Six Innovations to Increase Productivity, Cut Costs, and Extend Coverage

Innovation Number One

Reprinted from Physician Leaders, June 14, 2007

Facilitating patient-physician information exchange as a key of productivity.
Many believe we can’t change the productivity of health care, changing the system would be akin turning around a battleship in a pond. Americans will only accept incremental change. In other words, because of the contrariness and fixed behaviors of patients and doctors, the system cannot and will not change. Besides, they will argue, human interactions take time, are imponderable and immeasurable.

If you believe that, you believe only rationing will cut health costs.
I reject this line of thinking. Instead, I believe soon most doctors' offices will feature information exchange stations. Some will be "virtual," connected to the Internet; others will be "real," located in doctors' reception areas.

These stations may go by various acronyms. Some may be analogues of ATMs, hence ACM (Automated Clinical Machines), and will feature "free" data entry, an important ingredient of clinical productivity. Others may be information shopping centers and may go by the name of EKIE (Engagement Kiosks for Information Exchange). Whatever one calls these information exchange sites, they will have four broad purposes:

•To make it convenient for patients to judge the nature of the practices and their services, view the qualifications and quality of its providers, schedule visits, refill prescriptions, submit personal health cards demographic, financial, and medical data, and communicate by email with their doctor about minor health problems.

•To allow patients to share their complaints and tell their full stories electronically without interruption in a narrative form by using easy-to-understand clinical algorithms, while at the same time, permitting doctors to zero in on patient perceptions without being overly intrusive and saving time and appreciating the complexity of the patient’s problems.

•To give patients realistic expectations about their disease or the procedures that may undergo using automated multimedia presentations--visual, voice, verbal--for patients to view and study in the comfort of their homes and to share with friends and relatives.

•To increase the productivity of the patient-physician encounter and information exchange by saving time and costs for both, reducing the time and personnel costs of data entry, making the transaction more transparent, completing or financial transaction or its credit terms at the point of care, and allowing the patient to leave the office with the histories, findings and treatment plans in hand.

Six Innovations to Increase Productivity, Cut Costs and Extend Coverage

Introduction

Reprinted from Physician Leaders News, Jun 14, 2007

Prelude: This is the introduction to an article that appeared online in Physician Leader News. The Six innovations will appear as single entries for the next six days.

"All I know is that the Internet will transform the world."

Alfred D, Chandler, Jr. (1918-2007), Business Historian, Newsweek, 2006.

"It's about time that the sleeping giant (the healthcare industry) wakes up, smells the coffee, and learns from other giants (like the manufacturing industry): process improvement, incentivization, and healthy competition are drivers of change to control costs in the current healthcare system."

Pankaj Gupta, M.D., medical director of an insurance company. May 20, 2007, Letters to the Editor, New York Times</span>.

"A system controlled by insurance companies or hospitals or government will kill us financially and medically … There is only one group that can prevent this damage--you and me--working together with our doctors."

Regina Herzlinger, Ph.D., Who Killed Health Care? America's $2 Trillion Medical Problem and the Consumer-Driven Cure, McGraw Hill, 2007.


What follows are six innovations that could transform the health system, while offering universal coverage. These innovations cover technological, managerial and governmental waterfronts, but stress entrepreneurial and consumer input and engagement.

John Niasbitt, whose 1982 megatrend predictions were so prescient, avers, "Countries don’t create economies. It is entrepreneurs and companies that create and revitalize economies ... The role of governments should be to create a nourishing environment for entrepreneurs and companies to flourish."

Most governments are mistaken when they think their role is to simply make rules and regulate and launch costly social welfare programs. Innovation and entrepreneurship is what separates and makes the U.S. in general and healthcare economies in particular more vibrant and innovative than economies of other developed economies. But, at the same time, something must be done to control and rationalize U.S. health costs, which are unsustainable and run 50 percent higher than costs in comparable countries.

Health costs threaten the U.S economy, most notably its automobile sector. And the Internet, to use Tom Friedman's term, has "flattened" the differences between our economy and those of other nations. This flattening has suddenly made "medical tourism," Americans going abroad for comparable care, a threat to U.S. health care.
It is time for the health industry to wake up and smell the coffee and for consumers and doctors to brew that coffee by recognizing they can make a difference when it comes to cutting costs and upgrading quality. Consumer-driven care as a cure for American health costs will come to naught unless consumers and doctors are "engaged"--motivated to change, defend and advance their own self-interests.
"Engaged patients" propel consumer-driven care. Becoming engaged in their care is why patients visit Web sites like the Mayoclinic.com, WebMD.com, and Revolutionhealth.com. Engagement is why the patient education video industry is so robust.

Furthermore, go to YouTube.com, and you can view educational videos on almost any surgical procedure or disease. YouTube and educational videos are part of a larger phenomenon--a visual educational culture. Visual education, often computer-driven, is faster to absorb, easier to understand, and doesn’t require verbal literacy.

Michelle Sobel, chief creative officer for Emmi Solutions, Inc, a Chicago-based company that produces interactive patient education videos, says: "The engaged patient is more than an informed patient. The engaged patient is activated. She understands information critical to her health, communicates effectively and confidently with her clinical team, complies with instructions related to here treatment, and is positively transformed by her experience with care."

What will this "engagement" take? I believe it will take three things:

•Cogent, relevant and understandable communication between patients and doctors giving compelling reasons to engage as partners in care. One example of this are Internet-based videos, "prescribed" by doctors for patients before surgery, telling patients what to expect at surgery--the details of the procedure, its anatomy, its benefits, its risks and its consequences.

•A more structured approach to the patient doctor encounter. A standardization of the medical history so that one can compare performances and outcomes based on a commonly understood basis.

•New financial arrangements that reward patients and doctors based on realistic incentives for both to produce more favorable outcomes and on the recognition that outcomes depend heavily on what goes on outside as well as inside the office.

Rip Van Relman

No Margin, No Mission

A company's primary responsibility is to serve its customers and to provide needed goods or service. The company exists to produce a profit. Profit is not the primary goal, but rather an essential condition for the company's continued existence. Other responsibilities, e.g., to employees and society, exist to support the company's continued ability to carry out its primary purpose.

Peter F. Drucker, Management and Social Philosopher, 1919-2006

In 1999 I wrote “No Margin, No Mission” for The Physician Executive. The article opened with this paragraph,

A tough-minded Catholic nun, the CEO of a major not-for-profit health system on the West Coast, captured the dilemma of our health system with this down-to-earth comment:” No margin, no mission.” This article and many others indicate any organization, however noble its mission , whether “for-profit” or “not-for-profit,” must make a profit to survive as an institution and to serve its constituents. Whether a business or a charitable organization runs the enterprise makes little difference. Both need to make profit to survive. No mission is morenoble than caring for the sick. That's what medicine and hospitals are for. But to say openly that one must "make a profit" running a hospital, medical practice, or health insurance company or "compete for patients" is unseemly. For example, you may recoil at the thought of New York City hospitals' escalating competition for cancer patients to build cancer "market share."

I thought of this passage when I read a review of Arnold Relman’s latest book, A Second Opinion, Rescuing America’s Health Care, A Century Foundation Book, 205 pp, New York, Public Affairs, $24, 2007) in the June 28 New England Journal of Medicine.

Arnold Relman. M.D., has been fighting a valiant war against profit-making U.S. health care companies since 1981, when he wrote “The Medical Industrial Complex,” in the The New England Journal of Medicine, of which he was then the editor. Relman, a nephrologist, is a long-time card-carrying member of the New England academic intellectual elite who believe they hold the best answers to most U.S. health system problems, if only the rest of the world would listen.

Here are some of Relman’s solutions.

•Eliminate all for-profit health companies

•Implement a single payer system run by government or quasi-government agencies

•Have doctors provide care through organized, not-for-profit prepaid group practices

•Limit primary care practice panels to 1500 patients (the average is now 2300 patients)

•Finance health care through a national tax earmarked for health care

•End health care commercialism and multi-payer financing

•Return health care to a human service rather a market commodity

•Organize preventive, acute, and chronic care programs of consistently high quality.

There is much to admire in these proposals. Relman has been fighting his gallant, noble, and losing campaign for 25 years now. But in many ways, he is a modern day medical Rip Van Winkle. He has remained asleep in his intellectual academic cocoon in Boston while the rest of the real world moves on.

•Is he aware 75% of physicians beyond Boston and its medical schools practice in groups of 5 or less?

•Does he know 95% of doctors still charge fee-for-service while prepaid capitated care languishes?

•Does he know there are now over 190 recognized medical specialties in which physicians can obtain board certification and to organized them into prepaid groups borders on the impossible?

•Does he realize most health care innovations, e.g. new drugs and new devices, flow out of the commercial sector, not out of academia?

•Does he appreciate academic institutions have extraordinarily high costs, vis a vis community hospitals, and those high cots pose cost problems for patients and insurers?

•Is he oblivious to the reality most not-for-profit hospitals behave precisely like their for-profit brethren?

•Does he realize health care professionals live and work and pay their debts in a capitalistic democracy fueled by profits?

Without profits, there’s no money to invest in opportunities to improve care, recruit better doctors, train and educate future doctors, retain doctors you already have, invest in new technologies, build new hospitals, establish new medical schools, and lobby in Washington for what you believe in.

Not all academic Bostonians think alike. Regina Herzlinger, a professor of business at Harvard Business school, prefers a market and consumer driven system to big government and big academia. In her book, Who Killed Health Care? she argues that government and academics and general hospitals are a big part of the problem—not the solution.

She and Relman reside at opposite ends of the ideological spectrum and operate at cross-purposes. The debate between the “commercial” interests, which in Relman’s world include all those who make a “profit” and idealistic reformers, who believe health care should be “money-neutral” and guided by high ethical principles of academics and policies of government officials, will rage on.

Where it stops no one knows.

Thoughts That Go Bump in the Night and Suddenly Awaken Hospital CEOs

From Sailing the Seven “Cs” of Hospital-Physician Relationships: Competence, Convenience, Clarity, Continuity, Competition, Control, Cash (Practice Support Resources, A Practice Support Resource Publication, www.practicesupport.com)

1. Medical staff will revolt and cause firing of hospital CEO.

2. Hospital quality ratings will be published in local newspaper and will place hospital at bottom of list.

3. Hospital will experience an uncontrollable epidemic of drug resistant staphylococcus infections.

4. Orthopedic surgeons and cardiovascular specialists will withdraw from medical staff and build their own specialty hospitals.

5. Dickie Scruggs, Mississippi lawyer, will bring successful class action suite against not-for-profit hospitals, converting them into taxable entities.

6. Medicare pay-for-performance movement will catch fire, forcing hospital to invest heavily into IT system.

7. Hospital loses multibillion dollar malpractice lawsuit.

8. Debt burdens from paying for uninsured grow, and hospital is forced to pursue program and merger with main rival.

9. Demand for transparency and for quality based purchasing and quality reporting to support evidence-based medicine and improved coordination of care overwhelms hospital IT department.

10. Pressures on margins force hospital to tighten integration with physicians – to employ more specialists, to strike partnerships with competing physicians, to fund EMR technologies for physicians, and to jointly negotiate prices for costly supply chain technology items.

11. Regional Health Information Organizations are for real, and the government will force hospitals to share tightly held , secret information with competitors.

12. As consumer-driven movement gains traction, hospital will force greater price transparency, patient-friendly billing, public reporting of pricing in advance, bundled billing with physicians, more collection and billing from individual patients, longer payment cycles, and more competition from lower-cost providers.

13. Political events in Washington, D.C., and state capitols will impose heavy taxes and more regulations upon hospitals.

14. Forces of decentralization will compel hospitals to abandon central facilities, to outsource many services, and to cede partial control of management and finances to providers at peripheral sites.

It Ain’t All About Information: It’s About Communication

Notes of a Health Care Market Watcher

Paula Dean, one of the most popular cooks in the food channel, has a book out called It Ain’t All About the Cookin’ Her point is there’s more to cooking than meets the eye. Cooking reflects your life experience. Cooking is something everyone can connect with. We all have to eat, and we’re all thinking about that next meal.

Similarly there ‘s more to health care than information. We’re up to our hips in information. There’s information everywhere – on TV, the Internet, blogs, newspapers, magazines. Much of it, particularly on the Internet, is undigested and unedited. There’s so much of it in health care, in fact, that there’s a new executive in the health system C-Suite – the CIO, Chief Information Officer.

But information has gotten so overwhelming for the CIO, that we’ve added another "C" in the C-Suite , the CXO, or Chief Experience Officer. Here’s how the Cleveland Clinic explains the duties of the CXO in a press release:

The Cleveland Clinic has named Dr. Bridget Duffy as its first chief experience . a new role aimed at making sure each patient has a high-quality expererience that meets their medical, physical and emotional needs.
"As a leading healthcare provider, we must exceed the expectations of those we serve, offering compassion, showing empathy and passion for patient-centered initiatives," said Dr. Toby Cosgrove, the Clinic's chief executive, in a written statement.

Duffy, who most recently was a health-care consultant and advisor in San Francisco, is known nationally for building health-care environments that treat the whole person, humanize the delivery of medical technology, and support the role of doctors and nurses as leaders in patient care.

The Chief Experience Officer might also be called the Chief Communication Officer, for it is her duty to communicate to the public just what they are likely to expect and experience in the hands of health care professionals.

This communication requires a mastery of multimedia technologies and marketing strategies. It will also require fulling “engaging” the patient (I still prefer “patient” to “health care consumer” in the experience of their own care. Here is how I explain it in an article of mine that appears this week in Healthleadersmedia.com
What will this "engagement" take? I believe it will take three things:

•Cogent, relevant and understandable communication between patients and doctors giving compelling reasons to engage as partners in care. One example of this are Internet-based videos, "prescribed" by doctors for patients before surgery, telling patients what to expect at surgery--the details of the procedure, its anatomy, its benefits, its risks and its consequences.

•A more structured approach to the patient doctor encounter. A standardization of the medical history so that one can compare performances and outcomes based on a commonly understood basis.

•New financial arrangements that reward patients and doctors based on realistic incentives for both to produce more favorable outcomes and on the recognition that outcomes depend heavily on what goes on outside as well as inside the office.

Finally, it will take observing and applying some of the strategies and techniques that have worked in the American retail sector. Retailing is America’s most productive sector. In the last dozen years, chains like Wal-Mart, Starbucks, Staples, Home Deport and Home Stores have sparked America's remarkable productivity. How have they done this? By restructuring the way they do business. According to marketing guru, Erich Joachhimsthaler, retailers have done it by looking at behaviors and demands of customers from the "outside-in," i.e., through the eyes of time-bankrupt hardworking two-career families, seeking convenience and by adopting a strategy of DIG (Demand-first Innovation Growth). Retailers have introduced multiple sites for shopping (mail-order catalogues, Internet, television), increased convenience by minimizing travel time (by placing outlets in malls, neighborhood stores, office buildings, transportation terminals), placed goods in huge stores that offer one-stop shopping, reorganized contents around lifestyles and trained employees to play defined roles concentrated on serving the customer.

Similar changes are beginning to occur in health care:

•Retail clinics in drug stores, grocery stores and retail outlets

•Urgent clinics that are specialized easy-to-reach

•Exercise and fitness facilities in retirement villages

•Big MACCs (Multispecialty Ambulatory Care Centers), conveniently located in suburban and rural settings

•Big Boxes (large buildings co-owned by hospitals and doctors with joint reception areas, support personnel and support services)

•Specialty surgical hospitals for heart, orthopedics and neurosurgical disorders

•"Focused-factories" with integrated teams to treat diabetes, AIDS, heart disease, back disorders, hernias, infertility

•Companies that specialize in providing care in the home for the frail elderly (that socially isolated one percent segment of the population that account for as much as 20 percent of health costs).

Experiences are building to provide Americans with better and more accessible care. Now all we need to do is to communicate what we’re doing to the American people. After all, the biggest variable in America’s health care future is public opinion.

In Search of Physician Search Engine Innovations

AMA and Sermo.Com Sign Deal

Q: What’s new these days?

A: Well, it’s summertime, and the news is slow, but I’m still on the hunt for innovations that might level the playing field for doctors and improve the system.

Q: Anything exciting?

A: Yes, I think so. I just became a member of Sermo.com. Sermo is a Web 2.0 application that allows physicians to exchange interactive online views with each other about what’s going on out there. Sermo just signed a deal with the AMA to help doctors respond more quickly to the clinical and professional issues of the day.

Q: Doesn’t sound like a big deal to me. Who is this Sermo?

A: It’s a small 2-year old software company developed by Dr. Palestrant, a Cambridge-Mass general surgeon. Wall Street firms who use it pay $100,000 to $500,000 to track doctor trends, view doctor postings, and take doctor surveys. Sermo just entered into a partnership with the AMA to magnify the physician’s voice on medical issues of the day. Doctors will be paid $20 for each opinion of theirs that is posted.

Q: I still don’t see why this is big news.

A: I’ll bring you up to speed. Sermo is a “human powered search firm.” That means it features more than a simple mechanical algorithm ranking like Google. In their June 23 Sunday section on Innovation, “Bright Ideas,” the New York Times says human-powered sites brings humans into the search engine field.

The Times goes so far as to say The human touch may loosen Google’s grip on the search engine field. You may not be aware of it, but Google is the 800 pound gorilla in the search field. Google had $28 billion of cash in its pocket by the end of March, far outdistancing Yahoo and Microsoft who are mere pygmies in the search engine race.

Q: Maybe I’m dense, but why should doctors care what each other think? What makes Sermo so powerful for doctors?

A: It allows the nearly instantaneous collective feedback of thousands of physicians in small practices. It gives them a voice and a forum for exchanging ideas.

Besides, a lot of big time businesses care a lot about what doctors think. After all, they’re a $500 billion industry, and doctors’ pens may be the most single powerful medical instrument known to man.

Q: I’m still not impressed.

A: Maybe I should let Sermo explain. Here’s what they say in their press release.

Launched in September 2006, Sermo is already the largest online physician community, ever. Sermo’s Web-based platform provides a medium for physicians to aggregate observations from daily practice— rapidly and in large numbers — to challenge or corroborate each other’s opinions. This forum accelerates the discovery of emerging trends and provides new insights into medications, devices, and treatments.

Through Sermo, physicians exchange knowledge with each other the minute it is learned and gain potentially life saving insights from colleagues as they happen instead of waiting to read about them in conventional media sources.

Sermo harnesses the power of collective wisdom and enables physicians to discuss new clinical findings, report unusual events, and work together to improve patient care in a way never before possible. Through its unique business model, Sermo is free to physicians and has no advertising or promotion.

Based on a system of information arbitrage, Sermo allows health care organizations, financial services firms and industry analysts to access the community’s collective knowledge on a subscription basis.

Q: That explanation is a little long-winded for me. “Information arbitrage!” That’s a new one on me. You’ll have to do better than that.

A: OK, here goes.

•Think of Sermo as a collective edited blog.

•Think of it as an expression of the collective wisdom of the medical profession.

•Think of it as a doctor-type Google with the addition of human interaction, rather than just a mechanical algorithm.

•Think of it as a Wikopedia for doctors.

•Think of it as an algorithm with a heart and soul.

•Think of it as the embodiment of human interaction with machines.

•Think of it as giving doctors a hammer with which to hit the nail they want to hit.

•Think of it as converting doctors’ voices into action.

