Friday, June 26, 2009

The Physician Foundation, Obama, Doctors, and Health Reform - Who Speaks for Doctors?

As the health care debate builds towards a crescendo and my book Obama, Doctors, and Health Reform (, 2009) hits the streets, I am thinking of a new book, to be called Who Speaks for Doctors?

• Patients, of course, 89% of who say they are satisfied with doctors, but patients are not noted for having powerful advocacy groups. The most powerful of these groups, AARP, weighs in on the side of the Obama administration and favors reducing physician income.

• The American Medical Association, but only 15% of 20% belong to the AMA, and the AMA has been neutralized by trying to be everything to everybody. One of the offshoots of the AMA, the Reimbursement Update Committee, sets coding fees for doctors and favors specialists.

• The four major primary care societies representing family physicians, internal medicine, pediatricians, and osteopathic physicians, representing about 30% of physicians. They are having some impacting health reform aimed at “revitalizing” primary care.

• The specialty societies, collectively representing perhaps 60% of American physicians. They tend to represent their specialized interests, particularly their awesome technologies, which have becoming a driving inflationary force, often for the good.

• The academic establishment, representing America’s 130 medical schools, all of whom belong to the American Association of Academic Colleges. A powerful organization, but one which tends to be sympathethic but disconnected from the interests of practicing physicians. Publications such as New England Journal of Medicine and Health Affairs tend to reflect their positions on reform, which tend to liberal.

• The Medical Group Management Association, representing practice managers and physician leaders, in medical groups across the U.S. and perhaps 300,000 physicians in those groups. Publishes an annual survey showing the stagnant incomes and growing overhead of American doctors.

• The Physicians Foundation, which represents perhaps 650,000 physicians in state and local medical societies, and which defends practicing physicians, has issued a national survey reflecting the state of demoralization of primary care physicians, and seeks a more prominent place at the health reform table.

• Medicare and Medicaid, which does not represent doctors but pays them at rates averaging 20% below private plans. These programs are popular with the public, but are open-ended entitlements with no effective cost controls, and their costs are rising at a 34% higher rate than the private sector.

• Lastly, there are lone wolf physicians, who publish in national publications, like the New York Times, USA Today, or the Wall Street Journal, and who try to inform the public what is really occurring on the ground from the individual practicing physician’s point of view. Below is a sample of what one physician, an internist from Washington, D.C., had to say about conditions on the ground.

A Doctor’s Reflection on Health Reform, WSJ, June 23


Dear President Barack Obama and Members of Congress:

I understand that you have undertaken the Herculean task of repairing the health-care system in the United States. As a physician who has practiced medicine for the past 19 years, I think you would benefit from hearing about my experience. I am a board-certified internist with a specialty in endocrinology who currently practices in Washington, D.C. I also provide primary care to many of my patients.

There has been much concern about the rapidly rising cost of health care. I am convinced that costs have increased for a few reasons. First, there are simply more patients in the system. The baby-boom generation has gotten older and now requires care for chronic medical problems. Second, we have unparalleled levels of obesity in our country. This has led to a massive increase in diabetes, hypertension and other chronic problems.

If we could prevent even a small percentage of people from becoming obese and developing these conditions, the costs of health care could go down far enough to cover everyone's insurance. To that end, we need incentive programs to encourage healthy eating and exercise. Vending machines and fast food should be banned from our schools. Children should be provided with meals that are low in saturated fat, refined carbohydrates, and sugar.

Another major issue is reimbursement. You may find this hard to believe, but when I first started practicing medicine in 1990 I received more payment for an office visit than I am currently receiving. This has occurred despite the increasing cost of practicing medicine, which is the result of rising malpractice premiums, rents, staff salaries, professional membership fees, license fees, and costs needed to comply with various new regulations. What other profession has experienced a reduction in reimbursement over the last 20 years?

I feel strongly that if doctors are reimbursed more for office visits, they will spend more time with patients. This will lead to fewer referrals by primary-care physicians and result in lower health-care expenditures. Currently, harried primary-care physicians don't have the time to delve into medical problems with a hint of complexity. So patients who could be dealt with if more time was available are referred to specialists or expensive radiology studies.

I have heard that physicians may be mandated to participate in a government-run health plan. I sincerely hope that this is not true. First of all, it sounds unconstitutional. As free individuals and citizens of this country, physicians should not be forced to participate in any plan. We have paid for our professional training and worked hard to distinguish ourselves. We owe no debt to the government. If you want physicians to participate in your plan, give them the right incentives and they will flock toward your program.

Electronic medical records have been praised as a way to save money and avoid duplication of tests. It's true that electronic medical records will save some money, but not as much as you probably are counting on. In my practice, if a patient tells us he had a test performed, we call the physician or medical facility to retrieve the results. But a standardized electronic platform will likely be useful for physicians and should lead to better care.

Contrary to what you may have heard, my experience is that smaller practices provide better patient care than larger practices. There are no economies of scale in medicine. If you hire more physicians, you need to hire more support staff to deal with the increased work demands. Larger practices with less support per physician often end up providing worse service. They also require office managers, and sometimes even managers of managers, all of which just bloat costs.

I worked in a university multispecialty practice for seven years before establishing my own private practice. At the university practice, I found that patients' requests often went unfulfilled. Phone messages didn't get to me, and charts and laboratory tests were routinely lost. In my own practice, my fingers are continuously on the pulse of my staff and patients. Because I can overhear how staff interact with patients, I can intervene rapidly if patients are not getting good service. We routinely have patients transferring to us from larger multispecialty practices where they often wait for hours to be seen, aren't called with their test results, and their phone calls are ignored.

The idea that multispecialty practices lead to better referral patterns is erroneous. If I need to refer a patient to a physician in another specialty, I choose the best physician I know to meet that patient's needs. When making the referral, I consider the physician's clinical competence and the potential chemistry between that physician and the patient. I am not constrained by a limited choice of referral options dictated by a multispecialty group.

When I refer a patient, I fax or mail over pertinent notes, lab work and radiology results so that the specialist knows the patient's problem and doesn't need to perform additional unnecessary tests. The specialists that I refer to either call me or write comprehensive consultation letters so that I am aware of their treatment plan and can coordinate future care with them.

I have also heard that Medicare will be looking to recoup money by increasing oversight of fraud. My fear is that fraud will be poorly defined and a simple miscoding of an office visit will be misconstrued as fraud.

Untold story - Knee Replacment - Another Untold Story

One of the untold stories about modern medical technologies is that they often restore people to normal function. I have coffee morning with 12 men over 65. All are physically and socially active, and more than half have had some medical procedure – a knee or hip replacement, open heart surgery, a cardiac stent, cataract surgery, CT or MRI scans to reveal the nature of their condition, invasive urological or abdominal procedures – to make them whole again.

One of the untold stories of health reform is that aging citizens have great expectations of the health system and its ability to help them live a graceful and fulfilling old age. There is much talk about “over-treatment” “unnecessary procedures,” and “too much money spent on the last illness,” and the necessity to spend billions of comparative effectiveness research, but precious little is said about restoration to a normal functioning life style

I have many friends who have had knee replacements – and all agree their new knee erases pain and makes them more functional. Indeed, most result normal lifestyles before their arthritic knee or knees crippled them. Well, a study has just come in analysis has just come in from the Archives of Internal Medicine indicating that knee replacement, which has an average cost of $20,000, are cost effective in restoring quality of life.

Here is the story, as told by a Wall Street Journal reporter in the June 23, 2009, edition of that newspaper ,“Knee Replacements Are Determined to Be Cost-Effective.”
A $20,000 procedure to replace a knee ravaged by arthritis in the elderly is generally a good deal for both patients and the federal Medicare program that pays the bill, according to a new study.

In the study, based on a computer model using Medicare claims and other data, total knee replacement provided about one year of better quality of life compared to that experienced by patients who didn't have the procedure, researchers said. The average age of patients whose data were included in the model was 74.

Here is the key paragraph in the report,

Almost 500,000 knee replacements cost the U.S. more than $11 billion in 2005, and the number of surgeries is growing rapidly due to increased life expectancy and rates of obesity, the researchers said. Other studies indicate total knee replacement is 90% effective in relieving pain and improving function.

I predict similar results will be found for hip replacements, cataract surgery, and cardiac stents( in patients with acute symptoms but not with stable angina. Since these procedures account for much of Medicare spending, I would hope the proposed Comparative Effectiveness Institute start with these procedures. I hope also concurrent polls are conducting among older Americans about their expectations of having access to these restorative procedures.

Thursday, June 25, 2009

Reform delays - Big Health Reform Bill May be Unlikely This Year

June 24, 2009 - In my book Obama, Doctors, and Health Reform, out next week,I describe health reform as a whirling Rubik Cube with a lot of interchangeable moving parts. Two of the biggest of these moving parts are hospitals, where the bulk of Medicare money is spent, and politicians. President Obama is trying to keep the Rubik Cube moving forward, but there are signs the gears between the moving parts are beginning to clog.

The recession is hitting hospitals. Total margins are at an all time low. So is cash on hand. Fifty percent of America’s 5700 hospitals are now losing money. Many hospitals are laying off workers and cutting capacity.

This is important for timing reasons. Politicians are now getting ready for their fourth of July recess, and nothing will have been done before they go. In August comes another political recess. When the politicians return home to consult with their constituents during these recesses, they will find unrest among hospitals, often the biggest employers in town. Obama’s plans call for big Medicare cuts, as much as 30% for hospitals. Hospital CEOs are not likely to look upon these cuts kindly, and they will no doubt share their angst with their Senators and Representatives.

Add this angst to increasing anxiety among the public about the growing federal deficit, and you have a formula for gridlock. If the federal legislators don’t get some of the details worked out, such as to pay for the $1.6 trillion cost over the next ten years, health reform momentum may grind to a a halt if polls indicate a reluctance to pay for a massive overhaul, and nothing big will pass before the end of the year.

Transferring Data Directly to Patients

In an era when technology allows personal health information to be more easily stored, updated, accessed and exchanged, the following rights should be self-evident and inalienable. We the people:

• Have the right to our own health data

• Have the right to know the source of each health data element

• Have the right to take possession of a complete copy of our individual health data, without delay, at minimal or no cost; If data exist in computable form, they must be made available in that form

• Have the right to share our health data with others as we see fit
These principles express basic human rights as well as essential elements of health care that is participatory, appropriate and in the interests of each patient. No law or policy should abridge these rights.

