I notice the Obama budget addresses the issue of dwindling numbers of primary care physicians by offering up to $330 million to expand repayment of education loans to to doctors, nurses, and dentists who agree to practice in medically underserved areas.
To which, I say,
Get real. Medical students will not enter primary care in greater numbers until they perceive they will receive the same pay, prestige, work hours, and choice of desirable practice locations as their classmates who choose to go into specialties. Loan repayments to primary care for serving in doctor-short areas will simply not cut it. The time has come, as the Walrus might have said in Alice in Wonderland, to talk of other things.
Friday, February 27, 2009
Thursday, February 26, 2009
Medicare, health plans - WSJ Health Blog, HMO Stocks Take A Dive
Posted by Sarah Rubenstein
Company Medicare Advantage Share of Revenue
Aetna 18%
Cigna 3%
Coventry 31%
Humana 51%
UnitedHealth 23%
WellPoint 6%
HMO stocks took a beating today as investors digest the Obama budget proposal’s push to cut federal payments to insurers that run private Medicare Advantage plans.
Here’s the damage as of mid afternoon.
Humana: down 20%
UnitedHealth Group: down 14%.
Coventry Health Care: down 14%.
Aetna: down 13%.
WellPoint: down 10%.
Cigna: down 9%.
The market may be shocked, but the writing’s been on the wall for a while. Back in December, Obama said Medicare Advantage isn’t “necessarily giving good bang for the buck.”
Humana, United and Coventry are among the biggest players in Medicare Advantage, which helps explain why their stocks are taking the biggest hits. See the chart at right for Goldman Sachs analyst Matthew Borsch’s breakdown on how much of each company’s total revenue comes from Medicare Advantage. (His count of Aetna’s and Cigna’s total revenue doesn’t include certain relatively small non-health businesses such as life insurance.)
America’s Health Insurance Plans, insurance trade group, put out a statement that praised Obama’s push toward broad health reform. But the group also worked to defend Medicare Advantage, saying that cuts the size Obama is proposing would “jeopardize the health security of more than ten million seniors enrolled in Medicare Advantage and would turn back the clock on innovative payment incentives to improve the quality of care that patients receive.”
AHIP said the plans provide programs such as disease management and care coordination. Democrats, meanwhile, tend to see them as tax-subsidized profit centers for insurers.
Comment
By cutting out Medicare Advantage HMOs, Obama no doubt felt he was doing good.
Indeed, he may have thought of himself as a modern senior health care Robin Hood,
But taken as a whole, HMOs are a huge national employer,
And slashing HMO revenues is a potent profit and job destroyer.
This is something Wall Street understood.
Comment by Richard L. Reece, MD, medinnovationblog.blogspot.com
Company Medicare Advantage Share of Revenue
Aetna 18%
Cigna 3%
Coventry 31%
Humana 51%
UnitedHealth 23%
WellPoint 6%
HMO stocks took a beating today as investors digest the Obama budget proposal’s push to cut federal payments to insurers that run private Medicare Advantage plans.
Here’s the damage as of mid afternoon.
Humana: down 20%
UnitedHealth Group: down 14%.
Coventry Health Care: down 14%.
Aetna: down 13%.
WellPoint: down 10%.
Cigna: down 9%.
The market may be shocked, but the writing’s been on the wall for a while. Back in December, Obama said Medicare Advantage isn’t “necessarily giving good bang for the buck.”
Humana, United and Coventry are among the biggest players in Medicare Advantage, which helps explain why their stocks are taking the biggest hits. See the chart at right for Goldman Sachs analyst Matthew Borsch’s breakdown on how much of each company’s total revenue comes from Medicare Advantage. (His count of Aetna’s and Cigna’s total revenue doesn’t include certain relatively small non-health businesses such as life insurance.)
America’s Health Insurance Plans, insurance trade group, put out a statement that praised Obama’s push toward broad health reform. But the group also worked to defend Medicare Advantage, saying that cuts the size Obama is proposing would “jeopardize the health security of more than ten million seniors enrolled in Medicare Advantage and would turn back the clock on innovative payment incentives to improve the quality of care that patients receive.”
AHIP said the plans provide programs such as disease management and care coordination. Democrats, meanwhile, tend to see them as tax-subsidized profit centers for insurers.