•Think of it as a tipping point for physicians where their collective experience on clinical and professional issues tips things in their favor and on the side of patients.

Q: You certainly have a way with metaphors, but sometimes you mix your metaphors too much and let them spin out of control

A: I know. Some people say I suffer from bouts of metaphorrhea. But thank you for the backhanded compliment anyway

Is Fee-For-Service Medicine the Primary Cause of High Health Costs and Mediocre Care?

If So, Should It Be Curtailed, and How?

A chorus of opinion is growing out there among health care critics, academic pundits, integrated systems with salaried doctors, employers, and government health officials that fee-for-service is the main cause of bad elements of U.S. medicine. These include,

•Soaring costs

•Inconsistent quality

•Duplicated services

•Poor coordination

•Sketchy collaboration

•Inadequate follow-up

•Too many specialists chasing too many sick patients

•Incentives to commit greed, and even fraud

If only, some argue, we could,

•Herd doctors into larger groups

•Place doctors on salaries or hourly wages

•Adopt universal prepaid care

•Remove incentives to perform procedures and tests.

•Create “medical homes” for patients by placing them under one doctor’s or one group’s guidance.

•Pay a single fee on a risk-adjusted basis for spectrums of care for disease episodes.

•Integrate services for chronic disease into discrete reimbursable packages

•Bundle bills for hospitals and doctors into one predictable and transparent fee package known in advance

No doubt, discrete fee-for-service paid by third parties for every imaginable service generates real problems.

One case in point is the 10% Medicare fee reduction doctors will face in 2008 under current law, followed by eight annual reimbursement cuts to follow. If these cuts go through, 28% of 9000 doctors in a national AMA survey said they will stop accepted new Medicare patients in 2008, and 64% will cease seeing these patients by 2015. That happening, coupled with an anticipated doctor shortage, could trigger a national access crisis.

Another problem is “fragmented care.” Critics use this umbrella term to describe when occurs when doctors are paid individual fees for what they do. In a June 21 Wall Street Journal Op-Ed piece, “How Many Doctors Does It Take to Treat a Patient,” Dr. Peter Bach, a doctor at Memorial Sloan-Kettering who recently served as senior advisor to CMS, described the situation:

“Medicare patients bounce between many doctors, most of whom are unaffiliated with one another and as a result, few patients have a single doctor who is central to the care they receive.

The typical Medicare patient in one year sees seven different doctors, including five different specialists, working in four different practices. For vulnerable patients with multiple chronic conditions, care is even more fragmented and involves more doctors. Forty percent of the patients in our study had seven or more chronic conditions and they saw on average 11 doctors in seven practices. The upper quartile of this group saw 16 or more different doctors in nine or more different practices.

Health care is like this because of the way doctors are paid. Few doctors receive an hourly rate or a set annual salary; most are paid according to a system called “fee for service,” in which visits, tests and procedures are reimbursed separately. Doctors face incentives to provide more services and more expensive services and they do just that.”

Bach says doctor spending will rise 6% in 2007, and may top $500 billion in 2008. He believes patients would be better off seeing fewer doctors working together to develop “a cohesive coordinated plan of care.” He commends the American College of Physicians and the American Academy of Family Physicians for recommending a “medical home” model for Medicare beneficiaries. Congress is now considering the home model for Medicare patients (Tax Relief and Healthcare Act of 2006). But Bach quickly adds doctors shouldn’t be paid extra for “coordinating care” or for providing “appropriate” care.

What will it take to tamp down fee-for-service? And how we do it? By government fiat or market forces? A lot of models have been tried – prepaid care, diagnosis related groups, systematic fees reductions, claims rejections , utilization review, gatekeeper physicians, exclusion of expensive doctors or those doing inappropriate services from “preferred “networks, large integrated systems offering prepaid one-stop care - and a lot of models have failed, at least on a large enough scale to deflate overall medical costs. Whatever’s tried, it seems, fee-for-service doctors find a way around.

Furthermore, how do you address these realities?

•75% of America’s 750,000 doctors are in groups of five or less and are paid FFS,

•40% practice solo or in groups of two, also paid FFS

•Who will choose the “medical home”?

•What about “cash only” practices”?

•What about rural practices?

How do fence off doctors from the rest of the American economy, which operates on a fee-for-service basis? How do you exclude or include those doctors who make their living doing mostly single procedures – colonoscopies, vasectomies, cosmetic surgeries, and a myriad of other things? What about those doctors who function in 190 different medical specialties? And what about innovative niche practices – like retail clinics – that keep cropping up? What about the trend towards on-site work clinics in corporate settings? Do these corporate clinics qualify as “medical homes?”

And what about all those federal regulations – Stark rules, certificates of need, anti-monopolistic rulings, IRS laws – that stifle innovation, cooperation, and collaboration between doctors and hospitals? After all, hospitals are where 50% of health costs reside. Will adding thousand of other pages to curtail fee-for-service to the already fat 140,000 pages of the Mesdicare code book make a difference?

Lastly and perhaps most importantly, what about those assertive new health consumers armed with HSAs and/or in high deductible health plans who are comparison shopping for price and who want choice, convenience, and freedom to choose and dictate their own care – and to go to whomever they want for care?

I‘m skeptical centralized top-down government can seriously curtail individual fee- for-service or even control the underground medical economy. Regional market forces may cause these fees to be bundled and integrated into packages for a range of services for a given disease or procedure to be established, and prepaid care may prevail in the far West, but I don't foresee and can't envision abandonment of fee-for-service medicine in America.

Fee-for-service is the market engine that drives decentralized Western capitalism. It’s the basis for market transactions in every sphere of our daily lives. It rests on trust and integrity of responsible seller and informed buyers. Maybe health care radically differs from other transactions, but I doubt that it does.

Moreover, we live in a democracy, where people are free to seek opportunity, act in their own self-interest, live and move where they please, and outside of Medicare and Medicaid and health plans, physicians are free to set the fees they please; and consumers are free to accept or reject those fees.

The question is, if I may use a bad pun, what’s feesable across the broad health care economy? Maybe taking away the present physician reimbursement formula, which calls for a 40% reduction in fees over the next five years and replacing it with fees geared to annual cost of living increases, or increases in overhead expenses may be a start. I invite readers out there to offer suggestions and comments.

Sicko! Wacko! Stinko?

Michael Moore Movie,”Sicko”: The Truth or Pinko Lingo?

Michael Moore, favorite wacko of Hollywood, George Soros, and far-left bloggers, has produced a documentary portraying Cuban medicine as superior to American medicine. The true test of his convictions will be where he will go for treatment when he gets sick.

Fast forward 20 years. What happens when Moore’s health goes blotto, and he needs medical help pronto? Who knows? But for now, we know these truths. Moore has aroused the ire of two of America’s most ardent advocates of a market-driven system, and earned the admiration of the New York Times movie reviewer.

Here are their comments.

First, Greg Scandlen, President and Founder of Consumers for Health Care Choice, June 22, 2007

"Sick and Sicker" to Counter Michael Moore
CHCC Foundation Sponsors New Movie

If you go see Michael Moore's "Sicko" you will probably leave the theater wondering why nobody ever presents the other side of the story. Most people agree that Moore's critique of American health care is not just right, but his answers are seriously off-base. I mean, c'mon -- CUBA, for Pete's sake?

Moore's premise -- that over-reliance on Third Party Payers results in bureaucratic interference in medicine -- is sound. But his remedy -- to create one colossal Third Party Payer in the federal government -- will only make the existing problems that much worse.

The CHCC Foundation has arranged to be the fiscal sponsor for a new movie being produced by Logan Clements that will answer Moore's charges. Logan is actively filming in Canada right now, exploring the disastrous results of Canada's system. Deaths from neglect, two year waits for basic services, long waits for critical consultations such as oncology for cancer that delay treatment until is too late are common in Canada. The Canadian Supreme Court recently ruled the Canadian system violates the Canadian Charter because it denies the human right to use one's own recources to save one's own life and as a direct result many are dying.
The American people need to know that although our insurance system is flawed and needs a good injection of consumerism and transparency, replacing it with Canada's system will make a sick system much sicker. Access to a long waiting list is not access to care.

As the fiscal sponsor of the film, the CHCC Foundation will be able to accept tax deductible contributions to pay for the production of the feature-length movie and ensure that Michael Moore's propaganda is met with a factual examination of the realities of socialized medicine.

But he can't complete the movie without funds. Michael Moore had big Hollywood bucks behind him. All we have is people like you. Instead of just complaining about one-sided propaganda, this is your chance to help ensure that America hears the whole story. Any contribution -- large, small, or in between -- will help complete this important project.

To find out more about the movie, go to the film's web site -- http://www.sickandsickermovie.com/index.html.
To contribute, go to the CHCC Foundation's site - http://www.chcchoices.org/foundation.html


Contact Information
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
email: greg@chcchoices.org
phone: 301-606-7364
web: http://www.chcchoices.org
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Next, Grace-Marie Turner, Founder and President, The Galen Institute

Health Policy Matters®
SiCKO. Need we say more?
June 22, 2007

So Michael Moore brought his latest film to town on Wednesday for a well-publicized preview. SiCKO seems to have pushed most other serious health policy discussions off the agenda this week, even while key congressional committees were voting on more than a dozen important health care bills on prescription drug safety and health spending.

Heaven forbid that we would wind up making policy by propaganda, because that is exactly what would happen if anyone were to base any serious health reform proposals on Moore's film.

First, he makes the ridiculous assertion that Cuba's government-run, single-payer health care system is far superior to the United States. Give me a break! Cuban doctors even botched surgery on Fidel Castro, and a Spanish surgeon had to be called in to try to repair the damage.

In a film scene reminiscent of the Keystone Cops, Cuban doctors dash around to care for several American patients (9/11 rescue workers) that Moore has brought over on a fishing boat he commandeered. The care they get is purported to be representative of the care that anyone in the socialized health care system in Cuba gets. Credible? You tell me.

Moore has also been doing the TV interview circuit, and one question he was asked seemed to get to the heart of his incongruity. An interviewer for FoxNews asked why he would be calling for a health care system run by government when he is so opposed to government in the first place. “Good question,” Moore responds. He then uses the opportunity to slam the Bush administration, saying that government used to do things right before the current administration took over.

Exactly when was it that we had that perfect government?

Today, it is overwhelmed just trying to issue passports. Could any government magically run an infinitely more complex health care system for 300 million Americans?

The Cato Institute held a forum on Capitol Hill on Thursday morning to show clips of SiCKO as well as clips from several other films which tell the other side of the story.

One of the presenters was filmmaker Stuart Browning of the Motion Picture Institute. He has produced a series of films at www.freemarketcure.com using interviews with patients to show the limits, restrictions on access, and rationing of care in single-payer health care systems, especially Canada.

Another film is in production to answer Moore. Called Sick and Sicker, producer Logan Darrow Clements is filming in Canada right now and has interviewed a number of us from the free-market policy community to talk about the value of a free-market health care system that values people and progress. The inimitable John Stossel of ABC News also is working on a major hour-long special this summer to offer what surely will be a more balanced portrayal of the U.S. and other health care systems.

One of Moore's core arguments in SiCKO is that profit in the health sector is evil. It is a view also shared by the chairs of many congressional committees and several presidential candidates.

They believe that the health sector can be forced to operate under a different set of rules than those which govern the rest of our economy.

But everywhere, profit is the reward that we give to the innovators, entrepreneurs, and risk-takers in our economy for offering something new or better. And the marketplace is where the conversation takes place between buyers and sellers to see if what they are offering has value and, if so, at what price.

That's the genius of our economy and how progress works. But a government-run system stops this conversation in its tracks and replaces it with price controls, centralized decision-making, and government micromanagement.

Single-payer advocates argue that we since we are such a rich country that wouldn't happen here - - that there is enough money for everyone to have all of the health care they need for the money we spend now.

But we do have centralized micromanagement of decisions and price controls in our own government-run health care systems -- Medicare, Medicaid, and the VA for example. Government makes decisions about what will be covered, under what circumstances and for whom, and how much doctors and hospitals will be paid for their services. And government seldom gets it right -- overpaying for some and underpaying for others, but also inducing huge demand for over-consumption of health care.

Earth to Michael Moore and crowd: The problems with the U.S. health sector aren't that it needs more government control and regulation but less!

In a system governed by free-market principles, people won't be asked to make decisions about their medical treatment when they are on a gurney in an emergency room. But they would make decisions about the kind of health insurance coverage they want to protect them if that happens, and they would gain more control over their routine and non-emergency care.

You do have to admit, however, that Moore is a master of publicity. He has created so much hype for his film, first premiering it before the liberal entertainment world at the Cannes Film Festival. Now, after a preview showing in Washington this week, he plans to open it in just one theater in New York today. And what will the cameras show? Long lines of people waiting to see the film, suggesting to all of the rest of us that this is a must-see movie.
Don't believe it.

Finally, the New York time movie critic, A.O. Scott

Open Wide and Say ‘Shame’
By A. O. SCOTT
June 22, 2007

It has become a journalistic cliché and therefore an inevitable part of the prerelease discussion of “Sicko” to refer to Michael Moore as a controversial, polarizing figure. While that description is not necessarily wrong, it strikes me as self-fulfilling (since the controversy usually originates in media reports on how controversial Mr. Moore is) and trivial. Any filmmaker, politically outspoken or not, whose work is worth discussing will be argued about. But in Mr. Moore’s case the arguments are more often about him than about the subjects of his movies.

Some of this is undoubtedly his fault, or at least a byproduct of his style. His regular-guy, happy-warrior personality plays a large part in the movies and in their publicity campaigns, and he has no use for neutrality, balance or objectivity. More than that, his polemical, left-populist manner seems calculated to drive guardians of conventional wisdom bananas. That is because conventional wisdom seems to hold, against much available evidence, that liberalism is an elite ideology, and that the authentic vox populi always comes from the right. Mr. Moore, therefore, must be an oxymoron or a hypocrite of some kind.

So the table has been set for a big brouhaha over “Sicko,” which contends that the American system of private medical insurance is a disaster, and that a state-run system, such as exists nearly everywhere else in the industrialized world, would be better. This argument is illustrated with anecdotes and statistics — terrible stories about Americans denied medical care or forced into bankruptcy to pay for it; grim actuarial data about life expectancy and infant mortality; damning tallies of dollars donated to political campaigns — but it is grounded in a basic philosophical assumption about the proper relationship between a government and its citizens.

Mr. Moore has hardly been shy about sharing his political beliefs, but he has never before made a film that stated his bedrock ideological principles so clearly and accessibly. His earlier films have been morality tales, populated by victims and villains, with himself as the dogged go-between, nodding in sympathy with the downtrodden and then marching off to beard the bad guys in their dens of power and privilege. This method can pay off in prankish comedy or emotional intensity — like any showman, Mr. Moore wants you to laugh and cry — but it can also feel manipulative and simplistic.

In “Sicko,” however, he refrains from hunting down the C.E.O.’s of insurance companies, or from hinting at dark conspiracies against the sick. Concentrating on Americans who have insurance (after a witty, troubling acknowledgment of the millions who don’t), Mr. Moore talks to people who have been ensnared, sometimes fatally, in a for-profit bureaucracy and also to people who have made their livings within the system. The testimony is poignant and also infuriating, and none of it is likely to be surprising to anyone, Republican or Democrat, who has tried to see an out-of-plan specialist or dispute a payment.

If you listen to what the leaders of both political parties are saying, it seems unlikely that the diagnosis offered by “Sicko” will be contested. I haven’t heard many speeches lately boasting about how well our health care system works. In this sense “Sicko” is the least controversial and most broadly appealing of Mr. Moore’s movies. (It is also, perhaps improbably, the funniest and the most tightly edited.) The argument it inspires will mainly be about the nature of the cure, and it is here that Mr. Moore’s contribution will be most provocative and also, therefore, most useful.

“Sicko” is not a fine-grained analysis of policy alternatives. (You can find some of those in a recently published book called “Sick,” by Jonathan Cohn, and also in the wonkier precincts of the political blogosphere.) This film presents, instead, a simple compare-and-contrast exercise. Here is our way, and here is another way, variously applied in Canada, France, Britain and yes, Cuba. The salient difference is that, in those countries, where much of the second half of “Sicko” takes place, the state provides free medical care.

No state-run medical system is “free.” It may be “free” financially at the point of care, but it is not “free” of taxes, restricts “free” choice of doctor, and limits “free” access to preferred care and cutting-edge technologies. If you're sick, waiting lines and times are "free" fiscally in state-run systems, but are not necessarily good for your physical health. Moore doesn’t mention these trade-offs. “Free” is in the eyes of the beholder

George Halvorson Powerpoint on Heath Care Industrial Revolution

With Emphasis on The “Wobbly” Parts of U.S. Health Care

The June 20 Wall Street Journal ran a piece called “The PowerPoint Turns 20, and Its Creators Ponder a Dark Side of Success.”

In 1987, Robert Gaskins and Dennis Austin, working for Microsoft, came out with PowerPoint1 for Macs. Americans now view 3.5 million PowerPoint presentations each year. PowerPoint has become something the world loves to mock but loves to use.

Powerpoint is the perfect match for presentations and graphics. It has the outline and the format to effortlessly deliver talks. Just rare back and let it flow.

For some, PowerPoint has a dark side. Critics say it elevates format over content, smacks of commercialism, reeks of salesmanship, destroys the ability to write and speak independently, impairs intellectual rigor, separates the speaker from the audience, and requires a bullet-point proof vest for bored listeners, who tend to drift off into the blue of the slides.

The Pentagon thought so little of PowerPoint that they disallowed its use. The military establishment now requires officers to speak their mind directly eyeball-to-eyeball – without colored slides, bullet points, and graphics.

I’m not a PowerPoint fan, but I’m often obligated to use it because conferences at which I speak ask for PowerPoint slides in advance, so attendees will have something to have in hand to show and tell when they go home.

But Powrpoint has its powerful points too, if you'll excuse the redundancy. PowerPoint is often just the ticket to reduce a complex subject to its elements.

The Powerpoint I have in mind is a George Halvorson, Kaiser chairman and CEO’s, presentation before the World Bank in September 2005 “It’s Time to Create an Industrial Revolution in Health Care.”

I’m not going to reproduce the Halvorson PowerPoint here. You can google it by going to George Halvorson, World Bank Presentation, clicking on PowerPoint, and view or listen to the presentation. It takes 40 minutes to view.

To give you a feel for Halvorson’s presentation, he starts by saying Kaiser has 8 million members, 142,000 employees, 32 hospitals, 12,000 salaried doctors, and $30 billion in revenues.

He goes on:

•It’s time for health care to stop floundering as a highly localized, unacceptably idiosyncratic cottage – with the exam room functioning as a medical cottage.

•It’s time to bring a significant degree of systems support and systematic thinking to health care.

•It’s time to give health care a whole new set of tools

When he says “tools,” Halvorson is mostly speaking of computer information at doctors’ fingertips at the point of care with accompanying systematic prevention, treatment, and follow-up measures to improve care..

Halvorson describes U.S. health care as:

1.The most expensive in the world

2.with superb high tech

3.with superior technologies for the sick

4.with mediocre outcomes

5.and inconsistent quality

Then comes my favorite part “The Wobbly Parts of U.S. Health Care.”