Declaration of Health Data Rights, June 22. 2009

There is a school of thought that has as its main theme,” Give all patients their data. They have paid for it, they deserve to have it, and, given the wide availability of Internet information, they can interpret it. In this age of unlimited Internet information, they can look up what it means.”

A subtheme is;” To make the health system transparent and accountable, all we need to do is strip away the secrecy and the mystique that physicians have created that they are high priests who alone can plumb and decipher the mysteries and complexities of modern medicine.”

Here is the case for A Declaration of Health Data Rights, as eloquently presented by by Brian Klepper and David Kibbe in the June 22, The Health Care Blog,

Today's unveiling of a Declaration of Health Data Rights is an important action, long overdue, that represents a collaborative effort by a group of health care professionals - activists, entrepreneurs, technologists and clinicians - all colleagues we hold in high esteem.

The Declaration's several points arise from a single, simple premise: that patients own their own data, and that that ownership cannot be pre-empted by a professional or an institution. And there lies its power, especially in the context of early 21st Century health care. It is a transformative ideal that currently is not the norm. But we join our colleagues in declaring that it should be.

It is fair to note that this effort - making sure that all of us have immediate access to personal health information in easy-to-use (i.e., electronic or "computable”) format - is NOT the most important thing we need to achieve in health care right now. We all know that the system is wildly out of balance, with costs so excessive that even the insured mainstream of Americans risk financial ruin with a major health event, and quality that varies from superb to atrocious. Restoring a semblance of stability and sustainability to America's health system will require many measures that may not include an individual's right to control his/her own health information.

But it is an appropriate, critically necessary seed, nonetheless. Information withheld from patients, purchasers and professionals, wittingly or unwittingly, is the deepest root of America's health care crisis. Too often it is an act of power, enabling - and we use this word in the clinical sense - actions without accountability, and trumping the checks and balances that laws and markets strive for in progressive societies. There are many other roots to our current dilemma, of course, but nothing is as pernicious or corrosive as the lack of information transparency. It has been the practice in American health care for decades, with ramifications so grave that, by itself, it has placed the nation’s future in peril.

I personally think Klepper and Kibbe’s argument is over-stated and overly dramatic, especially the bit that lack of access to data is “pernicious and corrosive” and “so grave that, by itself, it has placed the nation’s future in peril.” I seriously doubt that data is systematically withheld and is the “deepest root of America’s health care crisis.” But I respect their opinion and their right to say it.

But alas, life and the reform of health care is not that simple. Today’s news and a personal experience illustrates some of the problems.

• A study by Senator Jay Rockefeller released this day and reported upon the Associated Press, New York Times and Wall Street Journal reveals that the database owned by Ingenix, a subsidiary of United Health Care, and used by most of the nation’s health plans, systematically underpaid doctors and forced patients who visited out-of-network doctors to pay up extra amounts of money. This is an example of lack of transparency, and the patients should have been apprised of the data, but the health plans had signed a contract saying they would not do so.

• A second report on a data study is from the June 22 New York Times, “Abnormal Test Results May Not Get to Patients.” In a study of 5, 434 patients, Researchers studying office procedures among primary care physicians found evidence that more than 7 percent of clinically significant findings were never reported to the patient. Or they may have been reported, but they were not documented. This does not seem to me to a big deal. It strikes me the fact that only 7% were not reported, and may simply have been from lack of documentation, is an affirmation. Maybe some of the “abnormal results” were frivolous.

• Yesterday I had blood drawn for a chemistry profile at a Quest drawing station. I asked that the data be sent to me, and they said they could not do that because that would be illegal in Connecticut. I do not know if this is a nationwide policy. I could only get the information from my primary care doctor. The doctor called on his own and said all tests were normal except for an elevated uric acid. I knew the reason for the high uric acid, having had a previous gout attack. But would the typical patient. There are roughly 100 causes of a high uric acid, including many drugs, such as Diuril, kidney disease, alcoholism, almost any disease with tissue breakdown. In addition, if you perform 20 or so tests on a chemical or hematologic profile, you will invariably get borderline statistically abnormal tests, which are no cause of alarm to the doctor, but may be to the patient.

Perhaps I’m unduly sensitive to reporting raw, uninterpreted data to patients. Not that some data should be reported immediately. In a laboratory I once ran, we got a blood glucose of 500. Because the state In which I practiced forbade reporting results directly to the patient, we tried desperately to track down the doctor – calling repeatedly, looking of his back-up, slipping the results under his door and delivering the results to his home. This was on a Friday. On Monday, the patient died of bowel infection, which was probably unrelated to his hyperglycemia We were sued for not reporting the result, which was illegal, and lost a $250,000 malpractice suit.

So yes, I believe data should be reported to the patient, but I also believe the doctor ought to interpret significant abnormal results before transferring the results

Costs, Data-Driven Care -The Office Visit as Health Cost Saver: Another Untold Story

During the health care debate, you will hear a lot of talk about how to save money. President Obama has three main strategies – stressing prevention to avert chronic disease, installing interoperate medical records across the land in health facilities, and coordinating and offering comprehensive care through medical homes or primary care physicians.

What you don’t hear is that much of the cost occurs because care is offered outside primary doctors offices - in specialists offices, in emergency rooms, hospitals, specialized diagnostic and treatment facilities, and hospitals.

I became acutely aware of the magnitude of cost differences in an interview I conducted with Jerry Reeves, MD, chief medical officer of the Hotel and Restaurant Employees International Union (H.E.R.E.I.U) located in Los Vegas, “Data-Driven Health Care: An Interview with Jerry Reeves, MD, June 8

Jerry’s argued was the point of entry of patients into the system – where they are seen and treated – makes a tremendous difference in costs.

Point of Entry of Patient – Cost per Disease Episode

Hospital $9363
Emergency Room $737
Urgicenter $64
Private Office $69

In Jerry’s study, conducted in 4 cities around the country, stunned me. Jerry said his union had made a systematic effort to persuade their members to be seen in physicians’ offices rather than in other settings. He said doctors received 6 times more payment for administering chemotherapy in specialized facilities than in their offices.

Why should this be? Well, in the first place, facilities outside of medical offices have a much higher overhead. Secondly, regulations may be more stringent and expensive. Thirdly, facilities can charge a “facilities fee,” made possible by government mandate. For these and other reasons, including the fact they must be open 24 hours a day, hospital fees are much higher.

So why is this fact not more widely recognized as a huge factor in health inflation? And why is nothing being done about it? There are a host of reasons, including.

• By law, hospitals are obligated to take all comers, and patients know this.

• Hospital ERs are open 24 hours. Patients know this, and many don’t want to “bother” their doctors at night, weekends, or off-hours.

• Primary care doctors are in short supply, and waiting times to see them are 20 to 50 days depending on the city.

• One of five Americans is a recent immigrant, may not be a citizen, and may not understand how to access a private physician.

• Roughly 47 million Americans are uninsured. These citizens may delay treatment, may have negative lifestyle, and may not seek care until they are seriously ill and require hospitalization.

So what are the answers?

• Publicity campaigns apprising the public and health plan and union memberships of this information.

• More care provided in less costly settings – urgicenters, cash only practices, retail clinics.

• Incentives and national programs to induce more medical students to enter primary care careers (general internal medicine, family practice, pediatrics.
Strategies to “revitalize” primary care include.

One, Payment reform. Increase primary care payment under the Medicare fee and health plan fee schedules.

2. Pay primary care doctors for phone calls and email requests.

3. Medical student debt relief for choosing primary care.

4. Change in the way primary care is reimbursed through the festering of medical homes centered on patients.'

Two, Investment in primary care infrastructure and organization.

1. Investment in health information technology for primary care.

2. Creation of nationwide system of primary care extension agents to assist practices in making improvements,

Three, Attracting more U.S. medical statements into primary care

1. Redirection of substantial portions of Medicare graduate medical education funds to primary care residency programs.

2. Increase in funds for Public Health Service primary care training.

Monday, June 22, 2009

Untold stories - Ten Untold Stories about Health Reform

Untold Story One – A nation’s health system accounts for only about 15% of a nation’s health status, life style makes for 30% and other factors – poverty, inferior education, income differences, and lack of social cohesion make up the other 55%(Satcher, D, and Pamies, R (2006), Multicultural Medicine and Health Differences, McGraw Hill). Therefore, any reform of our system is unlikely to increase the nation’s overall health status. In other words, a nation’s culture and its life style habits determines its health

Untold Story Two - You can make polls about health reform mean anything you want them to mean. A survey of 895 Americans found 72% supported a government-run plan, but 67% felt such a plan would decrease costs and restrict choice of doctor (“In Poll, Wide Support for Government-Run Health, New York Times, June 20, 2009). Don’t trust the headline spin, i.e., “Wide Support for Government-Run Health,” until you look carefully at the “internals” of the poll. The truth is, 80% of insured Americans are skeptical of a government takeover for fear they will lose their existing policies.

Untold Story Three – The “uninsured” population is believed to be mostly poor and sick. In reality, 1/2 are employed, 2/3 to ¾ are in good health. Many are “young invincibles” on good health, who use their money for other things. About ½ are between jobs, 1/5 are not citizens, ¼ are eligible for government programs, and 1/5 have household incomes over more thatn $75.000. Finally, Obama’s plan would cover only 16 million of the 46 million at an estimated cost of $1.6 trillion. The public is beginning to ask: is is worth covering the uninsured if the consequence is a huge addition to the national debt? One ironic twist: all health care stakeholders support covering the uninsured because universal coverage assures payment for another 46 million people.

Untold Story Four – Medicare “administrative costs” are low, about 3% of costs, much lower than private plans, but the reasons why are not administrative “efficiency,” but because Medicare subcontracts administrative tasks, has not market expenses, does not have to negotiate contracts, has no competition, and runs no business risks because it has government dollars to back whatever they do. Furthermore, Medicare can charge whatever it wants to charge – without fear of market backlash or losing customers.

Untold Story Five - Medicare underpays hospitals and doctors by $90 billion each year and shifts costs to the private sector. These differences would have to be made up with a government-plan. Because more and more doctors, perhaps 30% are not accepting new Medicare patients and more than 50% will not see new Medicaid patients; because of an increasing primary care shortage; because of the recession, which produces more Medicaid applicants; and because 78 million baby boomers will start turning 65 in 2011, the next big political crisis will be lack of access to doctors.

