trying to reform.

Many talk about quality, whatever that means.  About 50% of Americans don’t get the healthcare that academics recommend.  Is that a quality problem.  Well, maybe.  Depends on who defines “quality.”  Traditionally, quality is defined by the customer, and academics are certainly not the customer.  Not even an interested party.  What about patients?  They want access and lower prices.  But they’re not the only customers.  Those who pay for healthcare also want lower prices, but more particularly, they wan lower costs.  And these are not the same.  Costs are a function of price and volume, so if you can lower the volume of healthcare, you can lower costs without affecting prices.  That’s what providers want.  That’s the reason Congress keeps vetoing efforts to reduce  Medicare payments to physicians--unit price.  Physicians (and other providers) want to keep the unit price constant.

However, it’s REALLY hard to lower costs if you leave unit prices the same and don’t limit access.  But access is what patients want.  So now we have competing goals.  Imagine that.

The Kaiser Health News references the Contra Costa Times with an article about Tort Reform.  Who wants Tort Reform?  Well, Republicans, and anyone else who doesn’t want to talk about prices of individual healthcare services.  Tort Reform is a good thing, and needs to be done.  I would vote for it.  However. it won’t affect the cost of individual healthcare services and won’t affect the amount of money the U.S. spends on healthcare every year.  A distraction. Smoke an mirrors.  

Here’s a test:  Here are some quotes from a quality healthcare meeting advertisement I received today.  Your test is to guess where the meeting is:  “...standing apart from your rivals is more important than ever. . . . sharpen your competitive edge. . . . TQM, and Six Sigma. . . . improve operational process, customer service, reduce costs, and increase customer loyalty. . . . quality management principles. . . . enhance leadership skills. . . .”  Give up?  Well if you guessed anywhere in the U.S., you’re wrong.  Kuwait.  
Yep.  Speakers at this meeting are from Kuwait, Iran, India, and Dubai.  They’re appealing to the Healthcare Tourism market.  These folks are competing for U.S. patients’ money, and all those things mentioned above are important in a competitive market.  But those factors are not important in the U.S. market.  None of that matters here, because there is no price competition.  

The U.S. healthcare market is characterized by small monopolies of local hospitals, so health insurance companies have weak bargaining power and generally pay whatever the local hospital asks.  Well, it’s not quite that black and white, but this is a problem.  Imagine, if you will, setting up a health insurance company in Charlottesville, VA without including the University of Virginia in your plan.  You want them in?  You pay their price.
So,  are the insurance companies the victims of evil hospitals and large provider groups?  Well hardly.  When you get finished with Wall Street, focus your ire on health insurance executives and be glad you’re not married to one.  I still remember the insurance company in Milwaukee that saved money by not reading PAP smears.  Just marked them all “normal,” except that they weren’t all normal.  The insurance company is still in business, but some of their patients are not.  More recently, there’s WellPoint that stands accused of canceling insurance on women who’s mammograms came back positive.  Breast cancer does cost money, you know.  

Still, it’s easy to conclude that they are victims or rising healthcare costs and just charge what it takes to stay in business.  In one sense, the health reform legislation is designed to put a little starch in their bargaining backbones.  Maybe they’ll press a little harder at the table if there is sufficient pressure on their prices and they can’t just cancel policies on people who get sick.

So where do we save money?  What about fraud and abuse?  That’s a traditional Washington source for money when all else fails.  Yes, there is some.  There are poster child cases, particularly but not exclusively in FL.   According to the Wall Street Journal, Regina Herzlinger resigned from the board at WellCare Health Plans amidst charges of accounting fraud.  A million here, a million there, and pretty soon . . . .  But be careful, one man’s fraud is another’s dispute over which procedure code actually applies to that patient visit.  

At the end of the day, if your want to reduce healthcare costs, you have to reduce the costs of healthcare.  We need to introduce efficiency into individual healthcare processes so that providers can charge less and still make a good living.  And yes, it is possible, but you need a reason to try.  I believe that reason will be competition, but we’re not there yet.