The most obvious “wobblies”, Halvorson says, are:

1.Inadequate medical records

2.Inconsistent access to current science

3.Poor patient compliance

4.Sketchy patient follow-ups

5.Lack of outcomes tracking

I won’t go on. Suffice it to say, Halvorson talks about how large integrated systems like Kaiser can fix the “wobblies” by bringing a systematic informed approach to health care by focusing on information technologies to give immediate access to science and organizing doctors in to act in teams in a unified system to improve care across the health care spectrum.

Halvorson has a noble concept, and he has facts to back up what he says. His ideas may yet catch fire. Presently, however, only about 12% of doctors are in groups of 50 more.

Maybe someday independent doctors can be “virtually integrated” in some fashion and can act in a more systematic, organized, and purposeful way, but that would require an EMR or its equivalent in every doctor’s office and a personal health record in every patient’s hand – an unlikely development for at least the next decade.

But don’t despair. Worthwhile reform takes time – and money.

Hospital Quality Ratings

Useful Tools or a Flawed Exercise in Futility?

Perhaps I’m a contrarian. Perhaps I’m overly pragmatic. Perhaps I’m cynical when I always consider the source. Or maybe, just maybe, based on my experience on the Medical Advisory Board of America’s Top Doctors, I trust doctors’ judgments on who are the best doctors more than mere data. Reputation, in other words, in my mind often trumps data.

I know these attitudes must sound naïve, but that’s how the mind of many of us non-managerial types work. Reputation, and related factors, word of mouth, personal knowledge, private referrals, and closeness to home are more powerful than often conflicting ratings and data emanating from the Internet, government, or media sources.

In any event, three articles, one in Medscape’s General Journal, one in the AMA News, and the other in the New York Times, prompt this blog.

•The Medscape piece, posted 6/1/07, appeared first in the Journal of Hospital Medicine. It bears the title “Conflicting Measures of Hospital Quality from ‘Hospital Compare Vs the U.S. News and World Report’s Best Hospitals.” The article notes that in April 2005 CMS launched “Hospital Compare,” the first government sponsored hospital quality score care. The authors compared government rankings vs. U.S. News and World Report’s Best Doctors. Here’s what the authors’ conclude.

The Best Hospitals lists and Hospital Compare core measure scores agree only a minority of the time on the best institutions for the care of cardiac and respiratory conditions in the United States. Prominent, publicly reported hospital quality scorecards that paint discordant pictures of institutional performance potentially present a conundrum for physicians, patients, and payers with growing incentives to compare institutional quality.

If the movement to improve health care quality is to succeed, the challenge will be to harness the growing professional and lay interest in quality measurement to create rating scales that reflect the best aspects of Hospital Compare and the Best Hospitals lists, with the broadest inclusion of institutions and scope of conditions. For example, it would be more helpful to the public if the Best Hospitals lists included available Hospital Compare measures. It would also benefit consumers if Hospital Compare included more metrics about preventive and elective procedures, domains in which consumers can maximally exercise their choice of health care institutions. Moreover, voluntary reporting may constrain the quality effort. Only with mandatory reporting on quality measures will consistent and sufficient institutional accountability be achieved.

• The second article, in the June 18, 2007 AMA News, has this title and subtitle, “Coping with Rankings: More Plans are Rating Physicians, but Patients Aren’t Keeping Score. Doctors Still Have Time to Pressure Insurers for Accurate Data or None at All.” The article says demand for publicly available performance measurements are up, and corporations are demanding this data more and more. In response, the AMA-led Physician Consortium for Performance Improvement and CMS has created 184 measurements it believes provide accurate evidence-based measures and outcome data. The trend is inevitable, so doctors are learning to shape new data based on physician negotiation with health plans. Harris Interactive Polling indicate less than 1% of patients use ratings to select their doctor. Most patients still rely on word of mouth. But health plans and corporations may think differently. They believe ratings are an effective tool for identifying the best doctors.

•And then there’s the New York Times June 14 revelation In Health Care, “Cost Isn’t Proof of High Quality.” Reed Abelson, the reporter, leads off with this commentary,

“Stark evidence that high medical payments do not necessarily buy high-quality patient care is presented in a hospital study set for release today. In a Pennsylvania government survey of the state’s 60 hospitals that perform heart bypass surgery, the best-paid hospital received nearly $100,000, on average, for the operation while the least-paid got less than $20,000. At both, patients had comparable lengths of stay and death rates.

And among the 20 hospitals serving metropolitan Philadelphia, two of the highest paid actually had higher-than-expected death rates, the survey found.
Hospitals say there are numerous reasons for some of the high payments, including the fact that a single very expensive case can push up the averages.”
Still, the Pennsylvania findings support a growing national consensus that as consumers, insurers and employers pay more for care, they are not necessarily getting better care. Expensive medicine may, in fact, be poor medicine. “


The Times has been running a series of articles on medicine and money, and have reached the conclusions that doctors and hospitals vary in their pricing, that their results vary, that greed and fraud and bill padding must be involved, and that surely, if everyone including the public and payers, knew and understood the data, and the underlying costs, more homogeneous, more favorable, and lower pricing would logically follow.
T
he reporter concludes:

As eye-opening as the Pennsylvania report may be to the public, insurers have already been aware that their payment practices do not necessarily encourage hospitals to provide better care. Medicare, for example, pays essentially a flat fee, which varies depending on location and type of hospital, for the same surgery, regardless of outcome. Complications tend to simply mean additional payments.”

The basic idea behind data-seekers, as I see it, is that we should pay more for better care and less for lesser care. That intuitively makes good sense. It may sound simple, but it is not, and the process can be distorted by a few cases with horrible outcomes and by hospitals’ locations and their varying constituencies and their expectations.

It is fashionable in government and managerial circles to say that anything that can measured can be managed. It is also fashionable, in conservative circles, to say that health care is so full on interactive permutations and combinations and personal considerations and choices that only the impersonal forces of the market can sort it all out. Finally, there are those who say hospital care is too “secretive,” and therefore only data and total “transparency” can identify the best, reveal the outliers, and smooth out cost and quality variabilities.

All of these critics may be right and yet all of them may be wrong. Unfortunately, variable costs, variable quality, and variable outcomes are a function of humanity, regional cultures and their constituencies. Independent variables are part of the human condition. Some of these variations may be beyond managerial control. Health costs are 30% higher in Boston, because the Boston public is enamored with the halo of quality surrounding academic medical centers. Health costs in Miami are higher because the seniors there may consider health care “free” because of Medicare and Medigap policies. In New York City, last illnesses are 40% higher at Columbia Presbyterian than at the Mayo Clinic because people have different cultural expectations, e.g. access to the best independent specialists. Variation in cost, quality, and outcomes is not always about greed or fraud or mismanagement. They may be about cultural expectations.

I remember Peter F. Drucker’s comment, “Large health care organizations may be the most complex organizations in human history.” It’s going to take a while to establish criteria to judge and sort out the good, the bad, and the ugly. Public disclosure of outcome data and performance data on the processes of care may help, but they are only part of a complicated human equation.

Hospitals and Doctors – Cash Relationships

In the book James Hawkins and I wrote for hospital CEOs, Sailing the Seven “C’s of Hospital Physician Relationships: Competence, Convenience, Clarity, Continuity, Competition, Control, Cash (Practice Support, Inc), Jim observed:

Cash, in many ways, is the measuring stick for the other six “Cs.” The key questions that often determine the quality of the hospital-physician relationship may be the following -"At the points of intersection between the hospital and the doctor, is the hospital putting money into or taking money out of the doctor’s pockets?” If the hospital is contributing to the doctor’s ability to make a living and be professionally and personally satisfied, then the hospital will have gone a long way towards establishing a positive relationship. The converse is equally true.

Let’s examine the converse. What kind of net in patient and outpatient revenues do physicians in various specialties generate for hospitals? Here are the numbers derived from a 2004 survey, Merritt, Hawkins, & Associates conducted with hospital chief financial officers nationwide.

•Orthopedic surgery, $ 3.0 million

•Cardiology, $2.6 million

•Cardiology (invasive), $2.5 million

•General surgery, $2/4 million

•Neurosurgery, $2.4 million

•Internal medicine, $2.1 million

•Family practice, $2.0 million

•OB/GYN, $1.8 million

•Hematology/Oncology, $1.8 million

•Pulmonology, $1.8 million

On average, physicians generate over $1.5 million a year in inpatient and outpatient revenue for affiliated hospitals. That’s one reason why the physician shortage concerns hospitals. Each month that a needed physician is not in place can cost a hospital $100, 000 or more. On the other side of the equation, each time a high tech specialist, such an orthopedic surgeon or cardiovascular specialist pulls out of the hospital to form or own his/her own facility can cost the hospital $2.5 to $3.0 million for each departing specialist.

The cash problem get more complicated when you consider more and more physicians are seeking hospital employment or asking to be paid for doing hospital duties. Physicians are asking of hospitals, “Show me the money!” and I will cover the emergency room, take care of your inpatients, spend time on administrative committees, act as head of a hospital department, permit you to cover my malpractice premiums, and even allow you to pay me a salary.

In “The ‘Hire’ Road: Physician Employment Makes a Comeback” (Healthleadersmedia.com News, January 3, 2005), hospital consultant Preston Gee says “Hospital employment is back on the strategy radar screen and spreading like wildfire throughout the industry. If your hospital is not already pursuing the model, or seriously considering it, you are likely an anomaly.”

Today, it is specialists and sub-specialists and hospitalists, who are hot when it comes to physician employment. For hospitals, salaried specialists fill a void – in-house patient coverage, ER coverage, and prestige in the community.

For the physician, other factors are at work – a predictable 40 hour week, which fits the life styles of young or burnt-out physicians, a refuge from the unceasing bureaucratic demands of running a practice and pressures to buy EMRs. Many doctors are saying, “To hell with it, I am going to work for the hospital,” and escape from soaring malpractice costs. For others, there is a genuine desire to collaborate rather then compete with the hospital.

The Government Giveth and the Government Taketh Away

Medicare Physician Payments and Medicaid Aid for Children

If Medicare cuts of 10% for physician pay go forward as planned in January 2008, here, based on an AMA survey of 9000 physicians, is how doctors say they will respond,

•Defer medical equipment purchase, 72%

•Defer health IT purchase, 67%

•Begin referring complex cases, 67%

•Discontinue nursing home visits,58%

•Stop providing certain services, 65%

•Discontinue rural outreach, 57%

•Reduce staff, 54%

•Close satellite office, 41%

•Shift more services to hospital, 40%

•Reduce workload services, 36%

•Leave the office setting or retire, 14%

Compared to a similar survey conducted in 2006, 15% more physicians said they would reduce or end acceptance of new Medicare patients, and 17% more said the would stop seeing existing Medicare patients.

Because the implications for a vulnerable patient population are similar to those for the Stage Children’s Health Insurance Program (SCHIP), the AMA would like SCHIP reauthorization, a state Medicaid problem and physician pay reform move forward as part of the same Congressional Bill. The current SCHIP program covers 6 million people, including 600,000 adults, has fallen short by $700 million.

As this point, it may be worthwhile reprinting a portion of a paper by John Goodman, PhD, health of the National Center for Policy Analysis. Here are four things he says should be avoided when considering health reform.

1. Do not turn a tax subsidy into an entitlement.

The primary way the government encourages private insurance is through tax subsidies. Many reform proposals would completely change the nature of the subsidies; e.g., by creating a refundable tax credit. The risk is that the new tax subsidy could become an
entitlement.

Medicare and Medicaid entitlements are already on a course to crowd out every other government program. We cannot survive creating more health care entitlements.

That means: government's commitment must be defined contribution, not defined benefit. Tax subsidies are going to grow roughly at the rate of growth of national income. Health care spending is growing at twice that rate. The new system of tax subsidies must also grow with national income, not with health care costs.

2. Avoid mandated coverage and mandated benefits.

Proposals to require everyone to have health insurance increase the likelihood that the government subsidy will become an entitlement.

It makes no sense to mandate a benefit package if the cost of the package is going to grow at twice the rate of the subsidy. By keeping the subsidy restrained, you will force health plans to curtail costs somehow - with HSAs, restricting payments to evidence-based medicine, HMOs, etc.

Pay-or-play is much better than a mandate. Since you will never be able to enforce the mandate anyway (and rigorous attempts at enforcement would cost far more than they are worth), let people choose whether to be insured or not. If they choose to be insured, give them a subsidy; if they choose not to be insured, make them pay a tax penalty and put the unclaimed subsidy (or the tax penalty) into the safety net.

Also, with pay-or-play you do not have to define a mandated benefit package, vulnerable to cost-increasing special interest measures.

3. Don't create perverse incentives for health plans.

Insurance pricing restrictions create perverse incentives. If people can switch plans annually at premiums that are unrelated to expected costs, the plans will seek out the healthy and avoid the sick. Once people are enrolled, the plans will over-provide to the healthy and under-provide to the sick.

A much better idea is to give plans an incentive to compete for the sick.

4. Don't encourage people to forgo private coverage by expanding public coverage.

There should be no expansion of Medicaid and SCHIP in a way that encourages people to drop their private coverage in order to get free public coverage. Instead, the incentives should work the other way. We should use public money to encourage private insura

A Medical Blogger’s Self-Afflicted Interview

Q; Good Morning. It’s Monday, June 18. This is your 189th consecutive blog. By now, you must know why you’re doing these blogs. Tell me, are you a left wing or a right wing blogger?

A: I’m neither. I’m a MD Blogger, which means “Medical Doctor Blogger” or “Middle Blogger,” take you pick.

Q: Why do you talk so much about “innovation?”

A: Because you can always do things better, quicker, more conveniently, and cheaper for the benefit of patients. Besides, it’s never too late to innovate.

Q: Why not “consolidation” into one single system covering all?

A: Given the American culture’s desire for freedom of choice to providers, equality of opportunity but not results, distrust of centralized government, dislike of sweeping changes, and access to high tech care without rationing, I don’t think “consolidation” would work. It's been debated for 95 years, and it hasn't worked yet.

Q: Anything else?

A: Well, there’s this myth floating around out there that universal coverage means better care. That’s never been proven to be true. Medicare outcomes are no better for the elderly than they have even been. Federal entitlements like Medicare and Medicaid and child coverage are about financial security, on occasion “safety net” care, but rarely about overall improvement of care.

Q: Any other myths?

A: Yes. That somehow federally-run top-down care will be more even-handed, equitable, and fair to all. As a matter of act, centralized government is a lousy way to distribute resources. Take Medicare. Its payment schedules are so low and convoluted in paying primary care doctors, that primary care is on the verge of collapse. Or take Medicaid, Its payment rates are so low and its bureaucracy so unwieldy, that 40% to 50% of doctors refuse to take Medicaid patients.

Q: Are you suggesting a market-based system might be better?

A: In some ways, yes, because consumers on the ground spending their own money and making their own choices are wiser than federal or state bureaucrats and technocrats.

But suggesting that a market-based system would replace federal reimbursement is a fool’s errand. The government already pays for 46% of care, and as we all know, the sun never sets on federal programs, once established.

Besides, ideologically, one man’s meat is another man’s poison. Advocates of government-care and market-based care will never deviate from their “principles.” In the end, there will have to compromise.

Q: What about lowering costs? That seems to be the main theme of current reformers.

A: The reformers are right. Lowering costs is the key to reform. “How” is another matter altogether. Retail clinics, which charge less than primary care practices or emergency rooms, are a concrete step in that direction. Other innovations, mostly IT, such as having patients enter their own information through smart cards, personal health records, or debit cards and paying at the point of care – or patient-doctor communication through website, e-visits, or video education – will help. Other suggestions – universal interoperable computer systems, better coordination, obligatory public outcome data publication, regional information sharing, integrated health systems, pay-for-performance - are still largely abstractions.

Q: Are there things we ought to look for as the reform movement begins to play out?

A: Yes, and I would list them this way, but not necessarily in this order.

1.Experiments and compromises with “universal coverage” in Massachusetts, California, Illinois, and Pennsylvania – the big states with lots at stake and the size to see if new systems of care are possible.

2.Chronic-care management of Medicare, Medicare, and health plan populations, through “hands-on,” telephonic, and IT monitoring, of that 10% of the population causing 90% of costs.

3.Innovations in the marketplace – retail clinics, work-site clinics, disease-focused and integrated clinics, and strategically place big MACCs (multispecialty ambulatory care centers).

4.The decentralization activities of “everything-for-everybody” general hospitals, who now consume almost 50% of all health care dollars, and who know they must make moves, many specialty based - to become more productive and cheaper, please increasingly demanding constituencies – the public within their communities, demanding and assertive consumers, and restless specialists seeking more productivity and income, and to make their facilities more pleasant and safer places to be.

A; And the employers – what about them?

Q: They’re a huge factor, and they’re doing many things, -- becoming more active in their business coalitions, shedding and narrowing benefits, shifting costs, setting up wellness and preventive programs, establishing on-site clinics run by salaried physicians, insisting on use of generic drugs, clamping down and managing health care supply chains. A central issue in all of this is how to reduce costs so American businesses can compete globally. Businesses aren’t going to sit idly by and let their profits g down the drain.

A: Finally, what about the doctors?

Q: People tend to stereotype doctors as being of one mindset – compulsive, loyal to each other, oblivious to costs, focused only on themselves, resistant to change. I have never found this to be true. We are more like the “rats” (no disrespect intended because I admire doctors) of Hamelin City,

And out of the houses the rats came tumbling,
Great rats, small rats, lean rats, brawn rats/
Brown rates, black rates, gray rats, tawny rats,
Grave old plodders, gay young friskers.
Fathers, moths, uncles, cousins,
Cocking tails and pricking whiskers,
Families by tens and dozes,
Brothers, sisters, husbands, waves –
Followed the Piper for their lives.

Our Pipers are the patients. In the end, I believe we will do what pleases them, prevents their diseases, improves their health, cures them, and increasingly, costs them less in time, money, and inconvenience. Medicine is rapidly changing. Young doctors don’t think like old doctors. They seek security, stimulation, balanced life styles, and time off for themselves and their families. Doctors are innovating with new drugs, new procedures, new forms of organization, new specialties, new forms of payment, new forms of communication and education. Experimentation and innovation are the orders of the day.

A: Is that all?

Q: Isn’t that enough for now?

How Can Hospitals Simultaneously Engage Consumers and Doctors?

“The empowered and engaged consumers of health care – the passive ‘patient’ increasingly seems an anachronistic term – are a force to be reckoned with…The assertiveness and self-confidence that typify marginal consumers are evident in health care Internet users….More than 70 percent want online evaluations of physicians, and when they obtain the information, they use it.”

Regina Herzlinger, in “Why Innovation is Health Care is so Hard,” Harvard Business Review, May, 2006, and Who Killed Health Care? (McGraw-Hill, 2007)

Hospitals are looking for answers on how to simultaneously engage consumers and doctors. After all, without consumers, and without doctors who direct consumers to their facilities, hospitals would be nothing but empty shells.

The traditional answers to attracting consumers and doctors are,

•Beef up the hospital marketing department

•Set up referral services to doctors

•Run “feel good” ads in local media outlets – radio, TV, and newspapers –telling how the hospital “cares”

•Create messages saying how the hospital has acquired cutting edge technologies that make it a leader in the medical arms race

•Promote the hospital at one of the “top hospitals” in one or more of its centers of excellence

•Profile a leading doctor

•Stage a community event and bring in a national speaker on a hot topic

•Feature testimonials of patients pleased with hospital services
•Develop a hospital website

•Organize and Own ambulatory care or surgical centers

•Employ doctors, partner with them, build centers of excellence with their help, or become known as an integrated super clinic or health system with the hospital as the central piece

•Become a student of hospital marketing by buying books on the subject, subscribing to hospital marketing publications, or visiting websites like Healthleadersmedia.com, which regularly features stories on hospital marketing.

