Do American Doctors Make Too Much Money?

Many approaches have been advanced to lower the American health costs. These include,

•Introducing a single payer system.

•Forcing cuts in prescription drug prices

•Eliminating insurance company profits

Now American liberals, academicians, think-tank leaders, and reformers have added a new twists: Reduce American physicians incomes by not paying so much for procedures and by placing doctors on salaries.
Here are a few critics’ comments, as quoted in a July 29 Sunday NYT piece (Alex Berenson, “Sending Back the Doctor’s Bill”).

•Dana Goldman, director of health economics, RAND Corporation, on diabetes care, “The doctor is paid to check his feet, they’re paid to check his eyes, they’re not paid to make sure he goes out and exercises, and really, that may be the most important thing. The whole health system is set up to pay for services that are rendered when the patient, and society is interested in health.”

•Peter Bach , M.D., pulmonary specialist at Sloan Kettering and former senior adviser to Medicare and Medicaid, “The problem is the way they are paid. They have to do stuff. They have to do procedures.”

•Stephen Zuckerman, MD, health economist at the Urban Institute, “There’s not a lot of utilization review or prior authorization. If you’re doing the work, you can expect to get paid.”

•Alan Gerber, MD, director of the Center for Health Policy at Stanford University, “The United States should move toward paying doctors fixed salaries, plus bonuses based on the health of patients they care for.”

In other words, if we could only place doctors on salaries, stop giving them incentives to do procedures, encourage them to provide preventive counseling, and reward them with bonuses for good outcomes, we could “significantly” reduce health costs.

Well, maybe. So far , P4P (pay-for-performance) with small bonuses for meeting quality indicators hasn’t consistently produced good outcomes or lowered costs, paying doctors bonuses in the United Kingdom for meeting quality indicators has cost more than projected and has driven the National Health Service more deeply into debt, and the American people don’t seem to mind American doctors being well paid, on average $200, 000 to $300, 000 a year, with about $150,000 for primary care doctors, and as much as an average of $400,000 for some specialists. According to a 2004 survey by the British government, European doctors in 2002 averaged $60,000 to $120,000.

How do academic and think tank critics, generally far removed from the clinical frontlines, know what’s a fair income for American doctors? They seldom provide details or a thoughtful analysis based on life in America. Do they factor in the cost of living and housing is much greater in the U.S, the relentless 3% annual rise in practice expenses sending, the 5-6% annual rise in college tuitions now running abut $30,000 a year, the average debt of doctors entering practice, now in the neighborhood of $150,000. Besides, American doctors’ malpractice rates dwarf those of their European counterparts?

And what about the American culture? Do they know that American patients “expect” to have something concrete done and quickly when they visit a doctor, as small as writing a prescription or as big as having a CT scan or MRI for their bad back or arthritic hip or knee? Are they cognizant most of those participating the American capitalistic society, outside of major corporations, which employ only about 10% of Americans, function on a fee-for-service basis without intervening third parties..

Lastly, is the critics’ assertion realistic that U.S. doctors’ incomes are a “significant factor” in why American health costs surpass those of Europeans by about 50% .

Let’s take some rough numbers. Health costs are now $2.2 trillion in the U.S. About $500 billion of that $2.2 trillion is represented by physician incomes. Now let’s say Medicare goes ahead with its 2008 plan to cut doctors’ incomes by 10%, and health plans follow in lockstep as they have done in the past.. That would cut $50 billion from the $2.2 trillion, a 2.3% reduction of the total the U.S. spends on health care, a large amount but probably not significant in reducing the health care gap in national health spending.

Medicare lowering of doctors’ incomes has consequences. AMA surveys indicate as many as 30% of physicians say will no longer accept Medicare patients if the 10% cut goes through, and if Congress follows through with a 40% reduction over the next five years, the number approaches 50%, and Medicare recipients will have to scramble to find care. Projected lower incomes would likely persuade talented college graduates to enter fields other than medicine and worsen the doctor shortage, estimated to be 50,000 by 2010 and $200,000 by 2020. Why would any bright young person spend 11 to 15 years preparing for a profession in which systematic fee reductions are guaranteed ?

Finding The Right Cancer Surgeon

The Sunday July 29 New York Times carries a front-page piece “Cancer Patients, Lost in a Maze of Uneven Care, Sick, Scared, and Daunted by Complicated Choices”

The piece is essentially the story of two patients.

•Karen Pasuqauletto, 35, of Amherst, New York, who had an advanced metastatic colon cancer diagnosed just after giving birth to her first child. She bounced around among various specialists, even going to Seattle for advice at the Seattle Care Alliance and Swedish Cancer Institute. Finally, after multiple bouts of chemotherapy, she was referred to Michael Chotti, a Johns Hopkins surgeon who specializes in removing metastatic colon cancer masses from the liver. Eleven months after her initial diagnosis, Chotti operated for eight hours and removed four masses from her liver and one from her colon.

•Gordon Hendrickson, 66, of Albuquerque, was diagnosed with pancreatic cancer in 2002. The tumor, which was small, required a Whipple procedure. His internist found that M.D, Anderson had extensive experience with the Whipple procedure. MD Anderson required a $5000 deposit. Hendrickson had the operation, and was left with $80,000 in bills, which his health plan, Presbyterian Health Plan, refused to pay. Hendrickson fought his insurance plan and ended up before the state review board, where it was determined that the five surgeons at Presbyterian Hospital had performed only 5 Whipples between them. Ultimately Hendrickson won the case, and Presbyterian paid the bill in full. At his 5 year follow-up at M.D, Anderson, Hendrickson was said to be free of cancer.

The main point of the article is that it is difficult for patients to locate surgeons with sufficient experience in performing complex operations – such as removing metastatic tumor masses from the liver and doing a Whipple procedure.

For the last ten years, I have served on the Advisory Board of America’s Top Doctors, a book produced by the Castle Connolly Medical, Ltd. The 1200+ page book contains names, phone numbers, educational background, date of graduation from medical school, and institutional affiliation of 3000+ specialists, selected on the basis on nominations by specialists, residency directors, and others. In 2005, Castle Connolly published America’s Top Doctors for Cancer, which contains similar information on 2000 top oncologists and cancer surgeons. It is 678 pages long and is indexed by cancer center and names of physicians

Swabs on Admission

A Simple But Effective Innovation

Since 1968, when MRSA (Methicillin Resistant Staphyloccus Aureus) organisms were first identified, hundreds of thousands of hospital patients have died from MRSA infections. This is now such a problem that a few hospitals across America have resorted to routinely swabbing the nasal passages of all patients being admitted. Those identified as + carriers are confined to isolation rooms with a red line outside. A sign outside warns of the dangers of infections and the necessity to wear gowns and gloves. Used BP cuffs are discarded, and each room has its own stethoscope.

This simple but effective approach has reduced infections by 78% at the Pittsburgh VA. The infection control program costs the VA $500,000 a year, including tests kits, three workers’ salaries, and $175 per patient for gloves, gowns, and hand sanitizers. The hospital, which has a $431 million budget, says it saves $900,000 due to the fall in infections. This and other hygiene measures – such as changing urinary and vascular catheters often, cleaning the mouths of ventilator patients, and no shaving surgical sites – may become routine in hospitals across America. Several European countries, Finland and the Netherlands, have virtually eliminated MRSA infections through aggressive infection-control measures. Several states have passed legislation requiring hospitals to test high risk patients. But the problem is that sometimes deaths result form what started as a routine procedure.

Innovations to make health care better, safer, less expensive, and more effective need not be complicated, they can be breathtakingly simple – like constantly reminding people of the importance of hand hygiene and treating all patients as a possible carrier of MRSA organisms.

Making the Unknowns of Hospice Care Known

This week’s New England Journal of Medicine contained an excellent article “Understanding Hospice – “An Underutilized Option for Life’s Final Chapter” by Gail Gazelle, MD. She is a member of the Division of General Medicine and Primary Care at Brigham and Women’s Hospital’s and president of MD Can Help.

In her piece, Dr. Gazelle says use of hospice care is increasing.

•Medicare beneficiaries in Hospice Care increased from 534,000 in 2000 to 797,000 in 2004, a 49% jump

•Medicare payments for Hospital rose from 2.9 billion to 6.7 billion over the same period, a 130% increase.

But she adds “Despite its increased use, many aspects of Hospice Care are still misunderstood by both physicians and patients.”

Among these misunderstandings are:

1)Hospice patients need not to have cancer. Less than half of Hospice patients have terminal cancer. Nearly 40% of hospice admissions are for end-stage cardiac disease, end-stage dementia, debility, pulmonary disease, and stroke.

2)Hospice care at home is free. In about 80% of cases, Medicare is the primary payer – for care most often provided in the home. Most expenses are paid in full, medication, equipment, and visits by hospice nurses and aides.

3)Hospital addresses concerns surrounding end-of- life care – dying with dignity, dying at home without unnecessary pain, and reducing the burden placed on family caregivers.
4)More than 98% of families touched by home care report they are satisfied with hospice care and would recommend it to others.

Dr. Gazelle feels many patients are referred to hospice too late to experience its true benefits. She says late referrals are largely due to physician attitudes.

•Preoccupation with cure even though cure in no options in many late stage disease.

•The belief that the death of a patient is a professional failure.

•The fear that hospice referral will destroy a patient’s hopes for cure.

•The view that hospice care is only for the imminently dying rather than a service designed help people live as long as they can as well as they can.

To determine eligibility, the attending physician and hospice medical director must certify that the patient to the best of their judgment is likely to die within 6 months. Hospice develops a plan in accordance with the wishes of the patient and family. The goal is ensure that pain and symptoms of insomnia, dyspnea, depression. agiation, nausea, and emotional and spiritual distress are attended. Most care is provided by a hospital nurse, and most patients are not seen by a physician.

I have personal experience with hospice. My twin sister, who was dying from mad-cow disease, was treated at home for the last month of her life by hospital nurses, and in her comatose condition was allowed to die with withdrawal of IVs. My son, a hospice chaplain and soon to be an Episcopal priest, wants to spend his life overseeing hospice care. And my wife, a nurse, and I plan to take a course preparing to be hospital volunteers

Raising Your Patient’s Health IQ

When I go to see the doctor, my IQ drops 50 points.

David Hingsburger, Chewing The Fat Blog

Seek simplicity and distrust it.

Alfred North Whitehead

“Engaging” and communicating with patients, and overcoming health illiteracy are very much in the news these days. These are all part and parcel of the wellness and health movement, which first gained traction about 25 years ago.

Just over 20 years ago, as a partner in a clinical laboratory, I came up with the idea of the HQ. The idea was simplicity itself. You can measure a person’s over all health, by measuring three pieces of data routinely and easily collected in a physician’s office.

•Demographic data, age, gender, family history of premature heart attack or stroke

•Physical data, BP, pulse, height and weight with calculated body mass index, chest, hip, t and waist circumference

•Laboratory data, glucose, blood lipids. Cholesterol/HDL ratio

From this data, you can calculate a person’s HQ with 50-75 being subnormal, 76-125, being normal, and over 126 being in superior health.

To make a long story short, we applied this calculation to over 4000 State employees in Oklahoma, most of who were sedentary. The average HQ in this population was 77. About 30% were hypertensive (>120/80), 50% were overweight with a BMI index over 30, 5% were diabetic (glucose > 120), and 8% were in imminent danger of a heart attack (total cholesterol/HDL ration 13.5). With each report, we sought to “engage” the patient by sending a personal letter stating their HQ, advising them to visit their doctor if the HQ was love, and telling them to go immediately with threatening lipid evidence of a possible impending coronary event.

I regard our little experiment as an early method to “engage” patients by informing them of their true health compared to peers. Patients and doctors alike responded positively, but employers were not yet read to spend the $39 we charged for testing and sending a personal letter.

Lately I’m seeing a renewed push by multiple quarters to engage patients as “partners” in their own care. This patient engagement is taking multiple forms.

•The Institute of Medicine, in its 1999 report, To Err is Human, brought patient engagement to the forefront by reporting that 98,000 hospital patients died unnecessarily and something had to be done to implement “patient-centric care” to educate patients and minimize hospital dangers.

•The Institute for Healthcare Improvement, spearheaded by Donald Berwick, MD, picked up the gauntlet and launched its “Saving 10,000 Lives” campaign in 2004, which advised hospitals to follow 6 measures to increase hospital safety, one of which was to educate patients and their families and to listen closely to their complaints.

•In 1997. Regina Herzlinger wrote Market-Driven Health Care, and in 2002, she followed with Consumer-Driven Health Care. The central theme of both books was that health care consumers are very bright people, and given the right information and the right financial incentives, they will become fully engaged in their care.

•In 1998, Susan Keane Baker wrote Managing Patient Expectations: Te Art of Finding and Keeping Loyal Patients. She emphasized educating, engaging, and meeting patient expectations at 15 critical “moments of truth” which occur during every patient visit to a doctor’ office.

•In 2001, a company in Chicago, Emmi Solutions, Inc, developed a series of over 80 online interactive programs to educate patients precisely what to expect from surgery and certain disease episodes. The reasoning was that patients expecting surgery would become “engaged” in learning about their impending surgery, especially if that information was presented in plain language, fortified by visual information, and allowed patient questions.


•Between 2001 and 2007, “Health Illiteracy” became a burning issue in American Health Care, in part due the complexity of health care, the jargon employed by the medical establishment, and rising tide of non-English speaking immigrants from different cultures. In response, The Joint Commission published Patents as Partners; How to Involve Patients and Their Families in Their Own Care. Oakbrook Terrace, Illinois: Joint Commission on Accreditation in Healthcare Organizations. 2006. Also i 2006, Michael Roizen, MD and Mehmet Oz, MD followed with a highly readable book The Smart Patient – An Insiders Guide for Getting the Best Health Care, The Free Press, 2006).

To some degree, I’m surprised by all of this talk and movement towards “engaging patients.” I thought patient engagement was what the practice, and the Art of medicine, was all about. Online interactive videos, educational videos in the front office, links to disease information on physician websites, training in interviewing techniques may help but there is no royal road to simplifying the process of patient engagement or raising patient health IQs.

The Vision Thing

Pretend you’re driving a futuristic health care car called “the vision thing.” It’s your vision of how things ought to be.

Your car has three mirrors – one left, one right, one middle. You can view the road ahead through all three. Your mirrors, save for the middle one, are totally transparent. Nothing obstructs your ideological vision.

Computers steer your car. They sense every dip in the road, every curve, every piece of ideological debris that might veer you off course. Computers in your vision thing will take you straight towards a more perfect health system.

In your left mirror, you can see clearly where you’re headed – towards a compassionate, government-run, tax-supported system covering everyone - with no fiscal concerns, nothing in limbo, no care stone left unturned. It pays for all.

Though a side window, you can see you’re nearing your destination. Through Medicare, Medicaid, and now Schip, your government already pays for over half of health care costs. The only things left to done and paid for are covering the uninsured, all adults before 65, and all long-term care for the elderly.

The future is clear. Washington-based pundicrats, politicrats, technocrats, and other carecrats – each with the wisdom of Solomon – will guide care for less knowledgeable beings on the ground. These wise ‘crats will know what you need -- and what government can afford to pay. Citizens will be entitled to everything , and government will have enough resources to cover the healthy -- but not all of the sick. The sick will have to wait for certain optional high tech services –expensive drugs, cancer treatments , kidney dialysis, joint replacements, heart bypass or stents. The healthy, 90% of the electorate, won’t object, for they will believe in the end government will protect them against all that may come.

Your chances of becoming ill or dead will drop. The government will set up a Preventive Care Agency (PCA) to assure every preventive care measure is carried out. Government will create a Best Practices Agency (BPA) to guarantee doctors and hospitals follow best practice guidelines, practice Evidence-Based Medicine (EBM), and pay doctors be paid for performance (P4P), performance being defined as meeting all quality indicators. No “grays,” clinical uncertainties, or“idiopathic” thinking , will be allowed. All will be black or white.

Government will insist all doctors be salaried in large groups, where they’ll be monitored for compliance with guidelines and safety standards. Concern over drug costs will disappear. The government will negotiate prices for drugs and everything else, health costs will fall, and care will be “free.”

Your chances of becoming ill or dying from over-eating, over-drinking, over-smoking, and under-exercising will plunge. Government will heavily tax and, in other cases, prohibit or make prohibitively expensive junk foods, trans-fats, cigarettes and alcohol beverages, and it will reward those who wear ankle-bracelets containing computer-monitored pedometers.