Not perfect yet. but moving out of the laughable column.  Some are coming to realize that the new Medicare panel will be able to make decisions about Medicare costs without consulting Congress.  Guess who’s unhappy about that?  Well, Congress, for one thing.  And all those lobbyists and their sponsors who influence Congress.  Pete Stark was quoted as decrying the “unprecedented power to make sweeping changes and virtually lock Congress out of the process.”  And this is bad because . . . .

Oh, there is one person who is not unhappy:  Peter Orszag who has long railed against rising healthcare costs and views Medicare as a threat to the Nation’s economy.   Two things the board will not do, however, are cut benefits or raise premiums.  That kind of leaves payments to providers to shoulder the load.  Although Congress is protesting loudly, the speculation is that they will welcome the opportunity to shift blame for difficult cost cutting decisions.

On another money front, the competitive bidding  trials within Medicare may see new life.  When first tried by Medicare, the results were vetoed by Congress when some constituents lost out in competitive bidding on contracts for durable medical equipment.  Chief complainers today:  Henry Ford and the Univ. of MI.  They argue that their prices are higher but they do other neat things that make up for it.  Sure.  If this project is successful, perhaps CMS will consider expanding the concept to common surgical procedures.  But that would take an act of Congress.

All of the above constitutes refreshing news, because it signals a serious interest in the cost of healthcare at the individual service level.  

From the Kaiser Health News, a report from the NY Times that Sen Dianne Feinstein, D-CA, introduced legislation to allow the feds to block any increase in health insurance premiums they deem “excessive.” 
Insurance lobbyist Karen Ignagni wisely pointed out that insurance premiums are responsive to the costs of the services they insure.  A symptom and not a root cause of the problem.  This is instinctively true, but it is also true that insurance companies might bargain harder with suppliers if premiums are limited.  Wallmart anyone?

Speaking of money, this will be one of the tough questions for Don Berwick during confirmation hearings to be the new head of CMS.  No one questions his leadership abilities in convincing providers to institute measures that improve patient care.  What’s not to like?  The Republicans are looking hard for something, and finance will be one area for intense questioning.  Although Berwick runs a large and profitable business, that effort is dwarfed by the Medicare budget.  In an era when cost is the primary problem in healthcare, is someone who’s weak suit is finance the best choice for the largest healthcare agency in the world?

Also referenced in the Kaiser Health News, a report from Miller-McCune magazine that not everyone behaves rationally.  Gee whiz!!  They discussed a study by David Nieman on the efficacy of Ibuprofen to relieve pain and inflammation in long distance runners.  Bottom line: it doesn’t help.  Nevertheless, when the results were presented to runners, they persisted in taking the ineffective pills.  (Maybe they’re running for Congress.)  Conclusion:  Not everyone has a capital ‘T’ in their Meyers-Briggs profile.  Don’t confuse me with facts, etc.  Ask any Republican about the efficacy of abstinence education in reducing teen pregnancy.  And on and on.  One point in the discussion is that medicine is rife with similar illogical practices.  Anyone remember internal mammary artery ligation to improve coronary blood flow?   Many of these were rushed into common use without a rigorous trial, but the Ibuprofen use flies in the face of objective facts.  Well, one study, so maybe we’ll look again.

But be careful about extending study results into clinical practice. Remember the mammogram controversy or PSA tests.  Neither makes sense for a population.  If the government were running all of healthcare, neither would be allowed.  But patients are individuals, and some individuals have reasons.  In our current healthcare setting, individual patients are entitled to make individual decisions.  It’s not OK to let some people die because the population as a whole does well without these drugs or tests.  Anyone want a single payer system?  Have we talked about the NICE committee in England?  (Read: “Comparative Effectiveness Research”)  A government panel decides which treatments or drugs will be available and which are too expensive.
 