All of these are sensible and sound approaches, but they may fail to allay the hospital CEO’s apprehension about such questions as:

•How do we develop strategies that engage consumers and doctors at the same time?

•How do we directly address patients’ fears about coming to the hospital?

•How do we persuade them our institution is “safe”?

•How do we shape pateints’ expectations and give them clues of how to deal with their admissions for a disease or an upcoming surgery?

•How do we inform them in a sensible targeted way with a predictable return of investment?

•How can we give the doctors something of value without appearing to be meddling in their practices?

•How can we build a sense of “virtual integration” within the community – of getting everybody – local citizens , surgeons who use our facility, employers, and others – the sense we are all singing from the same page while we are pursuing steps towards more formal integration?

•In other words, how do we get the entire community behind us in this environment of competition and shifting loyalties?

The long answer to these questions is that you use multimedia approaches to communicate your message – simply, plainly, and effectively.

The short answer is that you must begin to address multiple converging factors together. You must recognize that you’r now operating in a consumer-driven environment; that doctors are restless about declining reimbursements; that 90% of your revenues come from heart, orthopedic, and other procedural specialists, most of whom are surgeons or endoscopists; that the American public now reads at the fifth grade literacy level; that between 80% to 90% of the public now has broad band access to the Internet; that visual communication is crowding out verbal communication; and that people are most concerned about effects them in their busy and time-short daily lives.

Samuel Johnson is famous for saying, “Nothing concentrates your attention so much as a hanging in the morning.” Similarly nothing concentrates a patient’s attention so much as an upcoming surgical procedure. And nothing concentrates a surgeon attention so much as the fear that the procedure won’t go well and he/she will be subject to a malpractice suit due to some misunderstanding which is usually difficult to document.

Now , for full disclosure. I’ve been working with a Chicago-based company, Emmi Solutions, that has developed over 80 online interactive programs (translated into Spanish) designed to teach patients what to expert from surgical procedures or episodes of chronic disease. Evidence indicates patients forget 85% of what they are told within 10 minutes of leaving a surgeon’s office after being told they need an operation. My job is to arrange for Emmi presentations to key players in the hospital “C suite.”

These programs consist of videos featuring an empathetic voice and vivid animated anatomical drawings or illustrations – both presented in simple language a fifth grader would understand. Doctors “prescribe” these videos by giving patients an access code. Patients, in their turn, can download the videos at their convenience in the comfort of their homes. A number of prestigious institutions – Cedars Sinai, Stanford, Kaiser, The Cleveland Clinic, Evanston Hospital, the University of Pittsburgh, and Columbia-Presbyterian, among others are using the online interactive programs. The University of Pittsburgh likes them so much its surgeons are required to prescribe them.

The virtues of this online interactive approach are:

1) the videos are a powerful patient education means of overcoming health illiteracy;

2) patients like the videos because they now understand risks, benefits, consequences, and complications of surgery;

3) doctors like them because it simplifies and clarifies the informed consent process, make them “heroes” in the eyes of their patients, and leaves a documented record of what the patient was told;

4) hospitals like them because patients and doctors like them, because they have a tangible return on investment (fewer cancelled procedures, shorter hospital stays, lower chances of misunderstandings leaded to complaints or even malpractice exposure), and because they require no changes in the hospital IT system.

Hospitals are moving into a era requiring new strategies to please more demanding consumers, to keep doctors closer to the institution, and to achieve a sense of “virtual integration” across the community. These strategies will require new and innovative forms of communication that are “win-win-win” for consumers, doctors, and hospitals.

Richard L. Reece, MD
15 Banbury Crossing
Old Saybrook, Connecticut, 06475
860-395-1501\
rreece1500@aol.com

Is Health Care Too Important to be Left to Doctors?

This isn’t an idle question. Sit back a moment and think about it. Many hospital CEOs, insurers, Congressmen, think tank leaders , Medicare bureaucrats, media pundits, employers, journalists, managers, and single-payer advocates think they can run the system better than doctors.

The question reminds one of Clemenceau’s famous statement, “War is too important to be left to generals.” I, for one, don't equate foreign wars with health care. Nevertheless, the reasoning goes like this. The issues of ware and disease are too big for generals or doctors to grasp or control. Health care may be even more important. It takes 16% of the GNP versus 3.5% for the military, and the casualties, estimated by the Institute of Medicine, are 100,000 unnecessary annual deaths in hospitals, exceeding by far Iraq’s combat deaths, approaching 4,000 over a five year period.

Let me state upfront I don’t agree with the analogy of generals, doctors, and war. My sympathies are with the doctors. Doctors may be fighting a war against disease, but federal rules and regulations unnecessarily and often unfairly hamstring them.

Physicians rarely set their own fees – or are seldom free to do whatever they might want to do for patients. Medicare sets physician payment rates for a wide range of services. Private insurance companies set their rates based on what Medicare pays. The money doctors receive often has little relation to costs of doing business.

I became acutely aware of this today. I was speaking to a family physician who is leaving town because his three person practice is collapsing economically. He said, “ I get $12 from Medicare for seeing a patient postoperatively in my office. The surgeon got $3000 for doing the operation. Medicare fees simply have no relationship with my costs of doing business. Primary care is on the verge of collapsing, but no one seems to care. You simply can’t practice independently anymore. You have to be salaried by a hospital.” Something has to be done, he said, to level the economic playing fields between hospitals, specialists, and the primary care doctors in the trenches.

Hospitals consume nearly half to the $2 trillion spend on health care in the U.S., But they too are bound by Medicare rules and regulations, which account for roughly ½ of their revenues. Hospitals and systems have sought for years to find ways to unite doctors and hospitals. These ways include: physician employment, joint ventures, gain sharing projects, centers of excellence, and integration into clinic model. Once again, federal rules make many of these ventures hard to carry out. In all of these efforts, hospitals – because of their superior resources, organization structures, access to capital, and sheer critical mass – have economic advantages over physicians.

In addition, third parties dictate what doctors can and can’t do for patients by declining to pay for services doctors think their patients might need. To complicate matters, the Medicare regulatory code for doctors is 130,000 pages long (compared to 11,000 pages for the federal tax code). Doctors must document everything they do or risk civil or criminal penalties for fraud.

According to Merritt, Hawkins, & Associates Guide to Physician Recruiting (Practice Support Resources, Inc),

"This is not the environment most of us work in. There is no ”third party” barrier between the lawyer, the accountant, the computer programmers, the plumber, the mechanic and his or her clients. They all set a fee, perform a service, and are paid directly by the person for whom they did the work. Imagine a plumber who fixes a pipe for a fee set by the government – a fee that does not meet the cost of his tools. The plumber then submits a bill - not to his client, but to an agency or insurance company. The agency then declines to pay the bill n the grounds that they do not cover that particular service under those particular circumstances. It would be no surprise if, under these conditions, plumbers became a generally cranky group – especially if they had to complete 11 to 15 years of post-college training to become plumbers.”

It should also come as no surprise that,

•The morale of the medical profession is at an all-time low.

•The U.S. faces a 50,000 shortfall of physicians by 2010 and 200,000 by 2020.

•Medical students are no longer entering primary care specialties – which Medicare pays at a rate of $90 an hour (actually $40 an hour after overhead is paid) – and going into specialties which pay as much as $600 an hour. Medical students are no fools, and word quickly gets around.

•Doctors, beset by declining federal reimbursements, rising practice costs, and worries over malpractice, are increasingly seeking employment, and in the process, forsaking autonomy and independence.

Why this state of affairs? It boils down to a matter of mindset. If you think of disease and death as inevitable and of patients as vulnerable, ill-informed, and potential victims of doctors, you have to protect them. If, on the other hand, you regard patients and doctors, as intelligent consumers of care and providers of integrity, who give that care, you may believe they are perfectly capable of fending for themselves.

If you regard health care as a “inalienable right,” then naturally government has to make the rules, set the fees, decline the payments, make everything transparent, provide the oversight, and supply the advice on how to make the system rationale.

The advice goes like this.

•Overhaul the payment system by eliminating fee-for-service. Fee-for-service, you see, gives doctors incentives to do more services. To use the words of critics, it creates a “fee-for service treadmill that runs faster and faster in pursuit of billable services.” Never mind that the rest of the economy runs on a fee-for-service basis, buyers tend to trust those who set the fees, and the market in general does a good job of weeding out and regulating miscreants.

•Organize doctors into bigger groups so they can have a managerial infrastructure that places them on salaries, gives them no incentives to do more, compels them to follow protocols, and otherwise integrates, rationalizes, and coordinates their professional activities. Never mind that this talk have been around for at least 50 years, that only about 10% of doctors practice in groups of 50 or more, that 75% still practice in groups of 5 or less, and that most doctors still think of themselves as automomous professionals, not unlike university professors, who deem themselves capable of making their own judgments.

•Create a homogenous national system that eliminates regional variations, charges uniform fees, pays only for evidence-based care, follows rigid protocols, documents performance of all doctors, and rewards those with the best outcomes. Never mind that Wennberg and his associates at Dartmouth have been decrying the sins of regional variation for 33 years with visible effect, that monolithic top-down regulation to achieve uniformity rarely works, that federal bureaucracies are easily manipulated to favor those doing the manipulating, that patient expectations and demands vary profoundly from one region of the country to the other, and that pay-for-performance and outcomes has so far produced a very mixed picture.

What is the solution? No one can say for sure. Right now an ideological battle is being waged between government and marketplace advocates. Government advocates say only government can achieve universal, evenhanded, and equitable care. Marketplace advocates say a free-market is much more efficient and innovative at distributing resources.

In the end, political and managerial compromises are likely, and public-private partnerships, i.e. “deals,” will result. As always, there will be “top-down” versus “bottom-up” considerations. It’s my belief that consumers and doctors, acting together, and with help from the business community with their management platforms and retailing strategies, are better equipped to achieve what patients and doctors want – efficiency, choice, convenience, value, access to technology without rationing, and freedom from bureaucratic rules and regulations

The Future of Health Information Technology (HIT)

“All I know is that the Internet will transform the world.”

Alfred Chandler, Jr (1918-2007) Business Historian

I would like to bring your attention to one event and two medical articles.

1.A Robert Wood Johnson Foundation announcement that it is sponsoring an international competition to identify the 12 most disruptive innovations. Entries for the competition will close on July 18. You may enter by googling “Robert Wood Johnson, Disruptive Innovation” to review the current entries, one or which is mine. Mine is titled “Spreading The News of Health Care Innovation in Health Care.” Simply click on the "enter the competition" button and describe your disruptive innovation.

2.An article in the June 14 New England Journal of Medicine, “Communication between Physicians and Patients in the Era of E-Medicine” by John H. Stone, MD, MPH, deputy editor for rheumatology at UpToDate. The article concludes, “It is our task to ensure that e-medicine – now inevitable in one form or another – improves the ways in which we deliver, receive, and pay for health care.”


3.Another article in that same issue of the New England Journal “Information Technology Comes to Medicine,” by David Blumenthal, MD, MPH, and J. P. Glaser, PhD, of Massachusetts General Hospital and Partners Health Care System in Boston. Their article raises three questions: a) Will the Bush Administration’s current decentralized. market-based approach to promoting IT spread prove effective in meeting the promise of HIT? b) Can we rely on benefits of HIT to materialize when the market rewards those who can afford it and deprives the disadvantaged? 3) How will the health system assist 75% of physicians who practice alone or in groups of five or fewer so they can afford electronic health records?

Like most Boston medical elite, Blumenthal and Glaser trust the government more than the market. They prefer federal mandates and imprimaturs to marketplace vagaries. The trouble is that government has not provided physicians with sufficient incentives to install EMRs. Most physicians in small groups simply do not see how EMRs give a sufficient return on investment to justify their expense, which may initially run $30,000 per physician not to mention annual maintenance fees.

The demand side of the IT market (consumers desiring doctor use of IT) has yet to sway the supply side (doctors investing in and using IT equipment or expertise to supply IT information). According to the Wall Street Journal (wsj.com), the demand is there.

Consumers would like to see these IT services from doctors.

•77% would like reminders by email from their doctors when they are due for a visit or some type of medical care

•75% would like the ability to schedule a doctor’s visit in the Internet

•74% would welcome E-mail communicate directly with their doctor

•67% would like to receive receiving the results of diagnostic tests by email

•64% would like doctors to have an electronic medical record to capture medical information

•57% would like home monitoring devices to send medical information like BP readings.

Many patients expect these email services to be free. Most e-medicine models focus on online appointment scheduling, prescription refills, general messaging, and “web visits” with physicians.

These services are fine and good. Their chief benefit so far has been to reduce the number of telephone, Fax, and paper messages flooding into doctors’ offices.
Doctors may be missing a good bet by not stressing the value of the Internet as a mean of interactively educating and engaging patients about their care. The Internet and home held devices now allows consumers to receive interactive multimedia information – through visual, verbal, and voices messages – transmitted through videos directly related to their immediate problem, to an impending surgery, or to questions on how to use medical devices. Patients embrace doctors who communicate with them by giving them clear, understandable, relevant jargon-free messages in language and images they can grasp

Review of Reece Book and Article by Grace-Marie Turner, Galen Institute

Prelude: Yesterday I spoke to Grace Marie Turner, who heads and speaks for the Galen Institute, a market-based health care think tank, in Alexandra, Virginia. She told me her greatest fear was that the government would completely take over health care through a series of incremental steps – e.g. universal coverage of children and government negotiation of Medicare drug prices. She said we are nearly there: the governments already pays for 46% of health care and, in one way or another, sets the fee schedules for most providers.

She was kind enough to: A: run the following brief review of my book in here widely read newsletter; B) to share this article containing her thoughts on U.S. health care vis a vis that of other nations;

A)Review o

INNOVATION-DRIVEN HEALTH CARE 34 KEY CONCEPTS FOR TRANSFORMATION \

Author: Richard L. Reece, MD

Source: Jones and Bartlett Publishers, 04/07

In his new book, Dr. Richard L. Reece, a pathologist, writer, editor, consultant, and speaker, provides an in-depth look at innovative trends health care from both the physician's and consumer's perspective. Reece breaks down health care innovations within six key areas, including hospital-physician joint venture innovations, employer an health plan innovations, constraining costs and expanding markets, and consumer innovations. Dr. Reece's book “is an intelligent, knowledgeable analysis of the impact of innovations on the future of U.S health care. ,” writes Harvard Professor and Manhattan Institute senior fellow Regina Herzlinger. “If you want to continue doing what you are doing, this book will enable you to assess how you fit into this new world and to adapt yourself if needed.”


B)ou Get What You Pay For, By Grace Marie Turner

We have precisely the health sector in this country that we are paying for. As we are barraged from all sides with articles, books, and now movies about how absolutely awful our system is, it is important to realize that if we want change, we must start by improving the payment and incentive structures that direct how it functions.

•A conference of senior and seasoned health policy analysts that I attended in Princeton this week focused on the shortages today -- and the much greater shortages projected for the future -- in the health care workforce, especially primary care doctors and nurses.

But why is this surprising? Primary care doctors are paid an average of about $90 for half an hour of their time (which must cover their own salary as well as all of their office overhead) while radiologists, for example, are paid about $600 for the same amount of time. Medical school graduates are making very smart economic decisions in flocking to specialties because that is what we are paying them to do.

•Florida is becoming renowned for having a huge concentration of specialists catering to wealthy seniors. Between Medicare and their supplementary Medigap or retiree coverage, seniors' health care consumption is virtually free. (One Princeton speaker observed: If you think you are old and rich, go to West Palm Beach and you will find that you are neither…)

Jack Wennberg of Dartmouth and others have shown that seniors in Miami consume more than twice as many Medicare dollars as seniors in Minneapolis, for example, but the Miami outcomes are no better and in some cases, they are worse. Seniors in Florida are consuming a great deal of health care because that's what the system subsidizes them to do, and physicians respond by offering an abundance of services.

•And speaking of outcomes, one participant at the Princeton conference said our current system could just as easily be called “pay for mistakes.” Doctors and hospitals get paid even if they make errors. And you could argue that they get paid more if they make mistakes because they can be paid again to fix the problem.
This week, we received refreshing news that the Geisinger Health System in Pennsylvania is offering surgery with a guarantee: The hospitals will charge a flat fee that includes a 90-day warranty. And the doctors themselves came up with a list of what they considered best practices to help avoid errors in the first place. We offer a short summary of an article about the initiative in the round-up below.

•And the big news of the week was the saturation coverage of Michael Moore's newest movie, “Sicko,” due in a theater near you on June 29. That is, if the U.S. government doesn't ban it because Moore may have gone to Cuba illegally in his search of the best-on-the-planet health care for a group of sick American patients.
Give me a break! Cuban surgeons botched several surgeries on Fidel Castro, for heaven's sake, and a surgeon from Spain had to try to repair the damage. One has to wonder, if Moore were to need medical care for heart trouble, for example, do we really think he would go to Cuba for his care?

•Already a rebuttal to Sicko is circulating. It's worth a few minutes of your time to watch this short clip about the difficulty of obtaining surgery in Canada and the consequences of the long waiting lines for one woman who needed surgery for a bladder malfunction.

The only surgeon who could do the procedure in her region was limited to 12 a year, and he already had more than 30 people on his waiting list. The outcome for this Canadian woman was not good. And the film also depicts the distortions of decisions about who gets surgery in a health care system where payment decisions are made by politicians.

Canada spends a lot less on medical care than we do in the United States, and they, too, get what they pay for.

•And in the United Kingdom, Prime Minister Tony Blair had made improving the health care system one of his top priorities. The parliament boosted spending on the National Health Service from 6.5% to 9.4% of GDP, primarily focused on increasing access to care by hiring more health care workers and giving new incentives to general practitioners to produce better results.

They did boost the pay of GPs, but are questioning whether they got anything for the added spending. A report from the House of Commons shows that one group did particularly well -- the number of senior managers went up by more than 62% compared to an overall increase in the health care workforce of 24%.

But while Americans are being brainwashed into believing that our health care system is the worst in the developed world, opinion polls consistently show that the great majority of Americans are satisfied with their health care system.

We have an obligation to embrace what is good and to do a much better job than we have of fixing what is wrong, particularly by adjusting the incentives to get better care and lower costs and to cover more of the uninsured. We can show the world what a functional, responsive, innovative, and affordable 21st century health care system should look like. We just have to shift the incentives so that is what we are paying for.

Minnesota Town Innovates to Recruit Doctors

Asks Humorist Garrison Keillor for Help

Prelude: International Falls ,Minnesota, reputed to be the coldest town in the U.S., is short on doctors. Its 7 person clinic needs a surgeon and three family physicians. So local leaders turned to Garrison Keillor, Minnesota’s icon of humor, to rustle up a few good doctors, He responed on “A Prairie Home Companion,” listened to by 4.3 million listeners on 580 public radio stations, by composing and singing a doctor recruiting ballad. You can listen to it duluthclinic.org. Here are snippets from Garrison Keillor’s Song on International Falls’ Efforts to Lure Doctors. So far 15 doctors have responded to the call for help.