In the right mirror, you can visualize a pure market-driven system. In it, health care consumers, spending their own money, given perfect “metrics” on consumer satisfaction, convenience, quality, outcomes, and prices, will have the data and Internet savvy to sort out health care choices. Consumers will have high deductible accounts, HSAs, and total market transparency. They will know upfront what things cost, just as in any other market. Computer feedback from other consumers will allow them to know how others rate the quality, convenience, and satisfaction of providers. Consumers will pay for care with debit cards at the point of care, and there will be no third party to reject claims. “Compatibility” computer systems, similar to e-harmony.com, will match consumers with high performing doctors and hospitals. .

Choices will abound. Innovators and entrepreneurs will offer and develop a myriad of services to fill niches and gaps in health care. These services will be near where you work, play, and retire. Developers of new services will ask. What do health care consumers need and want? How can we satisfy these needs and wants with cheaper, more convenient, easy-to-understand, , and more effective care? What will consumers be willing to pay for? How can we make money?

Critics will protest you can’t trust markets and the profit-motive in health care. Patients aren’t smart enough, they will say, to shop for health care, and health care woods are full of commercial predators preying on the sick and gullible . Proponents will say markets adjust in the end, and consumers will weed out outliers and out-right-liars.

The middle mirror blurs ideas from left and right. It depends on compromise and collaboration, and may entail collisions. Critics may assert everything will change but the status quo, which may not be too bad, if given in the spirit of quid pro quo.

Regina Herzlinger’s Views of Consumer-Driven Health Care

Prelude: In the July 24, 2007 edition of Health Affairs, Robert Galvin, MD, Director, global health care, for General Electric Corporation and professor adjunct of medicine and health policy at Yale University School of Medicine interviews Regina Herzlinger, Professor of Business Administration at Harvard Business School. The interview’s title is, “ Consumerism And Controversy: A Conversation With Regina Herzlinger.”

Galvin may find Herzlinger’s views controversial because, among other things, she thinks,

•the health establishment protects the status quo;

•intelligent consumers are capable of making rational health decisions;

•consumers are smarter than health care pundits;

•our“top-down” system suppresses innovation;

•all payments should be risk-adjusted;

•The federal government’s role should be restricted to mandating and disseminating outcomes information.

Here’s selected excerpts of the interview:

Galvin: Will the high-deductible plan, paired with either a health savings account (HSA) or health reimbursement arrangement (HRA), engage consumers and elicit the kind of demand you envision?

Herzlinger: The market is clearly starved for insurance innovation. In four years, ten million people have enrolled in the relatively small innovation of high-deductible plans, and Goldman Sachs predicts by 2010 there will be forty million. So it's amazing how fast the market is growing.

Galvin: Much focus has been on whether people are smart enough to be savvy consumers of health care. How about the opposite: Might they be too smart? Some of the data coming out on the early experience of high-deductible plans show that many consumers, knowing that there is still an annual out-of-pocket maximum, are simply "writing off" the increased expense of the deductible but not changing the way they buy health care.

Herzlinger: Unless the supply system is changed, changes in behavior aren’t going to amount to very much. Our bloated, vastly inefficient hospital sector must be restructured.

Galvin: What do you see as the future of specialty hospitals?

Herzlinger: I'm amused that people talk about the spectacular growth of specialty hospitals. There may be a hundred of them, each with thirty or fifty beds. For a company the size of GE, the entire specialty hospital industry would be a rounding error.

So what's stopping real growth? One barrier is the general hospitals, which are so powerful and so territorial. The general hospitals go to Congress and they say, These specialty hospitals, they're bad for my health. They're killing me. In the rest of the economy, Congress would say, Go away. If you can't compete. don't come to us. You need to be more efficient. We will not eliminate your competitors.

The second reason is the micromanagement of the payment system, both by Medicare and by the private insurers.

Galvin: Some of the evidence on specialty hospitals does show that they tend to attract healthier people. Is it fair that they get paid the same amount for someone with less co-morbidity? How would you fix it?


Herzlinger: As I have said since the 1990s, health care prices must be risk-adjusted.

Galvin: What do you see as the role of, and future of, health insurers in a consumer market?

Herzlinger: I believe that there isn't going to be as big a role for insurers in the future.

Galvin: How will we get information we don't have today?

Herzlinger: Only if the government requires collection, auditing, and widespread dissemination of that information.

Galvin: There are serious technical issues in getting outcomes data. The issue of sample size is real and may be a showstopper.


Herzlinger:</span> The sample-size argument is another example of the insular, self-referential, self-protective nature of the health care sector, which is run much more for the benefit of the status quo than the consumer.

Galvin: Couldn't this lead to the consumer who might not be health-literate enough to understand quality data to make decisions based on price?

Herzlinger: It is part of the self-protecting nature of the health care establishment to pooh-pooh the literacy of consumers. Tell me, if the average consumer is such a dummy, how did complex goods like computers become both cheaper and better?

Galvin: You have been critical of pay-for-performance (P4P), calling it at one point "a Trojan horse for government control of health care."


Herzlinger: Currently P4P pays for following Uncle Sam's idea of how the surgery should be performed. It's not about paying for superior outcomes, but rather about paying for following cookbook recipes, dictated by the U.S. government or insurers for delivering medical care.

Galvin: Why not simply go to a single-payer system?

Herzlinger: Single payer could control health care costs by rationing health care for the sick. But would it deal with the quality pr

Co-opetition and Collisions Between Hospital and Doctors

Ever since I served as chairman of a PHO and co-founder of the National Association of Physician Hospital Organization (PHO) in the early 1990s, I’ve been hearing about “co-opetition” between hospitals and doctors. “Co-opetition” is a neologism combining “cooperation” and “competition.”

The management literature says “co-opetition” is good for everyone, and in some magical way, leads to “collaboration.” I wonder is this is true for PHOs, for which you often heard two phrases. “If you’ve seen one PHO, you’ve seen one PHO.” “Big H, small P.” PHOs, in other words, vary enormously in structure, and hospitals generally control PHOs in the end. PHOs depend heavily on leadership on both sides of the hospital-physician divide. But because trust may be lacking and because payers prefer to deal with hospitals and doctors separately, PHOs too often are ineffective.

There is another divisive factor, as well. Hospitals depend heavily on high margin procedural services – as performed by orthopedic surgeons, cardiovascular specialists, neurosurgeons, gastroenterologists, oncologists, and radiologists. These specialists’ procedures may account for 80% to 90% of hospital bottom-lines. In their own practices, doctors depend on these same high margin specialty services.

There is, in the real world, intense competition hospitals and doctors for income of high end ancillary services. When competitive push comes to competitive shove, there may be little middle or high ground, as evidenced by hospitals determined and successful political campaign to impose a moratorium on specialty hospitals.

Everybody, of course has their pet model to solve these problems;

•form a completely integrated health system with health plan, doctors, and hospitals under one corporate umbrella (The Kaiser Model);

•let doctors own and refer to specialty hospitals for more efficiencies, better clinical control, and more revenues (The Specialty Hospital Model);

•Have entrepreneurial doctors organize large multispecialty clinics that specialize in providing high technology care and high margin services (The Cleveland Clinic Model);

•organize integrated systems under physician leadership with hospitals or clinics at their core (The Mayo Model);

•create partnerships between hospitals and doctors and build “big boxes” or big MACCs (multispecialty ambulatory care centers) in which hospitals and doctors have equal stakes (The Collaborative Partnership Model);

•if all else fails, turn it over to the government (The Single Payer Model).

Just a couple of observations, if I may.

•Hospital-physician relationships are the most complex organizational problem ever created by humankind. Relationships are emotional and personal; issues may involve life and death matters; interdependent hospitals and physicians together consume 75% of health care dollars, so political and community stakes are enormous and often contentious.

•Hospitals can’t run their enterprise with doctors, and they can’t run them without them. Managing professionals with their own agendas, often dictated by the autonomous physician culture and hierarchical hospital cultures, sets up cultural turf battles, which may not be for the “good” of society, the efficiency or effectiveness of the system, or the safety and convenience of the patient.

•Encounters between hospitals and doctors, often conflicting, have many intersection points. James Hawkins, a former hospital CEO, and I discussed these encounter points in our 2006 book, addressed to hospital CEOs, Sailing the Seven “Cs” of Hospital-Physician Relationships: Competence, Convenience, Clarity, Continuity, Competition, Control, and Cash (Physician Support Resources, Inc, PSR Publications www.practicesupport.com). Managing these encounters requires human understandings of a high order of each other’s cultures

I’ve been asked “What is your agenda?” A big part of my agenda is to suggest and describe innovative hospital-physician relationships that improve health care, render it more convenient, enhance its safety and effectiveness, and make it less costly. I would be happy to deliver this message before audiences receptive to my message.

Physician Wellness Strategies: Scold, Scare, or Coax?

Tone makes a difference. Employees don’t want to feel scolded about their health.

Kelly Holden, “Wellness Programs Try To Be Welcoming, Too, “ New York Times, July 22, 2007

When I ponder how doctors might coax patients to adopt healthy life styles, my father comes to mind. When my brother, sister, and I refused to eat our spinach, he shouted,“ Swallow it! It’s good for you! Daddy knows best!”

I wonder if Dad might have been more effective had he soothingly said, “Listen, kids. You need to take steps to be healthy and live a long life. Spinach contains all the essential minerals and vitamins. Popeye eats it to become strong. Please join me in this effort to make us all stay healthy.”

Would that approach have worked? Put me down as doubtful. When you’re young and healthy, morbidity and mortality don’t enter your mind.

Spinach may have been good for us kids, but I didn’t eat spinach for the next 30 years. My spinach experience led me to thinking, “How do modern physicians bring patients the wellness table? ”

Doctors and patients alike know good habits are good for them, but many patients don’t want to be scolded or lectured about it.

Wellness strategies pose vexing problems, not only for doctors, but for American corporations.

Some corporations shy away from hiring obese job candidates. Others refuse to employ smokers. They even go so far as to test their urine for nicotine. Wellness programs don’t necessarily work well. Being told to eat your spinach may fall upon deaf ears. Fitness coaching, running tracks, fitness centers, reduced health premiums, and preaching that wellness is good for the company sometimes work better.

Corporations themselves don’t need to be persuaded, There are companies out there, such as Abridge, Inc, and C-Secure in Seattle, with software programs have documented beyond doubt that wellness programs have a significant return on investment, often in the 2:1 to 3:1 range.

But what are physicians to do? They aren’t paid to offer wellness counseling. And many patients with illnesses and conditions stemming from over-indulgence and under-activity resent being lectured to. A serious health event – unexpected development of diabetes, a serious heart attack, unremitting hypertension, or morbid obesity requiring bariatric surgery – may bring patients into the fold.

I’m unaware of any broad physician-led strategy that works well across the board. Health counseling and admonitions require individual approaches between doctors and patients. Physician-patient relationships are one-on-one. No approach fits all. Still, I’m interested in hearing how physicians specifically handle non-compliant patients with destructive health habits and preventive counseling in general.

The Future of Large Multispecialty Practices: Implosion or Explosion?

There are several points of view about the future of big practices.

•One is that held by Daniel Zismer, PhD, president of Essentia Health Services Essentia Health Services, and Peter E. Person, M.D., M.B.A., Chief Executive Officer, Essentia Health and St. Mary's Duluth Clinic Health System (SMDC), Duluth, Minnesota. Essentia Health is a not for profit, multi-state health system. It emphasizes fully integrated clinical and business models as an answer to the challenges related to effectively managing patients' acute and long-term health needs across the continuum of care.

In an article in the Group Practice Journal, Zismer and Person argue that large multispecialty clinics in the Midwest have reached a point they need to merge or be acquired by community hospitals to survive financially. These groups, the authors say, simply don’t have sufficient capital to recruit new doctors, retain existing doctors, upgrade facilities, invest in information technology systems, and maintain their place in the market without entering into partnership or ownership relationships with hospitals.

Here is their rationale:

Said simply, the fully integrated model has greater economic leverage. It aggregates more of the total health-care dollar within a unified business model. The potential for margin enhancement is driven by continuous process improvement and effective selection of the clinical services "menu" provided within the total "portfolio" of services. The model has superior capital regeneration potential, and debt markets see the mode as being more stable and credit-worthy over time.

This may be a phenomenon restricted to the upper Midwest, where large multispecialty groups of 100 doctors or more have been around for decades and have reached a maturation point requiring them to align closely with hospitals.

•Elsewhere in the U.S., large multispecialty clinics, and clinics comprised mainly of primary care physicians, are just beginning to evolve and may soon be on a roll. Many of these clinics believe conglomeration into large groups gives them the power to remain independent.

Here is the point of view of emerging large clinics, as explained by Brian Klepper, PhD, health care reformer and analyst, as explained in a July 21 blog www.thedoctorweighsin.com

Crabby Doctors and the Explosion of Big Practices

Doctors are a cranky bunch these days, and justifiably so. Their world is changing. Its undoubtedly less fun to be the object of a paradigm shift than its driver or observer.

A recent survey showing healthy 2007 income increases across specialties notwithstanding, physicians are besieged by increasing patient loads, a torrent of new information, Byzantine administrative requirements, demands for new technology investments and the very real likelihood that their incomes will plummet under Medicare and commercial coverage P4P programs. Despite the apparently rosy survey numbers, its clear that many primary care physicians are having trouble making ends meet. Many specialists are seeing their incomes drop as well.

So its striking that, unlike a decade ago, there are relatively few efforts afoot to bring physicians together in new ways that can leverage their market power and provide more satisfying professional lives. My bet, though, is that we’re on the cusp of a new trend in that direction.

Three important market vectors will drive the formation of much larger practices. First is the growing financial infeasibility of small practices. Second is the emergence of new technologies – these were only a dream 10 years back – that allow geographically separate practices to exchange information seamlessly and unify under a common provider ID. And third is the rapid transition to performance-based reimbursements – P4P – that will only pay top dollar for top outcomes, and that will effectively require doctors to use these technologies to achieve them.

We’re going to see the development of large, integrated multi-specialty group-practices-without-walls, linked by IT, contracts and consensus on practice rules.

These new practices – take a look at the Holston Medical Group in Kingsport, TN - will look a lot like Kaiser, but adapted to 21st century physicians. They’ll have the scale to easily invest in the information, diagnostic, treatment and data analytical tools that a modern practice needs to be financially diversified, robust and business savvy.
But, most importantly, they’ll recruit physicians who are, by nature, continuous learners, who understand that practice must change as new evidence warrants, and that the health care marketplace is far more transparent than it was in the past. The inflexible need not apply.

While these trends may dampen medical autonomy and profits, they’ll also result in better, more consistent, transparent and efficient patient care. Compared to today - just look at the low morale of American physicians right now - doctors will lead less stressful work lives. By responding to market forces and taking advantage of the host of increasingly powerful and affordable new tools, they'll also organically help re-establish a more stable and sustainable American health system.

Transparency

We do not have a functioning market in the true sense of the word in health care. That's a layer of transparency that's sorely needed in America.

Paul Ryan, U.S. Congressman, Wisconsin

To be transparent is to have truth as a parent.

Anonymous

Fifteen years ago, as chairman of a Physician Hospital Organization (PHO), I came up with the idea of offering “transparent bundled bills,” These combined hospital and physician fees for over 100 hospital procedures.

I described bundled bills in Innovation-Driven Health Care: 34 Key Concepts for Transformation (Jones and Bartlett, 2007) in chapter 28, “Meeting Demands for Knowing Hospital Costs Upfront.”

Transparent bundled bills upfront seemed like a great idea. Everybody admires “transparency,” which has been variously defined as, allowing light to pass through without interruption or distortion, obvious and easy to recognize, open and frank.

But, alas, transparency isn’t so apparent to health plans. They choose not to negotiate collectively with hospitals and doctors. HMOs prefer to deal with hospitals and doctors separately, to divide and conquer. Third parties are rarely transparent in pricing. They prefer to set prices, not to explain or justify them.

Today I received two communications.

•One was a July 19 blog, www. thedoctorweighsin.com, from a health care analyst, Brian Klepper, PhD, “Should We Have Health Care Transparency? By Whom, How?” Klepper cites a New York Times article. In it the New York Attorney General threatens to sue United Health Care for selecting physicians based on cost not quality. Ingenix, a United Health subsidiary, rates physicians based on “proprietary” software. Klepper complains any tool used to achieve transparency should be transparent as well.

Klepper endorses transparency as a tool to reform health care.

” To heal health care” he says, “we need transparency. But it should be provided by neutral organizations that don't have conflicts of interest, and assure doctors and everyone else involved in health care that the reporting will be fair and without prejudice.

Health care is too important for patients and purchasers not have objective information. Only if we get this accomplished properly can we say we've taken the first steps to really fixing America's health care system.”

•The other article was a report by Merritt, Hawkins, & Associates, “Hospitals Employing Physicians in Greater Numbers: Demand Continues to Rise for Primary Care Doctors,” The report is based on over 3,000 recruiting assignments from April 1, 2006 to March 31, 2007. It says a growing number of hospitals are employing physicians. Hospitals offered employment to physicians in 43 percent of searches conducted, up from just 23 percent the prior year and 19 percent the year before that. Traditionally, physicians have practiced as independent contractors or as employees of physician-owned groups. More hospitals employing physicians signals a shift in this former practice paradigm.