Untold Story Six - Government reimbursement of new programs for prevention are more likely to produce expensive programs for prevention costing billions of dollars rather than to save money. Here is how Abraham Verghese, MD, a professor of medicine at Stanford, views the situation, “Keep in mind that you may have to treat several hundred people to prevent one heart attack. Using a statin costs about $150,000 for every year of life it saves in men, and even more in women (since their heart-attack risk is lower)—I don’t see the savings there. Or take the coronary calcium scans or heart scan. It’s a money maker, without any doubt, and some institutions actually advertise on billboards or in newspapers.

Untold Story Seven - Widespread use of medical records may not save money, but instead will result in the so-called “iPatient syndrome. “ Doctors spend more time entering information, reading glowing computer screens, and making sure the record is complete than listening to patients. examining them, holding their hands, or counseling them . Of the iPatient phenomenon, Verghese comments, “Electronic medical record (EMR) may or may not save money (it won’t be anywhere as much as is projected) but what it will do is ensure that we doctors, nurses, therapists, particularly in hospitals will be spending more and more time focused on the computer, communicating with each other, ordering and getting tests, buffing and caring for our virtual patient - while the patient in the bed wonders where everybody is. “ Treating the medical record is not the same as treating the patient.

Untold Story Eight - Those who espouse government care believe in mass uniformity is more important than individual choice. Uniforming marks a profound philosophical difference between the “statists,” those who preach the gospel of equity and equality for all as enforced by government, and conservatives who advocate market improvisation and individual choice depending on the circumstances of patient-doctor interaction. Here is how Mark R. Levin, author of Liberty and Tyranny: A Conservative Manifesto, a book which has been number one the New York Times best seller list for the last 10 consecutive weeks, describes the situation, “The Statist misuses equality to pursue uniform economic and social outcomes. The Statists must claim the power to that which is unequal equal and that which is imperfect perfect.” An example is the current debates over practice variation among Medicare recipients. The government says such variations are “unwarranted” and insist they may be made equal, while the conservative argues socioeconomic conditions and costs of doing business are inherent unequal and to try to make them equal will violate individual liberties and choices.

Untold Story Nine - A rising number of policy wonks insist the only way to rationalize care is through organizing doctors into large groups, paying them on salary rather than fee-for-service, and reimbursing them on the basis of data-measured performance, population outcomes, episodes of care, management of patient panels, and continuous improvement of care that is integrated, coordinated, and comprehensive, all tracked by interlocking communicating interoperate medical records. This is “systems engineering” at work, and large multispecialty groups like Kaiser, Geisinger, Group Health Cooperative, have shown that it works for their patient populations. What is not said is that systems engineering requires a very expensive infrastructure and runs again the grain of most physicians, who prefer autonomy and who resist top-down control – by government and even their own leaders.

Untold Story Ten
- There are basically three ways to control cost – rationing by government of Medicare and Medicaid and the private sector, which is anathema to Americans; “savings” through as yet unproven national programs to prevent common chronic disease, information technologies to enforce compliance and demonstrate best practices; and market-driven innovations that rely on consumers spending their “own” money and taking responsibility for their own care by not becoming obese, eating right, exercising, and being rewarded for keeping their blood pressure and cholesterol levels and weight down. There are cost-reducing success stories out there among corporations, like Safeway and Toyota, and others who engage employees by strategies such as paying ½ their premiums for high deductible plans, encouraging purchases of health savings accounts, giving patients $1000 up front to spend for health care, instituting wellness programs, and establishing worksite clinics on site. But when the focus is on government control, as it is in the current Democratic-dominated Congress, you rarely hear anything about constructive roles for business. Instead the focus is on forcing business to pay for employee health care or pay a fine.

Last Friday's Wall Street Journal featured an opinion piece called How Safeway is Cutting Healthcare Costs, by Steve Burd, CEO of Safeway. Burd has long been an advocate of market-based solutions for the nation's health crisis, and he summed up the problem in simple terms:

"Safeway's plan capitalizes on two key insights gained in 2005. The first is that 70% of all health-care costs are the direct result of behavior. The second insight, which is well understood by the providers of health care, is that 74% of all costs are confined to four chronic conditions (cardiovascular disease,cancer, diabetes, and obesity.”

Friday, June 19, 2009

Government reform - At Last, The Long Awaited Announcement

Dear Readers: Here it is- the long awaited announcement of what the Democrats in their caucus are up to. They still do not know what it will cost except it promises to cut spending and raise taxes. Cost estimates run from $1 to $ 2 trillion. Splurge now, save later, tax later and greater. Let future generations take the hit and let the Republicans see what they can do to stop us. I’m reminded of Lyndon Johnson’s answer when asked the difference between a caucus and cactus. “With a cactus, “ he said, “all the pricks are on the outside.”
The Caucus: The Politics and Government Blog of the Times

June 19, 2009, 3:19 pm

House Democrats Unveil Plan for Health Care Overhaul

By David M. Herszenhorn AND Robert Pear

House Democrats on Friday answered President Obama’s call for a sweeping overhaul of the health care system by putting forward a 852-page draft bill that would require all Americans to obtain health insurance, force employers to provide benefits or help pay for them, and create a new public insurance program to compete with private insurers — a move that Republicans will bitterly oppose.

The bill was unveiled by a trio of committee chairman, George Miller of Education and Labor, Henry Waxman of Energy and Commerce, and Charles B. Rangel of Ways and Means, who have worked jointly for months to develop a seamless proposal. But the chairmen said they still did not know how much the plan would cost, even as they pledged to pay for it by cutting Medicare spending and imposing new, unspecified taxes.

The three chairmen described their bill as a starting point in a weeks-long legislative endeavor that they said would dominate Congress for the summer and ultimately involve the full panorama of stakeholders in the health care industry, which accounts for about one-sixth of the nation’s economy. They described their efforts as the historic culmination of a half-century of failed attempts across the tenure of a dozen presidents.

Mr. Miller, a Democrat of California, said that completing a bill would require extraordinary cooperation among lawmakers. “In order to change American’s health care system,” he declared, “Congress itself must change.”

House Republicans, who have had no involvement in the development of the health legislation so far, quickly denounced the Democrats’ proposal as a thinly disguised plan for an eventual government takeover of the health care system.

“Families and small businesses who are already footing the bill for Washington’s reckless spending binge will not support it,” the Republican leader, John A. Boehner of Ohio, said in a statement. “Raising taxes, rationing care, and empowering government bureaucrats — not patients and doctors — to make key medical decisions is not reform.”

The House Democrats’ plan is one of three distinct efforts underway on Capitol Hill to draft the health overhaul legislation. In the Senate, both the Finance Committee and the health committee have separate bills in the works, and in recent days those efforts seem to have stumbled.

The health committee, led by Senator Christopher J. Dodd, Democrat of Connecticut, in the absence of the panel’s Democratic chairman, Edward M. Kennedy of Massachusetts, began its public drafting sessions earlier this week. But the process was hampered by a much higher-than-expected cost projection from the Congressional Budget Office, which gave Republican critics ready artillery to fire at the bill.
In the Finance Committee, the chairman, Max Baucus, Democrat of Montana, announced that he had postponed his drafting process, expected to begin on Tuesday, until the week after July Fourth, to give him time to try to reduce the cost of his measure. The Finance Committee bill, being developed jointly with Senator Charles E. Grassley of Iowa, the senior Republican on the panel, may have the best chance of winning bipartisan support.

The House proposal unveiled on Friday was a decidedly progressive measure, which reflected many of the ideas championed by the White House, including such initiatives as the creation of public insurance plan, which Republicans have said they will never support.

In the Senate, lawmakers have been working on a number of potential compromise proposals, including the creation of nonprofit health care cooperatives that could compete with private insurers but would be regulated rather than controlled by the federal government.

The House proposal also included a requirement that employers either provide health insurance or pay a fee equal to 8 percent of their payroll. The House chairmen said that the 8 percent figure, along with virtually every other aspect of the draft legislation, was negotiable and intended as a starting point for deliberations.
But Republicans have voiced opposition to imposing any such requirement on employers, arguing that it would effectively lead to the elimination of jobs.

blogging doggerel -FSB's (Foils, Strawmen, and Bogeymen), Into the Valley of Debt Rode the 600, Trillions To the Left and Trillions to Right of Them

Foils – Persons or things that set off and enhance something by contrast
Strawmen - A weak argument or opposing view set up by politicians so that they may attack it and gain an easy, showy victory
Bogeymen – An imaginary frightful being, especially one used as a threat

As we enter the make-or-break phase of the health debate, the Senate Finance Committee confronts four huge issues - how to cover the uninsured, whether to create a new public insurance plan, whether to impose new obligations on employers, and who to blame if health reform passes or arrives DOA.

Who to blame comes in the form of FSBs (Foils, Strawmen, or Bogeymen), sometimes referred to simply as SOBs (Sons of Bureaucrats).

Whomever you blame, the trick is to demonize your opponent or terrorize the public. There are FSBs to the left and right of us.

FSBs to the Right of Us

Private Health plans, especially those devilish Medicare Advantage Plans, who have the gall to charge more than traditional Medicare simply because they offer more benefits, try to cover their losses, increase their profits, satisfy their investors, and pay their executives.

Drug Companies - Imagine. These drug makers, who require $800 million to bring a single drug to market, charge more for brand name drugs than generics to cover their losses. There ought to be a law to cut their profits, even if profits are needed to stay in business.

Hospitals and Doctors - Everyone knows these providers over-treat and over-charge those with incurable diseases , those at the end of life because of age, , and for those who want death-defying life-enhancing treatments. Why don’t we just cut $300 billion off their Medicare fees and tell them what they can and cannot do, and let them scramble to make up the difference?

Consumer-Driven Marketers, Innovators, and Entrepreneurs - These profite-mongering folks and their ilk create technologies that cost more and drive up the cost of care. We need to restrain them through comparative outcome research that restricts their activities which produces fragmented niche care. These sons of niches to be disciplined.

Employers, large and small
- Large employers say they can pay rising premiums and stay globally competitive; small employers say they can't afford to cover employees and stay in business. Both of them are sacrificing employees in the name of profit and their own high flying lifestyles. We'll fix them. We'll make them pay or play, even if we don't have to pay as we go ahead with our debt-ridden plans.

FSBs to the Left of Us

Public Plan Socialists - It should be apparent that a public plan with lower premiums, a huge-built in constituency, and no business risk will crush private health plans and stamp out free health care enterprise. This is not only socialistic but pathogenistic and portends a European welfare state.