They’re looking for doctors, in International Falls.

Up on the Northern Border, where the loon calls.

They don’t need a psychiatrist, they’re basically all right.

They Need fishhooks removed, and treatment for frostbite.

It’s not a luxury resort with miles of sand beaches,

It’s more known for blizzards, wood ticks, and leeches.

It gets cold in winter so you cannot feel your face.

But for the right kind of person, it could be the perfect place.

Here’s is my limerick commenting on Garrison’s noteworthy effort..

There once was a humorist named Garrison Keillor,

A real fine feeler, not known as a wheeler dealer healer,

Garrison wrote and sang a song calling for physicians,

Who might want to practice and fish under cold conditions.

Among physician recruiters he became a scene stealer


Reference

Damon Adams, “Radio Icon Sings Praises of Minn. Town to Lure Doctors, “American Medical News, June 11, 2007

Health Care at the Work-Site as a Major Innovation

Another Way for Resolving The Clash of Cultures between Managers and Professionals and Reducing Costs

“As a manager of professionals, how often in your career have you had to confront attempts by your professional associates or subordinates to challenge your authority? As a professional, how much longer can you put up with managers who interfere with your right to work autonomously?"

Joseph A. Raelin, The Clash of Cultures: Managers and Professionals, Harvard Business School Press, 1986

One of this blog’s purposes is to acquaint readers with powerful new innovative trends – those with “legs” strong enough to transform health care. In recent years, those trends have included consumer-driven care with its step-children – HSAs, high deductible health plans, retail clinics, and now a new kid on the block – work-site health care.

In one way or another, most major developments in health care have two purposes,

•To resolve conflicts between managers of corporations and independent physicians in order to contain costs, expand access, and improve care. Those conflicts led to the managed care movement – with HMOs serving as intermediaries to bring doctors to heel. Because of rebellions by patients and doctors, managed care largely failed.

•To find organizational models that would achieve these same ends. To date, the most effective models have been physician-led private and academic multispecialty groups and integrated hospital-based health systems with administrators (often physician leaders) and salaried physicians working in tandem.

For the most part, these developments have failed to resolve the authority and cost issues at the workplace. Corporations are hemorrhaging from health benefit costs -- and are desperately seeking solutions – solutions to protect employees’ health, retain employee loyalty, and save costs.

This is where CHD Meridian Health care, a medical management company enters the picture. It proclaims it is a champion of “employer-sponsored care.“ Meridian is a Nashville- based medical management company whose services are designed to provide cost-effective medical outcomes for large employers and their employee, retiree, and dependent populations. CHD Meridian is a managed care and managed cost provider.

The company designs, builds, staffs, and manages employer-sponsored health care work sites offering health care services directly to a company's covered population. Information systems within these sites communicate with existing pharmacy benefit management (PBM) vendors, as well as monitor employees, retirees, and their dependents. CHD Meridian currently provides employer-dedicated services at the worksite to 225 clients.

These services feature work site clinics conducted by salaried primary care physicians and nurses. Employees have direct access to care for workplace illnesses or injuries, chronic disease programs, occupational medicine care, generic drug prescriptions, lab work, physical therapy services – mostly free of charge or at markedly reduced rates. Clients include GE, Toyota, and other Fortune 1000 companies. Savings to date amount to about 20 to 25 percent of benefits costs.

It takes an employment base of about 1700 employees to make these clinics work. Employee coalitions can also avail themselves of these services. This approach reduces acute care expenses, takes care of low risk problems, and helps retain employees. Furthermore, it gives employers tight control of costs, partly because doctors are working on salary have no incentives to provide excess services.
Employer-sponsored health care was pioneered to enable large employers, mid-sized employers, and consortia to directly contract for primary care and pharmacy benefits - and to realize significant savings - without disrupting existing managed care or pharmacy benefit management plans.

Direct contracting reduces costs while improving access and quality of care. CHD Meridian was the first employer-sponsored health care provider to achieve accreditation by the Accreditation Association of Ambulatory Healthcare (AAAHC).

Will work-site health clinics resolve the nation’s health cost and access crisis? Of course not, but these clinics show convenient, lower-cost, consumer-oriented care can effectively be delivered where employers work. And, along with retail clinics, they’re an example of innovative organizational restructuring, outside the usual ambulatory health care settings.

Internet Health Markets – Too Disruptive an Innovation?

Are Virtual Visits and Virtual Markets Too Wild a Dream?

This blog emerges out of two visions,

• One is that of Barry Diller, the Hollywood mogul who has become a television/Internet billionaire (he was the nation’s most highly paid CEO last year, taking home $470 million). His vision was that people would buy goods and exchange information “interactively” through remote, animated, and intensely human encounters on the television and Internet screens.

• The second is that of David Brailer, MD, the former national health information coordinator for the Bush Administration, who resigned last year, and who has now founded, with $700 million in support from Calpers, Health Evolution Partners. This venture firm’s mission is to cut costs, mostly through remote technologies that keep people out of institutions. One of Brailer’s visions is to fund Internet Health Markets, which, among other things, might set up competitive markets to read chest X-rays.

Are these two visions, one from a commercial media mogul and the other from a doctor and economist, too radical – too wild a dream – for cutting costs? Would they call for to wrenching a change in current patient-doctor relationships?

Maybe.

Certainly the visions, fully deployed, would radically change the nature of our health system, which is based on hands-on personal encounters between patients and doctors in private settings in medical offices, clinics, and hospital rooms. Keep in mind, however, that changes wrought by this visions, would be evolutionary not revolutionary.

And so far, legal and regulatory barriers, based on privacy, licensure, reimbursement, turf, and relationship considerations have impeded these visions. Telemedicine, after all, has been around for 20 years, and despite its established cost-cutting powers, has yet to take the medical world by storm.

It’s not that the technologies are not there. Already, American radiologists are outsourcing imaging interpretation to radiologists in India, Australia, and other countries. The same is true of interpretation of complex cardiac rhythm strips. Barriers to outsourcing routine X-rays are likely to fall too.

And remote exams of patients using audio-visual technologies are common in the telemedicine world – and in institutions like Mayo are often used to elicit a second opinion within that institution. Furthermore, audiovisual examinations by doctors and nurses of home-bound patients is established in the chronic disease management industry and has been shown to dramatically cut hospital admissions and emergency room visits.

Which leads to another vision. Why not virtual interactive patient visits – using audio-visual interactivity coupled with measurements of vital signs, blood constituents, blood gases, body mass indices, and information from the patients’ personal health record?

The obstacles remain formidable – radical restructuring of the patient-doctor relationship, medical legal issues, and who shall pay and how. These obstacles are not insurmountable if costs continue to rise, if wireless technologies combining imaging, text, and sound continue to evolve, if medical licensure authorities change their policies, if medical legal threats abate, and if the payment system for physicians is altered to make it reasonable for them to participate.

Disruptive Innovations for Diabetes

No Miracles Among Friends

I see the Robert Wood Johnson Foundation is staging an international competition to identify the top “disruptive innovations” in the health care world.

You can find the rules for entry by googling “Robert Wood Johnson, disruptive innovation.” The competition closes on July 8, when the top 12 finalists will be selected. I congratulate the foundation on their effort, and I wish them luck.

Disruptive innovations are likely to be the backbone of improving health care – especially for addressing the epidemic of obesity and diabetes, now so prevalent in the Western World.

Disruptive innovations are innovations that make any product or service more convenient, less expensive, quicker to use, more effective, and more accessible to users. In health care, it’s important to point out that most disruptive innovations are not miracles – like open-heart surgery or multiple organ transplants, or in the case of diabetes, pancreatic transplants or bone marrow transplants to cure juvenile diabetes.

Two stories come to mind to make the point.

•During he early days of the first century, faithful disciples roamed the land preaching and winning converts. One day, St. Peter and St. Paul arrived at an inn in Jerusalem, weary and footsore. They called for wine and refreshed themselves, then fell into an argument as to who should pay. To settle the dispute, they threw dice. Paul shook the box and threw a four and a five. Peter followed and threw two sevens. Paul gave him a long look, and said sadly,”Peter, old man, no miracles among friends, please.”

•The other tale involves three surgeons boasting about their best operations at the height of the Cold War... The English surgeon said, “I once performed brain surgery on a deaf mute and restored him to full hearing and speaking.” The American said, “I did a spinal cord transplant on a quadriplegic and restored him to full movement.” The Russian said,” I removed a man’s tonsils “The English and American surgeons, astonished, asked,”What’s so miraculous about that?” “Because, “explained the Russian, “In my country, people are afraid of opening their mouths, and I have to remove them by coming from a different direction.”

Diabetes is like that. You have to approach it from different directions – high tech and high touch, prevention and maintenance. Many high tech approaches, which are essential disruptive innovations – insulin, inhaled insulin, insulin-pumps, monitoring devices, other drugs, and transplants – have been tried and work for many but often fail to stem the tide of complications.

For most doctors, controlling diabetes demands attention to preventive details and instructing patients ( To get the attention of his patients, Stanley Feld, MD, an endocrinologist in Dallas, had his diabetic patients sign a contract saying they would either abide by his rules or not be his patients. He also issued patients T-shirts bearing the words: “In Control!”).

For doctors, prevention entails,

•Precise blood glucose control

•Inspecting the bottom of patient’s feet – something many obese diabetics can’t do for themselves.

•Assessing loss of sensation in feet and lower limbs.

•Monitoring blood pressure.

•Checking blood lipids, blood creatiine and creatine clearance, and urinary albumin.

•Protecting the kidney with new drugs.


•Making sure patients take oral diabetic agents and insulin correctly.

•Instructing patients on proper diets and having a nutritionist or dietician re-enforce their message.

•Encouraging patients to lose weight and exercise (obesity is considered a precursor to most adult diabetes).

•Managing complications – blindness (the leading cause of adult blindness), heart disease and stroked (causes 65% of deaths among diabetes), kidney disease (accounts for 44% of case of kidney failure), and amputation (more than 60% of lower-limb amputations occur in diabetics).

Among diabetics and their physician friends, there are few miracles, because old habits are hard to break, and treatment regimens are hard to follow. But there are disruptive innovations on the horizon. Until these disruptions mature and take hold, the physicians’ best bet for controlling the vascular catastrophes associated with diabetes is strict adherence to best practice guidelines and rapt attention to clinical details.

A Book Review: Everything You Ever Wanted To Know About Physician Recruiting but Were Afraid to Ask

Merritt, Hawkins, & Associates Guide to Physician Recruiting, April 2007, 155 pages, $89 + $12.95 for shipping, 800-967-7790

Every once in a while a book comes down the pike that is worth every cent you pay for it, even though the price may seem high at first glance.

Merritt, Hawkins, & Associates Guide to Physician Recruiting is such a book. It contains information for recruiting doctors you won’t find in such compact form anywhere else. It is based on the Merritt, Hawkins, & Associates 20 years of experience in the recruiting field and on its numerous surveys of young physicians.

This is a no nonsense book. It contains facts on the physician shortage, what doctors want, where they want to settle, what they expect in terms of salaries and benefits, what salaries and benefits are being offered, why foreign medical school graduates are essential to the health care system, what the split is between females and males in various specialties, why locum teens have become an important commodity, what you have to pay doctors for emergency room coverage, how you can persuade doctors to join your group or hospitals, and a cogent introduction on who doctors think and why doctors are different than most other professionals. In short, this book contains everything you might possibly want to know about recruiting doctors.

The book is about physician search as a sequential process, as a kind of physician search safari. It answers these questions: Where do you look when you seek a physician? Will it be hard to find the right physician? Who else is looking? What are the legalities involved? What’s your game plan? Who’s on your safari team? What kind of pay and benefits should you offer? What resources do you need? The book is not only valuable for the hunter, but for the hunted. If you’re a physician being recruited, you will find more information here than anywhere else I know.

Finally, the book brims with information you may not have known:
Did you know?

•There will be a projected shortage of 200,000 doctors by 2020

•The five major causes for physician turnover once you have recruiting them

•The return of investment and efficiency gains of physicians who invest in specialty
hospitals

•The base salaries/guarantees being offered to physicians

•The average incomes generated by physicians by specialty for hospitals

•The physicians and types of physicians required per 100,000 population

•Overhead as a percent of income in practices.

•The percent of residents who are female in various specialties

•The number of international medical graduates by specialty

•The percent and size of hospitals recruiting doctors

•Salaries being offered as indicated in various compensation surveys

•The IRS/HHS/Stark recruiting regulations.

I thought not. You will find this and other hard-to-find nuggets of information between this little volume’s covers. If you’re looking for just the right doctors for just the right price for just the right reasons, buy this book, read it, absorb it, pass it around.

HeartMath – Why Understanding The Mathematics of Heart Rhythms Helps Reduce and Correct Stress

Measuring and Minimizing Stress And
Reducing Deaths From Coronary Artery Disease

In conclusion, our analyses suggest that approximately half the recent decrease in deaths from coronary artery disease in the United States may be attributable to reductions in major risk factors and approximately half to evidence-based medical therapies. Future strategies for preventing and treating coronary heart disease should therefore be comprehensive, maximizing the coverage of effective treatments and actively promoting population-based prevention by reducing risk factors.

Earl S. Ford, MD, MPH, “Explaining the Decrease in U.S. Deaths from Coronary Disease, 1980-2000, New England Journal of Medicine, June 7. 2007

This week I met Dr. Bruce Wilson, a cardiologist who practices in Milwaukee. Bruce is an academic cardiologist, founder of a specialty heart hospital, and medical director of HeartMath, LLC., a 15 year old company dedicated to studying, measuring, and reducing stress as a factor in causing and aggravating coronary artery disease.

Stress isn’t always mentioned as a cause of coronary artery disease, but Bruce has no doubt it’s perhaps the major underlying factor in the high-strung fast-paced U.S. society.

What are the usual risk factors mentioned as causing coronary artery disease?

According to an article in this week’s New England Journal of Medicine, multiple factors led to and contributing to 62% fewer deaths in men and 49% fewer deaths in women from coronary disease in the U.S from 1980 to 2000.

About 44% of these changes were attributed to reduction of these risk factors:

•Decrease in total cholesterol concentration, 24%

•Systolic blood pressure, 20%

•Smoking prevalence, 12%

•Physical inactivity, 5%

These reductions of risk were partially offset by increases in,

•Body mass index, 8%

•Prevalence of diabetes, 10%

About 47% of the decreased deaths were attributed to these treatments,

•Preventive treatments after myocardial infarction (bypass and revascularization), 11%

•Initial treatments for myocardial infarction and unstable angina, 10%

•Treatment for heart failure, 9%

•Revascularization for unstable angina, 5%

•Other therapies, 12%

The New England Journal article didn’t mention stress as an important risk factor, perhaps because stress is subjective and difficult to measure, i.e., isn’t quantifiable. Yet some experts like Wilson maintain daily stress may be a more important, overarching, contributing background cause than all other risk factors combined.

This is where Dr. Wilson enters the picture. He believes stress may be as important a risk factor to consider as an elevated cholesterol and LDL cholesterol, a low HDL cholesterol, increased weight, elevated blood pressure, and decreased physical activity combined. . His ideas, and those of HeathMath, are being implemented and tested at a number of major academic cardiovascular centers.

HeartMath LLC is a performance company providing a range of services, products, and technologies to boost performance, productivity, health, and well-being while dramatically reducing stress.

The name HeartMath derives from the fact that the company is based on the mathematics of heart rhythms and how these rhythms “entrain” other body organ systems, including the brain, during periods of stress, which in Western society, preoccupies us during most of our waking moments.

One of HealthMath’s products is EmWave, a small 2.2 ounce handheld device people can carry with them in their pocket or purse to relieve stress and restore tranquility and “coherence” in their thinking, performance, and brain function.

Founded in 1991 as a non-profit research organization by Doc Childre, HeartMath has earned global recognition for its research-based techniques and proprietary technology to transform the stress of change and uncertainty, and to bring coherence and renewed energy to the workplace, and the home.

It is common knowledge that meditation, happiness, calmness, lack of anxiety, reduced stress on the job or in a marriage or other relationship may prevent coronary disease or enhance healing after a coronary event.

Over the last 15 years HeartMath, LLC, has devoted itself to reducing stress as a cause of coronary disease. It has advanced the idea and developed technologies to measuring stress levels by recording the heart rate variability through an electrocardiogram or a analysis of pulse rhythms as recorded on a portal device worn on the wrist or ear.

Cardiovascular recordings, in short, are a measure of one’s emotional state or “intellectual coherence.” By thinking of positive things like appreciation, love, or happiness, one can change the heart rate variability. This change, an increase in variability, in turn, emotionally and physiologically reduces stress. One can see this change reflected in a visible “freeze frame” on a handheld device known as the EmWave.

Wilson and his associates believe one can use this portable device to measure and decrease stress, improve intellectual performance on the job, prevent coronary disease, and promote healing. Dr. Wilson has written a book The HeartMath Approach to Managing Hypertension and is in demand as a speaker on how HeartMath’s technologies can be used to reduce stress and minimize the risk of coronary artery disease.

I don’t pretend to be an expert on such matters as heart rate variability as the body’s master guidance system controlling stress, or on stress a major cause of coronary artery disease. But for your edification and to introduce you to the language of heart rate variability, I submit this excerpt from an article by two HealthMath advocates.

New Tool for Stress Reduction, Rehabilitation, and Performance Enhancement

Rollin McCraty, Ph.D. and Dana Tomasino, B.A.

An Introduction to Heart Rate Variability Feedback

Heart rate variability feedback is an exciting new technology that has broad-based applications in stress reduction, rehabilitation, and performance enhancement.
This article focuses on heart rhythm coherence feedback training, which has proven to facilitate rapid, profound, and enduring improvements in a wide variety of conditions.

An important reason this technology is effective in so many and diverse applications is that it facilitates the maintenance of a physiologically efficient and highly regenerative inner state, characterized by reduced nervous system chaos and increased synchronization and harmony in system-wide dynamics.

This psychophysiological mode, termed physiological coherence, is conducive to healing and rehabilitation, emotional stability, and optimal performance.
This article provides an introduction to heart rate variability feedback, explores its advantages, and discusses the use of heart rhythm coherence feedback to promote the physiological coherence mode.

A new heart rhythm coherence monitoring and feedback system known as the Freeze-Framer is introduced, and examples of the effective use of this technology to reduce stress and promote positive emotional states and coherence in a wide range of wellness and performance enhancement applications are presented.

Significance and Measurement of Heart Rate Variability

Heart Rate Variability (HRV) is a measure of the naturally occurring beat-to-beat changes in heart rate. The analysis of HRV, or heart rhythms, is a powerful, noninvasive measure of neurocardiac function that reflects heart –brain interactions and autonomic nervous system dynamics.

HRV can be derived either from the electrocardiogram (ECG), using electrodes placed on the chest, or from pulse wave recordings, using a plethysmographic optical sensor placed at the fingertip or earlobe.

ECG recordings have the advantage of producing fewer movement-related artifacts. However, pulse wave recording devices also provide data suitable for most applications, and, as they require no electrode hook-up, are more easily adaptable for use in a much wider variety of settings (see below).

Advantages of HRV Feedback

A promising advancement in biofeedback technology is the recent development of HRV feedback systems. In relation to other types of biofeedback, HRV feedback offers several unique advantages. First, HRV feedback reflects the activity of both the sympathetic and parasympathetic branches of the autonomic nervous system and the synchronization between them, and thus provides a window into the dynamics of the system as a whole.