Comment
By cutting out Medicare Advantage HMOs, Obama no doubt felt he was doing good.
Indeed, he may have thought of himself as a modern senior health care Robin Hood,
But taken as a whole, HMOs are a huge national employer,
And slashing HMO revenues is a potent profit and job destroyer.
This is something Wall Street understood.
Comment by Richard L. Reece, MD, medinnovationblog.blogspot.com
Regional variations - When Will They Ever Learn?
Where have all the flowers gone?
Long time passing
Where have all the flowers gone?
Long time ago
Where have all the flowers gone?
Girls have picked them every one.
When will they ever learn?
When will they ever learn?
Where Have All The Flowers Gone? Music and Lyrics, Pete Seegar
To slow spending growth, we need policies that encourage high-growth (or high-cost) regions to behave more like low-growth, low-cost regions — and that encourage low-cost, slow-growth regions to sustain their current trends. Our ongoing research program (funded in part by the National Institute on Aging) suggests that there are two broad and closely linked strategies for accomplishing these aims: fostering the growth of more organized systems of care and implementing fundamental payment reform.
Elliot Fisher, MD, Julie Byrun, MD, and Jonathan Skinner, PhD, “ Slowing the Growth of Health Care Costs – Lessons from Regional Variation,” New England Journal of Medicine, February 26, 2009
The Dartmouth Group’s latest work, as laid out in the February 26 New England Journal, on reducing regional variation, as the principle means of culling 30% waste out the system, will fail and will continue to fail.
Why? Stamping out variation violates the tenets of American culture – freedom to develop one’s own local and regional systems based on their culture and responding to the demands of that culture.
When will Dartmouth and other federal policy makers who want to wring variation out of the system ever learn? Ever since Wennberg’s original paper in 1973 on small area variations, Dartmouth’s has been proposing to homogenize and standardize Medicare payments across the U.S. These proposals, rational and scholarly though they may be, have had zero impact on regional cost variations.
Maybe there are lesions to to be learned from 36 years of futility.
When will Dartmouth-led policymakers ever learn,
1. That the U.S. is a vast diverse continental nation where health cost variations vary with local economies, socioeconomic differences of local and regional cultures, costs of living, and the competitive health care environments.
Costs are inherently higher in teeming urban centers with major academic centers. Care costs in Boston, for example, are 30% higher than the rest of the country. To ask Boston hospitals and doctors to lower their fees to match those of rural America defies logic and common sense. It will simply never happen, and it is the height of hypocrisy to pretend that it will.
2. That you cannot homogenize and standardize Medicare based payments without understanding what drives hospitals, doctors, and the local citizenry.
I recall the story of Paul Levy, CEO of Boston Israel Deaconess, in Boston. When asked why his hospital had purchased an expensive surgical robot, he said in a health blog labeled “Uncle!”, “Many months ago, I wrote about the da Vinci Robot Surgical System and expressed doubts about whether there was evidence to support the clinical efficacy of this equipment, as opposed to the marketing efficacy of the company selling it.
Well, the time has come to graciously say, "Uncle!"Without making any representations about the relative clinical value of this robotic system versus manual laparoscopic surgery, I am writing to let you know we have decided to buy one for our hospital. Why? Well, in simple terms, because virtually all the academic medical centers and many community hospitals in the Boston area have bought one.
3. That hospital executives and their boards are appointed to make sure their hospitals remain profitable, offer the latest in technologies, and rise to the top of the local or regional heap.
I wonder how a hospital board would react if a big city hospital CEO gathered his board together and announced: Ladies and Gentlemen, I have decided to lower our overall payments to match those of such and such a hospital in rural Alabama and for the nation as a whole for the common good of American society, even it means taking a loss, laying off employees, abandoning our mission to serve the poor, and jettisoning our expansion plans.
3. That health cost variations are very much a function of managed care market penetration and rules and regulations of a given state and metropolitan area.
In their article, Fisher et al note: “ Per capita Medicare spending from 1992 through 2006 varied in five U.S. hospital-referral regions. During this period, overall Medicare spending, adjusted for general price inflation, rose by 3.5% annually. But there was considerable variation among regions. Per capita inflation-adjusted spending in Miami grew at an annual rate of 5.0%, as compared with just 2.3% in Salem, Oregon, and 2.4% in San Francisco.”