“Physicians have long prized their independence,” observes Joseph Hawkins, CEO of Merritt, Hawkins & Associates, “But today more are willing to exchange independence for security and convenience of hospital employment.”

Physicians are accepting employed positions with hospitals to avoid private practice hassles -- high malpractice premiums and struggles for reimbursement. Younger physicians, Hawkins notes, don’t want to “hang up a shingle” and practice on their own. Hospitals, which went through a phase of employing mostly primary care physicians in the 1990s, now are employing both primary care doctors and specialists. Employment secures physician loyalty to hospitals. Doctor employment reduces direct competition between physicians and hospitals for medical procedures and tests.

Searches the firm conducted for general internists increased by 120 percent from 2003 to 2007. Searches for family practitioners increased by 84 percent in the same time frame while searches for pediatricians increased by 21 percent. Hawkins says more openings in primary care stem from fewer medical students entering primary care.

The report shows signing bonuses have become a standard incentive offered in 72 percent of searches Merritt, Hawkins & Associates conducted last year, up from 46 percent two years ago. Signing bonuses range from as little as $5,000 to as much as $100,000. The report may be viewed online by visiting the firm’s Web site, www.merritthawkins.com.

What distinguishes the Merritt Hawkins report is its transparency – clear and obvious data on signing bonuses, demands for specialists, increases in demand, starting salaries commanded by various specialists. The report exemplifies the attributes of transparency -- clarity, verity, and reality.

A Chronology of Innovation and Health Reform

“That mysterious independent variable of political calculation: Public Opinion.”

Thomas Huxley, 1826-1895

As I write these daily blogs, I sometimes wonder what their central theme ought to be. It occurs to me they’re nothing more or less than an historical chronology of events surrounding the politically charged issue of health reform.

This issue has three essential converging elements,

1)At the federal level, the presidential candidates debate about what form this reform should take: more government intervention versus a more market-driven system.

2)At the State level, comprehensive coverage initiatives in these bellwether States – Massachusetts, California, Illinois, and Pennsylvania – which generally force citizens to buy insurance. tax providers and businesses to subsidize those who can’t pay, and add billions to state budgets.

3)At ground level, struggles of various health care stakeholders and entrepreneurs to come up with a workable market-based system that’s uniquely American patient-centered, convenient, acceptable, and affordable.

These elements have countless permutations and combinations and unpredictable outcomes. Only one thing is certain. Somehow, each initiative has to bring down the cost of the system in ways acceptable to that Great Independent Variable – American Public Opinion.

There’s an urgency to the debate if America is to compete globally and if we are to stave off Medicare bankruptcy, now projected to occur in 2017 at current rates of spending.

At the national debate level, still in its formative stages, the Democrats favor more government intervention. Their plans, as yet sparse on details, include bringing down costs, assuring affordable care, promoting prevention, installing information systems, mandating quality, raising taxes for the “rich,” negotiating Medicare drug prices, expanding the State Children’s Health Insurance Program (or Schip). Of the Schip initiative, to which Democrats would give a $60 billion booster shot, opponents warn of stealthy creeping socialism.

The Republicans have yet to engage fully on what should be done, but their platform will almost certainly include a market –based system financed by tax parity between employees and individuals, universal tax credits, or a standard family tax deduction of $15.000. The Republicans want a system based on market principles and more consumer choice.

At the State level, initiatives to ensure universal coverage are struggling, even in liberal Massachusetts, because of resistance to more taxes on businesses and health providers, guaranteed coverage by health plans of those with pre-existing illnesses, and mandating individuals reluctant to being forced to pay for insurance.

In California, Governor Schwarzenegger’s plan would force all Californians to buy insurance, tax hospitals and doctors, compel insurers to accept all customers, compel business that didn’t offer coverage to pay 4% of their payroll taxes into a state fund.

This plan – opposed by many in the health care community, including Well-Point, Inc, the state’s biggest health insurer, and the business community – has profound implications. California, after all, has 6.8 million uninsured, more than the entire population of the Commonwealth of Massachusetts.

Meanwhile Well-Point is running “Harry and Louise” type ads warning of the “unintended consequences” of the government’s plan, such as turning the state’s $200 billion health industry upside down and shaving margins it needs to operate profitably.

While all of this is going on, I have been explaining and documenting innovations going on at ground zero in medinnovationblog.blogspot.com. These innovations include,

•retail clinics,

•work site clinics created by major employers,

•new forms of physician practices,

•hospital-group practice mergers and acquisitions,

•moving care out of hospitals and institutions into homes,

•telemedicine monitoring of embedded devices and vital signs,

•focusing on care of the chronically ill,

•using information technologies to bring care to those in locations outside of medical offices and hospitals,

•new forms of financing care,

•decentralizing care by offering one-stop medical shopping in convenient locations where people live, work, and retire;


•organizing specialized and integrated facilities to handle common disease problems;

•making costs of care more transparent by bundling bills and paying for episodes of care rather than charging fee-for-service.

Cumulatively, these innovations are changing American health care, but they don’t have high visibility in the health care reform debate.

Even though Americans are by nature innovative and optimistic, it isn’t easy to convince them that their health destinies are in their own hands – not in the pocket books of some higher authority.

Decoupling of Medicare Fees and Doctor Practice Expenses

A recent blog of mine evoked this response from Robert Teague, MD, an Austin, Texas pulmonologist. He serves as CEO of PracticeIT. com, a firm devoted to making sense out of information technologies for physicians.


I enjoyed your piece in Health Leaders this morning. You clearly have your hands around many of the complexities of the issue.

Here are a few ideas I think are hugely relevant to allowing some of your other elements to work:

• The health system can never be fixed until the financial and service transactions occur between the same two people.

• The “cost of production” of care is actually unknown ever since the government decoupled price from cost of production 40+ years ago. This will only be rectified by number one.

• Address regulation. I believe when history of health care in this epoch is writ it will show that the Stark Laws did more to inhibit point of service innovation than any other single factor. Through some well intentioned legislation we have horrific unintended results. The people with the greatest natural interest in point of service innovation are physicians. They are also the ones with the means both financially and intellectually to do it. But are prohibited from doing it by these ridiculous restrictions on innovation. It is not by chance that the patient/customer experience deterioration in health care delivery roughly parallels the passage of these stupid laws.

• Finally, add a line to HIPAA... one sentence will do... HIPAA established that personal health information “belongs” to the individual. HIPAA also supports that notion that those who store this information on any type of media (paper or electronic) own the media if not the information per se... all the sentence has to say is “any health provider who stores personal health information must on demand make it available to the owner electronically or on paper as requested.” Something along these lines would make RHIO’s go away as unnecessary and spur the adoption of connectivity of information in a way that will likely not occur otherwise.

I concur with Dr. Teague on his major points:

1) Third parties – Medicare and health plans – distort and complicate normal business relationships. In their book, Guide to Physician Recruiting, Merritt, Hawkins, and Associates put it this way:

2) Stark laws are “stupid” in that they prevent innovation at the point of care by making physicians go through the expensive exercise of jumping through unnecessary legal hoops Furthermore they prohibit collaboration between physicians and between physicians and hospitals and impede normal market transactions. In my book Innovation-Driven Health Care. Brooks ONeil, a health care analyst, put it this way:

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

3) HIPPA would work better if health providers would cough up personal information on personal demand by patients.

Patients deserve know their personal data, no matter where it’s stored.

4) Medicare payments bear no relation to the cost of doing business.

The cost of doing business is higher in fast growing rural areas near urban centers. It’s about time Medicare acknowledged this and did something about it.

Her are a few counties in which Medicare is underpaying.

State and Counties, Percent of Underpayment

Arkansas, Crittenden, 6.9%
California, Santa Cruz, 10.2%
Colorado, Denver, 5.2%
Connecticut, Fairfield, 3.7%
Delaware, New Castle, 3.7%
Georgia, Barrow, Bartow, Carroll, Coweta, Pickens, Spalding, 12.0%
Illinois, McHenry, 11.3%
Iowa, Dallas, Polk, Warren, 4.7%
Kansas, Miami, Johnson, Leavenworth, 5.9%
Kentucky, Kenton, 5.0%
Louisiana, St. Charles Parish, 5.4%
Maryland, Calvert, 11.4%
Massachusetts, Essex, 6.7%
Michigan, Livingston, 5.4%
Minnesota, Dakota, 6.0%
Missouri, Cass, Clinton, Lafayette, Ray, 11.0%
Nebraska, Cass, Douglas, Sarpey, 3.9%
New Hamsphire, Hillsborough, 3.4%
New Mexico, Los Alamos, Sante Fe, 8.9%
New York, Putnam, 8.3%
North Carolina, Chatham, Durham, Franklin, Johnston, Orange, Wake, 6.5%
Ohio, Cuyohoga, 4.9%
South Dakota, Lincoln, Minnehaha, 3.4%
Texas, Collin, 11.5%
Utah, Davis, Weber, 2,4%
Vermount, Chittenden, 3,2%
Virginia, Manassas City, 14.4%
Washington, Snohomish, 6.3%
Wisconsin, Pierce, St. Croix, 10.4%
West Virginia, Jefferson, 5.2%

The moral is that government can’t adjust to changes taking place on the ground. By so doing they financially undercut doctors, and the Medicare patients they serve.

EMRs and Pay For Performance (P4P)

A Response to One of My Blogs

One of the joys of blogging is the comments and dialogue you have with fellow bloggers. In one of my recent blogs, July 15, “Doctors Go Haywire with EMRs, A Critic Says,” I received the following comment from Vijay Goel, MD, a Los Angeles-based management consultant and author of www.consumerfocusedcare. blogspot.com.

“I really like the framework you used of force vs. persuasion. I think too many in the health policy field rely on force-- leaving us with a group of highly talented and dedicated, yet frustrated and demoralized group of physicians.

Where I would like to hear more is the purpose for physicians offering EMRs. There have been some studies where offices using EMR have been less effective than those without.

Ultimately, we should incent the outcome desired (i.e., better outcomes for diabetes care, better sugar levels, etc) over the process we think could help get us there-- and show how proper use of the desired process helps to achieve the desired outcome.

Having been a consultant for many Fortune 500 companies (and smaller ones), I fear that with process metrics people focus on form, not function-- installing an EMR becomes more important than designing a great clinical pathway to engage diabetics-- which takes us only partially toward the outcome we hope to achieve.

I discuss this on my blog: http://consumerfocusedcare.blogspot.com”

Here’s what Dr. Goel said in his blog:

Metrics: Be Careful What You Measure For--You Just Might Get It
“Quality is a buzzword in medicine today--unfortunately, its application is anything but a high-quality, well-designed approach.

There are many reasons why quality is hard, and many reasons why defining quality well may not be fair to existing players who are trying hard to do the right thing. In settings like these, there is no one right approach that fits everyone. Ironically, by having quality efforts led by the government (P4P) and major payers, we're less likely to get it right than by having a number of smaller players seek to play objective, third party roles that maximize benefits for specific constituents.”

”Structurally, quality is hard because:

1.There are no established benchmarks

2.The only metrics that matter--morbidity, mortality, and patient experience-- are complicated and seem largely uncontrollable

3.There is significant money at stake for the "chosen"

4.Politically, no doctor believes they are inferior

5.Society favors heroic intervention over statistically avoided event”

“I'll deal with the first 2 below:

Benchmarks

”The medical profession likes to think that all of its practitioners are better than average (of course a statistical anomaly). While licensing and training make all quite good, some will be better than others-- and recent evidence shows there is a strong correlation to better quality with a minimum volume of procedures done, by hospitals and by surgeon. There is also strong evidence that physicians differ significantly in rates of treatments recommended, with few added benefits to societal health. Where benchmarks have been applied and evidence of high and low performers made transparent (not the case in recent hospital mortality rankings), low performers quickly adjusted to close the gap with high performers (see NY state cardiac surgery rankings)”


Metrics

”There are two types of metrics, process and outcome metrics. Process metrics are seen as means of getting to desired results, with outcome metrics being the desired results. Outcome metrics are the things that really matter-- in medicine this would be rates of morbidity and mortality, with good patient experience also potentially a desired outcome.

The issue we have with quality reporting today is that most of the metrics available focus on process: did they use an EMR, did they give pill X in Y time, did they check body part A for B sign. While process is important, process metrics often forget about context and they forget that there are many roads to the end-goal. Unfortunately, process can only incorporate disease features we think we understand-- and as with drug-eluting stents, we may be maximizing to solve intermediate steps but creating a worse end outcome.”

”Outcome metrics, while politically less viable (everyone wants a reason why they're not #1--and will complain they need to stop seeing sick patients), are truly measures ensuring that treatments work as well as promised. Risk adjustment will never be perfect and segmentation will always be a rough estimation. This is where a single approach linked to payment will get tremendous pushback, whereas a few third party approaches (e.g., Morningstar for financial products) can be triangulated to determine appropriate risks and risk-payments. At the same time, spending a ton of resources on sick people who die soon is ultimately not a great use of society's funds if its not benefiting research-- or coming out of that individual's own wallet (yes, its not fair to the poor--and nothing else in life is fair to the poor either).”

”Outcome metrics also seem most out of the hands of providers. However, in the broader sense, providers have done a poor job of managing longer term adherence to therapy and some outcome metrics (blood pressure, sugar levels) can reflect those changes-- and have been linked to significant improvement in outcomes. Perhaps the issue isn't that physicians aren't able to control those metrics, but that we've been asking them to perform instant miracles instead of helping patients understand and control their disease over time.”

Three Questions Hovering Over P4P

Dr. Goel’s comments raises three questions in minds of P4P critics:

1) Should hospitals and physicians be reimbursed for what they should be doing anyway? That, of course, is a political question, viz, “Is pay-for-performance too much of a good thing?’

2)Is P4P worth the price it exacts from the health system? That’s an economic question. In the United Kingdom, since 2004, the national practice of awarding bonuses to practitioners for meeting “quality indicators, “ has worked in meeting those indicators, but in the process it has driven the national health system deeply into debt.

3) Does P4P, until now based mostly on rewards for meeting “process metrics” result in better outcomes in terms of lower mortality, less morbidity, and better patient experience. To date, that remains an unanswerable managerial, genetic, and cultural question because it’s a long-term question, because some of these factors are uncontrollable, and because it may be beyond the power of “ outcome metrics,” now in its infancy, to measure precisely.

References

1.S. Campbell and Others, “Quality of Primary Care in England with the Introduction of Pay for Performance,” New England Journal of Medicine, July 12, 2007.

2.R. Galvin, “Pay-for-Performance: Too Much of a Good Thing? A Conversation with Martin Roland,” Health Affairs, 2006:25:w412-w419.

3.GP Pay Raise “Was Mistake,” BBC News, June 21, 2007.

4.A. Epstein, “Pay for Performance at the Tipping Point, New England Journal of Medicine, February 1, 2007.

Wall Street Journal Finally Catches Up with Medinnovationblog.blogspot.com with News on Proceduralists

A Tongue-in-Cheek Commentary

”Proceduralists--This is a more recent but rapidly emerging specialty. It is a spin-off of the hospitalist’s movement. Proceduralists are hospital-based and are trained to do procedures common in hospitals--tracheostomies, cut-downs to create venous and arterial access, parancenteses and thorancenteses, spinal taps and diagnostic procedures such as ultrasound. Proceduralists are in demand, not only because of their skills gained and safety provided for patients from repeatedly performing procedures, but because they can train incoming residents to perform them.”

www.medinnovationsblog.blogspot.com, "Six Innovations – Innovation Number Two: Introducing New, More Focused, and More Productive Specialties," July 1, 2007

“With a steady decline in the number of doctors trained to perform intensive procedures in recent years, Cedars and other large academic centers are looking for ways to fill the gap. They are creating special procedure services and new procedure training programs for medical residents. Teams of doctors known as proceduralists are now available at some centers with special expertise in tunneling a catheter into a vein , slicing an incision into the neck for an airway, or plunging a needle into a patient’s back for a spinal tap.”

Laura Landro, “To Reduce Risks, Hospitals English ‘Proceduralists’”, Wall Street Journal, July 11, 2007

Ordinarily I’m not one to brag about scooping a major publication like the Wall Street Journal, but I will anyway. My blog was one of the first publications to bring proceduralists to the attention of a wider world. This minor scoop is probably of no lasting significance. The important thing is that patients are safer with proceduralists. That’s what counts, not who did what first.

I admire the WSJ reporter’s use of verbs – “tunneling” a catheter into a vein, “slicing” an incision into the neck for an airway, and “plunging” a needle into a patients’ back for a spinal tap.

