. . . 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.