Has it dawned on the authors that San Francisco and Salem, Oregon have heavy managed care penentration, that managed care dampens growth, and that its penentration varies greatly from one region to the next?
4. That other factors the Dartmouth folks mention vary profoundly from one region to the next. Here is their pitch.
“Consensus is emerging that integrated delivery systems that provide strong support to clinicians and team-based care management for patients offer great promise for improving quality and lowering costs. Most physicians already practice within local referral networks around one or more hospitals, which could form local integrated delivery systems with little disruption of practice. Policymakers would need to remove legal barriers to collaboration and offer incentives — such as larger payment updates or subsidies for implementing electronic health records — to providers who were willing to establish real or virtual accountable care systems. Our volume-based payment systems could then be changed to incorporate partial capitation, bundled payments, or shared savings, thereby fostering accountability for overall costs and quality of care. Although much remains to be learned about aligning reforms in delivery systems with payment reforms, early results from demonstration projects have been promising and could provide the foundation for national reform.”
This “integration” between hospitals and doctors and appeal for accountability. quality of care, and alignment of reforms, has a nice ring to it. Still, I wonder how man ymore years it will take to apply thse noble principles to all regions of the country, who may choose to continue to exercise their independence and judgments to their own well-being.
Long time passing
Where have all the flowers gone?
Long time ago
Where have all the flowers gone?
Girls have picked them every one.
When will they ever learn?
When will they ever learn?
Where Have All The Flowers Gone? Music and Lyrics, Pete Seegar
To slow spending growth, we need policies that encourage high-growth (or high-cost) regions to behave more like low-growth, low-cost regions — and that encourage low-cost, slow-growth regions to sustain their current trends. Our ongoing research program (funded in part by the National Institute on Aging) suggests that there are two broad and closely linked strategies for accomplishing these aims: fostering the growth of more organized systems of care and implementing fundamental payment reform.
Elliot Fisher, MD, Julie Byrun, MD, and Jonathan Skinner, PhD, “ Slowing the Growth of Health Care Costs – Lessons from Regional Variation,” New England Journal of Medicine, February 26, 2009
The Dartmouth Group’s latest work, as laid out in the February 26 New England Journal, on reducing regional variation, as the principle means of culling 30% waste out the system, will fail and will continue to fail.
Why? Stamping out variation violates the tenets of American culture – freedom to develop one’s own local and regional systems based on their culture and responding to the demands of that culture.
When will Dartmouth and other federal policy makers who want to wring variation out of the system ever learn? Ever since Wennberg’s original paper in 1973 on small area variations, Dartmouth’s has been proposing to homogenize and standardize Medicare payments across the U.S. These proposals, rational and scholarly though they may be, have had zero impact on regional cost variations.
Maybe there are lesions to to be learned from 36 years of futility.
When will Dartmouth-led policymakers ever learn,
1. That the U.S. is a vast diverse continental nation where health cost variations vary with local economies, socioeconomic differences of local and regional cultures, costs of living, and the competitive health care environments.
Costs are inherently higher in teeming urban centers with major academic centers. Care costs in Boston, for example, are 30% higher than the rest of the country. To ask Boston hospitals and doctors to lower their fees to match those of rural America defies logic and common sense. It will simply never happen, and it is the height of hypocrisy to pretend that it will.
2. That you cannot homogenize and standardize Medicare based payments without understanding what drives hospitals, doctors, and the local citizenry.
I recall the story of Paul Levy, CEO of Boston Israel Deaconess, in Boston. When asked why his hospital had purchased an expensive surgical robot, he said in a health blog labeled “Uncle!”, “Many months ago, I wrote about the da Vinci Robot Surgical System and expressed doubts about whether there was evidence to support the clinical efficacy of this equipment, as opposed to the marketing efficacy of the company selling it.
Well, the time has come to graciously say, "Uncle!"Without making any representations about the relative clinical value of this robotic system versus manual laparoscopic surgery, I am writing to let you know we have decided to buy one for our hospital. Why? Well, in simple terms, because virtually all the academic medical centers and many community hospitals in the Boston area have bought one.
3. That hospital executives and their boards are appointed to make sure their hospitals remain profitable, offer the latest in technologies, and rise to the top of the local or regional heap.