Health Plan Job Destroyers - Obama Democrats would cut $330 billion from Medicare budgets and $2 trillion from the medical-industrial complex, which makes up 1/6 of the U.S. economy and has created 4 million new jobs over the last 10 years, thereby undermining the only current growth sector of the U.S. economy, and in the process, cause millions of laid-off health care workers.

The Debt Creators - The U.S. already has $100 trillion worth of “unfunded liabilities” – Social Security, Medicare Medicaid, government pensions, U.S. military obligations. In his first 5 months, Obama has tripled the national debt and made it the highest compared to GDP in history. Now he proposes to add $1.2 trillion, probably closer to $2 trillion, over the next ten years to cover 16 million of the 46 million uninsured.

Bureaucratic Care, not Medical Care - Those pointy-headed policy wonks say only government can decide what care people should receive. They will decide through data-mongering computer algorithms to decide what works and what doesn’t work based on statistical averages rather than individuals needs and doctor decisions. Only government, based on collective data, has the wisdom to decide what’s best for the people.

Conclusion – Int the Valley of Debt Rode the 600, The Charge of the Political Light Brigade

Because the House and Senate contain 635 politicians of all partisan stripes and because the final bill may arrive DOA, I’m reminded of Alfred North Tennyson’s poem, “The Charge of the Light Brigade,” which I have changed to The Charge of the Bureaucratic Brigade, and which not reads, in part,with apologies to Lord Tennyson,

Half a league half a league,
Half a league onward,
All in the valley of Debt
Rode the six hundred thirty five:
'Forward and Upward, the Bureaucratic Brigade!
Charge future taxpayers' he said:
Into the valley of Debt
Rode the six thirty five.

Trillions to right of them,
Trillions to left of them,
Trillions in front of them
Rally'd & plunder'd;
Storm'd at with millions and billions,
Boldly they rode into the zillions
Into the jaws of Debt,
Into the mouth of Hell
Rode the six hundred.

'Forward and Upward, the Bureaucratic Brigade!'
Was there a man dismay'd ?
Not tho' the soldier knew
Some one had blunder'd:
Theirs not to make reply,
Theirs not to change the spending habit,
Theirs but to do another debit.
Theirs not to reason why,
Theirs is to send the debt high.

Trust Your Government, Your Doctor, or Yourself

The health reform bill is coming down to this. Trust your government, our doctor, or yourself.

The government is pushing a public plan to compete with private plans. Public plan premiums would be about 30% less than private plans, and it would run no financial risks, since it would have the federal treasury as a back-up. It would “compete” with private plans and make them “honest,” a favorite word of President Obama in his speech to the AMA.

The Message

The Obama message is: you can trust the government. As the saying goes, “I’m from the government. Trust me.” Your government will save money by cutting $380 billion out of the budgets of hospitals, doctors, health plans, drug companies, who are presumably “dishonest.”

Hospitals alone,. 5700 of them, many of them in your neighborhoods, would receive $200 billion less. And doctors? Well, under a public plan , they would be paid at Medicare rates, 20% less on average then they receive now.

That would make them “honest.” Don’t worry about them abandoning you or not accepting you. They have no other choice because private plans will be out of business. A public policy will make honesty the best policy.

Government Track Record

Yes, Sir, you can trust your government. After all, it created open-ended Medicare and Medicaid programs, now hurdling towards bankruptcy by 2017. Critics say bankruptcy is due to inefficiency, fraud, abuse, and inability to control costs – costs which are crushing budgets of state governments.

Oh, I know government in 1965 said Medicare and Medicaid would never cost more than $9 billion and costs now exceed $1 trillion. But you can trust the government to bring these costs down – by preventing disease, stopping the aging process, installing computers in every doctor’s office and every hospital, and coordinating care across the disease spectrum.

Spend Now, Save Later

Yes, I know government says it will need to expend vast amounts of money now – by investing in stimulus packages to lay the foundation – so they can save money later. The Senate Finance Committee projects costs of $1.2 trillion over the next ten years, but the Congressional Budget Office estimates the real costs at $1.6 trillion. Obama distracters say these figures are voodoo economics, a form of political doo-doo, but you and I know it’s Bush whacking to correct past mistakes.

Trusting Doctors

Or, I suppose you could trust your doctors. But the government, and its budget director, Peter Orzag, says you can’t trust them. Their practices vary greatly price. They can’t compare prices due to antitrust rules, but they are charging what the traffic will bear, even though Medicare, Medicaid, and private plans set their prices. They get around this by over-treating and by doing things that don’t need to be done. If you don’t believe that, read about the Dartmouth Institutes studies on practice variation, or the recent Doctor Gawande study on McAllen, Texas, or my blog interview with Dr. Jerry Reeves on Los Vegas.

Why, you have to pay doctors more in McAllen, Miami, Los Vegas, and most big cities than you do in the rural South. It’s a shame. The government ought to be able to federalize, standardize, and homogenize doctor payment everywhere. One unified health care nation with equal payment for all, that’s what we need, no matter what the costs of doing business, patient demands, the health of the local, or malpractice rates.

Trusting Yourself

You could trust yourself. If the government would give each citizen – whether employed by a large company, a small business, or self-misan$6300 a year.with more for families – perhaps you could decide how to spend it yourself. Of course, you would have to be well-informed, you might even have to seek out a doctor you could trust, based on word-of-mouth, advertised rates, and public outcome data.
Here’s how a Wall Street Journal editorial writer sees how that scenario might play out in the future.

Because consumers were not spending more of their “own”money on health care, doctors and hospitals found it necessary to public hand even advertise their prices. For the first time, Americans spend less and get more. Spending fell overnight 13%, which happened to be exactly w3hat6 economists had predicted if the price tags were restored to health care and consumers were allowed to see clearly what they were getting (or not getting) for their money.

As Donald Palmisano, MD, a spokesperson fot the Coalition to Protect Patient Rights and former president of the AMA for 2003-2004, noted in a June 15 Chicago Tribune piece,

A lot is at stake as the nation engages in the health care debate. Will we have a system that puts the patient in control with the doctor as trusted advisor, or a government system-run system that ultimately rations care and stifle innovation and self-determination?

Sunday, June 14, 2009

Regional variation, Gawande - Obama Health Reform and the Sunday New York Times

“There is disturbing evidence that many doctors do a lot more than is medically useful — and often reap financial benefits from over-treating their patients. No doubt a vast majority of doctors strive to do the best for their patients. But many are influenced by fee-for-service financial incentives and some are unabashed profiteers.

A glaring example of profligate physician behavior was described by Atul Gawande in the June 1 issue of The New Yorker. (His article has become must reading at the White House.) Dr. Gawande, a Harvard-affiliated surgeon and author, traveled to McAllen, Texas, to find out why Medicare spends more per beneficiary there than in any other city except Miami.

The reason for McAllen’s soaring costs, some doctors finally admitted, is over-treatment. Doctors perform extra tests, surgeries and other procedures to increase their incomes.

Dr. Gawande’s reporting tracks pioneering studies by researchers at Dartmouth into the reasons for large regional and institutional variations in Medicare costs. Why should medical care in Miami or McAllen be far more expensive than in San Francisco? Why should care provided at the U.C.L.A. medical center be far more costly than care at the renowned Mayo Clinic?

After adjusting for differences in health, income, medical price and other factors, the Dartmouth researchers’ overall conclusion is that the more costly areas and institutions provide a lot more tests, services and intensive hospital-based care than the lower cost centers. Yet their patients fare no better and often fare worse because they suffer from the over-treatment.

The Dartmouth group estimates that up to 30 percent of Medicare spending is wasted on needless care.

Editorial, “Doctors and the Cost of Care,”, June 14, New York Times

So reads parts of the lead editorial in Sunday’s in the New York Times.

What amazes me about the editorial is that the editorial writer swallowed the Dartmouth Institute Institutes’ data and Doctor Gawande’s interpretation of the reasons behind practice variation hook, line, and sinker without mentioning that local business conditions in various parts of the country – the cost of doing business, the demands and sickness status of of the local populace, the mix of wealth and poverty, the cultures of various regions, the number of immigrants and uninsured – may have a lot more to do with practice variation than raw greed by hospitals and doctors.

The editorial also fails to mention that some of the highest costs in the country are in New York City and Boston – the pantheons of liberalism and Obama supporters and advisors.

Still, the Times editorial and a series of other Obama-reform articles satisfy me greatly because they mirror precisely what I’m saying in my book “Obama, Doctors, and Health Reform: A Doctor Assesses Odds for Success; The Health System, from the Top-Down to the Bottom-Up, Through Lens of Cultural Complexity (Iuniverse, Inc, to be released in June).

The Times’ articles say that our health system and its reform is, well, complex, and that our pluralistic health system shapes the system.

Therefore, “fixing” the system, 1/6 of our economy, entails turning our culture upside down, which is not easy given our penchant for individualism and distrust of sweeping government change and fear we will lose our present private plans, which cover 70% of people.

A Run-Down of this Sunday’s Health Reform Pieces

Here’s a rundown on today’s New York Times’ articles with The Times titles in bold print, their word-for-word assessments of their own articles in quotes, and my comments in italics.

Many in Congress Hold Stakes in Health Industry - “As President Obama and Congress intensify the push to overhaul health care, financial reports show lawmakers with a say have heavy investments in the industry.”

Comment- Not only their own personal investments, but money to be garnered from lobbyists and votes to be gathered from their constituents.

Editorial: Doctors and the Cost of Care, “As the debate over health care reform unfolds, policy makers and the public need to focus more attention on doctors and the huge role they play in determining the cost of medical care — costs that are rising relentlessly. Doctors largely decide what medical or surgical treatments are needed, whether it will be delivered in a hospital, what tests will be performed, and what drugs will be prescribed or medical devices implanted.”

Comment: This seems clear enough. High costs stem from doctor greed. There are other factors as well. Defensive medicine,” high malpractice premiums , as much as $150,000 for neurosurgeons or obsteticians, fear of being sued lest you perform every diagnostic test known to patients and their lawyers, and the public and medical perceptions that CT and MRI scans, heart caths and stents, and joint replacement represent the standard of care. Furthermore. according a Kaiser poll, 67% of patients felt they did not receive enough treatment, and only 16% felt they were over-treated

Health Plan May Mean Payment Cuts – “The White House said Saturday that President Obama intended to pay for his health care overhaul by cutting more than $200 billion in expected reimbursements to hospitals over the next decade – a proposal that is likely to provoke a backlash from struggling medical institutions across the country.”

Comment - As indeed it will. Over 1/3 of hospitals are losing money, and many are the largest employer in any given town or city. Health care has created 4 million jobs over the last decade, while employment has been flat in other sectors.