And she has a nifty list showing risk of procedures.

Procedures and Risks

•Thorancentesis, collapse of lung, bleeding, infection, respiratory disease

•Parancentesis, puncture of bladder, lower or blood vessel in the abdomen; spread of cancer cells in abdominal cavity; shock

•Lumbar puncture/spinal tap. Leak of cerebrospinal fluid nerve injury; infection

•Central -line insertion, injury to nearby arteries lung, infection

•Arterial –line insertion, infection, bleeding, damage to surrounding tissues, blockage of artery

And I freely admit the WSJ reaches a much bigger audience.

But it gives me a small cheer when I realize minds of small blog creators and great newspaper reporters travel in similar channels when it comes to spotting significant news and trends. To sum up, it’s three cheers for the procedualists, two cheers of www.medinnovationblog.blogspot.com, and one cheer for the Wall Street Journal.

Hospitals and Sutton’s Law: The Obvious and Not-So-Obvious

Have Hospital-Physician Relationships Reached A ‘Tipping Point’ Requiring Consolidation and Integration Driven by the Need for More Capital?

“Because that’s where the money is.”

Prolific bank robber Willie Sutton (1901- 1980) purported answer when asked why he robbed banks. Sutton’s actual words may have been, “Go where the money is... and go there often.”

Sutton’s law has become known as stating the obvious.

It is obvious the greatest proportion of U.S. health care money is spent for hospital care. Most health care money and access to capital is in the hospitals – not in physician practices. Yes, doctors with their pens may be responsible for 80% of costs. But much of the money ends up in hospital pockets, while money doctors need to invest in their practices comes out of their own pockets.

Hospitals and Doctors Need Each Other

America’s 5000 hospitals consume 50% of the national health care dollar, $2 trillion annually. America’s 500,000 actively practicing physicians account for 25%, or $500 billion. Do the math. Revenues for hospital average $200 million for each hospital, and $1 million in revenues for each physician. These numbers are deceptive. Merritt, Hawkins, and Associates, physicians estimate on average doctors generate over $1.5 million a year in inpatient and outpatient revenue for affiliated hospitals.

•Hospitals need doctors. Hospitals would be empty shells without doctors admitting patients, ordering tests, and performing procedures.

•Doctors need hospitals even more. Most doctors need to be on a hospital staff to practice, and they need a hospital as a place to perform procedures and provide care for ill patients.

In 1997, the Croes-Oliva Group, a medical group management consulting firm in Boston, surveyed 31 CEOs throughout New England. They found 87.1% the CEOs believed doctor-partnering strategies were essential for their organization. Only 12.9% said they were exceptionally pleased with doctor partnerships. Less than half reported moderate satisfaction. (1)

In today’s competitive environment – with declining hospital reimbursements, mounting expenses, and the history of disastrous losses from hospitals acquiring practices in the last 1990s - boards of trustees are asking for hospital executives to be smarter this time around while recruiting and employing, and in purchasing doctor practices. Hospitals and doctors seek to consolidate and integrate care to leverage profits and control expenses.

Goals of Boards of Trustees

Hospital boards of trustees are,

•demanding clarity on why hospitals are seeking partnerships;

•asking hospital executives to justify physician recruiting expense and the return of investment ( recruiting a single physician can run $400,000 or more, but the ROI can run $2.5 million for high-profile procedural specialists such a orthopedic surgeons or cardiologists); (2)

•Requesting measurements showing the hospital is outperforming the market.

What’s Needed to Satisfy Doctors Entering into MoreIntimate Financial Relationships with Hospitals

The Croes Oliva Group says hospitals must “compete or retreat” thorough offering these service guarantees for their doctors.

•Provide higher compensation than the MGMA average compensation.

•Show superior billing performance -- reducing rejected claims to less than 5% and days in accounts receivable to less than 30 days.


•Grow practices by bringing in more patients.

•Reduce administrative burdens and accommodate to physicians life styles.

•Use IT expertise to improve care and integrate physician- hospital IT systems.

-Show integration and consolidation gives negotiating clout to reduce expenses.

•Demonstrate they can attract top-notch talent at all levels of the enterprise.

Hospital’s Inherent Fiscal Advantages

As hierarchical managed organizations, hospitals have certain undeniable fiscal advantages over scattered physician practices. Doctors function in a democratic environment where one-man-one vote prevails.

•In many communities hospitals are the biggest employer in town. This not only gives hospitals economics of scale, but brand name recognition and political power, e.g. the ability to impose a moratorium on physician-owned specialty hospitals and to prohibit their salaried medical staff from referring to these specialty facilities.

•Hospitals are where most invasive procedures are performed, most medical imaging is performed, intensive cancer care is carried out, critical care is done, and people go for emergencies.

•Hospitals have accesses to capital unavailable to physicians, who must dip into their own pockets or put their credit status on the line.

•Hospitals have a higher “brand-name recognition” than most physician groups, partly because the public knows they go can to hospitals 24 hours a day for emergency care,

Moreover and Furthermore

Hospitals are likely to remain the money centers of health care. American hospitals are undergoing an unprecedented building boom, have the most influential community business leaders on their board, possess the organizational structure allowing them to neutralize or engulf competitors. Hospital doors are open 24 hours a day, have access to capital, through tax-exempt bonds and other financial mechanisms; have seasoned executives in their “C” suites with talented managers below them. Furthermore, hospitals are on a physician hiring spree, as demoralized doctors flee insecurities posed by rising expenses, soaring malpractice fees, mounting federal rules and regulations, increasing pressures to install electronic medical records to document quality, performance, and outcomes. And hospitals have the “critical mass” to deal with issues like information technology systems.

Last, but far from least, everybody knows hospitals are where the money is. Ask almost any practice management consultant, Medicare official, supply chain vendor, drug or medical device maker, or physician recruiter, and they will tell you they derive most of their income from hospitals and affiliated physicians. Independent physicians, on the other hand, are notorious for hoarding their money, failing to set aside money for contingencies, and for not investing in needed infrastructure not giving an immediate and tangible return on investment.

Physician Capital Needs Have Outrun Their Capacity to Generate Revenue through Patient Visits and Managing Ancillary Revenues

There may be another factor as well. Doctor groups need for capital has outrun their capacity to provide it. Physician groups, even large physician groups of 100 doctors or more, can no longer generate the money or gain access to the capital needed --to recruit new physicians, to invest in widely heralded EMRs and physician websites, to buy ancillary technologies needed to supplement income from patient visits, to upgrade physical facilities, or to capture more of total health care revenues needed to maintain and grow their enterprises.

These limitations, say Daniel Zismer, PhD, President, Essentia Health and Dr. Peter Persons,MD, CEO, Essentit Health and St. Mary’s Duluth Clinic Health System, argue in a recent issue of the Group Practice Journal will force multispecialty group practices to merge or be acquired by community hospitals -- for economic leverage, greater brand recognition, more efficiency and less duplication, more negotiating clout with payers and vendors, capture of greater shares of total health care revenues, and, the ability to gain profitability from high tech ancillary services. (3)

Here is the crux of their economic argument. I shall quote in full because of my lack of economic expertise.

“The prototypical large, multispecialty medical group practice is an aggregation of clinical specialties with comparatively unique operating economics and "financial leverage" potential, meaning physicians' ability to directly create "downstream" revenues from patient contacts differs by clinical specialty.

The multispecialty group practice business model's ability to leverage the revenue potential of physicians within specialties (and in the aggregate) is limited by its ability to import, own, and profitably operate a range of ambulatory ancillary services; e.g., diagnostic imaging, ambulatory surgery and invasive procedures, laboratory services, etc., up to, but not including revenues available from a full-service hospital.

The revenue leverage available from such ambulatory ancillary services strategies will typically produce a physician net professional revenue to net ancillary services revenue ratio of $1.00 to $0.50 - $0.75; i.e., for every dollar of net professional revenue, up to $0.75 is produced in net ancillary fees. (This ratio differs markedly from group to group.)

An examination of a similar ratio in a fully integrated clinical and business model where a full-service hospital is an integrated component of the health system demonstrates a very different leverage ratio picture, where $1.00 of physician net professional revenue can leverage to $3.75-$4.00+ of total "downstream" net revenue, including hospital revenues-a several-fold difference. This ratio is affected by specialty services' scope and emphasis, primarily.

What does this mean? Said simply, the fully integrated model has greater economic leverage. It aggregates more of the total health-care dollar within a unified business model. The potential for margin enhancement is driven by continuous process improvement and effective selection of the clinical services "menu" provided within the total "portfolio" of services. The model has superior capital regeneration potential, and debt markets see the mode as being more stable and credit-worthy over time.

Larger, multispecialty medical group practices are likely to consolidate with hospitals and hospital systems to create "fully integrated" clinical and business models. Why? Reasons were cited earlier in this article:

•More of the total health care dollar is captured within a unified business model;

•Competitive inefficiencies are eliminated, i.e., hospitals and clinics competing with each other for the same health care dollar with duplicative capital investments (facilities, clinical technologies, programs, etc.);

•Support services and infrastructures become "scaleable"-electronic health records, information technology systems, support services, etc.;

•Third party payer contracting is from a unified and predictably, more leverageable business model;

•Health "branding" becomes easier, Debt markets favor larger, more leverageable business models;

•Physician income requirements are more supportable as a result of a larger revenue base where physicians are positioned to influence the operating cost (case cost) structure to the financial advantage of the system and themselves;

•Patients are presented a unified,seamless and collaborative"system" of care;

•The need for personal capital investments by physicians and financial risk is eliminated;

•The model is more "recruitable" given the needs and wants of future generations of providers; and

•Corporate-tax burdens are lessened and cost of capital is reduced.

Said more succinctly, patients are provided what they believe they've had all along: hospitals and physicians working together from the same, consolidated clinical and business model.

What struck me about this argument is this. Conventional wisdom says independent multispecialty groups are where the future lies – where doctors can leverage teamwork and multiple skills to provide efficient, affordable care, to bring order out of the present “fragmented” and “individualistic “ system, and to bring stability and life style sanity to doctors’ lives. (4)

Caveats

From the business point of view, Zismer and Persons present a compelling argument. Economic pressures, market forces, and need for central management, and more capital, will logically and inevitably compel hospitals and doctors to integrate and consolidate.

But there are counterarguments,

•Regina Herzlinger, In Who Killed Healthcare: America’s $2 Trillion Medical Problem – and the Consumer-Driven Cure, argues community hospitals already have too much power and misuse it -- by trying to be everything to everybody, acquiring competitors to consolidate power, overcharging the uninsured, crushing competition from physician-owned specialty hospitals and outpatient surgery and diagnostic units.

•The federal government –and its antitrust, OIG, and IRS divisions, and Stark Laws –may disapprove of combined hospital-physician enterprises perceived to monopolize care, fix prices, and stifle competition.

•The phenomenon Zismer and Persons describe – the merger and/or acquisition of multispecialty groups by community hospital, is so far is largely restricted to the upper Midwest and far West, where large multispecialty groups prevail.

•There are certain countervailing forces – business decentralization and the breakup of large enterprises into smaller more manageable pieces. The bigger the entity, the more it must be made up of smaller and smaller, more efficient parts to be successful.

The larger questions are:

•Can large community hospital-multispecialty-doctor-salaried- centrally directed enterprises be managed?

•Do hospital executive have the talent, flexibility, leadership skills and bent for collegiality to provide what doctors want – financial security, ease of practice, lifestyle control, and clinical control.?

•Will doctors, in their turn, buy into the concept bigger is better, and be willing to sacrifice their independence for a collaborative dream?

In the end, it may be that society will force hospitals and doctors into one business mold.

It may be the U.S. health system has reached an “age of discontinuity,” a tipping point. From now on, the public may entrust health care to large organizations, organized for convenience, visibility, and perpetuity and run by managers. It may be such organizations will govern health care and will overcome patients’ and physicians’ penchant for individualism. And it may be money – and the need for more control and access to it – will catalyze community hospitals and physicians to consolidate into one seamless entity.

References

1.Jayne Oliva, “Second Time a Winner: Managing Physician Practices with Success: A Proven Formula Based on the School of Hard Knocks, “ Tstyle="font-style:italic;">he Physician Executive, March/April, 2007

2.James Merritt, Joseph Hawkins, and Philip Miller, “Guide to Physician Recruiting: First Edition, “Practice Support Resources, 2007.

3.Daniel Zimmer and Peter Persons, “What Does the Future Hold for the Larger, Independent, Multispecialty Medical Group: Is a ‘Tipping Point’ on the Horizon,” Group Practice Journal, volume 56, April 2007.

4.David Lawrence, From Chaos to Care: The Promise of team-Based Medicine, Perseus Publishing, 2004.

Physicians Go Haywire with EMRs, Critic Says

Try to Patch Practices Together with Paper Charts

“Haywire,” according to Microsoft’s Encarte World English Dictionary, means:

1) Functioning Erratically, or not at all.

2) Behaving Oddly, behaving unpredictably or extravagantly.

Webster’s New World Dictionary defines “haywire” as, “A logger’s term for a camp with poor equipment held together with haywire. Out of order, disorganized, confused. Crazy, as, to go haywire.”

In a June 27 Healthleadersmedia.com entry “Healthcare Crisis: EMR Non-acceptance in the US, ”Bill Bysinger, principal of WGB Advisory a health care and technology management consulting company and co-founder of eMRnet, an EMR services company, implies American physicians have gone “haywire” when it comes to EMRs.
Physicians, he says, simply do not know what is good for them or their patients electronically.

Bysinger’s June 27 essay opens:

It has been almost 20 years since electronic medical records systems were introduced into medical practices, yet we have the lowest adoption rate of all the developed countries in the world. Most of Europe, Japan, China, Australia and even Russia have adoption rates above 50 percent and in many countries above 90 percent
We are supposed to be the world leader in adopting technology, but recent studies have put our practice EMR adoption rate at somewhere between 15 percent and 18 percent.
I submit the root cause of the problem is the culture of the health care industry. Health care in the U.S. especially at the practice level is a cottage industry. Medical practices don’t make business decisions based on productivity or process improvement, which dominates other industries. Instead, they make decisions based on how much money do they have to spend and what will it do for the providers personally (and immediately).

Bysinger closes:

We cannot be proud of the fact that we have the best physicians in the world and are ignoring the value of electronic medical records as an enabler of better care.
The U.S. is the leader in applied information technology in most industries in the world, and we stand in last place in applied health information technology among developed countries in the world. This makes me ashamed of my industry and more focused on evangelizing change in our broken practice paradigm of paper records and manual clinic information processes.

After reading Bysinger’s opinion and pondering his conclusions, I ran across an article by John Stossel, a conservative journalist who hosts ABC’s 20/20 and who is the author of Give Me a Break, The article “Live and Let Live” is carried by the Creators Syndicate.

Here’s what Stossel has to say:

There are only two ways to get people to do things: force or persuasion. Government is all about force. Government has nothing it hasn't first expropriated from some productive person.

In contrast, the private sector -- whether nonprofit or a greedy business -- must work through persuasion and consent. No matter how rich Bill Gates gets, he cannot force us to buy his software. Outside government, actions are voluntary, and voluntary is better because it reflects the free judgment of creative, productive people. As I wrote in Give Me a Break: "If government would just back off, the private sector will provide many of the same services faster, better, and cheaper." There are plenty of examples that should astound the socialists, like better private water works, ambulance services, roads, even air-traffic control.

Of course, I'm talking about a private sector that gets no privileges from the state. That doesn't describe our private sector now. For years government has bestowed all kinds of favors on special interests, from trade restrictions on foreign competitors to cash subsidies and cheap loans to corporate tax deductions for health insurance. People in and out of government have conspired to pollute the voluntary private sector with force and regimentation. That's why we have a mixed rather than a free economy.

Stossel’s comments caused me to go back to Bysinger to see if he would “force” or “persuade” doctors to embrace EMRs. As you might expect, Bysiner’s message to doctors to encourage them to adopt EMRs mixes force and persuasion.

1. Provide immediate tax incentives for a dollar-for-dollar write-off against the cost of electronic medical records for every practice in the country. (This is another proposal that has been talked about for over 10 years without action.) Here Byzinger stresses “persuasion.”

2. Provide higher levels of Medicare and Medicaid reimbursement for those practices that can demonstrate the use of electronic medical records. Here, Bysinger mixes “force” and “persuasion,” i.e. if you want to get paid more, adopt EMRs.

3. Create state tax and licensing incentives for physicians that use electronic medical records. This is mainly a “force” argument. If you want to be taxed less or get licensed, get on board.

4. Create a mandate among every medical society to promote the use of electronic medical records and provide cost incentives on membership and services to those physicians that use and promote EMRs. When you run across the word “mandate,” you’re talking about government use of “force.”