Here’s one that reaches my desk almost every day:  letters from mail order pharmacies to our 180 providers.  (They all work overseas, so all the letters come to my inbox.)  Typical examples include:  “Dear Dr. X.  Antihistamines should be used for seasonal allergies.  Your patient, Susie Smith, has been taking them every day for a year.  Don’t you want to stop her?”  And similar letters about psychotropics that have been prescribed beyond the limits suggested by the American Psychiatry Assn.  Some are worrisome cautions about drug-drug interactions--two physicians prescribing different drugs without checking what else the patient is taking.  Or even “Your patient has not refilled his prescription and may not be taking the medication you prescribed.”  As expected, some are trivial and some are potentially serious.  Will the wolf get lost in the cries?

The current issue of Health Affairs is all about healthcare IT, with a lot of words on cost and benefits.  There is an initial introductory article by Nancy Ferris that outlines some of the goals and problems to date.  

The VA probably has the longest and most successful experience with health IT, and an article by Colene Byrne, et. al. in the same issue tries to measure the cost of that system and then assess the value of the benefits.  Of course, neither is possible, but it’s an interesting exercise.  In some ways, this  is an example of the reason that money doesn’t really matter.  For some systems, a large expense for health IT makes sense.  This is particularly true for closed panel HMO’s like the VA or Kaiser.  Care is provided internally, and different offices need to communicate with each other.  For other care venues, it doesn’t make sense.  I’m thinking here about smaller offices and small hospitals.  And there are some in between where the decision is just whether this is the way you want to do business.


One great problem with selling healthcare IT is the HHS/ONC insistence on interoperable systems that can be accessed from Washington.  First, there are enormous privacy issues that have not been addressed or even acknowledged.  How do you make patient data available for analysis without disclosing the identity of individual patients?  Not really so difficult in theory, but no one is trying.  Instead, they are focusing on quite the opposite-making patient-identifiable data available to anyone via a National Health Information Network (NHIN).  When challenged on this problem, one official cited current interest in social networking and stated that personal privacy does not seem to be a problem as long as people are willing to post personal information on Facebook. 

With Facebook, etc., I control what’s there, and I can take it down anytime.  Not so with a NHIN.  Also with Facebook, the content comes from me.  With healthcare information, the content never comes from me, and I cannot remove it.

There is also the basic logistical problem with communication.  Easy to sit in Washington and say everything will come via the Internet.  Try that in rural Virginia.  

Then, there’s the issue of “meaningful use.”  To receive any federal money for your investment in health IT, the system must be certified by the ONC as doing something useful--useful, that is, useful in the eyes of the ONC.  Never mind what the user thinks would be useful.  And key among these requirements is the ability to share patients’ health records.  “A secret is no longer a secret when many know of it.”  

Seems inevitable that health IT will expand and that taxpayers will fund much of this expansion.  Health IT is unlikely to solve any of the problems in U.S. healthcare today.  Yes, maybe, some hypothetical situations might be ameliorated, maybe, someday.  It might, however, indirectly provide data that could be used to solve problems.  Maybe, for example, we will find out exactly how much it costs to do an appendectomy or fix a hernia.  Providers could then begin to address the root causes of these costs.  We’ll see.  

When health reform was still a gleam in Obama’s eye, there were three broad goals:
1. Insure the uninsured. This was seen as the ticket to healthcare.
2. Improve quality. A sop to the widely held belief that U.S. healthcare is somehow worse than that in the rest of the world.
3. Reduce cost. A vague principle, driven primarily by the concerns of Peter Orzag who pointed with alarm to the rising costs of Medicare. His famous curve that others want to bend showed how Medicare expenses would consume all discretionary spending if not corrected soon.

So what did we get? Some have suggested that the bill should be titled “health insurance reform,” because it does make broad changes in the insurance industry but does relatively little to healthcare per se. Obama was quoted by David Herszenhorn as saying, “But it does represent some of the toughest insurance reforms in history.”

Perhaps the more significant statement he made that day was, “But more broadly, this day affirms our ability to overcome the challenges of our politics and meet the challenges of our time.” The final test was indeed whether the Democrats could get their act together to do what they had the power to do. And finally, they did.

Not everyone agrees this was a good thing, but I think everyone would agree that
1. it doesn’t solve all of the problems of healthcare, and
2. it’s going to cost a lot of money. a LOT of money.