I wonder how a hospital board would react if a big city hospital CEO gathered his board together and announced: Ladies and Gentlemen, I have decided to lower our overall payments to match those of such and such a hospital in rural Alabama and for the nation as a whole for the common good of American society, even it means taking a loss, laying off employees, abandoning our mission to serve the poor, and jettisoning our expansion plans.
3. That health cost variations are very much a function of managed care market penetration and rules and regulations of a given state and metropolitan area.
In their article, Fisher et al note: “ Per capita Medicare spending from 1992 through 2006 varied in five U.S. hospital-referral regions. During this period, overall Medicare spending, adjusted for general price inflation, rose by 3.5% annually. But there was considerable variation among regions. Per capita inflation-adjusted spending in Miami grew at an annual rate of 5.0%, as compared with just 2.3% in Salem, Oregon, and 2.4% in San Francisco.”
Has it dawned on the authors that San Francisco and Salem, Oregon have heavy managed care penentration, that managed care dampens growth, and that its penentration varies greatly from one region to the next?
4. That other factors the Dartmouth folks mention vary profoundly from one region to the next. Here is their pitch.
“Consensus is emerging that integrated delivery systems that provide strong support to clinicians and team-based care management for patients offer great promise for improving quality and lowering costs. Most physicians already practice within local referral networks around one or more hospitals, which could form local integrated delivery systems with little disruption of practice. Policymakers would need to remove legal barriers to collaboration and offer incentives — such as larger payment updates or subsidies for implementing electronic health records — to providers who were willing to establish real or virtual accountable care systems. Our volume-based payment systems could then be changed to incorporate partial capitation, bundled payments, or shared savings, thereby fostering accountability for overall costs and quality of care. Although much remains to be learned about aligning reforms in delivery systems with payment reforms, early results from demonstration projects have been promising and could provide the foundation for national reform.”
This “integration” between hospitals and doctors and appeal for accountability. quality of care, and alignment of reforms, has a nice ring to it. Still, I wonder how man ymore years it will take to apply thse noble principles to all regions of the country, who may choose to continue to exercise their independence and judgments to their own well-being.
Obama strategies - Obama Health Care Budget
Well, details of the Obama “down payment on health care reform are filtering out.
They include.
• $634 billion to help pay for health care reform over the next ten years.
• $318 billion of that—about half—will come from tax increases that include reducing the mortgage and charity deduction for high income Americans.
• Charging wealthier seniors more for the Medicare Part D drug benefit—as is done for Medicare Part B now.
• Cutting Medicare HMO payments by $175 billion over ten years.
• Reducing Medicare hospital payments by $17 billion over ten years by bundling inpatient and outpatient reimbursement to include the 30-days after discharge.
• Cutting Medicare hospital payments by $8.4 billion over ten years for re-admissions resulting from substandard care.
• Requiring drug makers to increase the rebates on drugs sold to Medicare patients from 15% to 21% saving $19.5 billion over ten years.
What does this mean for doctors? I do not know. Some of it, of course, will come form higher taxes on doctors making over $250,000. Some may come from forcing doctors to “bundle bills” with hospitals. Some may come from only paying those doctors who use EMRs. Some of it may be indirect, as HMOs tighten financial screws on doctors to compensate for Medicare HMO losses. Little mention yet of how much is to be saved from prevention, EMR use, and lower Medicare fees for high ticket items that “don’t work” according to comparative effectiveness. Curiously, no mention of single-payers or universal coverage which will impractical unless costs are lowered.
They include.
• $634 billion to help pay for health care reform over the next ten years.
• $318 billion of that—about half—will come from tax increases that include reducing the mortgage and charity deduction for high income Americans.
• Charging wealthier seniors more for the Medicare Part D drug benefit—as is done for Medicare Part B now.
• Cutting Medicare HMO payments by $175 billion over ten years.
• Reducing Medicare hospital payments by $17 billion over ten years by bundling inpatient and outpatient reimbursement to include the 30-days after discharge.
• Cutting Medicare hospital payments by $8.4 billion over ten years for re-admissions resulting from substandard care.
• Requiring drug makers to increase the rebates on drugs sold to Medicare patients from 15% to 21% saving $19.5 billion over ten years.