Following the Money in the Health Care Debates – “Congress appears readt to confront the nation’s most contentious issue – health care reform – and arguments will fill the air in coming moths. Much of the discussion so far has focused on President Obama’s proposal for a government-sponsored halth plan that he says will reduce costs. Insurers and doctors argue it will limit choice. The size and complexity of the issue are daunting. To understand what’s going on, you need to follow the money.”

Comment – This says it better than my book.

Obama’s Difficult Choices in Medicare Spending. “Obama, by taking seriously Medicare expenditures threatening to crush the federal budget, yet the Obama administration is proposing that we start by spending more now we can spend less later. This runs the risk of becoming the new voodoo economics. If we can’t realize significant savings in health costs now, don’t expect savings in the future later.”

Comment - Most observers believe heavy investments now in unproved theories – namely in prevention, health information technologies, and coordinated comprehensive primary care – may be the right thing to do, but will not result in significant savings in the near term.

Where I Agree with The Times

I agree with much of what the Times’ writers and contributors say, especially the bits about the money sacrifices for hospitals and doctors (a public plan would likely result in a 20% hit in revenues and incomes); many legislators are in a clash all by themselves (with heavy personal and career investments in stocks, campaign contributions, and voter resistance); and that “all interest groups” support universal coverage ( to oppose would be cruel-hearted, and besides universal coverage translates into billions and billions of new payments for everyone),

Where I Disagree

I do not agree with the unquestioned acceptance of the Times of the Dartmouth Institute data , lack of sophistication in interpreting that data, and hypocrisy of the Times in accepting practice variation as a main cause of high costs.

In fact, the Times' naivete astonishes me. The Times and the Obama administration blithely attribute high costs to avaricious economic behavior on the part of hospitals and doctors, whereas these variations can be just as easily attributed to local costs of doing business, and wealth, poverty, and cultural differences in the populations being served. For example,costs of care in the New York City metroplex are among the highest in the land, not because of hospital and doctor greed, but because of mix of wealthy and poverty populations, he high costs of doing business, all of which results in health costs.

Alternatives to Obamacare

Finally, I am perplexed the Times never mentions alternatives to government programs - growth of wellness programs and worksite clinics in industry, the leveling of tax deductions for individuals and corporate employees, portabiliyt of plans across state lines, and the emergence of the consumer-driven movements with 20% of the private market now availing themselves of health savings and flexible savings accounts in high deductible plans, and power of reducing costs by having patients decide how to spend their hard-earned tax-free money rather than having the government decide for them.

Increasing Wariness

Americans are growing increasingly wary of Medicare cuts because of what they portend for access to care with attendant waiting lines and looming tax increases to offset inevitable massive federal debts.Obama’s proposal to cut $313 billion in Medicare in addition to his $635 billion “down-payment” to expand coverage are causing people to think and blink twice. “Payment cuts are not reform,: says Rich Umbenstock, president of the American Hospital Association, and Patrick Duval, governor of Massachusetts, says, “Universal coverage without access is meaningless.”

In any event, it is gratifying to see the New York Times is coming around to a more realistic view of the complexities, contradictions, and paradoxes of reform.

Friday, June 12, 2009

Access, Physician Shortage - The Ultimate Crisis in Health Reform: Lack of Access

An Interview with John McDaniels, CEO of Peak Performance Physicians, Inc, New Orleans, Louisiana

A: How long have you held your position as CEO of Peak Performance Physicians, Inc, a practice management firm dealing with hospitals of physicians?

A: We’ve been in existence for 20 years, and we manage and consult with hospitals and medical practices throughout the United States.

Q: How many practices do you consult with?

A: Thousands of doctors and hundreds of hospitals. About 1/3 are in the Southeast, 1/3 in the Northeast, and ½ everywhere else.

Q: What do you see as the major issue of health reform?

A: I think the ultimate issue will be access to medical care. If any kind of health plan is forced upon physicians, you will see more and more physicians opt out of Medicare and Medicaid, which will result in waiting times of 2 to 6 to 9 months for Medicare and Medicaid patients. As that happens, you will see a huge public outcry, and they will flood their Congressman and Senators with complaints because they won’t be able to find a doctor. The ultimate problem is to provide access and at the same time compensate doctors and hospitals appropriately.

Q: I notice the AMA came out this week and opposing a public plan and saying it was against the government making it mandatory for physicians to see patients in that plan. Is it possible for the government to mandate doctors must take care of patients?

A: Anything is possible. I think what you will see physicians will simply stop participating in any kind of health plan. They will just be in a private business just like where you go see your hair stylist. Certain things are necessary for people – housing, food, and health care. All other participants in other essential business sectors are reimbursed dollar for dollar. The grocer for food stamps is reimbursed dollar for dollar, the pharmacist is reimbursed dollar for dollar, but hospitals and physicians are not reimbursed dollar for dollar. They are forced to accept a 40% to 60% discount. Where else in our society is someone expected to provide discounted government subsidized services on less- than- it-costs basis? That is just fundamentally wrong.

Q: Well, Senator Kennedy came this week with his plan. He will solve the problem you mention by providing Medicare and Medicaid for all, and out of the generosity of his heart, he will give hospitals and doctors 10% more.

A: The ultimate solution is that if the government really wants to get in the health care business and government needs to find out a way to have its own governmental hospitals, its own governmental physicians. That way governmental patients can go to those governmental hospitals and governmental physicians. Then they ought to leave the private sector alone.

Q: Let’s get real for a moment. How many of the doctors with whom you consult are accepting new Medicaid and Medicare patients?

A: I do not know of any physicians with whom we are consulting throughout the United States who are accepting new Medicaid patients except those they may be treating as inpatients. If you’re on call and a Medicaid comes through the ER, you’re obligated to take care of them.

With regard to Medicare patients, most of our practices are not accepting new Medicare patients, but are continuing to see established Medicare beneficiaries. If this new public plan, if there is one, is worse than the old plan, I think you will see more and more physicians totally opt out of Medicare.

Q: Massachusetts may be a harbinger of things to come. It has achieved near total universal coverage over the last three years, but according to a Merritt and Hawkins study of waiting times for various specialists – primary care, internal medicine, cardiology, and orthopedics – of 15 major cities, waiting times to see a doctor are now 49 days, nearly twice as long in Boston as any other city. To me long waiting times and difficult access are what’s coming down the pike if President Obama has his way.

A: You’re right. All you have to do is look across the border at Canada to see how waiting times lengthen with government medicine. In the U.S, there are other models of universal care. In Louisiana, every citizen is entitled to free care at a teaching hospital. You may have to wait a while, but care is free.

Unfortunately, after Katrina, teaching hospitals don’t have the capacity – the beds, staff, and facilities- to care for them.

This brings up the fundamental point: is health care a privilege or is it a right? If it’s a right, we have figure out a way to pay for it legitimately. If you say to doctors and hospitals, it’s your public duty to take care of people, you’ll have to pay them enough to stay in business. Then you will have a financial death spiral.

Q: President Obama’s problem right now is how to pay for his ambitious $1.5 trillion health proposal for universal coverage in the fact of the federal government’s burden of $100 trillion of unfunded liabilities for Social Security, Medicare, Medicaid, and pension military obligations. People are sitting back and saying – now wait a minute. A trillion here, a trillion there! Where’s it all coming from?

A: Yes, how do you continue to sustain that kind of spending? How do you fund other than through taxation?

Q; Now, wait a minute. President Obama says we’re going to fund it by saving money through prevention, health information technologies, and primary-care based coordinated care.

A; Those are appropriate measures, but the problem with both Medicare and Medicaid patients is they have difficulty being compliant with these things because of transportation, caregiver, cultural, and lifestyle issues. For the most part, Medicaid patients are unwilling to change. You can throw all the money you want at doctors and hospitals to change these lifestyles, but it doesn’t solve the problem.

Q; So the road to financial salvation is paved with good intentions, but the financial hell is still there, and you can’s solve these systemic cultural problems.
The other solution Obama is suggesting that all we have to do reduce practice variations from high spending to low spending regions, and Voila! We will end 30% of waste and cover the uninsured in more impoverished in low-spending regions. What about that scenario?

A: It makes for a good academic discussion. There are different reasons for spending by city and state, and to a limited extent, those reasons may deal with practice patterns. But if try to homogenize care, you’re going to have to protocol how diseases are treated. That leads to the “S” word, namely. “Socialism,” which means you’re told what to do and how to do it.

Q; What is the mood of your physician clientele?

A: They’re despondent, especially regarding any type of governmental plan. I think they will drift towards private medical practices – concierge practices, cash only practices, practices unconnected to health plans. They really have no option. They just don’t have any lobbying power through their medical organizations. The AMA is impotent. The other thing, The vast majority of the public think hospitals and doctors make too much money. They would be shocked to know what the average doctor makes. Doctors can no longer collectively bargain, They are just going to individually bargain. I just won’t participate in Medicare or Medicaid, or I just won’t participate in any insurance program.

Q: And they’re doing it?

A: Yes, they’re already doing it. And it will accelerate, because that’s the only real clout they have. They have absolutely no bargaining power through the AMA or any other physician organization. Doctors are not by nature proactively politically, and they’re just hunkering down. If they, the government, try to cram their plan down our throats, we’ll just have a private practice – cash only.

Melanoma - The Bare Facts

As a physician who blogs, and blogger who occasionally doctors, I have been asked to write an educational blog on melanoma. Nothing brings you as close to reality as being a physician, so here goes.

The bare facts are these.

• Too much sun – or too much exposure to tanning lamps and tanning beds – usually precedes a melanoma.

• Severe sunburns, even when young, enormously increase the risk of a melanoma later in life.

• Melanomas most often occur on bare skin surfaces exposed to the sun or to tanning procedures.

• These bare skin areas are the head and neck, the chest and back, the abdomen, and arms and legs.

• Melanomas usually originate in a pigmented mole.

• The mole changes – it may become darker, grows, develops an irregular edge, or even ulcerates.

• Melanoma develop locally but may spread to other parts of the body, even leading to death.

• Melanomas are best caught early, when they are resectable and when nearby lymph nodes can be removed.

• Melanoma may occur at any age, even in young people who tend to be sun-loving and who regard a tan as glamorous.

A tan may seem glamorous, but it is also dangerous. The tabloids and TV may picture George Hamilton and Hollywood starlets sporting a golden tan as glamorous but don’t be misled. Too much sun or too many ultraviolet rays from tanning machines ages the skin, creates crow’s feet around the eyes, creates wrinkles, may lead to leathery skin at an early age, and often is the forerunner to melanomas.