5. Make health plans require physicians in their networks to be on electronic medical records by a specific date. Force again. The operative word is “require.”

6. Medical liability carriers should provide significant premium discounts to physicians who use medical records due to increasing patient safety and insuring better clinical documentation. Back to the use of “persuasion” in the form of “sweeteners.”

Maybe Bysinger’s six steps will bring doctors, who have haywired their practices together with paper charts, into the electronic age; jar them to their senses and consensus; and create order out of confusion.

I do not know doctors will react to this mix of force and persuasion. It is a matter of conjecture. It depends on what doctors perceive is in it for them, and on how one defines “digital.”

If I Were Surgeon General

What follows are questions distinguished NYT contributors would ask James W. Holsinger, Jr, MD, in his appearance before the Senate Committee on Health, Education, Law, and Pensions.

Below are the answers I would give if I were being considered for Surgeon General. Dr. Holsinger, of course, had his own set of answers. Among these answers were these.

-- On his attitude towards gays, “I can only say that I have a deep appreciation for the essential human dignity of all people, regardless of background or sexual orientation, Should I be confirmed as surgeon general, I pledge to you to continue that commitment.”

--On what he would do if asked to yield to political principles, “If I were faced with a situation that I felt I could not in good conscience do, I think I have a clear response to that. I would resign.”

--On universal coverage, “We need to have every American covered for health care.”

Here are the NYT’s Op-Ed contributors’ questions, and how I would answer them.

What Patients Need – from Abraham Verghesse , a professor of medicine and director of the Center for Medical Humanities and Ethics at the University of Texas

1. “Many Americans cannot afford preventive care in a doctor’s office, and therefore get acute care in emergency rooms for preventable conditions. What role does the surgeon general play in bringing about affordable health care for all — the key to practicing preventive medicine?”

My role is use my position as a public pulpit to preach the gospel to teach the benefits of good diet, good exercise, good weight control, good self-care, good management of disease, and avoidance of destructive habits and behaviors. I believe, of course, in affordable care for all, and I would say so.

2. “Americans often find that health care is so fragmented and technology-driven that no one person seems to be in charge as they shuttle from office to office, suite to suite. What can the surgeon general do to bring the pieces together and give patients the security of knowing that the system is paying attention to their needs?”

My role is to encourage Americans to keep a personal health record and to choose a primary care physician whom they trust. Beyond that, there’s little I can do personally. I have no power to integrate or coordinate the system. That task requires collaboration between America’s 5200 hospitals and its 900,000 physicians.

3. “Effective preventive health campaigns by previous surgeons general are partly responsible for Americans’ increased longevity. But now, older Americans carry an increased burden of illness and a greater need for custodial care. And death too often comes in a hospital’s intensive care unit — at great expense to the family and to the taxpayer. What is the surgeon general’s role in improving end-of-life care? “

My role is to encourage patients to investigate hospice services, to seek out disease management services that offer home care, and to encourage older patients to practice self-reliance and demand care that preserves dignity and independence.

The Care Gap – from Harriet A. Washington, the author of “Medical Apartheid.”

1.. “The surgeon general’s office, with a small budget and no specific mandate, makes its impact primarily as a bully pulpit that others have used to take courageous stands. Dr. Thomas Parran, surgeon general from 1936 to 1948, shocked the nation by urging nationwide syphilis education and treatment; Dr. David Satcher, who served from 1998 to 2002, vowed to end racial health-care disparities; Dr. Jocelyn Elders (1993-94) took on the tobacco companies; and Dr. C. Everett Koop (1982-89) dared to make AIDS a household word. What bold initiative would you make your personal mission? “

My “bold mission” would be to announce we’re all in this thing called health care together, including patients, and the best thing to improve outcomes is for patients to watch their blood pressure, their weight, their blood sugar and blood lipids; and to think of their doctors as partners in health.

2. “The black infant mortality rate remains twice that of whites; the black adult mortality rate is 1.5 that of whites and the black maternal death rate is four times that of white women. What action would you take to give racial inequities in health care more prominence on the national agenda? “

I would bring these gaps to the attention of the black community through their national leaders and through community-based organizations, like hair dressing establishments and churches. I would give black leaders a prominent place on my bully pulpit.

3. “Lesbians suffer a higher risk of a variety of health problems from cancer and heart disease to depression, and they are also less likely than other Americans to seek care from a medical system that they perceive to be judgmental, intolerant and even hostile. How will you assuage fears that your beliefs concerning the “unnaturalness” of gay behavior would hamper your ability to effectively address the medical needs of gay Americans?”

I would simply express tolerance and sympathy for gays and publicly support gay unions. That should help to begin to overcome negative perceptions about gays. The surgeon general can shape culture attitudes but he or she cannot overcome them.

4. “Dr. Koop pledged to abandon anti-abortion activities while in office, saying, “I’ve always been able to separate my personal beliefs from my responsibilities as surgeon general.” Will you pledge to the nation that you would not allow your personal beliefs about homosexuality to inform your official actions pertaining to AIDS, medical enfranchisement for gays or stem cell research?”

Sure, I can “personally” do that, but I would point out some belief “personal beliefs” are regarded by some as “personal principles” and “and “social responsibilities” there may be a fine line between them.

Faith in Medicine – From Richard P. Sloan, a professor at Columbia University Medical Center and the author of “Blind Faith: The Unholy Alliance of Religion and Medicine.”

1. “According to a recent report in The New England Journal of Medicine, more than 40 million Americans are cared for by doctors who believe that their religious convictions supersede their obligation to provide patients with legal treatments. Are doctors’ primary obligations to their patients or their religious convictions?”

To their patients.

2. “The Christian Medical and Dental Association, a professional society with more than 17,000 members, publishes a handbook that instructs doctors to use their practices to evangelize, explicitly encouraging them to take advantage of patients’ vulnerability. As both a doctor and a high-ranking layman in the United Methodist Church with a master’s degree in biblical studies, how will you balance your religious and medical views? “

Carefully-- and with balance. The tone of your question reflects an underlying hostility and a secular point of view – a view to which you are entitled but is far from universal. I would point out there are 902,000 practicing doctors, and only 17,000, less than 2%, belong to the association you mention.

3. “Former Surgeon General Richard Carmona has disclosed that Bush administration officials pressured him to censure medical information inconsistent with the administration’s ideological positions. If you experience similar pressure, will you resign in protest? “

I would resign if I thought the editing represented censure. The Bush Administration editing of speeches doesn’t necessarily represent censure. I may represent political consistency. In political and academic settings, most speeches are reviewed before presentation so the employing institution can send out a consistent message.

Dr. Advertiser – From Paul Offit, chief of the infectious diseases section of the Children’s Hospital of Philadelphia and the author of “Vaccinated: One Man’s Quest to Defeat the World’s Deadliest Diseases

1. “Cutbacks in state health programs mean that in several states new vaccines to prevent meningococcal, pneumococcal and papillomavirus infections may not be available to all children. Do you have any plans to address this crisis in providing vaccines? “

I will do my best to make sure these vaccines are available, but I would point out that many States have severe budgetary problems, new vaccines are expensive to produce and take time, and it may beyond my power to influence decisions at the state level.

2. “The surgeon general plays an important role in educating doctors and the public about health. Probably the most common way in which patients learn about medical products is advertising. But such advertising often inflates the benefits of drugs or medical devices while minimizing the risks. What role, if any, do you think advertising should play in educating the public about diseases and medical treatments?”

Advertising plays a powerful role in our capitalistic society in which drug and device manufacturers are trying to recoup the cost of their investment. In our society, people are free to make choices, and to believe or disbelieve the advertising message. If the advertising is incorrect, false, or misleading, it should be withdrawn. Mention of risks accompanies most advertising. It is up to the FDA to police medical advertising.

Guns and Needles – From Sally Satel, a psychiatrist and resident scholar at the American Enterprise Institute

1. “If confirmed, you will be working in the city with the highest rate of AIDS cases in the country. Intravenous drug users are estimated to make up about one-third of Washington’s new AIDS cases. The House recently lifted a ban preventing the District from using municipal money to set up a needle exchange program. However, the Bush administration remains opposed to the use of federal funds for needle exchange.”

“If asked to advise the president about changing this stance, using the epidemiological data on the effect of needle exchange on H.I.V. transmission, what would you tell him? And how would you, as a physician and former health administrator, weigh the pros and cons of needle exchange?”

I would weigh the evidence, and if the evidence was overwhelming that needle exchange prevented AIDS, I would advise the President to change his position.

2. “In the wake of the Virginia Tech shootings there was much discussion about re-examining the range of state laws on involuntary treatment of the severely mentally ill. In Virginia, the standard is so narrowly defined that a patient has to be on the verge of harming himself or someone else before the courts can act. What can the federal government do to bring needed change to reduce the chances of another Virginia Tech?”

The federal government can lobby for more consistency in State Laws regarding gun control. But gun control is an emotional and divisive issue in many states, particularly states in which hunting is an integral part of the culture. Short of changing the Constitution of the right to bear arms, I don’t think the federal government can do much but to argue for sane gun control laws.

3. “As you know, we are experiencing a dire shortage of organs for transplantation. Close to 100,000 people are waiting for kidneys, livers, hearts and lungs. Last year barely one-third of those on the lists received an organ, and 17 died each day. (Disclosure: I am one of the fortunate few who have received a kidney.) How would you remedy the shortage? “

I would encourage States to include a clause in the driving license process giving drivers permission to donate organs. Also one could encourage lawyers to include such a clause when drawing up “living wills.”

“Also, even if every usable cadaver kidney were transplanted, there would remain a vast demand for kidneys. This is why a growing number of transplant surgeons, legal scholars and ethicists believe we should conduct pilot programs in which living kidney donors can receive some form of compensation to give one up. Is it time to try this?”

It is time to try.

It’s The Culture, Not the System

What Shapes American Health Care Values

Q: You’ve now submitted 214 consecutive daily blogs on medical innovationblog.blogspot.com on the health system. That must be a real grind. Why punish yourself? What are you trying to do?

A: I’m trying to prove beyond reasonable doubt the U.S. culture – not government policy, not consumer-driven care – that shapes U.S. health care and how health professionals and patients behave. I’m suggesting constructive solutions, like innovative public-private partnerships, as one of the solutions. In the U.S. culture, the marketplace, not the government, usually determines what people do and where they go for care.

Q: That must be an uphill battle.

A: It is. Everybody, for ideological reasons and to preserve their status quo position, believes they have the right answers. They don’t. The answers transcend ideology and their stake in the system. Liberals will be liberals, conservatives will be conservatives, bureaucrats will be bureaucrats, and innovators and entrepreneurs will be innovators and entrepreneurs, and never the twain shall meet. It’s a stand-off. Control, equality, choice, and freedom have unpleasant trade-offs

Q: As a physician, what’s your position?

A: I’m a cultural anthropologist at heart. But I appreciate how important the physician culture is. Physicians, after all, are the second oldest profession – or culture – if you prefer to think of doctors that way.

Medicare, then Managed Care, and now Market Forces, have sought to change physicians from being independent professionals to businesspersons and corporate personages. These various controlling forces want doctors to cross the t’s and dot the i’s of practice management, serve as quasi-employees of government or health plans, or become team members in large multispecialty clinics or academic centers.

Being led by other physicians in teams has worked best, but independent physicians don’t widely accept being led by other physicians in big organizations. They don’t like the overhead or the politics. That’s why 75% of physicians are in practices of 5 or less. It’s possible independent doctors will go the way of the corner grocer, and become submerged as employees of hospital grocery chains, or as professional technicians for corporations, but it hasn’t happened on a large scale yet.

The general thinking of medical outsiders seems to be, if we grab doctors by the tender parts of their anatomy, their hearts and minds will follow. It hasn’t worked, not yet anyway.

Q: What is the health care culture like?

A: You ask excellent questions, if I don’t say so myself. Here’s how I explain it.

Healthcare cultural problems exist at three levels:

1.The Culture of American Society

As J.D. Kleinke has written:

"Such is the culture of medicine in America. We demand the best, accept nothing less and reward lawyers handsomely for making sure we get it. Even the imminence of certain death does not attenuate this cultural fact, as the clinical behaviors, costs and outcomes of typical intensive care illustrate. Our national consciousness is steeped in optimism, hostile to all processes and manifestations of aging and enraptured by a limitless faith in technology; as a people we have come to revile death as much a personal defeat as a personal loss.”

In other words, given America's medical culture, physicians, patients, and lawyers are likely to keep on doing what they're doing.

2.The Culture of Large Health Organizations.

Remaking Health Care in America: Building Organized Delivery Systems is an excellent book on the culture of large health systems. The authors – Stephen M. Shortell and four other consultants – describe the cultures of 10 large multi-hospital systems, which had 1994 total revenues of $500 million to $1.5 billion. These hospital systems have worked hard, with mixed success, to create physician group cultures stressing teamwork, cooperation, sharing of information, pride in the organization, and attentiveness to physicians.

Salaried physician stakeholders drive certain tightly integrated organizations – nonprofit HMOs such Kaiser and clinics such as Mayo. These successful models, led by physicians selected for their dedication to the organization's mission, have not been replicated on a broad scale.

Academic medical centers have special cultural problems. These centers, burdened with educational expenses, are fragmented, overspecialized, notoriously difficult to organize, and not very enthusiastic or good at training primary care doctors in outpatient settings. Too often the culture of academic health centers consists of sharply departmentalized and overspecialized independent fiefdoms, connected only by a common plumbing systems and grievances over parking.

3.The Culture of Physicians

Health industry leaders have repeatedly told doctors they must consolidate into larger groups or integrate with hospitals to survive; achieve greater size, critical mass, and scale; cultivate managerial care expertise; work in multidisciplinary teams; seek capital offered by large companies; follow evidence-based or standardized guidelines to practice good medicine; practice preventive medicine; develop systems approaches to managing chronic disease; enter into primary care specialties to assure a less costly health system; install information technologies in their offices; establish practice web sites; offload business functions to the Internet; communicate with patients through the Internet and by e-mail; convert to paperless offices, prescribe electronically; standardize codes and transactions for diagnostic procedures and develop leadership skills.

These admonitions from health leaders have left many clinicians unmoved. Physicians have not bought into the argument that bigger is better or that managed care and corporate models for achieving quality are in their best interests or their patients’.

To understand why physicians have resisted, you have to get inside their minds and skins. The way many physicians think can be illustrated in the following list of ideas:

1.You became a physician to serve patients, not hospitals or business corporations.

2.Your customers are “patients,” sick individuals who need your help, even when that help is expensive and experimental.

3.You're "the patient’s advocate," a protector and a guide through a world fraught with obstacles to care.

4.You see patients one at a time, and you don't feel responsible for "population health."

5.You don't really care about the financial health of investor-owned HMOs who profit from minimizing care.

6.You realize patients spent 99 percent of their time outside your office, and you know ill health often stems from flawed life styles and rarely rests on your advice, which you are not paid for offering.

7.You distrust group activities. Your success has always been by dint of your individual effort, whether that effort has been getting good grades in college, doing well in medical school to qualify for the residency of your choice, or caring for sick patients in academic medical centers or inner-city hospitals.

8.Your rewards have come through working hard, mastering your specialty and impressing colleagues, not through participating in hospital, HMO, or corporate bureaucracies.

9.You dislike organizational politics. You detest meetings. You turn a wary eye toward any activity that takes you out of the operating room, off the wards and away from your office, for those locations are where the patients, your joy in doing well and your income are.

10.What has any managed care organization, hospital or business corporation done for you? HMOs, in your mind, manage cost not care. Has any HMO medical director or health executive ever helped you care for a patient better? Has any HMO policy improved quality of care for your patients? Has adherence to clinical guidelines really helped you find the right answers to your patient’s problems? Has any managed care organization placed at your fingertips in the waiting room, at the “point-of-service,” an easy-to-use information system that saves you time by telling you what drug to use, what diagnosis to consider and or whether the patient can pay?

11.Everything that relates to the new competitive environment has discounted your fees, driven down your revenues, compelled you to hire more personnel to deal with HMO clerks or “Doctor Denial” HMO medical directors and forced you into organizations where autonomy is less, rules are stricter, income is lower, work is harder, and a production-line mentality is at work.

12.You are a professional. Not a "provider" to be ordered about. What do these health care executives and those on the other end of an 800 line know about practicing medicine anyway?

Q: Your explanation reeks of physician tunnel vision. You can’t see the light in your dark tunnel. What about the common good? What about guaranteed and consistent quality and better outcomes? What about equity and equality? What about providing affordable care for all? Health care culture is just a sub-segment of the greater American culture. Where does the health care culture fit into our egalitarian culture?

A: That, of course, is a philosophical as well as an historical question. It goes back to Adam Smith and his theory that everyone acts in their own-self interest and to the tenets of our founding fathers in establishing American Democracy 231 years ago.