What does this mean for doctors? I do not know. Some of it, of course, will come form higher taxes on doctors making over $250,000. Some may come from forcing doctors to “bundle bills” with hospitals. Some may come from only paying those doctors who use EMRs. Some of it may be indirect, as HMOs tighten financial screws on doctors to compensate for Medicare HMO losses. Little mention yet of how much is to be saved from prevention, EMR use, and lower Medicare fees for high ticket items that “don’t work” according to comparative effectiveness. Curiously, no mention of single-payers or universal coverage which will impractical unless costs are lowered.
Wednesday, February 25, 2009
Costs, health care and the economy, Obama strategies - Response to WSJ Blog on Obama Strategy on Containing Health Costs
February 25, 2009
WSJ Health Blog
Obama Addresses Health Reform as a Cost Issue
Posted by Jacob Goldstein
During the campaign, Barack Obama’s health-reform agenda focused mainly on giving Americans access to care. In his first formal address to Congress last night, President Obama brought up health care again — but he framed it largely as an issue central to the economic health of the nation.
He led into the health-care section of his speech with the line, “[W]e must also address the crushing cost of health care.”
Then, after rattling off some numbers about rising health expenses and their impact on individual Americans, he said health-care costs are “one of the major reasons why small businesses close their doors and corporations ship jobs overseas” and “one of the largest and fastest-growing parts of our budget.”
“Given these facts,” he added, “we can no longer afford to put health care reform on hold.”
The speech was a prelude for Obama’s first budget, which will be released later this week. Early reports say there will be a substantial chunk of money in the budget for expanding access to health care.
There does seem to be a pretty strong political will for greater access; delivering the Republican response to Obama’s speech, Louisiana Gov. Bobby Jindal said: “Republicans believe in a simple principle: No American should have to worry about losing their health coverage.”
But, especially in the short term, the costs to the government of expanding access are likely to exceed any savings that come from finding ways to make care more efficient. And, if figuring out how best to expand access will be tough, figuring out how to lower costs — perhaps including reducing reimbursements to highly paid specialists, demanding lower prices on some expensive drugs and restricting the use of unproven treatments — will be even harder.
Comment
I enjoyed immensely Barack Obama’s beautiful, bereft of details, speech,
But simultaneously cutting costs and covering all exceeds mortal reach.
EMRs and comparative research to reduce costs has never been shown to work,
The Brits have tried, wasting five years and $18 billion, without on costs putting a cork,
Sorry, but between cutting costs and providing more care, there’s an unleapable breech.
Comment by Richard L. Reece, MD, medinnovationblog.blogspot.com -
WSJ Health Blog
Obama Addresses Health Reform as a Cost Issue
Posted by Jacob Goldstein
During the campaign, Barack Obama’s health-reform agenda focused mainly on giving Americans access to care. In his first formal address to Congress last night, President Obama brought up health care again — but he framed it largely as an issue central to the economic health of the nation.
He led into the health-care section of his speech with the line, “[W]e must also address the crushing cost of health care.”
Then, after rattling off some numbers about rising health expenses and their impact on individual Americans, he said health-care costs are “one of the major reasons why small businesses close their doors and corporations ship jobs overseas” and “one of the largest and fastest-growing parts of our budget.”
“Given these facts,” he added, “we can no longer afford to put health care reform on hold.”
The speech was a prelude for Obama’s first budget, which will be released later this week. Early reports say there will be a substantial chunk of money in the budget for expanding access to health care.
There does seem to be a pretty strong political will for greater access; delivering the Republican response to Obama’s speech, Louisiana Gov. Bobby Jindal said: “Republicans believe in a simple principle: No American should have to worry about losing their health coverage.”
But, especially in the short term, the costs to the government of expanding access are likely to exceed any savings that come from finding ways to make care more efficient. And, if figuring out how best to expand access will be tough, figuring out how to lower costs — perhaps including reducing reimbursements to highly paid specialists, demanding lower prices on some expensive drugs and restricting the use of unproven treatments — will be even harder.
Comment
I enjoyed immensely Barack Obama’s beautiful, bereft of details, speech,
But simultaneously cutting costs and covering all exceeds mortal reach.