So, to avoid melanoma, don a hat, wear sunglasses, use strong sun screen, wear a shirt and long pants, watch your skin for changes in moles, and stay out of the mid-day sun. The sun is the skin’s worst enemy, and a tan is a sign that the enemy is at work. The world’s best complexions and most beautiful skin occurs in Scandinavia, not in Southern California or South Beach.

Thursday, June 11, 2009

Notable and Quotable - Two Major Reform Issues

The health care debate is boiling down to two major issues.

One, paying for a public plan, and selling it in the face of mind-boggling federal deficits, this year alone a record $1.75 trillion, and a projected health cost of $1.75 trillion over the next ten years.

Two, convincing the public, 70% of whom have private plans, that a public plan is necessary and will not interfere with their private plan and choice of doctors.

The stakes are enormous. Domestically, Obama has staked his presidency on the health care issue. And in the foreign affairs arena, he argues America’s ability to compete globally depends on bringing down health costs.

Here are notable quotes, drawn from June 10 and 11 press commentary, on health care debate, to show the magnitude of the issues.

The great unknown of the health care debate as if unfolds in the months ahead is whether the current political landscape will prove more hospitable to mandates, cost controls, and tax increases – all measures that helped doom the Clinton plan.

Shaligah Murray, “On Health Care, Congress Must Navigate Tricky Political Terrain,” Washington Post, June 10, 2009

The blunt fact is that most Americans are satisfied with their health insurance and don’t believe major legislation will improve things for them.

Michael Barone, “Qualms and Questions about Obama’s Health Plan,” Real Clear Politics, June 11, 2009

The goal of the Obama White House is to come up with a health plan that can attract bipartisan support...There is good reason for that preference. When you are changing the way over one-sixth of the American economy is organized and altering life for patients, doctors, hospitals, and insurers, you need that kind of strong launch if the result is to survive the inevitable vagaries of the shakedown plan.

David Broder, “The ‘Rock’ in Health Reform,” Washington Post, June 11, 2009

If Democrats enact a public-options health insurance program, America is on the way to becoming a European-style welfare state. To prevent this from happening, there are five arguments Republicans must make.

The first is, it’s unnecessary.

Second, a public option will undercut private insurers and pass the tab to taxpayers and health providers. Medicare pays hospitals 71% and doctors 81% of what private payers pay. Who pays the rest?

Third, government-run health insurance would crater the private insurance market, forcing Americans into the government plan.

Fourth, the public option is far too expensive... as much as $1.5 trillion over the next ten years.

Fifth, the public options put the government firmly in the middle of the relationship between patients and their doctors

Karl Rove, “How to Stop Socialized Medicine,” Wall Street Journal, July 11, 2009

As the health care debate heats up, the American Medical Association is letting Congress know it will oppose the creation of government-sponsored insurance plan. The A.M.A. says, “The introduction of a new public plan threatens to restrict public chaise by driving out private insurers, which currently provide coverage for nearly 70 percent of Americans.

The medical association said, “It cannot support any plan design that mandates physician participation…Many physicians may not have the capability to accept the influx of new patients that would result from such a mandate. Federal programs have never required physicians or other providers to partiticapte but rather such participation has been on a voluntary basis.”

Robert Pear, “Doctors Group Opposes Public Insurance Plan,” New York Times, June 10, 2009

When President Obama touches down today in Green Bay, Wisc., he will be landings in one of the highest-value health communities in the nation, a city that by numerous measures has managed to control costs while steadily improving health outcomes…

Richard Cooper, a professor of medicine at the University of Pennsylvania, says he thinks variations identified by Dartmouth Research - a discrepancy due to enormous hospitals expenses – are often related to patients’ economic status. States such as Wisconsin have fewer medical expenses because they are predominantly white and middle class.”

Cici Connolly, “Obama Administration Finds Health-Care Model in Green Bay,” Washington Post, June 11, 2009

Tuesday, June 9, 2009

Health care realities - Getting Real About Health Reform

As the health reform debate heats up, the public and politicians are getting real and the Obama health care juggernaut is beginning to take on water. Obama is now saying he feels obligated to plunge into the debate, as his health initiatives show signs of floundering. Why this concern on the part of President Obama?

First, the public is growing restless over the “trillion here and a trillion there” policies of the Obama administration. Obama has now been in office longer than Bush has been out of office, and blaming the deficit solely on Bush is losing traction. In his first 120 days, Obama has doubled the Bush deficit, accumulated over 8 years, and the public is beginning to see deficits are far as the eye can see and the mind can stretch. Consequently, moderate Blue Dog Democrats are insisting the Obama team specifically identify how it proposes to pay the estimated $1.5 trillion bill, which will come due in 10 years. For the Democrats the means of covering the deficit – raising taxes when they promised not to, taxing alcohol, tobacco, and soft drinks, and making corporate health benefits taxable – carries political risks.

Second, the Medicare and Medicaid Paradigm – modifying and saving money through new and untested Medicare programs, not paying for complications and “never-never” events, rewarding only those doctors who adopt medical records, and extending these programs to cover all – as the solution is coming under closer scrutiny. CMS may be the biggest enchilada, the biggest payer, and the Sheriff of the system with the biggest stick and biggest badge, but CMS has a miserable track record for containing costs. Expansion of CMS programs without cost controls is a recipe for financial disaster. Programs such a more prevention and more electronic records sound good in theory, but the savings are unproven and long term. CMS may be part of the problem, and not the solution. With 78 million baby boomers coming on board in Medicare in 2011, Medicare’s unfunded liabilities are $34 trillion, and it may go bankrupt by 2017.

the American people are leery of programs such a public plan that would undercut existing private plans. More than 160 million Americans are in private plans, and, rightly or wrongly, many fear a public plan would undermine private plans and might be a path to “socialized medicine” They also fear taxing existing corporate and employee health benefits, which could bring in $550 billion, to pay for Obama’s ambitious goals, represents a $4000 to $5000 increase in taxable income. Finally, the people in plans tend to be satisfied with what they have, including the ability to avail themselves promptly of the wonders of modern technology without waiting in line. Massachusetts, the only state with near universal coverage, now has the highest costs in the U.S. and the longest waiting lines for office appointments. This may be a sign of things to come with universal coverage.

Four, there is currently a spirited debate about whether regional practice variations are “unwarranted” or are merely a function of regional differences in cost of living and ethnic and cultural differences in our vast continental nation. I recently commented on this debate in a letter to the editor of the Wall Street Journal as follows.

To the Editor: Re: Obama’s Health Care Cost Illusion, June 8.
You have hit a nail on the head. The Obama team’s effort to portray practice variation as a “30% waste” for U.S. health care is an illusion.

Practice variation depends on local conditions – costs of doing business, demands and traditions of locals, ethnic mix and culture of local populations, number of the local uninsured and their relative health and stage of disease, where local patients enter the system - ERs,urgicenters, retail clinics, hospitals, specialists or primary care offices, levels of medical technologies among local competing hospitals.

To delude oneself into thinking you can lower costs by 30% by narrowing these local variations by bringing costs down from high-spending regions to low spending regions based on Medicare data is statistical tomfoolery and ignores and misses cultural complexities of local health systems.

Using retrospective Medicare data to federalize, standardize, and homogenize health care behaviors for the entire health system based on half-baked Medicare economic theory will end up being an exercise in bureaucratic futility.

Five, politicians should begin to pay more attention and give more credence and credit to the market-based solutions as embodied in Senators Coburn and Barr’s Republican alternative plan which recommends eliminating corporate employer and employee health benefits, replacing them with generous tax credits, and allowing consumers to shop using their own tax-free monies. There is a school of thought, led by Regina Herzlinger of Harvard, Grace Marie Turner of the Galen Institute, and John Goodman of the National Center of Policy Analysis, that says only consumers spending their own money and assuming responsibility for their own care, can control health costs. You won’t be hearing much of this as Democrats control the debate and position themselves to install a government-controlled system guided by Washington based policy wonks.

Monday, June 8, 2009

Data, use and misuse, regional variation, Data-Driven Health Care: An Interview with Jerry Reeves, MD

This interview appeared on June 8 in The Health Carre Blog. In conducting interviews, my policy it to let the interviewee speak his/her mind at length. The resulting interview does not represent my opinion.

An under-the-radar debate is occurring in health care between those who say data shows that practice variations across the land are “unwarranted” and those who maintain that such variation is inevitable given socioeconomic population differences and cost of practice differences in major metropolitan and rural areas.

• Data transparency proponents say costs of medical practice, to achieve the same outcomes, should not vary much.

• Data transparency opponents say data can be shaped to fit a premise that variation is unwarranted, while ignoring the human and economic realities and inherent variability driven by different regional cultures.

That Medicare law forbids doctors to compare fee schedules to avoid monopolitistic behavior, that costs of episodes of care vary greatly with points of patient entry into the system, that third parties generally set physician payments, and that reformers and physicians have fundamentally different economic points of view confounds and complicates the argument.

What follows is an interview with Jerry Reeves, MD, an articulate spokesperson for using data to reduce practice variation, promoting value-based purchasing by payers, and achieving higher levels of physician performance.

In God we trust, all others bring data.

W. Edwards Deming. 1900-1993.American statistician who taught top management how to improve design, product quality, and sales in global markets.

Researchers have estimated nearly 30 percent of Medicine’s costs could be saved without negatively affecting health outcomes if spending in high- and medium-cost areas could be reduced to the level of low-cost areas – and those estimates could probably be extrapolated to the health system as a whole.

Peter Orszag, Director of the Congressional Budget Office, “Opportunities to Increase Efficiencies in Health Care," statement before Congress, June 16, 2008

It is no surprise that the I.T. candidate, Barack Obama, is intent on being the I.T. president. To succeed, he will have to remind his administration early and often, that he is committed to transparency – and that the threat of embarrassment is no justification for secrecy.,” New York Times editorial, May 26, 2009

Dr. Reeves is Chief Medical Officer of Hotel Employees and Restaurant Employees International Union (H.E.R.E.I.U.) Welfare Fund. The Fund offers multi-employer health insurance coverage for 90,000 eligible employees and their family members. He is also Principal of Health Innovations LLC which provides health benefits, wellness, and health management consulting services for health plan sponsors and coalitions. He is a Director and Chairman of the Board of Health Insight, the Quality Improvement Organization for Nevada. And he is Medical Director of the Nevada Business Coalition for Health Improvement. Dr. Reeves previously served as Chairman of WorldDoc Inc., Chief Medical Officer of Humana Inc. and Sierra Health Services Inc., and as Chief of Clinical Medicine at USAF Headquarters in Europe. He served two terms on the Board of Health of the State of Nevada and has served on the faculty of three medical schools.