Our health system is a creature of our culture. When asked what Americans believe, Garry Orren, a professor of political science at Brandeis, who polls for the New York Times and the Washignton Post, said,

“A good place to start is to remember we are pro-democracy and anti-government. It comes down to ideas that are essentially anti-authority and tend towards self-regulation. If there were an American creed, I think it might begin.

One: Government is best that governs least.

Two: Majority rule.

Three: Equality of opportunity.

Q: What does that set of values portend for the health system?

A: I don’t know, but it explains why Americans,

•prefer local health solutions,

•health care varies from one region to the next,

•so far have rejected sweeping universal coverage with rationing,

•feel capable of making their own health care decisions,

•seek equal opportunity access to high technologies,

•prefer choice of pluralistic payer systems,

•allow market-based and public-based institutions to co-exist and compete,

•permit doctors to behave democratically, seeking their own locales to practice, often acting independently of hospitals, health plans, and government, and making their own decisions;

•are reluctant to jump into a government-run system;

•do not embrace a tax-based system that punishes the rich and rewards the poor and that assures equality of results but dampens equality of opportunity,

•want to be free to make their own choices of doctors, hospitals, and other providers, based on their own judgment.

American democracy is full of cultural conflicts, paradoxes, and tensions. That’s what we seem to like -= controlled chaos with a mix of choices and opportunities. We want our care when we want it, where we want it, on our individual terms, not the terms of the government, the insurance companies, or the market. That cultural mindset causes profound problems – as well as unprecedented opportunities.

Q: You haven’t mentioned the role of government.

A: Ah, yes, government. It’s a subject that lends itself to metaphors – the bloated and ballooning bureaucracy, the elephant in the room, a sun never setting on government programs. The role of government, in my view, ought to allow public-private health partnerships to flourish in areas like disease management and prevention.

Look, government in health care isn’t going to go away. With aging babyboomers, Medicare’s slice of government expenditures will only grow. It may even lead to a national bankruptcy. Already the CMS budget is the fifth biggest budget on the planet – behind Germany, France, China, India, and perhaps California. The government has shown no talent for containing costs over the last 40+ years. As a nation, our government spends more per capita than any single-payer system. If the U.S. were to adopt a single-payer system, it could easily bankrupt us and would be subject to severe political manipulation. Congressmen and senators and president wanna-be’s need money to run, and a lot of that money comes from health care special interests.

Q: And what should be the physician’s role?

A: It ought to be constructive, and it ought to be based on innovations – creative public-private enterprises, new forms of practice, new technologies, new, less costly, more convenient sites of delivery, new collaborations and partnerships with hospitals. Much of this will only happen if the government gets out of the way with its Stark laws, Certificate of Need, IRS and OIG regulations, and its traditional compulsion to regulate and make rules.

Perhaps naively, I believe the best options for doctors are to pull themselves up by their own innovative bootstraps by pleasing patients and improving their care, rather than depending on federal largess. Doctors have little choice. The government will continue to cut doctor reimbursement, perhaps as much as 40% in the next five years if the current reimbursement formula holds. Outside of the VA, few really wants care at government facilities. They want government benefits at someone’s else’s expense. But my thoughts on government are not all negative. We need government, and we need government innovation. I’m an optimist. I like Winston Churchill’s observation. You can always trust the Americans. In the end they will do the right thing, after they have exhausted all the other possibilities.

Multinational Electronics Giant Philips Seeks Innovative Health Care Solutions for Aging International Populations

Philips See Market Opportunities in Home and Independent Living Care

“Patients are behaving more and more like consumers. They go to the Internet and get second opinions. Care is being pushed out of hospitals, which are expensive, and into homes and clinics”

Gerard Klesterlee, CEO of Royal Philips Electronics NV, as quoted in “Electronics Giant Seeks A Cure in Health Care: Fleeing Chips and TVs, Philips Makes Big Bet on Aging Consumers,” Wall Street Journal, July 11, 2007

“The economic borderlines of our world will be drawn between countries, but around Economic Domains. Along the twin paths of globalization and decentralization, the economic pieces of the future will be assembled in a new way. Not what is produced by a country or in a country will be important, but the production within global Economic Domains, measured by Gross Domain products. The global market demands a global sharing of talent. The consequence is Mass Customization of Talent and education as the number one economic priority of all countries.”

John Naisbitt, chapter “Economics: From Nation-States to Economic Domains,” in Mind Set, Collins, 2006

When we think about health care, we focus on how each nation-state organizes its health system. We compare national costs and outcomes, but we ignore international business opportunities posed by aging populations worldwide. The health care paradigm may be shifting from care by nation-states to care assisted by international businesses.

Royal Philips Electronics NV, the Netherlands based electronic giant with $37 billion in 2006 revenues has shifted its attention from electronics and TV sets to business opportunities posed by aging populations across the globe. Since 2001, Philips’ annual revenues have shrunk from $44 billion to $37 billion, a drop of 16%, but its medical systems division has increased revenues from $7.0 billion to $9.2 billion, a jump of 31%.

In a 2006 move, Philips paid $750 million to buy Massachusetts-based Lifeline, a medical alert system company. The company makes devices allowing home-bound patients to push a button on a bracelet and connect to a call center. Operators, armed with health profiles, are on hand to help. Lifeline, founded in 1974, has 670,000 customers and strong relationships with 2500 hospitals, community organizations, and home health agencies.

Philips CEO, Gerard Klesterlee, noticed Philips professional medical division had grown 40% from 2003 to 2004. One of its products was HeartStart Home Defibrillator, which it sold to drugstores, on Amazon.com, and to hotels and shopping malls. The defibrillator success became a “trigger point,” and the company began to look for gaps in consumer health care not being addressed by competitors.

Philips created a new consumer health care division with one simple mission: look for opportunities outside of hospitals. Focus groups were organized in Madrid, Frankfurt, San Francisco, and Boston to find out what the elderly and their children wanted most in health care outside of hospitals. Philips sought a “A Senior Solutions Hot Spot.” They found people cherished self-reliance, staying connected to family and friends, and technologies and human help to address failing vision and trouble walking.

I believe Philips is on the right track. Companies like American Telecare in Eden Prairie, Minnesota, have remarkable results reducing hospitalizations and ER visits by placing audio-visual devices next to home-bound patients bedsides. Re-admission rates for patients with congestive heart failure dropped to near zero. Patients control the devices over ordinary telephone lines, communicate openly with doctors and nurses, and have proved to be highly educable and knowledgeable about complications.

Another company, Enhanced Care Initiatives, or ICI, located in rural Connecticut, has similar success with “hands-on” care of the elderly by nurses bearing laptops. Through contracts with managed care organizations, such as Tufts Health Plan and HealthSpring, Inc., a small managed care firm in Nashville, ICI provides and organizes care for frail and elderly patients, mostly over 80 and mostly with multiple chronic diseases. ICI has succeeded in reducing hospitalizations by 33% and ER visits by 25%.

More than anything else, aging patients seek self-reliance, independence, dignity, and technological and human support at home – away from hospitals. It may take a while for nation-states to recognize these desires are powerful drivers for better health for the elderly and for multinational corporations seeking new markets.

Why Selling of Innovations and Consumer-Driven Care as Reform Measures is So Hard

I support innovations and consumer-driven care as effective measures to cut costs and reform care. For in the end, only cost-conscious consumers can contain costs. As long as third parties promise comprehensive care with hidden or unknown costs to the consumer, health inflation will roar. Consumer-driven care is beginning to have an impact (there are now nearly 300 consumer-driven organizations, and employers offering nearly 700 different high deductible plan premiums), but that impact is marginal in the larger scheme of coverage.

The political voice of consumer advocates is small. Proponents of universal coverage have a strong emotional argument combining pleas for compassion and equity. Unfortunately, as every reform minded politician and crusader for universal coverage now knows – from presidential candidates to governors of Massachusetts, California, Illinois, and Pennsylvania - you can’t reform care unless you first bring down costs, or you will overwhelm the Federal and State budgets. Superimposing single-payer on the present system will not work without first cutting costs.

No Quick Fix

There is, in short, no quick fix, at either the State or national level.(1) Because of their diversities and variation in the number of uninsured, and lack of resources, State-based universal coverage plans may not be the “laboratories of democracy” that will serve as models for national reform (2) In the reform process, reform experiences everywhere indicate you will alienate hospital, physician, health plan, business communities, and even those who are uninsured and don’t want to be obligated to pay for insurance. Participation of these parties is necessary for reform to succeed. When stakeholders’ oxen get gored, health reform may end up stillborn.

Innovation and Consumer-Participation Needed

Proposals to cut costs need innovation and consumer participation.. Some proposals to cut costs involve innovation and consumer-participation, some do not.

•Ban on smoking in public places

This is something government can do, but it isn’t innovative. Those 20% of consumers who still smoke have their own form of innovation. They smoke outside. Human behavior is like a balloon. Push it down from the top, and it will pop out elsewhere down below.

•Reduction in rates of hospitalization for controllable chronic diseases, such as diabetes, asthma, heart disease.

Innovations like telemedicine with home monitoring markedly reduce ER visits and hospital admissions. Home monitoring requires active patient participation, and chronically ill patients have shown they are up to the challenge.

•Expansion in nurses’ roles in disease management, telephonic and personal follow-up, and retail clinics.

These roles require innovative restructuring and decentralization of delivery systems. Consumers have responded positively to increased attention to their needs. Hands-on home care works especially well.


•Taxing revenues of hospitals, doctors, and small businesses to cover costs of universal coverage.

It doesn’t strike me as innovative to raise costs to cut costs In fact, this may be counterproductive. The response seems to be, “Not on my back and not in my business backyard.” Gore someone’s ox, and they will gore back.

•Reducing hospital infections and medical errors.

This is often innovative and takes the form of systematic, hospital-based educational and monitoring programs.


•Stopping health plans from excluding people with pre-existing coverage.

To health plans, this is punitive, not innovative.

•Expanding IT systems to cut costs by promoting efficiencies and including only those high-performance physicians and hospitals that are cost-effective.

So far these ideas, which have existed for at least five years, have mixed results.

Innovation Not Highlighted

Politicians behind government–sponsored, cost cutting measures are reluctant to highlight the role of innovators and consumers, perhaps because innovation distracts from politicians as the movers and shakers of reform. Besides, innovators are businessmen who do not have roots in government sector. Government officials tend to think of themselves of protectors of the sick, the elderly, and the poor from the private sector and do not believe consumers are capable of making intelligent health care decisions and prudently spending their own money.

Hard Sells – Hard Steps to Create Ecology of Innovation

Innovation and consumer-driven care are hard sells when it comes to reforming the system. This is true even though a culture of innovation is absolutely indispensable for the progress of the U, S in the global economy. (3) According to William Wulf, president of the National Academy of Engineering, America must step back and encourage innovation by

•Adjusting patent processes for quicker and more flexible acceptance of patents relating to information software, snippets of DNA, medical devices, and business processes. In health care, government rules and regulations are strangling the business processes needed to advance care.

•Changing intellectual property and copyright laws to accommodate the ubiquity needed to speed the spread of digital technologies by allowing copying of web pages, A web page "would have zero value if it hadn't been copied," Wulf said. "If it was just stuck on the hard drive of the server, it would have no utility whatsoever." The power of the Internet and search engines like Google are their ubiquity.

•Change tax policy to remove the "idiocy" of reviewing and renewing the credit on a year-to-year basis, Innovation requires systematic long term investment in research and brain power, not diversion of monies into non-innovative government policies.

•Change manufacturing policy to promote manufacturing in the U,S, .The United States has effectively "ceded manufacturing to low-wage countries," but that's "both dangerous and unnecessary,” Wulf says "I have real trouble with the notion of a robust economy that doesn't produce something, even if the something produced is ephemeral, like software. I just don't see an all-service economy."

Innovation Turn-Offs

A friend of mine, who works with corporate benefit officers, tells me minds automatically shut down when health care consumers hear the words “$ 2000 deductible.” Subsequent language about tax deferred income, more portable choices, free preventive services; savings for the employer simply falls on deaf words. Convincing health consumers to be responsible for their own care isn’t easy.

Regina Herzlinger, professor of business administration at Harvard Business School and godmother of consumer-driven care has written that health care innovation may be turned off because of these forces (4)

1.Friends and foes, often competitors, who help or destroy innovations through passive or active resistance.

2.Difficulties finding funding, the raising of which differs from other industries.

3.Policies and regulations, e.g., the Stark Laws and Certificate of Need, HIPPA regulations, and anti-trust lawyers which handicap and sometimes make impossible innovations.


4.The slow adoption of technologies, e.g. EMRs that make other industries more efficient and offer more convenience to customers but in health care are sometime blocked because of concerns about privacy and costs to doctors.

5. The slowness and inertia of consumers in transitioning to market-based care requiring their active participation and even partnerships with physicians.

5.The often unreasonable demands of health plans, consumers, and government that every innovation must be proven absolutely safe, cost-effective, and accountable.

Public Difficulties in Understanding Innovation

There is another factor as well – difficulty of the public in understanding how incremental innovations, – be they in the realms of technology, service, new delivery models, new types of practitioners, new forms of financing – or how an innovative economy can reform the overall system.

The public wants a universal “fix” to bring down costs, not piece-meal innovations – not matter how good, no matter if these innovations help the U.S. maintain its reputation as the “best” urgent system in the world. Innovations simply do not fit the mindset of those who yearn for an instant government mandated fix...

The concept of a market-driven system is simply much harder to grasp. It doesn’t lend itself to political sound bites. It is perceived to reward entrepreneurs, innovators, and businessmen rather than the public at large, the chief benefactors of innovation. By the way, I define a health care innovation as doing something quicker, better, more conveniently at a lower cost – whether or not government or the private sector initiates the innovation.

Add to these various obstacles the image, fostered by some, that the U.S. has a cruel health system. It is a system, they say, that drives people into bankruptcy while letting them bleed, even die in the streets. It is a system, driven by HMO denial of services in pursuit for profits that punishes the sick and rewards the greedy. It is capitalism at its worst, so say the progressives.

Universal care advocates believe all people everywhere are morally entitled to “free care.” These beliefs pose political, psychological, and financial barriers to market-based entrepreneurship and innovation because there are only so many resources to around in the public and private sectors, a fact which may account for a general lack of entrepreneurial and innovative activities in single-payer nations.

Market-based care, and consumer-driven care, depends on consumers making their own decisions, spending their money, and it depends on innovators and entrepreneurs coming up with ideas that save money, expand choices, and provide convenience.

But as with all things human and non-governmental, such care depends on persuasion not force. As such, it may fail to protect all, may let a few people fall through the cracks, and may provide an incomplete safety net.

It is an illusion, of course, that government systems provide a complete safety net, particularly for the costly sick. A seldom mentioned truth is that single-payer systems are politically potent because they protect the healthy (95% of the voting population), but ration care for the sick (only 5% of voters).

It would be great, of course, for all health care participants, government technocrats, and consumers would join together for the common good, not their own self-interests, but that would require repealing the laws of human nature and of Adam Smith.

References

1.Sack, Kevin, “A States Finds No Easy Fixes on Health Care,” New York Times, July 10, 2007.

2.Klein, Ezra, “Over States: Why The ‘Laboratories of Democracy’ Can’t Achieve Universal Health Care,” Washington Monthly, July 10, 2007


3.Dean, Cornelia, “Determined to Reinspire a Culture of Innovation,” New York Times, July 10, 2007.

4.Herzlinger, R.E., “Why Innovations is Health Care is So Hard, “Harvard Business Review, volume 84, pages 58 to 66, 2006.

Limits of Government Intervention in Technological Assessment

The Case of Catheter Ablation for Atrial Fibrillation

In 1976 Dr. Howard Hiatt, dean of the Harvard School of Public Health, give a speech advocating a U.S. technological assessment center before any medical product went to market.

Joseph Califano, secretary of Health and Human Services, chimed in. He whined more CAT scanners existed in Los Angeles than in Canada, as if that was a bad thing.

The rest is history. Neurosurgeons recognized CAT scans as a superior technology. Immediately they deployed CAT scans to spot brain tumors. MRIs followed CAT scans. The scans received the same warm reception as CAT scans among physicians. In 2001 a survey of 225 general internists published in Health Affairs ranked the top 30 major medical innovations, and MRI and CAT scans came out number one.

Government can’t control technology markets once doctors and patients spot a superior device, even if the device costs more than government thinks it can afford and even studies of safety and effectiveness have yet to be published..

Take the case of catheter ablation of heart atria sites that spark fibrillation. Atrial fibrillation afflicts 2.2 million Americans. It’s a leading cause of strokes and heart failure. Doctors think ablation is more effective than open heart surgery and multiple drug treatments. Consequently, thousands of ablations have been performed since 2000 – even though federal regulators haven’t approved the procedure and don’t pay for it.