The common solution in Washington to finding money is to “remove waste” or attack “fraud and abuse,” and this has been proposed for healthcare. However, as anyone who has studied process improvement knows, waste is mostly invisible and there’s no incentive to find it without a competitive market. Something there is about that compulsive drive to take market share away from competitors.

Fraud and abuse are truly in the eyes of the beholder. True, there are some poster-child examples, but most cases are honest differences of opinion between Medicare and practitioners. Don’t expect great savings there.

Others say merely improving “quality” will produce savings, primarily through reduced demand for healthcare. There is evidence that conforming to practice guidelines in treating patients with asthma or diabetes will indeed reduce the need for more expensive interventions. However, any savings are small and very slow to come to the bank account.

Other definitions of “quality” are suspect because they have little to do with healthcare per se (life expectancy, infant mortality) or because most settings are already doing it tolerably well. The problem is mostly in reporting, and that’s an added cost on the provider end. Another problem is statistical power. If you want to get paid more for getting good results from your care of diabetic patients, how many diabetic patients do you have to have to demonstrate that fact? More than the average family practitioner. This means, of course, that the primary beneficiaries will be large group practices.

In the past, we have seen a lot of quality metrics that didn’t really make much difference to the patient. Akin to “teaching to the test,” we’ll have “medical practice to the metric.”

That leaves “Reduce Cost” from our list above. We’re waiting for the next law.

That title is somewhat redundant and belies the theme of efficiency. How can you be “back again.” Just “back” should be enough. Is anyone old enough to remember the Gene Autry song, “Back in the saddle again?” Anyone old enough to remember Gene Autry?

A lot has happened in the last month, and nothing has happened. Someone likened this era to Brownian motion--a lot of activity but no net movement. The House and the Senate have each passed legislation but neither addressed the central problem of cost, and both have so much pork and special interest footnotes that passing either would probably not produce any progress.

The two original goals of healthcare reform were:
access for the 47 million uninsured, and
reduce the cost of healthcare services (“bend the curve”).

The first item would be expensive. Think about purchasing health insurance for 18% of the U.S. population. And disruptive. If the government is going to buy the insurance, why would anyone else want to do so? And other arguments about why this isn’t as simple as it would seem at first.

The second goal was intended to rescue the U.S. economy from imminent doom, as Medicare and other federal programs are projected to consume an ever increasing share of discretionary spending. Alas, this issue was not even addressed. The main reason for this neglect was, I think, fear. The Healthcare-Industrial complex was fearful that any attempt to reduce the cost of healthcare services would mean less revenue for them. To some extent, this is not irrational. The feds want to reduce the amount they are spending on healthcare, and if that were to happen, someone would get less. Less revenue, that is, but not necessarily less profit. The difference, of course, is efficiency--producing the same goods or services at less cost enhances profit.

This basic principle is mostly lost on the healthcare industry. But not everyone. The Mason Clinic has been cited in this debate over their change in practices for evaluating low back pain. The revised protocols resulted in fewer MRI’s and thus lost revenue for imaging. However, they acquired a reputation for low cost evaluations and saw an increase in referrals. They used the extra availability in their MRI scanners for other studies. The net result was a net gain in revenue and profits. Do they give lessons?

Alain Entoven offers an interesting rebuttal to Atuhl Gawande’s article in the December New Yorker. Gawande is an excellent writer, but this piece is an easy target for ridicule. He does note that the current legislation “has no master plan for dealing with the problem of soaring medical costs.” He goes on to espouse a system for healthcare analogous to the agricultural extension service, a comparison that doesn’t fit here. As others have, Gawande points out that penetration of electronic healthcare records is greater in Europe than in the U.S., without exploring the reasons for that and whether it is really a bad thing. In fact, government run healthcare systems can impose EHR’s at will, whether or not they make sense. In this country, it has to make economic and/or professional sense, and most practitioners have concluded that the numbers don’t add up. If EHR’s were so great, everyone would be doing it. In reading the rest of his comments and suggestions, it’s important to recognize that he works at Harvard and has never really worked for a living. So, of course he would advocate large group practices as the answer to all problems with healthcare.