EMRs and comparative research to reduce costs has never been shown to work,
The Brits have tried, wasting five years and $18 billion, without on costs putting a cork,
Sorry, but between cutting costs and providing more care, there’s an unleapable breech.
Comment by Richard L. Reece, MD, medinnovationblog.blogspot.com -
Costs, Government reform - - Can Health Costs Be Controlled from the Top-Down?
“None of this will come without cost, nor will it be easy. But this is America. We don't do what's easy. We do what is necessary to move this country forward.
For that same reason, we must also address the crushing cost of health care.
This is a cost that now causes a bankruptcy in America every thirty seconds. By the end of the year, it could cause 1.5 million Americans to lose their homes. In the last eight years, premiums have grown four times faster than wages. And in each of these years, one million more Americans have lost their health insurance. It is one of the major reasons why small businesses close their doors and corporations ship jobs overseas.
And it's one of the largest and fastest-growing parts of our budget.
Given these facts, we can no longer afford to put health care reform on hold.
Already, we have done more to advance the cause of health care reform in the last thirty days than we have in the last decade. When it was days old, this Congress passed a law to provide and protect health insurance for eleven million American children whose parents work full-time. Our recovery plan will invest in electronic health records and new technology that will reduce errors, bring down costs, ensure privacy, and save lives. It will launch a new effort to conquer a disease that has touched the life of nearly every American by seeking a cure for cancer in our time. And it makes the largest investment ever in preventive care, because that is one of the best ways to keep our people healthy and our costs under control.”
President Barack Obama,
Address Before Congress, February 24, 2009
A central tenet of the Obama administration is that you can centrally control health costs from the top-down – by combining data collected by EMRs, using that data to force doctors to comply with “evidence-based medicine,” and creating a Federal Comparative Research Institute that uses data to decide what works and what to pay for.
Before Obama plunges too deeply into the abyss that says information technologies and comparative research are a cure-all for costs, I ask that he and advisors consider IT performance so far in this country and in Britain. That experience vividly illustrates the flaws of health IT and comparative outcomes as means of saving money.
Hayek
The Obama approach runs against the philosophy of Friedrich Hayek (1889-1992), who noted that in a centrally planned economy, a small group decides how to distribute resources. But central planners never have enough information to allocate resources reliably. Efficient use of resources, and control of costs, Hayek argued, reside only in free exchanges of price information at the level of the marketplace , synchronized through spontaneous self-organization of buyers and sellers.
Yea for Government-Induced Comparative Effectiveness, Says Robert Wachter,M.D, Professor of Medicine
Government can control costs through evidence collected through information technologies used to compare effectiveness. In a February 24 piece in The Health Care Blog, “Are We Mature Enough to Make Use of Comparative Effectiveness Research, “ Dr. Robert Wachter, who coined the word “hospitalist” in 1996 in a New England Journal of Medicine article, and who serves as a professor of medicine in a West Coast Medical school, argues that Comparative Effectiveness Research and its applications mark a mature society.
“Thanks to White House budget director Peter Orszag, a Dartmouth Atlas aficionado, $1.1 billion found its way into the stimulus piñata for “comparative effectiveness” research. Terrific, but – to paraphrase Jack Nicholson – can we handle the truth?
In other words, are we mature enough to use comparative effectiveness data to make tough decisions about what we will and won’t pay for? I worry that we’re not.
Is it worth wasting our time and money on comparative effectiveness research? I’m hoping that this is a new day – the coming implosion of the health care system is now well recognized, as is the quality chasm. We simply must find ways to drive the system to produce the highest quality, safest care at the lowest cost, and we need to drag the self-interested laggards along, kicking and screaming if need be. Comparative effectiveness research is the scientific scaffolding for this revolution, so bring it on. “
Nay for Government-Controlled IT and Comparative Research, retorts Greg Scandlen
Greg Scandlen, Director for Health CARE Choices, in “Research & Commentary: Health Information Technology, argues the opposite, as follows,
“As part of the federal government's economic stimulus package, Congress has authorized spending about $20 billion on health information technology (health IT) and another $1 billion on comparative effectiveness research. These provisions achieved wide bipartisan support in Congress and in the health care industry, based on the hope that the investment will help improve efficiency, cut costs, and result in better care. The reality is likely to be far different.