Where there’s a will, there’s a way. Catheter ablation is moving faster than the federal approval process. Doctors and patients are saying, in effect, “To hell with the clinical trials. This ablation procedure works.” And “We” the patients, will demand it, and you, the doctor, had better provide it, or we’ll go elsewhere.

Doctors and hospitals are inventive. They know they can bill Medicare and insurers by using codes for similar cardiac procedures to partially pay for atrial ablations. Doctors perform ablations in major hospitals or teaching centers, where doctors are on salary and not compensated for procedures, but who wish to distinguish and differentiate themselves from the competition. The American Heart Association and the American College of Cardiology have recommended the procedure, and many established and start-companies are marketing ablation devices. Major ablation centers are trumpeting ablation success stories and marketing services to atrial fibrillation victims..

When patients want something done, and doctors and hospitals want to do it, and mounting anecdotal evidence shows it works, it will be done, and there is little government can do to stop it.

Market forces often move so fast they overwhelm government assessment and resistance. There are limits to federal intervention in health care, and catheter-ablation to remove or neutralize the cause of atrial fibrillation is the latest, but not the last example of those limits.

Needed: A Documentary on “The Doctor in America”

Q: What’s on your mind these days?

A: A television documentary or a movie documentary on the “Doctor in America.”

Q: Why?

A: American doctors need to respond to Michael Moore’s “Sicko, ” to comment on Muslim physicians’ involvement in British terrorist attacks, and to state their positions on health reform. The public needs to know how doctors feel about these issues.

We need to counter “Sicko.” The major media admit Moore is slanted and polemic. But most agree with him the American health system is unfair, it’s the HMOs’ fault, and we need a “free” government-run system to straighten it out.

Q: What’s wrong with that?

A: Every issue has two sides. The American system is a product of our culture –dependence on market forces, thirst for innovation, desires for choice, and access to American medical technologies.

Moore doesn’t mention problems of single-payer systems. People are suffering or dying while waiting to receive treatment for serious illnesses, single-payer systems ration services to control costs, and most don’t offcr quick access to MRIs, CAT Scans, cancer drugs, coronary stents or bypasses, kidney dialysis, treatment for terminal disease like brain cancer. In most, you may wait for months to specialists. Furthermore, foreign trained doctors are flooding into America to practice.

Have you ever heard of Americans going to Canada, the United Kingdom, or France for treatment? I haven’t.

Q: What’s wrong with foreign-trained doctors coming to America?

A: Nothing. The AMA says foreign citizens or Americans graduates of foreign medical schools (about 20% of the total) account for 229,000 of the 902,000 physicians practicing in the U.S. That’s 25% compared to 42% of foreign-graduates practicing in the U.K.

Q: So what’s your problem?

A: The problem with physicians linked to terrorism is psychological. It paints Muslim physicians with a broad brush as potential terrorists, as persons to be treated with suspicion among fellow workers and patients.

I believe Khaled Hamid, a St.Louis-based asthma and allergy specialist, who said of physician-links to terrorism,” We’re hurt as Muslims and as physicians who believe life is sacred and must be protected.”

Q: Are foreign physicians practicing in America potential terrorists?

A: I see absolutely no evidence of that. But I do know that two of the eight British physician terrorists did apply for U.S. entry. Look, he U.S. gets the cream of the foreign medical school crop, many of these doctors become physician leaders in America, and they are more rapidly assimilated than in other countries..

Q: Any other problems?

A: Yes, the public needs to know the U.S. has a tremendous doctor shortage – 50,000 by 2010 and 200,000 by 2020.

Q: Any other beefs?

A: Yes. Through HMOs restrictions, government regulation, and systematic lowering of reimbursement rates, we’re making the profession of medicine unattractive to bright Americans. We need at least 12 more medical schools to produce the requisite number of American-born doctors; and we can’t make up the deficit through physician assistants, nurse practitioners, or retail clinics.

Q: I still don’t see the need for a documentary.

A: The American people need to know from doctors their opinions about the physician shortage, the need for foreign-trained doctors to fill the gap, the cost of third-party intervention, and doctors’ stands on reforms and who and what contributes to the so-called “health care crisis.” The AMA is about the launch a campaign on reform issues, but we need other voices too.

Q: What would the documentary contain? What would it explain?

A: It would contain interviews with various representatives of the American medical community: academics, leaders of big multispecialty groups, high tech specialists, but most of all, primary care physicians in the trenches, many of whom are dying on the vine, retiring, failing economically, quitting independent practice, and going to work for hospitals and HMOs. It would explain most Americans are satisfied with their care and most of its urgent care facilities and those who staff them are first-rate.

Q: And what would the American people learn from such a documentary?

A: They would learn there’s a doctor morale crisis bordering on despair, that doctors aren’t happy with the status quo; that doctors have good ideas on how to make the system better, and that they have the patients’ best interests at heart. The problem with the current political debate – whether we ought to have a government-run or consumer-driven system – is that the politicians rarely present doctors’ points of view. For God’s sake, doctors are a big part of what health care is all about. Let’s hear from them.

What’s Standing in the Way of A Perfect Health System?

To hear the presidential candidates tell it, the only things standing in the way of a perfect health system are improved quality, more prevention, better information systems, lower costs, and universal access.

There may be another reason – lack of patient compliance and better health habits. I pointed out these factors in the following July 6 letter to the editor of the New York Times.


To the Editor:

In her superb piece “2008 Candidates Vow to Overhaul U.S. Health Care, “ reporter Robin Toner gets it exactly right. The debate is about the role of government versus the private market in providing affordable and available care.

What she didn’t address were three realities: 1) In 42 years of existence, Medicare and Medicaid cost inflation rates have paralleled those of the private sector; 2) government already pays for nearly 50 % of health care; 3) the health of nations depends more on a nation’s culture than its health system. About 85% of health outcomes depend on the culture and 15% of the health system (Sagan L , 1987, The Health of Nations, The Cause of Sickness and Well-Being, Basic Books, and Satcher, D, and Pamies, R ,2006, Multicultural Medicine and Health Differences, McGraw-Hill).

In other words, in a multicultural nation like the U.S., neither a government-run or market-driven system is likely to reduce costs or influence outcomes. Government may relieve financial anxiety about costs, and the market may produce more choices, but neither is likely to dramatically improve our health, which is more a function of bad diets, lack of exercise, inactivity, obesity, stress management, self-care, accidents, and domestic violence and mayhem in the streets.

A recent survey of physician executives reinforces my point.

Obstacles, Percent of Physician Executives Feeling the Following Obstacles Are Major Issues

Patient compliance and awareness of healthy habits, 93%

Lack of resources or money, 90%

Clinician communications and culture, 88%

Physician resistance to evidence-based care, 87%

Insurance company practices, 80%

Federal government policies, 80%

Source: 2007Quality of Care Survey, American College of Physician Executives

And as far as electronic information systems guaranteeing quality, it isn’t necessarily so. In a survey of 50 family physician practices – 13 with EMRs, 37 without, these were the results

Measure, Percent of Practices with Favorable Quality Outcomes

• Processes of Care (3 of 5 guidelines met), with EMRs , 35.0%, without EMRs 53.8%

• Treatment (all guidelines met), with EMRs, 35.3%, without EMRs, 46.6%

• Outcome targets (2 of 3 guidelines met), with EMRs, 29.0%, without EMRs, 43.7%

• Outcome targets (all guidelines met), with EMRs, 3.9%, without EMRs, 10.7%

Source: “Electronic Medical Records and Diabetes Quality of Care, Annals of Family Medicine, May/June, 2007

Oh, well, everybody has some bad habits, nobody’s perfect, even when they are fully wired.

On Dangers of Dismissing Other Points of View

The other day a dear friend and dedicated health care reformer, who thinks differently about health reform than me, and I dismissed the other’s point of view on health reform.

My friend dismissed my idea that health care consumers, working with doctors, are key to improving quality and decreasing costs. He’s not a fan of “consumer-driven care” and feels, at best, it represents market driven zealots putting lipstick on a pig. Consumers, he asserts, don’t have enough “transparent” data to judge what’s or who’s good or bad, and that “fee-for-service” invites abuse by doctors to enrich themselves.

My friend is dismissive of Republican front runner’ Rudolph Giuliani’s rhetoric,

"The problem with our health insurance is it’s government – and employer dominated. People don’t make individual choices. It’s your health. You should own your health insurance. We should be giving you a major tax deduction - $15,000 for a family – so you can buy your own health insurance. Health insurance should become like homeowner’s insurance or like care insurance.”

Informed consumers, even working with doctors of integrity, do not, he argues, change the “structural” problems – i.e. inconsistent quality, mediocre outcomes, and improper incentives-- of American health care.

Solving these problems requires “data leverage” from the outside – government agencies or health plans exerting pressure through use of computer-generated management information to require better resource use. In certain situations, large multispecialty groups, this leverage or pressure ideally comes from physician leaders who downgrade pay, don’t recruit, or banish physicians who don’t prescribe generics, meet quality indicators, or follow clinical protocols. We should, my friend avers, discipline doctors in order to make them play data ball.

In my turn, dismissed the idea that a health care system focusing on data from “metrics,” and “best practices,” can significantly improve care by measuring quality indicators and outcomes and paying for performance. I reasoned we’ve lived through 30 years of HMOs “managing” and “measuring” quality and utilization through gatekeepers , and judging those who are good and who are bad, who overuse and who underuse, or who should be included or excluded from networks.

Managed care, after all, failed because patients and doctors revolted at the restrictions.. The problem, I argued, may not be “structural” but cultural because managed care ignored the two most important independent variables of American life – public opinion and the freedom to do what one wants and to chose the doctor one wants. I’m a big believer in persuasion, rather than force, in helping change people’s minds.

Speaking of managed care, I tend to be dismissive of Sen. Hilary Clinton’s eloquent rhetoric,

“There is an economic imperative to rein in costs. There’s a moral imperative to extend coverage to all Americans and there is a practical necessity to promote wellness and prevent disease whenever possible. There are three parts to this approach. First, lowering costs for everyone. Second, improving quality for every one. Third, insuring everyone.”

Well said, but how? Comprehensive care management, cost controls, best practices monitoring, government mandates?

My friend, whose opinions I deeply respect, asserts we might be able to accomplish everything Senator Clinton promises because we live in new age of IT. We can now use new IT “platforms” to measure, calibrate, and reward “good” doctors with “good results” who, when placed on salary or paid to perform in a cost-efficient manner with other members of clinical teams, will have no incentives to do more, but to do “well.”

IT may change doctors’ economic behavior, but it will change their culture or practice behavior – doctors’ desire to be their own boss and to work solo or in small groups – nor will it change patient behavior – which has more to do with outcomes than what doctors say or do. Health outcomes are about 15% related to health systems, and 85% related to a nation’s culture (Sagan, L (1987), The Health of Nations: The Cause of Sickness and Well-Being. New York. Basic Books. Satcher, D, and Pamies, R (2006), Multicultural Medicine and Health Differences. Columbus, Ohio, McGraw-Hill)..

Scott McStavic, a retired hospital executive, calls this cultural component “The Other Behavioral Medicine.” This “medicine” consists of patients’ dietary, exercise/activity, stress, and self-care habits.

Here is how McStavic explains the “The Other Behavioral Medicine,”

"The more we have learned about what causes or at least creates higher than normal risk of disease and injury, the more we have identified individuals' behaviors as the real problem. And the more we have learned about them, the more it appears that a few such behaviors represent both the most costly causes and the most promising changes that should be sought. Each of these tends to be a major, or at lease significant risk factor in a wide range of diseases or injuries, and a major source for savings if reformed into healthier alternatives.

The four biggest behavioral problems in the population seem to be:

•dietary habits

•exercise/activity habits

•stress/time management habits

•self-care/management habits

If any one of these four sets of habits can be transformed from risks to benefits, the effects on the incidence and prevalence of disease could be dramatic. And for employers, the effects of such transformation are likely to be far more valuable than managing any single disease or injury.'

McStavic didn’t mention our culture’s penchant for fast foods, fast cars, fast sex, fast access to high tech care, and fast violence – as quick and dirty solutions to seek pleasure, work off our anxieties, and solve our problems. If we could control these habits, we could probably effectively control costs and outcomes. And if doctors could be more effective “health care coaches” and be paid for that role, we might have better health outcomes at the margins.

Unfortunately, changing “habits” is about changing culture. It becomes a matter of public persuasion – a tactic that has been effective in reducing smoking rates. But this may take decades. Our democratic culture says we can eat and live as we please; legally drink and smoke as we please; drive as fast as we please, sleep with whom we please, weigh what we please; exercise as much or as little as we please, stress or emotionally abuse ourselves as much as we please; and depend on “quick-fix” prescription and non-prescription drugs and medical technologies to correct misuse of our pleasures. We are a nation who believes in quick technological fixes when things go wrong.

“Metrics” has another problem – doctor rejection of EMRs – which may be essential if we are to have interoperative communicating systems across our nation. Here is how Bill Bysinger explains doctor EMR rejection.

"It has been almost 20 years since electronic medical records systems were introduced into medical practices, yet we have the lowest adoption rate of all the developed countries in the world. Most of Europe, Japan, China, Australia and even Russia have adoption rates above 50 percent and in many countries above 90 percent.
We are supposed to be the world leader in adopting technology, but recent studies have put our practice EMR adoption rate at somewhere between 15 percent and 18 percent.

I submit the root cause of the problem is the culture of the health care industry. Health care in the U.S. especially at the practice level is a cottage industry. Medical practices don’t make business decisions based on productivity or process improvement, which dominates other industries. Instead, they make decisions based on how much money do they have to spend and what will it do for the providers personally (and immediately).
All this adds up to process improvement and quality not being well understood. Therefore when technology like electronic medical records are introduced in the medical practice market, most physicians are afraid to invest and have no idea how to use automation to make process improvement or generate profit.

My friend and I don’t totally dismiss all of each others’ views. We agree reforms on the extreme left or extreme right aren’t the answer; and we agree a single-payer government run system will not decrease costs or improve quality, though it will improve access and relieve financial anxiety. Superimposing a single payer system on the current system is a formula of a cost explosion of unprecedented proportions..

My friend and I do not use the term “socialized medicine.” It is too pejorative. “Perjorative” is a code word reserved for the far right. Besides, our health system is already “socialized” to a large extent. Government pays for 47% of care, and universal care for children would push it past the half-way point.

Although government-dominated systems may not improve care, they will relieve anxiety about access, ease financial pressure, and assuage societal guilt. When something is “free, ” it diminishes the angst (and increases the demand). The trouble with government is that it’s too far removed from the clinical marketplace to make intelligent even relevant decisions, doesn’t realize the consequences of its actions, e.g. paying primary care doctors too little, thereby causing their exit from the physician population, and the costs, waiting lines, inefficiencies, and rationing, inevitable consequences of single payer systems in other countries.

But my friend and I do not summarily turn off the idea of either a government or market system because we know we’re going to have both. Besides dismissing each other’s ideas is the mark of closed minds – a trait we were both guilty of the other day.

Six Innovations - Innovation Number Six

Tax Deductible Insurance for Everyone to Extend Coverage--with Strings Attached

Reprinted from Physician Leaders, June 14, and HealthLeaders, July 5

To most, "universal health coverage" is code language for a government-run and subsidized single-payer system emanating out of Washington, DC. That tends to be the mindset of Democratic presidential candidate. But, as shown in Oregon, a liberal West Coast state, where voters rejected the idea of a single-payer state-run system by 71-to-29, and in Massachusetts, the bluest of the blue states, which put in place a system of universal coverage requiring mandatory individual payments and payments by small businesses not currently allowing coverage, there are other ways to skin "universal coverage" cat besides a national government program.

In states as diverse as Illinois, California, Minnesota and Connecticut, governments have found they cannot superimpose a heavily state-subsidized system on the current mix of government subsidized and private care, without bankrupting the state, alienating businesses and raising taxes.

One way of achieving care for all is to level the playing field for all by offering tax-deductible plans for all, providing a set amount of upfront money based on the health status of the healthy and risk-adjusted status of those with disease, having government subsidize the poor, introducing a consumer-driven system overseen by the federal government, and giving consumers the choice, control, and information necessary to make intelligent choice.

Towards this end, a consumer-driven system with universal coverage similar to the system already in place in Switzerland, the U.S Congress and state legislatures could implement a system, where,

1. Everyone buys his or her own insurance, using tax-sheltered income.

2. Government subsidizes those who cannot afford to buy health insurance.

3. Providers are free to bundle care as they see fit and to quote their own prices.

4. Government requires publication of data on the performance of all providers.

5. Prices are risk adjusted.

Six Innovations - Innovation Number Five

Chief Innovation Officers Will Become Common.