Q: What does Health Innovations do?

Reeves: We work with self-insured employers, Taft-Hartley Trusts, and business coalitions on health to promote programs of transparency and accountability that engage hospitals, doctors and patients in improving their health with a focus on primary and secondary prevention and wellness. We engage people in more rational lifestyle choices.

Q: And what about your work at HEREIU Welfare Fund, the health plan for Hotel Employees and Restaurant Employees International Union members and their families?

Reeves: We align incentives in the benefit designs of our health insurance coverage to engage beneficiaries in taking their medications, getting their tests, and seeing the same doctor regularly. We collaborate with doctors, hospitals and utilization management firms to modify behaviors that generate excessive costs and to minimize payments for low value services to achieve better control of costs and outcomes. Much of my work involves analyzing medical and pharmacy claims data and other self reported data reflecting patient risks and provider practice patterns. The findings help us prioritize interventions. We then use ongoing measures to monitor and improve the impacts of our chosen interventions.

Q: You have been doing a study and giving a slide presentation with the title “Variations of Care, Comparisons of more than 450 Episode Treatment Groups - Evaluating Physicians in 4 States.” Tell us about that study, and the 4 states you are talking about.

Reeves: The 4 states are Nevada, Illinois, New York, and Pennsylvania. The study is based on health plan data. We pay medical and pharmacy claims for our members who seek medical services under our health plan. We collect information from those claims and from health risk questionnaires and other biometric measures to track patterns of care.

We can compare plans geographically because we have plans spread across several states. I can see significant patterns between providers in the same specialty not only in multiple States but also in the same town. They are treating hotel and restaurant workers with many socio-demographic similarities and are paid using similar fee schedules.

The variations in physician preferences are substantial For high volume episodes in primary care – otitis media, bronchitis, urinary tract infections, or chest pain – the most expensive high volume adult primary care doctor is about 7 to 8 times more expensive per episode than the least expensive doctor in the same specialty within the same town paid on the same fee schedule. The outcomes – no more ear pain, no more cough, no more dysuria, and no more chest pain – are the same.

These variations are not just in the primary care arena. They exist in the specialty arenas as well – cardiology, ob/gyn, orthopedics. The most expensive cardiologist who takes care of an episode of angina is 5 times as expensive as the least expensive cardiologist; the most expensive orthopedic knee surgeon is on average 2 ½ times more expensive than the least expensive. We see no differences in outcomes.

So there are dramatic differences. The question is: with health care as expensive as it is already, can we as a country afford to sustain overpayment to outliers who are so much more expensive than their peers in the same town when they are each achieving the same results?

Admittedly there may be variation in the severity of the cases. But we attempt to minimize the impacts of varied illness burden by comparing multiple cases, typically more than 30 cases per doctor. That probably washes out most of the severity related variations. To make things fair, we also take the top 3% and the bottom 3% outliers out of the comparisons to make our estimates more reliable.
Are these variations sustainable in today’s economic environment and in today’s era of global competition?

Q: Are doctors you are comparing aware of what their peers are doing? Do you send them de-identified information on these variations?

Reeves: We do. We also sit down with them and share comparative information when we believe we’re using fair measures. In some cases, there’s a reasonable explanation for the variations. For instance, we learned that an outlier orthopedist was known throughout the town as the doctor who did the best job with redoing surgery for patients with failed back surgeries. That likely explained why episode costs were higher for him. We want to learn from them what a rational explanation might be. Sometimes we get logical valid explanations. What we notice, though, is that after we’ve had these discussions, the trends move more towards the middle instead of staying at the extremes.

Q: So there’s a swing towards the mean?

Reeves: Yes, there’s a regression towards the mean. The overall system becomes more efficient, and cost trends decrease.

Q: I notice you indicate variations in total costs of certain episodes of care differ greatly depending on the site of patient entry into the system - the hospital, the ER, an urgent care clinic, or the office.

Reeves: People have known for years that when the first visit is at the hospital, expenses soar. The typical hospital admission costs 12.7 times as much as an ER visit; an ER visit costs 10.7 times as much as an office visit; a hospitalization costs 136 times as much as an office visit.

When you think about it, you could get a lot more office visits for the cost of one hospital admission or one emergency room visit. We would rather pay more for patients regularly visiting their continuing care physician than going into the hospital or emergency room.

From our point of view, a patient showing up at the hospital or ER represents a failure of outpatient management. The great majority of all care should be going on between doctor and patient in less restrictive settings and safer environments than hospitals and ERs.

Q: You must offer some educational process informing your members of these cost considerations.

Reeves: We do. We expend a lot of effort on developing systems to engage our members – posters and brochures, newsletters and explanation of payment (EOP) stuffers, reminders, making available telephonic nurses and health coaches, making it easy for people to call in, making it convenient to reserve a next day appointment. We show them the comparative out of pocket cost of going to the ER and hospital and explain alternatives that can get their problems solved faster and at less cost.

There is value derived from this approach. For instance, Microsoft has found they can save a lot of money for both the company and the beneficiary if they pay for a doctor to spend an hour at a patient’s home rather than having that patient go to the ER. Also it’s more personal and more likely to lead to a continuous care process that identifies needs earlier.

Also, to align incentives with desired behaviors, we’ve made it much more costly for our members to go the ER rather than seeing their doctor. We also work with our doctors to make sure they have slots available so people can be seen within one business day when they are worried they are getting worse.

It takes two to tango. We need to engage both the doctor and the patient in improving the availability and affordability of care that improves health. We combine a number of incentives for members and information campaigns about choices resulting in less out of pocket costs, with incentives and interventions with doctors to provide more efficient care.

Q: Do you have data indicating significant cost reductions.

Reeves: We do. In Las Vegas, we ran three campaigns: one, to have more patients adhering to their chronic medications; second, a community wide campaign to champion the use of generic drugs; and third, free pharmacies where our people could come to fill prescriptions for generic drugs for chronic conditions with no out-of-pocket expense. Simultaneously, we profiled and gave performance feedback to primary care physicians displaying their apparent adherence to quality of care guidelines and their comparative efficiency expressed in terms of average costs per episode. We used things like ratios of HbA1C testing, microalbuminuria testing, hypertension management, compared to their peers – 22 quality indicators in all. The episode comparisons were for those episodes most common to their specialty with ratios expressed in comparison with the median values among their peers.

We rewarded 155 of those primary care physicians with bonuses and displayed them as Gold Star physician in our provider directory. At the same time, there were 50 doctors who persistently underperformed despite our sitting down with them and showing them their patterns. We discontinued our contracts with them for lack of a business reason to continue their contracts. At the same time, we intervened regarding the use of Oxycontin, which was being hugely overused at the time. It turned out that the physicians discontinued from the network had been prescribing more than 50% of the Oxycontin used for our whole population in that town.
The result of our suite of interventions was that out of the $268 million spent the baseline year, we saved $69 million over the next two years according to actuarial projections; our medication adherence for chronic conditions went up 8% even while our drug costs went down dramatically; and our adherence to mammography, Pap smears, and lipid management guidelines improved.

Q: Just to give us perspective, how many people live in Las Vegas and how many doctors are in your network?

Reeves: The total population is about 1.6 million and we had about 1900 doctors in our network then. Our patient base was about 120,000 lives including children then.
Q: Is inpatient cost control a different animal?

Reeves: Inpatient cost control has similar patterns. We looked at inpatient costs obligated by physicians who sometimes admit patients to hospital in 4 different states – Nevada, Illinois, New York, and Pennsylvania. In this group, we focused on the inpatient facility costs as part of the overall costs of episodes of care that might result in hospitalization.

When we compared the variance from the expected median inpatient facility costs for various episodes managed by internists, the most expensive internist was $71,000 more expensive than the least expensive internist. The most expensive cardiologist was $203,000 more expensive than the least expensive cardiologist for episodes managed by cardiologists. The discrepancy between the most expensive and least expensive general surgeons was $284,000; and for obstetricians the discrepancy was $305,000.

It appeared that a primary driver for excess cost among obstetricians related to wide variations in the prevalence of primary cesarean section deliveries (among women in their first pregnancy). Among obstetricians delivering more than 200 births per year, we had obstetricians with 54% primary c-section rates and others with 9% primary c-section rates.

It is not defensible or believable that all of these obstetricians can be right. There are some variations that go on that are frankly just plain unsafe. Malpractice insurer underwriters told me they spend much more malpractice insurance payouts for major surgery complications of c-sections than payments for babies who might have fared better from cesarean delivery.

Q: What incentives do you use to encourage doctors to perform better? What are your techniques? You’ve mentioned sitting down with them, showing them data, rewarding them with bonuses. Anything else?

Reeves: We’ve used a suite of multiple interventions. Doctors deserve multiple opportunities to correct these variations. It should be three strikes before you’re out.

The most common comment I get back is: “Nobody ever told me this.” “How come nobody has ever said this before?” It’s a little bit like patients who have previously seen urgent care doctors for quick symptom relief when you tell them they have hypertension or diabetes. They often say, “Nobody ever told me that.” The doctors are right. Few payers give comparative performance feedback to rank and file physicians.

Essentially once doctors finish their residency program, they are on their own unless they work in a large multispecialty group with internal peer review. By and large in private practice offices, there is not much performance feedback.
Q: So many private practice physicians, if you will, function in a data-vacuum?
Reeves: Exactly. Once you share the information, they will often point out deficits in the data, even though the data ultimately comes from them. We are open to challenges and want to continuously improve the quality, accuracy, and reliability of the data.

The first strike is defined by a doctor’s or hospital’s response to reviewing the data so they can internalize it and take action to address the root causes that lead to these variations.

The second strike we may take toward corrective action is sharing the information more widely so that doctors and hospitals understand payers are reluctant to keep paying extra for something that doesn’t result in a superior outcome. The people paying these bills are hurting, trying to pay their employees and to stay afloat and to compete with other companies. On a larger scale, they are trying to compete with companies in other countries making the same product but not bearing the same costs. This kind of understanding can sometimes bring accountability and behavior change. We have doctors who call us and ask when they can see their next report. Of course, most of those are performing well and want to disseminate that news.