Compared to EEG feedback, HRV feedback is also considerably simpler and more straightforward to learn and use, which facilitates rapid improvement. Further, because the instrumentation utilizes only a simple pulse sensor requiring no electrode hook-up, it is extremely versatile and can be used easily and effectively as an educational tool not only in clinical settings but also in the home, in the workplace, in schools, or even while traveling.

Its cost-effectiveness also makes it accessible to a greater number of people and in a wide range of applications. In relation to other biofeedback modalities, HRV feedback is also more reflective of changes in emotional/ psychological state, and thus is particularly powerful in applications where reducing stress and increasing emotional stability are critical.

Brailer Resurfaces as Health Care Cost Cutter

The health care industry is ripe for innovation. We've used better technology to treat illnesses, but we've never harnessed technology to make the system efficient.

Larry Levitt, Kaiser Family Foundation, ”CalPers to Invest in Containing Health Costs, The pension fund plans to back companies that seek ways to make medical care more efficient,” Los Angeles Times, June 5, 2007

We’re going to be investing in things that can reduce the rushing costs of health care.

David Brailer, MD, Former Bush Administration National Coordinator of Health Information Technology, “Venture Fund to Seek Out Cost Cutters in Health Care, New York Times, June 5, 2007

It is generally agreed the U.S. spends enough money on health care. There’s plenty of money sloshing around out there. We just spend it in the wrong places, high technology hospital care, in the wrong way, fragmented fee-for-service care. That’s one reason presidential candidate are talking so much about cutting costs as a prelude to reform.

In any case, I find it fascinating that Doctor David Brailer, a medical economist as well as a physician and former government official, has resurfaced at the head of his own venture capital fund dedicated to using technology to cut costs.
Brailer, you may recall, was President Bush’s National Coordinator of Health Information Technology. He served for two years as the national salesman of electronic medical records before resigning in May 2006.

Now he’s saying his investment firm has no plans to invest in electronic health records, which he terms a “saturated market.” I interpret this remark as meaning EMRs aren’t an effective way to cut costs.

Health Evolution Partners, backed by $700 million from Calpers, the big California pension fund, now hopes to cut costs by the re-allocating technology to cutting costs.
Brailer says he would like to invest in companies that “keep people out of institutions.” He gives the examples,

•Remote monitoring of patients with chronic diseases in their homes.

•Management of chronic disease

•Telemedicine

•Predictive genomics to tailor drug doses

•eBay-style Internet marketplaces for services like reading chest X-rays

Brailer is making a safe bet.These technologies already exist.

•Companies like American Telecare in Minnesota and Piedmont Health Systems in Atlanta have already demonstrated you can dramatically reduce hospital and emergency room admissions for home bound patients to near zero in some cases.

•John Shard, MD, health of Enhanced Care Initiatives in Lakefield, Connecticut, has shown you can decrease hospitalization by 33% and ER visits by 25% among the frail and elderly by simply paying “hands-on” attention to them and decreasing their social isolation.

•Management of chronic disease, led by companies like American Healthways, is already a giant industry.

•Telemedicine and its technologies have been around for 20 years.

•Predictive genomics is rapidly evolving, thanks to predictive modeling and artificial intelligence and genomics technologies.

•Only the Internet marketplaces for auctioning and spreading interpretations of radiologic and cardiology wave rhythms remain to be done.

I’m reminded of a quote in my book Innovation-Driven Health Care about present and future innovations by Brooks O’Neil, a senior analyst. All of the present and future innovations he spoke about entail cost cutting.

“I see five huge innovations going forward:

1.Consumer-driven health care

2.Chronic care management

3.Health care IT (particularly tools for consumers to better manage and pay for their health care)

4.Public-private partnerships to manage care for seniors (Medicare) and the disadvantage (Medicaid)

5.Customized car centers (chains to delivery high quality, cost-effective patient services locally, regionally,l and nationally)”

But then Brooks added this caveat,

“The regulatory environment has got change to allow these innovations to occur. We’ve got to open up Stark, eliminate corporate practice lays, eliminate Certificate of need, and eliminate a few other things, too.”

Regina Herzlinger Discusses Consumer-Driven Cure

June 5, New York City, – Here I am at the Harvard Club in New York City, along with 95 others listening to Regina Herzlinger discuss her new book, Who Killed Health Care: America’s $2 Trillion Problem and The Consumer-Driven Cure (McGraw –Hill, s007).

The other listeners include venture capitalists, major media representatives, think tank types, capital managers. health care lawyers, medical academics, public relations people, government officials, drug company executives, health care public relations experts, heads of consulting firms, financial firm executives, and even a few doctors. I’m here because Regina, a tenured professor at the Harvard Business School taught me a little about economics at an advanced management course at Harvard Business School many years ago. She also wrote the foreword to my book Innovation-Driven Health Care: 34 Concepts for Transformation (Jones and Bartlett, 2007), so I owe her one.

Regina’s presentation is one of a series of forums given by the Manhattan Institute, a think tank here that stresses policy research. In addition to her Harvard position, Regina is a senior fellow at the Institute, The brochure I have in my hand as I listen to Regina, it says,

We have cultivated a staff of senior fellows and writers who blend intellectual vigor, sound principles, and strong writing ability. Their provocative boos, reviews, interviews, speeches, articles, and op-ed pieces have been the main vehicle for communicating our message and influencing the debate.

From our founding, support for books have been a unique feature of the Manhattan Institute’s approach. We ensure that our authroes meet the regious intellectual and editorial standards demanded by major publishers, and we promote the books to the media, opinion leaders, and the general public. Nothing allows us to make a sustained comprehensive argument more effectively.

Our mot successful books have opened new intellectual frontiers and given new impetus to whole movements for political and social reform.

Regina’s book certainly qualifies as a new “intellectual frontier” and as “whole movement for political and social reform.” In her book and her podium presentation, which she admits “shamelessly” promotes her book, she lambastes those powerful special interests who wield the power that maintain the current health atatus quo. These include general hospitals, health insurers, the employers, the U.S, Congress, and elite police makers.

These power-mongers, she argues, act in their own interest rather than the interest of health care consumers and their physicians. The health care establishment’s problems are both attitudinal and altitudinal.

• Their attitude problem is that they, not health consumers and doctors, know what’s best for patients and their health. It is a paternalistic attitude that they, and only, they have the intellect and information to preside over the nation’s health system, and patients and the doctors lack the brains and intelligence to know what’s good for them.

• The altitude problem is that hospitals, insurers, employers, Congress, and the academic are so far removed from the clinical frontlines – from what patients want in their everyday lives and what innovative doctors can deliver – that they are unaware of the problems they have wrought.

The problems include limited consumer choice, rules and regulations that stifle innovations, oligopolies and monopolies that kill competition, bureaucracies that impede care, unrealistic fee schedules that demoralize doctors, government agencies that have believe the know how to practice medicine, uncoordinated and fragmented care that endangers patients, and soaring costs that unnecessary and a burden on the economy.

The cure?


•Everyone is required to buy his or her insurance, using tax-sheltered income.
•Government subsidizes those who cannot afford to buy health insurance.
•Government, employers, insurers, hospitals, and policy makers get out of the way of consumers spending their own money and doctors who compete for consumer business.
•Doctors and hospitals are freed to bundle care as they want to and to quote their own prices.
•Government requires publication of data on the perofmrance of all medical practices.
•Prices are risk adjusted.

Will the consumer-driven cure work? Not if those currently in power and control of the system have their way. But it just might work if the current consumer-driven forces at play – high deductible plans, HSAs, and proven performance by physician-led specialized and integrated facilities – show they reduce costs, provide better results, and lead to more consumer demands for more choice, lower costs, and more control over their health destinies.

CLARITY – THE THIRD “C” IN HOSPITAL-PHYSICIAN RELATIONSHIPS

Prelude; This is chapter 4 from Sailing The Seven :Cs” of Hospital-Physician Relationships: Competence, Convenience, Clarity, Continuity, Competition, Control, and Cash. James Hawkins opens by expressing the views of a former hospital CEO; I respond with a physician’s point of view

Clear, unambiguous communications and straightforward processes are absolutely essential, if your hospital is to maintain positive relationships with physicians. Otherwise, you will find yourself dealing with unnecessary problems and confusion. Muddled messages and ambiguous processes simply don’t work.

Be Clear What It Takes

Often, physicians will not care what the process is to accomplish a particular task. They just want to know what it takes to get the job done. If a process is clear, straightforward and consistent, in most cases, they will adapt to it, assuming it doesn’t impact their convenience. Confusion over a process, however, wastes time and creates doubts about competence. It may generate concerns about your motives.

Achieving Clarity

So, how do you go about achieving clarity in your communications and methods? First, recognize that the potential for misunderstanding exists. Acknowledge that if misunderstanding occurs high costs may result. Innocent mistakes may be very costly. In a hospital, lack of clarity can easily lead to a patient’s death. Without appropriate appreciation of the critical need for clarity, you may treat communications and procedures casually. False assumptions may be made, “Oh, he knows what I’m talking about or he knows what I want to do” when in reality he has no clue of what is meant by a statement or what he should do next.

A Domestic Example

If you have teenagers, it’s highly likely you have had such an experience recently. You heard what was said. You know what all the words mean, at least you think you do, but you have no idea what your child was talking about. But one advantage of being befuddled from the onset is you know you’re confused. It gives you an opportunity to clarify the communication and to understand what was meant before any harm results from the misunderstanding.

Danger Lurks

A more dangerous situation is when you think there has been clear communication, but in reality you’re headed in two entirely different directions. For instance, suppose you tell your teenager not to stay out late. It’s highly possible that his definition of “late” may differ from yours. Consequently, you end up with different assessments of his behavior.

Know What You’re Trying to Say

To achieve clarity in your communications and to create processes understandable to those who use them, make sure you really know what you’re trying to say. Is that really what you want to communicate? And when you’re setting up a process, make sure you have a thorough grasp of each step in the process and of what it takes to go from start to finish.

If Every Administrator Were a Patient or a Doctor

Hospitals would run much more smoothly if every administrator was a patient and experienced first-hand the consequences of processes and procedures they create. Similar benefits could result from walking in the shoes of your physicians and experiencing their daily trails and challenges in your hospital.

Simplify

So first, clarify your thinking. If what you want to say isn’t clear in your mind, it’s not likely to become any clearer when you start putting your ideas out for others to see. Once you have a solid understanding of what you want to say and do, we recommend you follow the KISS (keep it simple stupid) Principle. There are those who would reject such an approach. They suggest it denigrates audiences by talking down to them.

Simplicity Means You Value Your Audience

We suggest just the opposite. By taking the time to ensure your message is understandable and your process is doable, it shows how much you value your audience. They are worth the time and effort it takes to make your meaning clear. Anyone can make a subject complex and confusing. What takes real genius is to figure out how to make a complex subject clear and easy to grasp.

KISS and President Reagan

When President Reagan stood at the Berlin Wall, he issued this challenge, “Mr. Gorbachev, tear down this wall!” Everyone knew what he meant. There was no question where Mr. Reagan stood on the question of freedom and what should be done to improve Soviet-American relationships.

In contrast, former vice presidential candidate James Stockdale left a bewildering and confused image in the candidates’ debate in 1992. Admiral Stockade, a genuine, if relatively unknown war hero, left millions of voters perplexed when he opened the debate by saying, “Who am I? And why am I here?” and then never got around to answering these questions.

“Soon” Means Different Things to Different Folks

As you search for clarity, overcome an inherent difficulty of communications in our profession. Medicine has its own language and healthcare its own lingo. In what other fields, for example, are negative results good and positive results bad? In your search for clarity, minimize using ambiguous language. If you tell a physician a problem will be fixed “soon,” you may mean sometime within the next two weeks. The doctor, in contrast, may believe you have just made a promise to have the issue resolved in the next five minutes.

As a result of this different interpretation of “soon” you may have an irate physician who believes you have broken your word. So, while there may be some instances where ambiguity has its benefits, in most situations you will be far better off if you spell out specifically what you intend to do. This will enable you to resolve differences at the front end rather than after disappointments arise down the road.

Test Your Meaning on a Colleague

Next, as you seek clarity, have someone else check out what you’re saying or doing. Just because it’s clear to you, it doesn’t mean the rest of world will understand it. Have a colleague or associate listen to your message. Better yet, test it on someone who isn’t steeped in the subject matter. They can look at it with fresh eyes and give you an untainted perspective.

Have a Doctor Review Your Material

If possible, if you’re communicating with physicians, have a doctor review your material. If these alternatives are unavailable, let the material, and your mind, rest overnight or longer if possible. You can return to it with renewed energy and clarity. It will be more understandable in the morning. As a general rule, no one should serve as his or her own editor. It’s too easy to overlook a mistake. Your mind sees what you thought you said. It may not be apparent to others what you put down on the page.

Challenge Your Assumptions and Simplify, Simplify

When you’re creating or redesigning a process, challenge if each step is truly necessary. Could the same results be achieved with fewer steps or a simpler process? Too often, we’ve seen steps added to a process without anyone ever asking whether any of the existing steps could be removed. Consequently, the process just gets more and more complex.

Warning – Legalese Can Kill Understanding

One thing you don’t want to do once you have finished designing your process is to have your attorney write the instructions for it. While a lawyer can help you avoid legal pitfalls, the written material he produces is unlikely to be easily understood or user-friendly. So while you may not get sued, your hospital is unlikely to achieve the results that it seeks.

Forbes magazine conducted a campaign to have the writing of warning labels done by journalists, who are skilled in communicating, rather than by attorneys who were focused on other objectives. In the December 26, 2005 issue, William Baldwin noted, “Whatever our faults, and I know from the mail that we aren’t lacking in that regard, we journalists at least know how to draw the reader’s attention. A little secret: Long-winded stuff won’t get read. Nor will gimmicks. Capital letters and boldface fonts aren’t going to save your story if it’s boring. Don’t waste ink stating the obvious (‘Use only as directed’). You will lose the reader before you get to the important things.”

Be Vivid

Baldwin added, “What works? What works are real-life examples, described vividly with memorable details. Details count. What if a can of floor sealant label didn’t mention fumes are heavier than air and can catch on a pilot light in the basement, and a fellow dies as a result? Or if the gasoline-powered emergency generator came with a true-life story about what happened to the family who had one of these things running indoors?”

Know Your Audience

Finally, in figuring out what to say and how to say it, remember to fit your message to your audience. The following story illustrates our point. A contractor was showing a prospective buyer around a new house. The builder’s crew swarmed around the site putting the finishing touches on the property. As the contractor walked the house, he stopped at first one window and then another and shouted out, “Green side up.”

After this happened a third time, the customer asked, “What in the world are you doing that for?” The contractor replied, “Oh, I have some college students laying sod in the front yard.”

Just as the builder understood the level of communication he needed to have with his workers, you need to know your audience. For hospital administrators trying to communicate with physicians, this means you need to spend time with them so you can understand how they think and learn what the best ways to communicate with them really are.

Take Away Question for Clarity

1. What do you really want to say or do in your hospital? Is your own vision clear?
2. What are five specific steps you can take to improve your communication
3. How can various processes be broken down step-by-step?
4. How can you get to know your audience better?
5. Who can you use as a communications sounding board?
________________________________________________________________________
Physician Perspective—Clarity

Clarity in writing is one thing. William Strunk, Jr., a Cornell English professor, captured the essence of clarity in writing in The Elements of Style (MacMillan Publishing, second edition, 1972).

“Vigorous writing is concise. A sentence should contain no unnecessary words, a paragraph no unnecessary sentences, for the same reason that a drawing should have no unnecessary lines and a machine no unnecessary parts. This requires not that the writer should make all his sentences short, or that he should avoid all detail or treat his subjects only in outline, but that he make every word count.”

Clarity in communicating with key physicians and clarifying hospital physician relationships may be quite another matter. Hospital CEOs live in two worlds – the world of mission-focused community hospital boards and the world of bare-knuckled competition with other hospitals and certain physicians. CEOs will communicate differently in these two worlds.

With physicians, the CEO’s mission is to use every communication means at his or her disposal – meetings, social gatherings, staff room conversations, and corridor encounters – to persuade physicians to be partners and supporters of the hospital enterprise.

In writing, brevity may be soul of wit, but in physician relations, repetition of a clear consistent message in multiple settings may be necessary.

You must win the physician’s trust. You must persuade him that you’re not meddling in his affairs, you know what you’re doing, you can deliver what you promise, your deal will not harm his relationship with peers or other facilities, and other physicians have profited from similar partnerships.

One final caveat: Hospital physician relationships are where two different cultures intersect. These relationships are therefore political. Clarity, unfortunately, may be the first casualty of politics. So tread lightly, use a sharp pen, and carry a small stick.

Hospital CEO in 2020

Old hospitals CEOs never die, they just lose their facilities.

Anonymous

January 1, 2020, Anywhere U.S.A. – Back in 2007, the world was your oyster. You presided over everything in the hospital. In your community, your hospital was everything to everybody who needed care 24 hours a day. You were the center of their health care universe.

Your facility was the only game in town. In 2005, your hospital had merged with the hospital across town, effectively ending local hospital competition. The merger made it easier to negotiate with health plans. They had nowhere to go.

The U.S. government had imposed a moratorium on doctor-owned specialty hospitals, thus eliminated another source of competition. But government intervention was not really necessary. Your hospital had acquired most primary care doctors in town, and you had forbidden them to refer to the a local specialty heart hospital, thereby depriving it of referrals and killing it before it got off the ground.

Your bottom-line was healthy – so you pretty much had your way with the governing board. You worked well with other members of the “C-suite” – the chief operating officer, the chief information officer, the chief medical officer, and the risk manager. With your record of success, they have no reason to question your judgment or to quibble with your leadership.

The locals flocked to your hospital's various “centers of excellence” – the heart center, the cancer center, the hospital-owned ambulatory care center, and the newly minted orthopedic and endoscopy centers, which you owned and controlled.

The emergency room was crowded with long waiting lines, but there was no where else for people to go, so the ER was breaking even and serving as a “loss leader” for other hospital departments. Besides, you were in an affluent growing community, and unpaid care was not yet a burden.

At first slowly but then swiftly things began to change.

External Affairs – What was happening outside the hospital grounds suddenly became more important than what was going on inside. You began to realize that inside there were always problems, outside there were the opportunities – and dangers that threatened your control.

•The citizens of your state became concerned about high health costs and the high rate of the uninsured. From 2007 to 2011, the state introduced a universal coverage plan, which imposed a 4% tax on his facility.

•More and more, business and community groups asked you to speak on the issues of universal coverage and the uninsured. You started to spend more and more time on preparing for those events. You were forced to give up some of your internal duties to other members of the C-suite.

•Lawyers across the nation and the state began to question whether non-profit hospitals like yours should retain your tax-free status. One lawyer had the gall to bring suit against you for your bill for an uninsured person and for pursuing the collection of that bill. One lawyer, Dickie Scruggs in Mississippi was threatening to bring a civil action against all not-for-profits, thereby threatening their charitable tax=free status. This troublesome lawyering intensified when the public learned that the rates charged the uninsured were much higher than rates of Medicare, Medicaid, and health plans.