Proponents of heavy government spending rely heavily on a short RAND Corporation analysis from 2005 that predicted $77 billion in annual savings and improved outcomes. RAND estimated "implementation would cost around $8 billion per year, assuming adoption by 90 percent of hospitals and doctors offices over 15 years." It said, "The benefits can include dramatic efficiency savings, greatly increased safety, and health benefits."
Unfortunately, RAND assumed an error-free system that is quickly and enthusiastically adopted by virtually the entire health care system. That might happen, but it is an absolute best-case scenario. Even then, instead of "dramatic savings," the $77 billion hoped-for savings amounted to a mere 4.5 percent of total costs, placed at $1.7 trillion by RAND.
Far more likely is that every penny of the $20 billion will be wasted on systems that don't work and can never be implemented. That was the outcome of federal attempts to upgrade technology at the IRS, the FBI, and the air traffic control system. And these are all relatively simple enterprises involving single federal agencies. Health IT is vastly more complex and must include hundreds of thousands of private organizations that have invested in legacy systems that work reasonably well and are as varied as there are providers.
This also has been the experience of the United Kingdom, which has been trying to adopt a similar information technology upgrade for its National Health Service (NHS) since 2002. This plan was far less ambitious than the U.S. version, involving merely 30,000 physicians and 300 hospitals, all of whom are already employed by the NHS. Originally estimated to cost 2.3 billion pounds, it is already at 12.7 billion pounds--$18.4 billion, or about as much as provided in the stimulus package for the entire United States. A recent report to Parliament admitted the program is four to five years late and may never be implemented as envisioned. The project has lost two of the four vendors who were working on it, and some of the elements that have been installed are not meeting expectations.
This is not to say health IT is a bad idea or that hopes for it are unwarranted. Quite the opposite. The health care system sorely needs better management tools and better application of technology. There is currently a vast amount of entrepreneurial energy, innovation, and money being invested in developing, refining, and marketing the tools the system needs to come into the twenty-first century.
The danger is that massive federal intrusion will bring all that innovation to a screeching halt. Systems work best when they are developed from the ground up, not imposed from on high. In ground-up development, flaws can be detected and eliminated without much systemwide damage. Poor vendors can be removed without disruption to the whole system.
We do not yet know what the optimal system will be. Imposing federal standards on health IT in 2009 means the entire system will be locked in to those standards for very long time to come and innovation will not be rewarded.
The RAND study said "market forces" are an obstacle to health IT. Just the opposite is true. The market is the best way to test and refine new ideas. The process of repeated testing and refinement may seem slow to people who want instant solutions and shortcuts, but the failure to engage in that process often results in massive mistakes and wasted billions.’
Centralized comparative research to decide where to spend government health money, or reliance free markets to set those prices? Take your pick. Obama has made his choice.
For that same reason, we must also address the crushing cost of health care.
This is a cost that now causes a bankruptcy in America every thirty seconds. By the end of the year, it could cause 1.5 million Americans to lose their homes. In the last eight years, premiums have grown four times faster than wages. And in each of these years, one million more Americans have lost their health insurance. It is one of the major reasons why small businesses close their doors and corporations ship jobs overseas.
And it's one of the largest and fastest-growing parts of our budget.
Given these facts, we can no longer afford to put health care reform on hold.
Already, we have done more to advance the cause of health care reform in the last thirty days than we have in the last decade. When it was days old, this Congress passed a law to provide and protect health insurance for eleven million American children whose parents work full-time. Our recovery plan will invest in electronic health records and new technology that will reduce errors, bring down costs, ensure privacy, and save lives. It will launch a new effort to conquer a disease that has touched the life of nearly every American by seeking a cure for cancer in our time. And it makes the largest investment ever in preventive care, because that is one of the best ways to keep our people healthy and our costs under control.”
President Barack Obama,
Address Before Congress, February 24, 2009
A central tenet of the Obama administration is that you can centrally control health costs from the top-down – by combining data collected by EMRs, using that data to force doctors to comply with “evidence-based medicine,” and creating a Federal Comparative Research Institute that uses data to decide what works and what to pay for.
Before Obama plunges too deeply into the abyss that says information technologies and comparative research are a cure-all for costs, I ask that he and advisors consider IT performance so far in this country and in Britain. That experience vividly illustrates the flaws of health IT and comparative outcomes as means of saving money.