The third strike is discontinuing contracts with physicians or hospitals that do not alter excessive charging and wasteful practices. Sometimes it may involve discontinuing payment for particular services being overused. For doctors this might mean payers would discontinue payments to a primary care physician who owns a machine for nerve conduction velocity testing or ultrasound imaging who orders dramatically more of these tests per 100 patients compared to their peers who do not own and profit from such equipment. For hospitals, CMS and some other payers have discontinued paying for “Never Events” – high costs incurred as a result of certain hospital acquired conditions like venous thromboembolic events occurring after knee or hip surgery.

Q: As you know, as a nation, we are in the hot heat of the health reform debate, and the Obama administration, particularly Peter Orszag, the budget director, has put a lot of stock in John Wennberg’s work at Dartmouth. Wennberg and his colleagues, using Medicare data, keep emphasizing that most practice variation is “unwarranted,” and the nation could save 30% on total costs by bringing down costs in high spending regions, like some large cities, to those in low spending regions, like the upper Midwest and the South.

But some critics of the Dartmouth studies, like Dr. Richard Cooper, a professor of medicine at Penn and a principal at the Leonard Davis Institute of Health Economics at Penn, have challenged the Dartmouth interpretation of the data in Health Affairs and his blog, www. by saying you can’t compare spending, say in Los Angeles with a 70% Hispanic population, many of whom are poor and sick, with Rochester, Minnesota, with a 90% white population, most of whom are well.

Is your approach similar to the Dartmouth studies on Medicare studies, except that it’s done on a more local level and includes data from commercial insurers on the under 65 population?

Reeves: The Dartmouth and Obama Administration approaches are similar except their focus is mostly on Medicare hospital data. The end-of-life years are the most expensive by far. Our data is on hotel and restaurant workers and their families, perhaps more similar to Medicaid patients, but covering a wider spectrum of diseases and conditions. Most of our costs are for prescription drugs and professional services and new technologies.

Even so, our experience is that the overall patterns of practice variation in the commercial world and the Medicare world are parallel. I believe we need to merge the doctor and hospital data from Medicare and Medicaid payments with data available from other commercial payers serving working age populations. We need to consolidate all that data into common data warehouses.

The data should include not only the professional services of doctors and other clinicians but also the laboratory and diagnostic data, the inpatient and outpatient facility data, and data on high technology hardware (imaging procedures, implants,) and drugs (biologics, cancer therapies) at least by regions so we can compare these regions against each another. Then adequate sample sizes could become generally available to analyze and display care patterns, technologies, and drugs offering the most value (best outcomes) for the dollars invested.

Q: I just read in the May 22 New York Times a piece entitled “I.B.M. Unveils Software to Process Vast Amounts of Data “for quick analyses of massive chunks of combined data. Is that what it will take to carry out your vision? Would that be a breakthrough?

Reeves: It would be breakthrough, but I do not see technology as our major challenge. The challenge is political will. We have a competitive risk issue that leads to carriers not wanting to share their data in a data warehouse for fear that proprietary rates or payments might be revealed or confidentiality agreements that they have negotiated with various providers might be breeched. Some also worry that personal health information might be revealed.

The banking industry has been able to deal with the issues relating to money for many years and has brought dramatic improvements in efficiency and choice. I remember waiting in long lines to deposit a check on payday. Now I am irritated if it takes an ATM window more than 30 seconds to complete my transaction at a drive through window at midnight. Much of the fear of disclosure of health information is already addressed by HIPAA law and protected by reliable systems of maintaining confidentiality and security.

I cannot emphasize enough how important it is to merge the various data sources into master data files like the Dartmouth Atlas to include physician patterns of care and physician groups’ patterns to enable purchasers, consumers, and patients to get fairer representation of the choices they have, much like they do for buying cars and dishwashers.

Q: Are you talking of public disclosure?

Reeves: I would start out with feedback to the providers for their internal quality improvement initiatives and root cause analyses. We do not need to start with public disclosure. But we will need to move down the track of accountability and transparency in order to keep our country afloat because we simply can’t maintain competitive advantage globally with current health care cost trends.

Q: The Dartmouth Group did a study of five major academic centers – Mayo, UCLA, the Cleveland Clinic, NYU, and Hopkins – and it showed a significant variation in costs.
Reeves: That’s absolutely true, and I see the same thing happening in our domains. Take our data in Chicago and Pittsburgh. We can rank order costs in hospitals in those cities by diagnostic group, and the most expensive hospital may often be 5 to 8times as expensive as the least expensive hospital with the same outcomes for patients with apparently similar risk and case mix.

Q: Is it realistic to believe we can homogenize these cost differences across the country, given the different institutional, regional, and cultural differences? After all, there are different expenses and profits required in New York City and rural Alabama.

Reeves: I don’t know we can do that, but I think we can compare rural Alabama to rural Georgia. And we can compare Chicago to New York. What’s right is right.
The right way to practice family practice is the right way the world around. The right way to practice internal medicine is the right way the world around. It is both feasible and advisable to decrease the incredible discrepancies between good and bad practices of medicine in our country and elsewhere.

Yes, there are culture differences, and there are habits and preferences that vary from location to location. For example, we have more problems with back surgeries and re-dos and excessive narcotic use in places like Las Vegas than in New York. And we have a lot bigger problem with obesity and bariatric surgery in West Virginia than in Chicago.

There are variations driven by demographics, socioeconomics, and patterns of living. But when it comes to delivering effective, efficient care, 800% differences are not defensible. If you have two cars that drive the same speed, look similar, and last the same thousands of miles, and one is eight times more expensive than the other, how many people would buy the more expensive car at the 700% higher cost?

If you apply that same principle to health care, how long do we really believe we can sustain this kind of variation and turn a blind eye to it? It doesn’t seem like a reasonable proposition to me.

Q: Do you think the Obama administration’s proposal to create a National Comparative Effectiveness Institute would address these issues?

Reeves: It would simply be an extension of what’s going on already. A number of organizations have been doing comparisons of relative therapeutic effectiveness and cost efficiency of new technologies and drugs for years. They have graded the scientific evidence for level of proof of what works best, cost effectiveness, and safety. Managed care plans and carriers have been using these rank order grades to help them decide what their insurance plans are going to cover. We already have a long history of comparative effectiveness studies. For instance, the Medical Letter does this kind of thing for drugs, and looks in a nonbiased way at outcomes and costs. Do we really need more “me too” drugs and expensive images that don’t change care effectiveness and outcomes commensurate with their costs? I sometimes think new technologies are developed mostly because it’s possible, then the developers go looking for problems the technology might help. Can we really afford that? Who should pay for all of that? Under what special circumstances should society as a whole pay for that?

I think in the future we will see the rank ordering of ratings of various health care services much like in Consumer Reports. The day of secrecy and behind the scenes behaviors hidden to the public will eventually be coming to an end. There are multiple initiatives going on in state legislatures, business coalitions, and other organizations that are collecting comparative effectiveness data and displaying them to the public. For instance, you have the Leapfrog measures of safety, and the Institute for Healthcare Improvement’s 5 Million Lives campaign and the publicly displayed CMS core measures of hospital performance. You have publicly available data bases of Medicare claims payments in most States and all payer data bases in 17 states comparing hospitals’ data to that of competitors in the same market. And the National Business Coalition on Health and some States are collecting data comparing health plans to each other and displaying performance metrics on public websites. It’s all about transparency and accountability. Congress has a track record of strongly favoring this approach.

Q: And yet, despites all these rankings and initiatives and talk of transparency and accountability and nearly 40 years after Wennberg’s original paper on Medicare practice variation, the variations remain high.

Reeves: They do, but progress is occurring. Over a 3 year period in Las Vegas, we’ve been giving quarterly reports to hospitals comparing their Leapfrog results, patient satisfaction results, and CMS core measure national percentile rankings to those of their Las Vegas hospital peers. At the beginning, the rankings ranged from the 88th percentile for one hospital to 2nd percentile rank for another.
After regular meetings with senior executives of these hospitals, discussing their quality improvement initiatives, the hospital at the 2nd percentile moved up to the 38th percentile nationally at the end of the 3rd year. So substantial improvement is possible through transparency. Even more improvement is possible through incentives such as bonuses, as demonstrated by the Premier Project with CMS, in which hospitals received 2% more in payments for meeting quality standards. Those hospitals participating in the Pay for Performance cohort showed substantially more improvements than those subjected only to public reporting.

Value-based design of CMS and private health plan coverage works. They decrease out of pocket costs for high value services and treatments and may raise the out of pocket costs for interventions with marginal effectiveness and value. Cost trends bend downward, and value and quality go up. They have to, if this country is going to survive in a competitive world economy.

Along with 4 large company CEOs, a large company benefits manager, and a State health officer, I met recently with President Obama in the White House. This was the day after his historic meeting with national health leaders – the AHA, the AMA, America’s health Insurance Plans, PharMa, the Service Employees International Union, and others - who pledged to reduce national health care spending by $2 trillion over the next decade. Our roles were to explain our interventions that have lowered cost trends and improved health outcomes so they could be adopted for federal employees and other Americans. President Obama and his administration are determined to reform the system to achieve lower cost trends and better health status for Americans. It will take insurance plan designs that align incentives with desired behaviors, and data based reporting of impacts of positive and negative incentives that engage physicians and patients more actively for this effort to succeed. Working together, we can do a lot better than we have the past several years.

The interviewer is Richard L. Reece, MD, author of Innovation-Driven Health Care: 34 Keys to Transformation (Jones and Bartlett, 2007), Obama, Doctors, and Health Reform; A Doctor Assesses Odds for Success (Universe, 2009), and blogger,

June 8, 2009 in Dartmouth Atlas, Economics, evidenced-based medicine, Health Plans, Obama administration, Patient Safety, Physicians, Policy/Politics, primary care, Quality, The Industry, Transparency | Permalink
Dr. Reeves says, "We collect information from those claims and from health risk questionnaires and other biometric measures to track patterns of care."
Until the clinical information from the documents of clinical activity (DCAs), composed by the clinicians attending the patient, is collected and analyzed, all we can do is guess at what happened. Claim's data is never appropriate for analysis of any clinical activity.
This is why the quality assurance and utilization review efforts require the on-site examination of the patient's chart--the compendium of DCAs--by a nurse or doctor who is used to operating in the clinical domain for accurate analysis and reporting.
Claims creation is an activity for the business realm and rarely requires clinician input. DCA creation is the unique activity of the clinician in the clinical domain. Claims are supposed to reflect the activity of the DCA, but rarely do because of the limitations of coding.