•Consumers, many of whom had joined high deductible health plans linked to HSAs began to demand to know in advance what the costs of procedures would be in your hospital. Why, they asked, couldn’t they know in advance what the bundled bill – the combined bill of doctors and hospitals – would be for joint replacements, heart bypasses, and a variety of other high tech procedures? Why, they pressed, couldn’t the bill be more “patient-friendly,” i.e. comprehensive to the ordinary layman?

•Demands for “transparency” data on costs, outcomes, and other quality measures grew. The hospital was forced to make public its death rates from cardiac surgery. The infection rates of the hospital also became mandatory public information. Legislation on public safety became a state and federal issue. You were compelled to spend more time. to divert more resources, and to explain your policies towards drug safety and infection safety issues.

Strategic Concerns -Then matters of increasing strategic importance began to surface, one after another.

•How was your centralized facility going to handle the consumer demand for decentralization? For placing your facilities where the patients were? For turning your hospital inside out to serve the greater public – particularly those assertive baby boomers? The public was asking for ambulatory care units where they worked, played, and paid their bills – in the suburbs and beyond. They wanted your hospital and your doctors, who weren’t “yours” at all and over whom you had scant control, to operate as an integrated entity – with one reception area, one bill, and one-stop shopping facility.

•Physician specialists, pressured by dropping reimbursement and mounting regulation, sought to own and operate their own facilities, or failing that, to enter into a partnership status with the hospital. They wanted to control the clinical care, they wanted equity, and they wanted a percent of the profit. To make matters worse, the moratorium against physician-owned specialty hospitals and ambulatory care facilities was dropped. It became apparent that specialty owned facilities had better outcomes and more satisfied customers. Your moral high ground – that you had a God-given right to serve the community, to control care because only you served the common good – began to erode. Consumers armed with HSAs began to change allegiance from the hospital to more convenient ambulatory centers with better parking, more amenities, better service, and more options.“Decentralization,” getting closer geographically to patients, became a rapidly expanding movement. And doctors were quick to capitalize on better anesthesia, less invasive procedures, quicker recovery time, and rapid turnaround times making overnight stays unnecessary.

•The shift to alternative sites was aided, abetted, and facilitated by great leaps forward in information technologies. Google, other search engines, and the Internet in general, began to impact how you did business. The costs of EHRs dropped, more doctors installed them, electronic diagnostic support at the point of care became the rule, personal health records became the order of the day, and duplicate tests at hospitals became unnecessary. You were being asked to join with other hospitals, and with your own doctors – with whom you competed – into RHIOs (Regional Health Information Organizations – to pool and compare your data. For you, this was a tough sell. You were not eagar to share your results and your secrets with your competitors.


•Because many high-tech specialists were abandoning the hospital to perform procedures at their own facilities, your hospital began to suffer profit losses. You adjusted in various ways – by becoming business partners with physicians, specializing in acute and critical care for the desperately ill, hiring more hospitalists and proceduralists to become more efficient, expanding into such areas as alternative, cancer and hospice care, and becoming more “green,” holistic, and experiential. You became aware of the “total patient experience.” You hired focus groups to study what patients really felt and did. You outsourced “customer management relationship.” You began to use predictive modeling and artificial intelligence techniques to shape your management decisions.

•From 2005 to 2010, hospitals underwent an unprecedented building boom to prepare for aging and demanding babyboomers. The boom featured hospitals with greater safety, green rooftop gardens for peace and healing, more and softer lighting, exclusive dining for patients with ordering from high-end menus, rooms for visiting relatives. While this was occurring, there were increasing demands for “green energy” with hospitals requiring less energy to heat and operate, and for “socialized networking” and “virtual visits, “ whereby prospective patients could visit online with previous patients and could visit and view the hospital over the Internet. There was also a movement to “engage” patients by showing them videos of exactly what to expect from a surgical or any other invasive procedure or from treatment for a chronic disease episode. The demand for transparency had extended to clinical care itself.

Governance Changes – The changing environment required new skills for the CEO.

•You began to recruit experts from outside the usual hospital fields – from the financial, marketing, information technology, and retail sectors. Many in the retail sector had learned to innovate to survive by offering consumers more choices, more convenience, more bundled and packaged service, and more control over their health care as it applied to their everday lives. This required intensive consumer research, as well as ATM-like data entry by health consujmers, card swiping, card containing health and financial information, more buying options, and more credit opportunities. Health care was becoming more open, more transparent, and more scrutinized by consumer, government, and Internet-based rating agencies. It was if you were operating under a data microscope.

•You had to transform the whole nature and content of the hospital board. Running a hospital was no longer a low risk enterprise, it no longer involved just managing a centralized facility, it required multiple experts from other fields, it offered previously unthought of opportunities, it had become an innovative and creative enterprise, more complex but also more exciting and more satisfying than other purely commercial ventures – for it involved life and death, and sickness and health decisions. In some ways, it was less fun than it used to be, for the tail seemed to waving the dog, and it was no fun going from a big dog to a lap dog. But you were up to it. You had come a long way since 2007, and you knew what you had to do in the brave new world outside your old facilities.

The Data Mining Race: Making the Unknown Known at the Point of Care

In a Healthleader’s feature story, “Data Mining and Innovation: Keys to U.S. Reform” (June 27, 2006), and in a chapter “Employers Push to Release Medicare Claims Data” in Innovation-Driven Health Care (Jones and Bartlett, 2007), I predicted extracting and distilling clinical information for use at the point of care would be a major factor in improving health care. I observed data mining was already rampant in Medicare and pharmaceutical related industries.

Shift to Data Availability at Point of Care

Now the focus has shifted to applying IT extracted patient claims data in the private sector at the point of care, especially in emergency room and hospital settings. The idea is to simplify data access for doctors and other health professionals and make it immediately available when it’s most needed – when doctors are confronted with patients in emergency or hospital settings. Many of these patients are in critical condition or have complex illnesses.

Two organizations are leading the race to supply data extracted from existing data bases at the point of care: 1) Fusion from Carefx, Inc., a Scottsdale, Arizona, firm; 2) Medecision, Inc, based in Wayne, Pennsylvania. Their data extraction systems are complementary rather than competitive.

Carefx clients include more than 200 hospitals while Medecision clients consist of 21 Blues plans and other health plans. The marketing conduits for the two companies may differ, but their aim is similar – to make the unknown known by providing medical professionals with timely and critical information extracted from existing patients’ databases.

The Carefx idea is to funnel data from everything taking place within the hospital and to make it available at the doctor wherever he or she is within the hospital. The hospital is a very complex organization, and communication between departments and other specialists may fall through the cracks. As Peter F, Drucker observed in 1975, “Even small health care institutions are complex, barely manageable places. Large health care organizations may be the most complex organizations in human history.”

Carefx extracts its information from the hospitals’ information systems, unlike Medecision which gets its data from health plans’ databases. Both Carefx, like Medecision, simplify physician access to patient information. Their systems seek to satisfy physicians and hospitals clients by increasing work flow efficiency.

Interview with Henry DePhillips, MD

To give healthleaders readers insight into the race to simplify and speed access to patient data, I interviewed Henry DePhillips, MD, executive vice president and chief medical officer of Medecision.

The interview focuses on IT technologies that create a patient clinical summary and transmits it to the point care. This summary is designed to cut costs per patient episode for health plans, help doctors make more informed decisions, and, in some cases, raise doctor reimbursement by documenting complexity of care.

Reece: Is it safe to say you champion better use of technologies for physicians at the point of care?

DePhillips: Yes, there’s much technology can bring to physicians. Technology has brought leaps of efficiency and productivity to other industries, but not to practicing physicians at the point of care.

I’ve been working with Medecision for the last three years, and we have come up with something called the patient clinical summary. It’s an innovation that is and will be a market-mover and market-changer for health plans.

Reece: Why so?

DePhillips: First, I’ll give you a high level view, and I’ll then go further if you like. The bottom-line is that Medecision is in its 19th year, and all that time we have done care management systems for payers – for health plans across the country. We have expertise on payer data sets and interfacing payer data systems.

We’ve leveraged that experience to a capacity to extract useful clinical information from payer data sets – claims, pharmacy, lab results – and use our analytics capability so summarize, clinically validate, and distill that information into a concise individual electronic health record called the payer-based clinical summary.

Using our web tool, we transmit that information to the point of care in less than a minute. We’ve deployed clinical summaries to emergency rooms and other care settings across the country. When a patient shows up who’s insured by an organization that runs our software, the emergency room staff can pull down a patient-based health record and get a complete history what payers know about the patient.

This is invaluable in a high-intensity-illness- low-availability-of- information setting. Doctors who are using it are happy with it. It contains a medication list, a medical problem list, procedures that have been done, studies that have been done, doctors patients have seen, hospitalizations patients have had, and even some predictive modeling data identifying gaps in care.

That sums up what we’ve been doing. We have a third party study validating what the medical cost savings are for payer and patients associated with the use of this information, which amount to $545 savings for each transaction in the emergency room setting.

Reece: How long have you been offering this condensed payer-based clinical summary at the point of care?

DePhillips: We’ve had in production for two years.

Reece: So it’s relatively new.

DePhillips: Yes, but it’s production-hardened. It’s certainly not vaporware. It’s an evolutionary document. We continue to do market research, as recently as today. We continue to improve the record and processing capabilities, and we’ll add more data sets over time. The care management data are relatively new additions.

Reece: Who are your clients – doctors, hospitals, health plans?

DePhillips: Our client is the payer – the insurance company. Companies using our software deploy it to their provider networks. Different payers are using it in different ways. Some are focused on emergency rooms and cost savings. Some are concentrating on doctors, some in their own private offices.

Reece: By payers, you mean health plans – large and small?

DePhillips. That’s correct. Our clients include 21 Blue Cross Blue Shield health plans. About 2/3s of our clients are non-Blues plans.

Reece: So you’re preaching the gospel of cost savings to payers? What is the evidence for that?

DePhillips: We commissioned a study by company called HealthCore to do an independent study on medical cost savings. The bottom-line was $545 in cost savings every time one of these documents was transmitted from Blue Cross Blue Shield of Delaware to the level 1 Trauma Center at Christiana Health System in Delaware.

Reece: Give me a feel of how that $545 savings is achieved.

DePhillips: There are four subcategories that showed statistical significant differences in savings.

First was laboratory costs. You don’t need to repeat lab tests that have already been done.

Second was a reduction in cardiac catheterizations. As you know, if someone comes into the emergency room with what looks like unstable angina, you have almost no choice but to send them to the cath lab. But if you have access to the workup that’s been done previously, you may not have to send them.

Third was medical supplies. If you have a patient that comes into the emergency room, you’re likely to want to get access to their blood stream right away, with an IV for venous access or central line. But if you have their medical history in front of you, you may not be in such a rush.

Four, there was significant increase in reimbursement for cognitive care for physicians in the emergency room, about $35 on average.

Reece Why is that?

DePhillips: What we believe happens, and this is a consensus opinion, not scientifically based, is that in using the patient clinical summary we basically make the unknown known.

For example, if the patient presents with a fractured femur, and the clinical summary shows the patient has hypertension or diabetes, the medical complexity is higher. Doctor can legitimately code more appropriately for the medical complexity of the case.

Reece: In other words, the complexity is documented. I’ve had some experience with that. A friend of mine, Allen Wenner, a family physician in South Carolina, has developed software called the Instant Medical History. The patient creates their own medical history using a “yes’ or “no” algorithm based on their age, sex, and gender. When the patient enters the exam room, the doctor has a complete narrative history. The end result is that the doctor can code at a higher level, with an average increase of $50, because of documented complexity.

DePhiilips: Right, Wenner’s system is making the unknown known.

Reece: Or putting the obvious into complex context. In any event, you’ve been transmitting these clinical summaries for two years, and you have a clinically focused record based on payer data that’s available at the point of care. What are applications outside of the ER?

DePhillips: We’re seeing different deployments based on different business needs. We’ve proven cost reductions in the emergency room, but we haven’t yet proven it elsewhere. Health plans focusing on slashing costs use it most in the emergency room.

But we have other plans who using clinical summary reports for marketing purposes. Plans want to develop the reputation of being a doctor friendly organization. Health plans go out to employer groups and say, “We think your employees will receive higher quality care, certainly more informed care, because we supply our physicians with the previous clinical summary” We have many plans deploying it without regard to the health savings component.

Reece: It’s interesting to hear you say plans are changing their strategy so they will be perceived to be more doctor-friendly. I have a chapter in my book, Innovation-Driven Health Care, which is just out, entitled, “Health Plans and Banks Move to Ally with Doctors.” Health plans will need to ally with consumers in a market-driven environment if they hope to retain them as customers. Plans will have to be “doctor-friendly” in the consumer driven era. Among doctors, plans are in the process of converting from being perceived as the “enemy” to being an “ally.”

DePhillips: When you think about it, giving payer-based clinical summaries at the point of care helps doctors make more informed decisions.

It’s important here to mention our business model, how we charge for these clinical summaries. The payer, the insurance company, pays for the transaction. It’s free of charge for the physician, and there’s no installed software necessary to receive it. We’ve created a situation to make it simple for a doctor to receive the information.

Reece: Do you think the health plans are beginning to realize that, as we move into the consumer-driven era, they will need to pay more attention to cultivating not only physicians but consumers, too.

DePhillips: Yes, I see health plans beginning to stutter about what to do about consumerism. Many plans have created initiatives to engage consumers in the clinical and financial process. Many of these initiatives have failed. You see a lot of stopping and starting, failing, falling back, and trying again. Payers are feeling their way as to what works and what doesn’t.

If you think about how the payer can best contribute to the entire health system, the biggest asset payers have is data. I’ll grant you claims data was not originally designed to be used in clinical care. But because of the analytics, new technology, clinical validation, and predictive modeling, you can now derive quite a bit of useful clinical data.

Reece: United Health Care pioneered exploiting claims data. From claims data, United learned, for example, who was using insulin or oral diabetic agents, They knew who the diabetics were, and they could then track their costs and outcomes.

DePhillips: That’s a good example. You get my point.

The Hospital CEO – The IImportance of Creating Convenience for Physicians

Part 3, Convenience, Part of a Series from Sailing the Seven "Cs" of Hospital-Physician Relationships</span>


Readers may wonder why I devote so much space to hospital-physician relationships,
Indeed, why James Hawkins and I went far as to write a book on the subject? To me the reasons are simple:

One, hospital costs represent nearly one-half of all health expenditures.

Two, hospitals and doctors compete and often duplicate services, further driving up costs.

Three; relationships between hospitals and doctors are often testy, even antagonistic.

Four, the number one reason hospital CEOs are fired is a failing out with the medical staff.

Five, many of these ill-feelings could be avoided if the hospital CEO would think of his/her preeminent role was to make physician hospital usage convenient and profitable for physicians, who are, after all, the hospital’s number one customer.

As James Hawkins, a former hospital CEO and now President of Professional Services, explained in our book, Sailing the Seven “Cs” of Hospital Physician Relationships, the second “C” that’s important for hospital CEOs to recognize for physician is creating convenience for physicians in the hospital working environment.

In his “Take Away Questions on Convenience,” Jim asks these questions.

• What resources are needed by your physicians at each point of intersection with the hospital?

• What are the things that take your doctors’ time away from the practice of medicine?

• What are the things that would make the practice of medicine more efficient?


• Since bad outcomes are one of the biggest wasters of time , how do you achieve superior results?

• How do you get timely information to the point of decision making?


• How to you develop automatic alerts to warn physicians when problems arise (dangerous lab results, drug conflicts, etc)?

In his chapter, Jim points out the physicians’ most valuable asset is time, and if the hospital CEO creates more time for the physician, at the physician’s convenience then that CEO is likely to have a pleasant working relationships with his doctors.
Here is my response to Jim’s remarks on the CEO’s responsibility and obligations for creating convenience for physicians.

In 1964, David Lambuth, an English professor at Dartmouth, wrote a memorable little book “The Golden Book on Writing.” In it he said, “If you have a nail to hit, hit it on the head.” In this chapter, Jim Hawkins hits a nail on the head, viz. saving the physician time is the greatest convenience hospitals can offer physicians.

In 1966, Peter F. Drucker, who died in December 2005, hit the head of the nail even harder in The Effective Executive. He said, “Time is a unique resource. One can’t rent, hire, buy, or otherwise obtain more time. The supply of time is totally inelastic. Time is totally irreplaceable. There’s no substitute for time. Everything requires time. It’s the one truly universal condition. All work takes place in time and uses up time. Yet most people take for granted this unique, irreplaceable, and necessary resource. Nothing else, perhaps, distinguishes effective executives as much at their tender loving care of time.”

So, you hospital CEOs, take heed. Saving your physicians time is the single best thing you can do to secure your career and make your facility more efficient and profitable. You can start by hiring a hospitalist, or a group of them. Perhaps the single best example of time saving for independent office-bound physicians in the last decade has been the hospitalist hirings by hospitals.

Drs. Lee Goldman and Robert Wachter of the University of California coined the term “hospitalist” in 1996. Now, ten years later, hospitalists’ hiring and contracting has reached gale-wind force, with 12,000 hospitalists in place and 3,000 more on the way. The reason for hospitalists’ popularity is crystal clear: in-house hospitalists are convenient for office-bound physicians, saving them time to make trips to the hospital during office hours and during their time at home.

Not only is time saved, but hospitalists increase hospital care quality, improve clinical outcomes, enhance patient satisfaction, and decrease length of stay.

In the future, my guess is that the most time-saving movement will revolve around wireless communications allowing transfer of laboratory data, patient progress notes, x-ray images, and patient histories.

The Decline and Fall of Restrictive Managed Care

In One Era and Out the Other

Those that ignore history are doomed to repeat it.

Old Saying, Origin Uncertain

An article in the Mary 27 2007 American Medical News, “Blues Settlement in Class-Action Shifts to Last HMO Holdouts,” says that more than 30 of the nation’s Blue Cross Blue Shield Organization and their subsidiaries agreed to pay more than 900,000 doctors $128 million to settle a physician-led class-action suit against health plans. Only two companies – United Health Care and Coventry Health Care – haven’t settled. This is a significant victory since the Blues cover 98 million lives.

The Blues agreed to.

•Pay physicians more than $128 million.

•Uniformly define medical necessity and set clinical guidelines.

•Establish independent review board to resolve reimbursement disputes.

•Promptly pay clean electronic claims within 15 business days and paper claims within 30 days.

•Set up a mechanism to address disputes regarding the Blues’ compliance within the settlement.

•Provide fee schedules for doctors.

•Create a physician advisory committee.

•Give 90 days’ notice of policy changes and annual fee schedules amendments.

These changes bring the estimated value of the settlement to more $1 billion. Physicians hope their success will force insurers to play by the rules of reimbursement. This ends a nearly decade long fight by doctors against insurers.

The history of the conflict is this:

•1998-2000 – Doctors and state medical societies across the country begin filling lawsuits against health plans.

•October 23, 2000 – U.S District Court judge for the Southern District of Florida, Miami, consolidates cases.

•September 26, 2002 – Miami federal judge grants class-action status.

•May 21, 2003 – Aetna settles.

•September 4, 2005. Cigna settles.

•May 5, 2005 – Prudential Insurance Company settles.


•July 11, 2005 – WellPoint Health Networks/Anthem settles.

•October 17, 2005 – Humana, Inc. settles.

•June 19. 2006 – Miami federal judge dismisses claims against UnitedHealthcare and Coventry Health Care; ruling doctors are appealing to the U.S, Circuit Court of Appeals.