In fact, both Gawande and Enthoven mention competition in passing but fail to explore the ramifications of price competition for healthcare services. Suppose there were no price competition today for (fill in the blank here). That’s where we are in healthcare. The computer I’m writing on is faster, better, and cheaper (by a lot) than the one I bought 5 years ago. Now translate that thought to any business and ask what their cost would be for computer capability if the government (Medicare) set the price and all suppliers got the same reimbursement. That’s where we are in healthcare today.

Wayne Fischer has some good thoughts, but a lot of the writing about healthcare recently has focused on the wrong issues.  First, of course, we have to define "quality," which means different things to different people and is so poorly defined in healthcare as to be a source for obfuscation. Those who don't want to talk about efficiency or cost of services deflect the conversation to "quality."

 Yes, we need to look at what works (effectiveness), but we're already doing that.  It's called peer reviewed journals.  Lots of examples of discovering a respected practice that doesn't really work when you do the numbers.  However, the primary and central problem with U.S. healthcare today is that it just costs too much.  And it doesn't have to.  We can provide the same healthcare at a lower cost, but we have to try.  Healthcare providers need a reason to provide their services at a lower cost, and competition could be that reason.  If you want to be in business next year, you must charge less than you did last year.  Otherwise, all your business will go to the facility across the street.  Then, prices will come down.

A quick comment:

First, let's dispell the notion of any relation between quality and price:  A Lexus is a high quality automobile.  Lots of awards, testimonials, data on frequency of repair, etc.  But so is/was the Volkswagen Beetle.  Both were consistent, reliable vehicles.  They did what they said they would do, and they did so reliably.  That's quality, at both ends of the price spectrum.  So, the first rule of quality is consistency.  You may or may not like a Big Mac, but you have to admit it is the same hamburger every time, every place.  High quality.

When most of us talk about efficiency in healthcare, we're thinking of the systems that bring the patient and the doctor together.  In my surgery center, the patient saw three employees before arriving in the OR:  a clerk, a nurse, and an anesthesiologist.  That process took, on average, 45 minutes.  When I had my hernia repaired in a local hospital, I saw 6 employees before going to the OR.  That's NOT efficient.  What did those extra three employees do?  (Besides collecting a paycheck) Well, one gave me a number so I could wait to see the second one. 

Physician services are more complex and sometimes impossible for the patient to judge--"technical quality."  But sometimes not.  As an anesthesiologist, I would judge quality of anesthetic care by the incidence of nausea or vomiting post op and the time to discharge from recovery.  Easy to see what the patient wants in both of those variables, and it's possible to minimize them if you pay attention.  In this case, good quality is also efficient, because vomiting costs money, and added time in recovery requires added nursing time, which also costs money. 

The point of these (and other) examples is that good quality doesn't cost money.  It's the lack of quality that costs money.  Usually, quality and efficiency go together.  Important footnote here that "speed" doesn't always equal efficiency.  I have watched surgeons who operated quickly but were careless or sloppy. 

For other specialties, there are abundant metrics for quality of care.  The best ones are devised by the specialty societies rather than a Washington think tank.  If you do colonoscopies, you should always reach the cecum and not ever perforate the colon.  For primary care, what percent of patients who should have actually did have a mammogram, PAP smear, colonoscopy?  What % of two year olds have all their immunizations?  For efficiency in the short term, you might ask how many patients can you see in a day?  For another perspective, let's look at what resources you use to take care of the average diabetic patient.  This latter metric may not be valid if you have only a few diabetic patients, and that's a big problem with Pay for Performance.  (One of many).

One problem with talking about quality of care is that it is frequently used as an excuse to avoid looking at efficiency.  Good care doesn't have to cost more.  In fact, if it's really good, it should cost less.  Right now, the truly BIG problem with healthcare is that it just costs too much.  Let's work on bringing down the cost of episodes of care, and the quality will take care of itself for awhile. 