Reprinted from Physician Leaders, June 14, 2006

As healthcare becomes more complex, as competition intensifies and as Americans go abroad in increasing numbers for care, health care organizations will add the position of chief innovation officer to their executive suite (currently consisting of the Chief Executive Officer, Chief Operating Officer, Chief Information Office and Chief Medical Officer).

The search for innovative ways to compete will make this new position necessary, to find less costly, quicker, better and more effective ways of doing things. The duties of the chief innovation officer will be hard to define and will be polymorphic. The chief executive officer will interact with his executive colleagues, preside over creative marketing teams, solicit ideas from providers on the front lines, outsource services to organizations that can do things better, and seek the means of tamping down continuing rising supply chain costs.

Within five years, I predict health care organizations of all sizes, shapes and functions--health plans, hospitals, practices, support groups, consultants and supply chain vendors, healthcare associations, and consumer groups--will select someone within their organization to be their chief innovation officer.

The chief innovation officer will generate ideas, sift through them, pick winners and lead organizations towards a future geared to productive change.

Right now, only a handful of health care chief innovation officers exist--at the health plan giant, Humana; at Alegent Health, mid-sized hospital system in eastern Nebraska and western Iowa; and at Cadient Group, a health care marketing agency. No doubt other chief innovation officers exist that have escaped my attention, but there are too precious few.

Many health leaders are already serving as functional chief innovation officers--CEOs and CIOs of hospitals and health plans, chief medical officers, physician leaders, nurse executives, nurses and managers in physician offices. I don't really care what title these persons bear, or whether they call themselves chief innovation officers--chief information officers, chief inspirational officers, or chief instigation officers--as long as they can create, generate, foment, elicit, implement, filter and test out new ideas.

The CIO's chief functions are to stimulate, generate and instigate ideas from managers, employees, people on clinical front lines, patients, staffs in medical offices, consumers and the public at large. Workable new ideas generally do not come from the top rungs of an organization, but from lower and bottom rungs, from service and interactive personnel on the front lines of care.

The CIO's other functions are to keep ideas flowing and to try them out, again and again, failing again and again, and then starting out again. My favorite definition at the moment for "innovation" is this one, which I read in the New York Times:
"Innovation is a constant process of trial and error. You need the willingness to fail all the time. You have to generate many ideas and then you have to work very hard only to discover they don't work. And you keep doing that over and over until you find one that does work." (Steve Lohr, "John W. Backus, 82, Fortran Developer Dies," March 20, New York Times).

John W. Backus assembled and led the IBM team that created FORTRAN, the widely used computer program language that opened the door in 1957 to modern computing. Perhaps this is my favorite quote because in the late 1960s, Russell Hobbie, a professor of physics at the University of Minnesota and I, used computer software, which Hobbie wrote in FORTRAN, to create a program that generated a differential diagnosis for abnormal laboratory results of some 600 tests that was used in 6 million laboratory reports.

What does a chief information officer do? Jonathan Lord, MD, chief innovation officer of Humana since 2002, says, "The CIO becomes the spiritual leader within the enterprise. His basic role to bring new ideas into healthcare and to find talented people who can handle ambiguity and who have passion for change--people who have comfort with new ideas, who can align beliefs, and who can co-create."

The CIO, in short, constantly co-generates idea, keeps the ideas flowing and tests them out to see if they work or fail.

Harry Lukens, chief information officer of Lehigh Valley Health Network in Allentown, Pennsylvania, has developed and chaired a group he calls the "Wild Idea Team." It has a rotating membership of 18 to 25 people, at all levels of the organization. The team places no ideas off limits, and there is only one rule "no snickering."

Healthcare needs more Harry Lukens, who take positively nothing for givens, tolerate no gratuitous snide snickering, forbid all internecine biased bickering and who believe out there lies some wild idea that may very well be the key to the future.

July 4, Health Care Choice and Independence

Costs and Consequences

Choice is the U.S. health system’s wild card. Choice makes the system what it is, not what it ought to be. Choices pose dilemmas – choices between unpleasant options.

Choice is the right, power, and chance to choose. It is freedom. It is also variation – the bane of those who preach “zero variation” in human behavior and services. But this is America, a land where people vary enormously.

Patient Choices

In America, people have the right to choose. Choice lets them choose one doctor – or many doctors. Some say many choices of doctors are bad. They say patients ought to have one doctor directing traffic. Each patient, they say, ought to have one medical home. But this is America, and people have choices of where and from whom to seek care. American people, it seems, want more than one doctor home.

Medicare patients have choice of doctors. Medicare claims show patients average seeing six doctors each year. Sick patients with multiple diseases average 11 patients. Many doctors do not know of the other doctors. This is bad, critics say. There ought to be a common health record for each person so other doctors can know what other doctors are doing, saying, or prescribing. There ought to be one choice, which some consider no choice at all. But every patient, say the pundits, ought to have one record, shared by all doctors with the patient’s permission. But this is America, and some people feel a personal health record showing all your medical history violates privacy and invites job discrimination.

People have the choice of going to one doctor, practicing alone or in a small group, or of going to a large group with dozens, even hundreds of doctors. Critics say big groups are better. Doctors can confer with one another. They can work in teams. They can provide options in one setting, coordinate care, and offer one-stop care. But patients have choices, and 90% still choose to be seen in solo or small groups. It’s a matter of being in the neighborhood, word of mouth, and personal choice. This is America, and people choose to make personal choices.

In America, people can choose to be uninsured or uninsured. Some, of course, have no choice. They lack cash to pay premiums. But two-thirds of those with no coverage choose not be insured. They want to spend their cash on other choices. Some are young and healthy and see no need for insurance. In Massachusetts officials are trying to explain to people having insurance is an obligation, not a choice, but some, given a choice, prefer not to pay. Instead they chance going “bare” and tempting fate.

Another set of choices is emerging. The consumer-driven movement talks of consumers should choose based on quality and price data. One think tank pushing the consumer concept calls itself the Center for Health Care Choices. Advocates say consumers spending their own money in high deductible plans, often linked to health savings accounts, will choose more prudently, just as they do in making other choices in the consumer market. Doctors, optimists say, will compete openly on costs and quality data. “Transparency” is the vogue word of the day. In America, people like to know costs and quality upfront.

Patients have a choice whether to change their habits of diet, stress management, weight control, smoking, drinking, and self-care. They can choose to improve their health status or stave off disease complications. But America is a free country. We are free to choose what habits to cease or change. Government and corporations are trying to change people’s habits by banning smoking in public places and at work, hiring only non-smokers, raising “sin” taxes, forcing food vendors to post nutritional labels on their products, banning foods high in trans-fats, and rewarding employees who stay healthy by participating in preventive and wellness programs. But Americans, if they wish, can choose to continue bad habits. They know other Americans will pay for their habits and their consequences.

Doctor Choices

Doctors have choices, too. They can choose to practice solo or in small groups, be paid fee-for-service, or practice in large groups or in hospitals or other institutions, and be paid hourly or by salaries. Most still choose to be paid piecemeal for what they do, not for what they do or don’t do, although 40% of doctors now work on salaries, often with clauses for productivity.

Doctors can choose to see patients – or not to see them. With declines in Medicare payments of 10% next year, nearly 30% of doctors say they will no longer choose to see new Medicare patients. Many doctors no longer accept Medicaid patients. Doctors say they have no choice because payments from these patients no longer cover overhead costs.

Doctors have a choice whether to invest in EMRs. Many health care gurus say EMRs are the electronic Holy Grail. They say EMRs will improve care, patient safety, and efficiency. Doctors say EMRs cost too much, pose privacy problems, slow productivity, and are for the good of government and health plans – not for doctors and patients. It doesn’t make matter who is right. Doctors have a choice. In spite of nearly 20 years of pushing for doctors to instill EMRs, only 15 to 18% use them, which is why 82% to 85% of doctors choose not to invest in EMRs.

Doctors can choose to follow clinical protocols and quality indicators. There are as many as 400 of protocols and 1000 indicators, depending on your specialty and the organizations offering them. The purpose of these protocols and indicators is to standardize and improve care. Yet doctors have a choice. For various reasons, only about 50% to 55% of doctors choose to meet these indicators and follow these protocols. In America, independent doctors can choose to exercise their independent clinical judgment.

Doctors have choices what and where to practice. More than three-quarters of medical students are choosing to practice in specialties other than primary care. This is not surprising. Specialists, rather than primary care physicians, teach medical students, and many medical schools look down on family practice programs. Medical students are aware specialists command more prestige and income. A 2006 Merritt, Hawkins, & Associates survey indicates the average base salary/guarantees offered were $370,000 or orthopedic surgeons, $340,000 for cardiologists versus $162,000 for internists and $145,000 for family practice. As for where newly minted doctors want to practice, another Merritt and Hawkins survey of final year medical residents indicates only 4.0% want to practice in communities of 25.000 to 50,000, <1% in towns of 10,000 to 25,000, and none in towns of less than 10,000. Doctors have choices, and 81% choose to practice in cities of 100,000 or more. American doctors, like other citizens, can choose what they want to earn and where they want to live.

Doctors have choices of what drugs they prescribe. With drug formularies, and government and health plans efforts to police utilization and identify “outliers,” these choices are narrowing. Patients are starting to have a say, too, by asking their doctors to prescribe cheaper generic drugs. Everybody, it seems is looking for more bang for their buck, an inevitable trend in an inflationary health cost environment and in America itself, whose people are always seeking bargains.

Doctors are told they are part of the “health industry.” Doctors do not think of themselves are being part of an industry. They regard themselves as autonomous professionals. To rub the industry notion in, critics keep saying doctors are part and parcel of a “cottage industry,” meaning doctors vary in their practice patterns, resist uniform standards, prefer to practice individually, and use their clinical judgment. Government and health plans, doctors counter, have no business “practicing medicine” -telling them how to practice, what to prescribe, and what procedures to perform, and what tests to do.

Hospital Choices

American hospitals consume about 50% of all health care dollars. They are the dominant institutions in American medicine. This fact shows American health care focuses on treating rather than treating disease. Hospitals have choices – the status quo, bringing business to centralized institutions vs. decentralizing to serve convenience-seeking consumers; employing doctors vs.partnering with them; catering to consumers with patient-friendly bills, patronizing consumers with marketing with jargon proclaiming technological superiority vs. engaging them with straightforward communication telling them what to expect and avoid in hospital care. It is a tough balancing act. Increasingly consumers will have public information documenting hospital outcomes, and consumers will demand more and will be willing to travel beyond the neighborhood hospital to hospitals with better data. My sense is that hospitals will employ more doctors, sonsolidate multispecialty groups, and seek brand-name recognition as the best regional treatment center. Americans have choices, and they will migrate to regional institutions with the best images.

Employer and Government Choices

Employers have choices. The most obvious ones are to drop coverage, narrow benefits, or switch to health savings accounts and high deductible plans. But there is another choice as well – worksite clinics conducted by salaried physicians. There are already more than 250 of these clinics. Benefits for employers are reduced costs, onsite prevention and wellness programs, tangible convenience for employees, and control of referral networks.

Government Choices

Government has a choice. It can choose to regulate, monitor, make it hard for physicians and hospitals to collaborate and innovate, and punish pharmaceutical companies and health plans. Or it can choose to change conditions so public-private partnerships can flourish and to drop barriers that prevent cooperation and private investment. This is America, and tensions always will exist between champions of government and the market. Government protects the people; the market provides the jobs and funds the government.

Choice Dilemmas

The freedom of Americans and their doctors to make choices creates dilemmas for payers, patients, and physicians. These dilemmas produce consequences – higher costs, inconsistent quality, poor care coordination, sketchy follow-up, impaired patient safety, and freedom of patients and doctors to choose. But this is America, a country built on the freedom to choose what one wants to do, even if in the eyes of critics, those choices may compromise the common good. As a consequence, American health care is imperfect, but it is damn good although it could be better. Bettering the system will probably come from bottom-up choices rather than top-down mandates.

The End Choice

In the end, the American people have a choice,

•Universal government-run coverage with fewer medical bankruptcies, less financial anxieties, higher taxes, less access to high end technologies, longer waiting lines, fewer amenities, and less choices

•Public-private coverage of 85% of the population with higher costs but with universal access to emergency room care and speedy access to the best care their doctors and they choose and the world can offer, and choices only a free market can offer.

In America, where most people want quick but universal access to care, at lower or no cost at the point of care, but with a wealth of choices, this is not an easy choice.

Six Innovations - Innovation Number Four

Demand for transparency with bundled services and bundled billing arrangements

Reprinted from Physician Leaders, June 14, 2007

Soon health care services will be repackaged as bundled services with prices known in advance. This will share some features of packaged tours in the travel industry. Bundled services will partly be a response to a demand for transparency by HSA-card carrying consumers, spending their own money in high deductible plans, partly as reaction to consumer-demand for convenience and partly to give consumers a sense of precisely what to expect for the array of services needed for many chronic disease ailments.

Bundled services will require bundled bills by hospitals, specialists and others participating in providing services. It will require integrated teams of doctors, nurses and other paraprofessionals. It will require advance knowledge by consumers of the quality, price and outcomes provided.

To a limited extent, demands for transparency will replace fragmented fee-for-service model. But consumers will continue to frequent their own doctors, whose revitalized productive practices, will offer their own integrated services. Bundled services will make it easier for independent agencies to rank health services in terms of quality, outcomes and price. And it will be easier for consumers to comparison shop.

In the words of Regina Herzlinger, "In a consumer-driven health system, provider teams will name their price for bundles of care they create, reversing current, insurer-dictated prices for fragmented care and enabling consumers to reward excellence."

Six Innovations - Innovation Number Three

Lessons from retailers: Hidden in plain sight and DIG (Demand-First Innovation and Growth)

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)

Because of this restructuring, still in its early stages, general hospitals may go the route of downtown department stores, no longer able to provide everything-for-everybody and forced to diversify. Hospitals will have to decentralize, downsize and "act small."

Six Innovations -- Innovation Number Two

Introducing New, More Focused and More Productive Medical Specialties

Many are wringing their hands about the plight of primary care doctors. This hand wringing is accompanied by pleas for more generalists and less specialists. This isn't happening because specialists are generally better paid and more productive than generalists. Any medical student or primary care doctor knows this, and they're not going to sit idly by and be placed at the bottom of the socio-economic pile. So, under the radar, many primary care doctors are entering other related fields in search of more income, more time with patients, more control of their destinies, and more satisfaction.

These new fields include the following:

•Hospitalists--The hospitalist’s specialty is now 10 years old, and the number of hospitalists is approaching 15,000. In the eyes of most--patients, hospitals, independent doctors, and hospitalists themselves-- the hospitalist's movement has been an unqualified success. Because hospitalists are on the spot in hospitals to deal with problems that arise there--and because hospitalists are well trained in addressing urgent and clinical care--patient safety improves, complications decrease, hospital stays shorten and busy primary care physicians admitting to the hospital but practicing outside its confine are grateful because they have more free time for themselves and their families.

•Proceduralists--This is a more recent but rapidly emerging specialty. It is a spin-off of the hospitalist’s movement. Proceduralists are hospital-based and are trained to do procedures common in hospitals--tracheotomies, cut-downs to create venous and arterial access, parancenteses and thorancenteses, spinal tapes and diagnostic procedures such as ultrasound. Proceduralists are in demand, not only because of their skills gained from repeatedly performing procedures, but because they can train incoming residents to perform them.

•Palliative physicians--In hospices around the country, a new kind of physician, the palliative physician, is more frequently sighted. After attempts at cure have failed or debilitating diseases have progressed to near death, there is a need for physicians skilled in interacting with nurses, chaplains and other care givers in end-of-life care. These physicians coordinate care for patients with terminal illnesses, comfort the dying, commiserate with spouses and relatives, arrange for care in homes and tend to patients spiritual needs. Palliative physicians to whom I have spoken say this new specialty is a welcome and satisfying relief from the extraordinary demands of a busy primary care practice. It is satisfying because doctors have more time to show compassion, spend more time with patients and be more intimately involved with families of the dying.

•Predictive practitioners--This is as yet an unidentified specialty, and it may simply be part of the future function of existing specialties. But advances in predictive modeling and artificial intelligence may soon make predictive practitioners more common. For example, at Kaiser, an advanced predictive model, the Archimedes Project, has made it possible to predict what clinical interventions are likely to work for diabetic, heart attack, cancer and other chronic diseases. And a new device for simultaneously evaluating cardiac and lung function in patients, who are often asymptomatic but at risk, will soon be introduced to the market. It is called SHAPE (Superior Heart and Pulmonary Evaluation) and has been tested and evaluated at the Mayo Clinic. This device, which is based on heart and lung physiological data, contains a database of thousands of patients; the device permits practitioners to predict with precision the risks of hospitalization or death.