•April 27 – Blue Cross BlueShield Assn. plans settle.

Is this end of the line for health plans and their relationships with health plans? Of course not. The nation’s health plans are a $400 billion dollar industry, with plenty of money to pay lawyers, and a management structure that allows them to transition to other strategies including Medicare and Medicaid HMOs and to a new strategy that promises to dictate payment to doctors – it is just evolving and goes by the name of Pay-For-Performance.

The idea, which is not new, is that you can use performance data to judge doctors, reward or punish them for playing managed care ball, and include or exclude them from health plan networks. The problem with health plans, as the doctors see it, is one of altitude and attitude,

• the altitude problem being that managed care executives, far removed from the clinical scene, don’t have the knowledge and expertise to dictate fees,

• and the attitude problem being that independent doctors are quasi-employees of managed care plans. The class-action suit has created a deep divide between doctors and health plans, and with P4P we may see history repeat itself, with the health plans and doctors arguing and suing over what evidence constitutes “performance.”

For those of you not familiar with insider-details of the class action suite, I invite you to read this interview with Tim Norbeck, then executive director of the Connecticut State Medical Society and now retired, who led the charge against health plans. The interview appeared in my book Voices of Health Reform (Practice Support Resources, Inc, 2005)

Interviewer: Tell us about yourself.

Norbeck: I’ve been Executive Director of the Connecticut State Medical Society since 1977, and I’ve been in the Federation of Medicine since 1967, when I was working with the AMA. The Federation of Medicine includes the AMA, state medical societies, country medical societies, and specialty societies.

Interviewer: You’ve had 20 years of experience dealing with relationships between physicians and health plans. The relationships have been stormy at times, largely confrontations over micromanagements and fee disputes.

Not Initially Opposed to Managed Care

Norbeck: Well, first of all in the 1980s, we weren’t initially opposed to managed care. We knew employers and insurers were pushing HMOs to keep costs down. And in Connecticut we formed our own HMOs back in 1985, MD Health Plan. It succeeded, but after five years, it required more capital and was ultimately sold, much to our chagrin. When we formed MDHealth Plan, we adopted the theme that “nothing should come between you and your physicians.” We featured that them on the stationery and on billboards.

Opposition in Managed Care Grew

Norbeck: Distinct signs of the egregious managed care system first appeared in the late eighties and early nineties when physician began to complain.. They said contracts were unfair, payments were either denied or delayed, and claims were being down-coded or improperly bundled. Furthermore, their medical necessity decisions were being overruled by HMO personnel that had no first hand knowledge of the case or the patient. After failing to resolve our differences with the HMOs, we took our complaints to the legislature. After considerable lobbying efforts, our State Legislature stood up and passed some relief.

But the health plans ignored the legislature. We were back to square one. Doctors couldn’t get through to insurers. Phone calls weren’t returned one urologist performed lithotripsy for a kidney stone patient after receive pre-certification approval. Ninety days later, when he hadn’t been paid, he called. The clerk said, ”Oh, we never approve it.” “Wait a minute, “he said, “I have a fax of that very approval in my hand.” She responded, “No, you don’t.” Understandably, he went ballistic. It was that type of arrogance that naturally offended physicians throughout the country

Interviewer: As I recall, the Connecticut State Medical Society did a study. The average telephone “hang time” to get in touch with HMOs, was 29 minutes.

Opposition Crystallizes

Norbeck: It was extremely frustrating. We gain went to the legislature. They passed more managed care reform legislation, and it was again ignored. By the summer of 1999, we knew we need to do something else. So we ran full-page ads in all the newspapers in Connecticut. This was September of 1999. We said in big, bold headlines, “Aetna is Playing Doctors with Our Patients.” And they were!

The insurers, legislators, and the public picked up on it. We received national coverage as well. At the time, Dick Huber was CEO of Aetna. He was under fire from many directions besides us and was eventually forced out. Bill Donaldson became interim CEO of Aetna. We invited him to our House of Delegates in May of 2000. He appeared and said he understood physicians’ problems and that Aetna wanted to make amends – to reach out oat the physician community and to have a better relationship. He talked out a “sea-change” in attitude.

Lawsuit Ensues

Norbeck: Well, we waited until fall, and we didn’t see any change in attitude. So we contacted a law firm. What else could we do? We felt it was time to step up... There as only one last alternative available to us, ant that was to bring a class action lawsuit. We spoke to Milberg Weiss out of New York, a large class action that had plenty of experience in health care and had represented some hospitals in their complaints against HMOs. We worked with them for a number of months. Then, on February 14, 2001, we held a press conference announcing that Connecticut was brining suite against the HMOs in Connecticut state court.

Meanwhile, five other states were pursuing RICO claims against managed care firms. Eventually, ten state societies and two county medical associations joined us in brining actions in State courts. Texas, California, Georgia, Louisiana, and then Florida brought their RICO actions in Federal court.

Interviewer: How many state medical societies?

Aetna, then Cigna Settlement Occurs

Norbeck: Ultimately, on May 22 2003 in New York, we had a press conference with Aetna announcing a settlement. Subsequently, Cigna settled.

Interviewer: Didn’t the Federal Court in Miami play a role in this.

Norbeck: Judge Fredrico Moreno, the Federal Judge in Miami, played an instrumental role. He was sympathetic to the plight of physicians and deserves great credit for helping to change the system for the better.

Interviewer: You said you sued the managed care industry. You jut indicated Aetna and Cigna settled. What about the other HMOs?

The Other HMOs

Norbeck: The other insurers included WellPoint, United Healthcare Group, Anthem, Human, HealthNet, Coventry, and Pacificare. They haven’t settled yet. But they have pretty well exhausted their legal remedies in avoiding their day in court, especially since the 11th Circuit Court decision in Atlanta confirmed our right to bring these actins.. It took away the lat legal recourse for the other health plans. They will either have to settle, or we will see them in court on September 6. he question I would ask those who haven’t yet settled is: Do you really want to appear as not wanting to be accountable for reaching out to physicians and patients? Some future day in HMI boardrooms, someone will say the suits were actually good for them – that they lost their way, and we helped them find it.

I believe Aetna has done better and improved business because of their leadership settling. Jack Rower, the CEO of Aetna, took a statesmanlike approach. CIGNA settled, and I believe they will be the better for it as well.

David and Goliath

Interviewer: Wasn’t this confrontation between David against a Goliath? The managed care industry, after all, is a $300 billion industry, and State medical societies are financial pygmies.

Norbeck: Absolutely. Few people gave us any chance. The HMOs saw no reason to budge, and you know what they say about compromise – when the Lion and the Lamb lie down together, the Lamb won’t get much sleep... We have to do something to save the profession and the patient/physician relationship. Physicians had to understand the knight in shining armor wasn’t going to come to rescue them. Not now – not ever. We had to do it ourselves. And our co-counsels, Archie Lamb and Edith Kallas, and other attorneys did a great job.

Interviewer: What moved Aetna and Cigna to settle?

Norbeck: Jack Rowe, CEO of Aetna and himself a physician, understood the bad publicity and other negatives about being in conflict with physicians, was hazardous to their financial health. I’m sure the resource managers around the country took note that Aetna wanted to reach out physicians and settle their conflicts.

Interviewer: What were the date and terms of the Aetna Settlement?

Norbeck: The Aetna Settlment includes industry –leaidng improvements to physician-relte business practies that set new levels of tranparncy in playing claims, incuding a ntional Advosory Committee of Practice Physicians to prove advice to Aetna on issues of important to physicians. It also established an independent foundation dedicated to helping physicians in their practices and improving the quality of health care in America. The Agreement has helping to streamline communications between physician and Aetna, reduce administrative complecity in the claims payment system, and help improve the quality of the health care sytme. We announced the settlement on May 22, 2003.

That is not to say everything has now been resolved. We do have some compliance disputes with Aetna, but remain confident that well resolve them amicably to the benefit of the physicians of America -- but we prepared to go back to Judge Moreno if necessary.

Insurer-Physician Foundations

Interviewer: Out of these settlements cam the formation of two foundations. Tell us the name of the Foundations and your role in them.

Norbeck: The Aetna Foundatiion is called the Physicians Foundation for Health Systems Excellence. The CIGNA Foundation, which came later, is called The Physician Foundations for Health Systems Innovations. I’m privileged to the President of both Foundations. Jew Lewin, MD, my counterpart in the California Medial Assocaiton is Vice President of both oaf these Foundations. Lew Goodman, PhD, who is our counterpart with the Texas Medical Association, is the Secretary, and Bill Maho, who is the retired CEO from the South Carolina Medical Association, is Treasurer.

We have on our Boards six physicians and five medical executives. I cannot say enough about the physicians who serve on the boards and committees who have given so generously of themselves and taken so much time from their practices, without reimbursements, so that we can stay focused on our objectives. They are truly an inspiration. We’ve been meeting monthly since December 2003, although we sill try to meet every other month in 2005. Our missions, through the Judge, Federico Moreno, are to provide physicians with the tools to improve practice management, and promote and improve patient safety.

The Importance of Information Technologies

Norbeck: We would like to help physicians in their efforts to implement EHRS in their offices, whether they are in large groups or small, but with an emphasis on helping solo physicians in small practices, which need help the most. I noted in your book, Hello Health Care Consumer Practice Support Resources, 2004), that 47 percent of physicians are in groups of one or two. And you mentioned 82 percent are in groups of ten or less. We would like to help the small practices in their efforts to reduce errors, improve patient care, and enhance efficiencies.

Interviewer: Do Aetna and CIGNA fund these foundations?

Norbeck: The agreement was that Aetna would pin $20 million and CIGNA would donate $15 million. There were also some very modest forms of restitution to physicians, but their main expenditures under the settlement agreement were to change their operating practices – to change the system going forward. That $35 million may grow to $100 million. Frankly, $100 million for 700,000 physicians doesn’t amount to much – less than $150 per doctors. It certainly doesn’t make restitution to reimburse doctors for all their losses by any means, namely the unfair denials and delays and bundling and down-coding of claims and the overruling of medical necessity decisions and so forth.

But full restitution would have broken the system, if we had been able to pay back physicians for all they were improperly deprived of by the HMOs for the past 10 years. it would have put all the managed care companies out of business. Many would say, so what, that might not be so bad! But, there was no way; Judge Moreno was going to allow the system to break – for all those insurers to go out of business. If just wasn’t going to happen. It was impossible to reimburse the doctors for all their past grievances, and restitutions for past grievances would not change future egregious behavior. So, se got them to change their practices.

Interviewer: It would also have been a logistical nightmare to pay each doctor for what he or she had lost.

Never about Money

Norbeck: It would have been that too. But it’s important for people to understand these suits were never about the money. They were about changing a managed care system going forward. We have done 6that in the two settlements thus fare. Doctors had the option of letting the Foundations have the money or they could take a check for $100 to $200. Most doctors, I believe, have elected to let the Foundations have the money and thereby create a fund that can really help physicians in their practices. Physicians deserve credit for that act.

Interviewer: Today there’s much talk about wiring together the health system with interoperable systems. The government appointed Dr. David Brailer as health of their health information technology effort to make it happen. Are you working with him?

Norbeck: Our Health Information Technology Committee has been in touch with him. Don Berwick has also addressed us. We’ve invited the national experts to come in and talk with us and help us with our mission.

Interviewer: Well, as you know, making this electronic revolution isn’t in the details. It’s in the culture.

Norbeck: Of course. Only 10 to 15 percent of physicians and maybe 20 percent of hospitals are using electronic health records. We know IT proponents are well-meaning, certainly sincere, and passionately devoted to doing these things, but we have to be sure physicians can afford to implement these systems. And initially, after implementing the program, productivity goes down. That’ a big reason why EHRs are a difficult concept to sell to struggling physicians.

Doctors are financially stressed and overburdening with paperwork and administrative hassles. Many don’t even both submitting Medical claims. The reimbursement is so low. Sending out a bill increases the cost. Professional liability insurance premiums are skyrocketing almost everywhere. Medicare will impose additional cuts in 2006 unless changes are made in the fatally flawed reimbursement formula. If Medicare cuts go through, doctors will end up being paid what they were being paid 15 years ago. Meanwhile, their office expenses escalate. Doctors simply have far more important economic priorities t6han investing in EHRs. Many are just trying to find a way to remain in practice. Our foundations hope to be sending out Requests for Proposal for IT in the early spring so we can entertain some grant proposals that are transferable and economically feasible. We want to do the right thing, and we’ll be working with any organization or others that can help us help doctors.

Consumer-Driven Plans and HSAs

Interviewer: let’s talk about other emerging phenomena that may gain traction -- consumer-driven high deductible plans linked to HSAs. In the last month, Kaiser-Permanente has puts a pant on the market: United has switched all their employees to a high deductible plan, and all the major insurers, particularly Aetna, are out front pushing these plans. These plans have about three percent of the market, but they’re gaining momentum.

The prophets are these CDHPs will have a tremendous impact on not only the doctor/patient relationship, but also on the doctor/health plan relationship. Comment, if you will, on Aetna’s approach. They emphasize transparency whereby the patient can get all the information about the quality of their doctors and hospitals and their outcome. Patients can even determine the comparative price of a brand name drug versus a generic drug. Have you thought about what impact this transparency might have?

Norbeck: We’re very much aware of the HSAs. We’ve had initial discussions with insurers about consumer-driven plans. Many believe HSAs sill save health care costs, particularly for people who are health... HSAs will definitely appeal to young healthy people. If you’re in Medicare, of course, you can’t avail yourself of an HAS. But it’s an interesting phenomenon. We plan to track it careful.

But I wonder if HSAs will have much effect on overall costs. After all, 10 percent of people account for 70 percent of costs. Unless we have a better handle on that 10 percent, so many of them afflicted with chronic disease, we won’t make much of a dent on health costs. Many Americans, those on Medicare and Medicaid, won’t be affected by HSAs. Twenty percent of Medicare beneficiaries have five or more chronic diseases and account for 55 percent of medical spending in the program—35 percent is attributed to Medicare beneficiaries with congestive heart failure.

With HSAs, you are looking at somebody who may be 39 years old and in good health, and who has a medical checkup once a year, and that’s about it. There are a lot of these people. To be spending $5000 a year or so on a health plan and you can get tax relief on an HAS and roll it over into the next year is very enticing. Those people would be foolish not to get into an HAS. Will HSAs save the whole system by reducing overall costs? I doubt it.

Interviewer. But the market is driving consumer-drive plans. I was speaking to an insurance broker in Farmington. He told me 90 percent of the policies he had sold were linked to HSAs.

Norbeck: And some uninsured individuals are already buying into HSAs, which is good. But HSAs aren’t a comprehensive solution. We’ve got 45 million uninsured individuals and a health care finance system that doesn’t work for everyone. It’s a national disgrace. It has to be addressed. And with all the concerns about health care costs, you may have seen that McKenzie Group report that said in five years, employer’s health costs will consumer all the business profits in the United States. That’s never going to happen, and it can’t be allowed to happen.

Interviewer: I’m on the Board of an organization called the Center for Practical Health Reform. Our three basic principles are:

1. Basic health coverage for all.

2. Management platforms to compare results and insert guidelines.

3. Medical liability reform.

I know malpractice reform is a big thing in medicine, and that you spend most of your waking hours thinking about it, agitating for it, and talking about it.

Professional Liability Reform

Norbeck: It’s the number one concern of most doctors – particularly in the 20 crisis states. “How can I stay in medicine?” doctors complain, when revenues are dropping and expenses, particularly Malpractice premiums are rising? What a sad, sad commentary o the state of medical practice. Physicians desperately need relief.

Low Physician Morale and Declining Access to Physicians

Interviewer: Your comment reminds me of two things –one, a book by Merritt Hawkins, the recruiting firm, Will the Last Doctor in American Please Turn Off the Lights. The book says a doctor shortage is already upon us and is rooted in deep and pervasive morale problems among doctors. The second thing is January article that just appeared in U.S. News and World Report, “Doctors Vanish from View.” It cites two California surveys shows 75 percent of doctors are dissatisfied with practice, and 87 percent believe there has been a loss of morale.

Norbeck: In my nearly forty year career in organized m3dcine, I have never seen moral so low. The PLI (Professional Liability Insurance) situation accounts for much of it. Doctors are taking relief wherever they can get it. In some cases, hospitals will pay for them, and larger groups may cover malpractice insurance costs. In either case, physician independence is eroding.

I have never said this before, but I need to say it. One reason we don’t have a perceived patient access to care crisis now is related to those horrible, unforgettable events of 0/1ll. Thousands of doctors throughout this country were about ready to retire around that time. But, in addition to the horrendous human carnage, 9/1ll also caused the United States economy to crash, which has a devastatingly negative effect on retirement funds. Those losses forced many physicians to stay in practice, hoping to rebuild their funds.

Those financial reverses cannot and should be compared to the devastating loss of lives on 9/1ll, but that tremendous tragedy and the subsequent economic disaster to which it lead forced may physicians to stay in practice who otherwise would have returned. Therefore, legislators didn’t perceive enough of a PLI crisis, because their constituents didn’t complain about not being able to see physicians. When the access problem does become acute, and it already has in some places, it will happen fast and the bottom will drop out. Legislators must act now or there will be serious consequences.

Interviewer: We started this conversation by focusing on physician/insurer relationships. Do you see prospects for improvement?

Prospects for Improvement

Norbeck: It is too soon to say our relations with Aetna and CIGNA are improving. We have some compliance issues in dispute. I expect other insurers to settle because the PR value alone for them will be substantial. I don’t believe they want to face us in court. If they lose, and I believe they will, the losses for them could be catastrophic. Someday, the HMOs will thank us for suing them. Their behavior will not be allowed to continue forever. We will force them to find their compass.

Interviewer: Any other comments?

Norbeck: We still have worked to do with the foundations. I want to repeat: our lawsuits were never about the money. They were about making the system more equitable. Doctors down the road will b happy with what we’re doing and about what we’d doing to address the EHR it situation to help physicians in their practices.

Fast Forward Summary

Doctors are still fighting health plans over a variety of issues – fees, decredentialling, speed of claims payment, claims rejections. In some cases, as with United’s acquisition of Sierra Health, the health plans are simply buying up competitors with their affiliated physician groups.

The malpractice crisis remains unresolved, and neither state or federal legislators, dominated by lawyers, seem willing to intervene. Lawyers argue malpractice costs make up only 2-3 percent of health costs, but conveniently ignore the fact that the practice of “defensive medicine” to avoid future malpractice actions may lead to $50 to $100 billion costs for unneeded tests.

Meanwhile there has been a shift of attitude towards universal coverage. Events in Massachusetts, California, and Pennsylvania have shown the path to universal coverage may not lie in a single payer government controlled system but in political compromise , multiple private payers, payment for pre-existing conditions, requiring individuals to buy insurance, and requiring employers to provide benefits or pay into subsidy funds.

How this path to reform might affect the powerful insurance, pharmaceutical, and hospital lobbies remains unclear, or how such reform might impact consumer choice, market incentives, and technology initiatives remain unclear.

Nor is it evident how this universal coverage would be paid for, though the Democrats say they would do it by taxing the “rich” and canceling the Bush tax cuts. Democrats say they would cut costs by ending “profiteering” of health insurers , drug companies, and device manufacturers, and by covering more preventive care and averting expensive illnesses, a logical but improved strategy.