 

 

 

 

 

 

 

 

Always nice when someone agrees with you, particularly when they have never read what you wrote.  Washington Post columnist Fred Hiatt did that on 26 Oct.   In the second paragraph, he says that if Congress passes a new entitlement (healthcare for the uninsured) without reforms to reduce costs, “it will bankrupt us.”  That may be a bit strong, but not by much.  Healthcare costs are indeed rising faster than the economy.  And since the economy is where we get all that tax money, we’ll be shelling out more for our new healthcare entitlement that we are taking in with new tax revenue.

In a subsequent piece, he again cites the high cost of the current House proposal and the lack of cost controls. He also mentions an article by Ceci Connoly listing unhappiness by various parties over the lack of effective cost controls.

The administration’s approach to cost control seems to be to move from a fee for service system to “a coordinated system that pays doctors and hospitals for doing better.”  Huh?  Sounds like smoke and mirrors to me.  Something put forward by those who don’t want anyone to address the cost of healthcare.  Was it Gypsy Rose Lee who said, “Promise them everything, but give them nothing.” 

There  is mention in several of these pieces about taxing health insurance premiums as a means of controlling cost.  Maybe someday, someone will explain to me how that is supposed to work.  If you tax my health insurance premiums, that will certainly bring in additional tax revenue, but I fail to see any connection with the cost of healthcare.  One thought behind many of these schemes is that if you shift more of the cost to the patient--make healthcare more expensive for patients, they will order less of it.  This, despite several studies showing that life doesn’t work that way.  Patients who can’t afford healthcare do indeed postpone or defer care.  However, they defer necessary care as part of that decision, which makes their ultimate care more expensive.  I’ll let you in on a little secret:  I hate getting healthcare.  Have several times defied recommendations by competent practitioners and done nothing in the face of a disapproving stare.  My only regret is not doing that more often.  I spent my life in operating rooms, and there is nothing you could say or do to convince me to have another operation if there is any other alternative.  OK.  Are we clear on that?  So making healthcare or health insurance more expensive for me will not change my behavior.  I am perhaps unusual in my patient role in that I’m more comfortable with telling the surgeon, “No, I’m not going to do that.” 

  The central theme of Fred’s piece is that the “public option” will allow politicians to avoid any real cost control within healthcare by pointing with pride to the enhanced competition in the insurance market.   Insurance companies have many problems, but they do not control the cost of healthcare.  Increasing competition among insurance companies may shave pennies of global healthcare, but it will not bend the curve.  If you want to reduce the cost of healthcare, you will have to reduce the cost of healthcare.  In fact, inducing more competition among insurance companies might make them worse, if that’s possible.  Remember, insurance companies make their money by denying payments.  One personal example:  my grandson was attacked by thieves in his college dorm room.  Guys with guns who broke his jaw but didn’t kill him.  The insurance company denied his claim, saying that his broken jaw was a pre-existing condition.  Stop laughing.  It’s true.  And the University of Virginia is still using the insurance company.

Healthcare costs could be reduced by creating competition among providers for individual healthcare services.  That’s my story, and I’m sticking to it.  The odd thing about this is that everyone would win.  Find me an industry where increased competition hasn’t brought better service, improved products, lower prices, and happier employees.  This could work in healthcare too. 

Have you been following the news lately?  A government panel decided that we could save money by not doing as many mammograms.  Start at 50, not 40, and every other year.  We can also stop at age 75. No one dies of breast cancer after age 75, do they?  If you look at the panel members, it’s not clear that any of them has seen a patient in the last 10 years--or ever.  They are mph types--good people, but just focused on populations, not individuals. One good thing that may come out of this is to put a nail in the coffin of “comparative effectiveness research”  That’s the government panel that will make recommendations on all sorts of healthcare tests and procedures.  Like the NICE panel in England, these folks will decide what’s cost effective for patient care, and the insurance companies will adjust their payments accordingly.

Tomorrow, the Senate unveils the Harry Reid plan. I’ll be there.