Hayek
The Obama approach runs against the philosophy of Friedrich Hayek (1889-1992), who noted that in a centrally planned economy, a small group decides how to distribute resources. But central planners never have enough information to allocate resources reliably. Efficient use of resources, and control of costs, Hayek argued, reside only in free exchanges of price information at the level of the marketplace , synchronized through spontaneous self-organization of buyers and sellers.
Yea for Government-Induced Comparative Effectiveness, Says Robert Wachter,M.D, Professor of Medicine
Government can control costs through evidence collected through information technologies used to compare effectiveness. In a February 24 piece in The Health Care Blog, “Are We Mature Enough to Make Use of Comparative Effectiveness Research, “ Dr. Robert Wachter, who coined the word “hospitalist” in 1996 in a New England Journal of Medicine article, and who serves as a professor of medicine in a West Coast Medical school, argues that Comparative Effectiveness Research and its applications mark a mature society.
“Thanks to White House budget director Peter Orszag, a Dartmouth Atlas aficionado, $1.1 billion found its way into the stimulus piñata for “comparative effectiveness” research. Terrific, but – to paraphrase Jack Nicholson – can we handle the truth?
In other words, are we mature enough to use comparative effectiveness data to make tough decisions about what we will and won’t pay for? I worry that we’re not.
Is it worth wasting our time and money on comparative effectiveness research? I’m hoping that this is a new day – the coming implosion of the health care system is now well recognized, as is the quality chasm. We simply must find ways to drive the system to produce the highest quality, safest care at the lowest cost, and we need to drag the self-interested laggards along, kicking and screaming if need be. Comparative effectiveness research is the scientific scaffolding for this revolution, so bring it on. “
Nay for Government-Controlled IT and Comparative Research, retorts Greg Scandlen
Greg Scandlen, Director for Health CARE Choices, in “Research & Commentary: Health Information Technology, argues the opposite, as follows,
“As part of the federal government's economic stimulus package, Congress has authorized spending about $20 billion on health information technology (health IT) and another $1 billion on comparative effectiveness research. These provisions achieved wide bipartisan support in Congress and in the health care industry, based on the hope that the investment will help improve efficiency, cut costs, and result in better care. The reality is likely to be far different.
Proponents of heavy government spending rely heavily on a short RAND Corporation analysis from 2005 that predicted $77 billion in annual savings and improved outcomes. RAND estimated "implementation would cost around $8 billion per year, assuming adoption by 90 percent of hospitals and doctors offices over 15 years." It said, "The benefits can include dramatic efficiency savings, greatly increased safety, and health benefits."
Unfortunately, RAND assumed an error-free system that is quickly and enthusiastically adopted by virtually the entire health care system. That might happen, but it is an absolute best-case scenario. Even then, instead of "dramatic savings," the $77 billion hoped-for savings amounted to a mere 4.5 percent of total costs, placed at $1.7 trillion by RAND.
Far more likely is that every penny of the $20 billion will be wasted on systems that don't work and can never be implemented. That was the outcome of federal attempts to upgrade technology at the IRS, the FBI, and the air traffic control system. And these are all relatively simple enterprises involving single federal agencies. Health IT is vastly more complex and must include hundreds of thousands of private organizations that have invested in legacy systems that work reasonably well and are as varied as there are providers.
This also has been the experience of the United Kingdom, which has been trying to adopt a similar information technology upgrade for its National Health Service (NHS) since 2002. This plan was far less ambitious than the U.S. version, involving merely 30,000 physicians and 300 hospitals, all of whom are already employed by the NHS. Originally estimated to cost 2.3 billion pounds, it is already at 12.7 billion pounds--$18.4 billion, or about as much as provided in the stimulus package for the entire United States. A recent report to Parliament admitted the program is four to five years late and may never be implemented as envisioned. The project has lost two of the four vendors who were working on it, and some of the elements that have been installed are not meeting expectations.
This is not to say health IT is a bad idea or that hopes for it are unwarranted. Quite the opposite. The health care system sorely needs better management tools and better application of technology. There is currently a vast amount of entrepreneurial energy, innovation, and money being invested in developing, refining, and marketing the tools the system needs to come into the twenty-first century.
The danger is that massive federal intrusion will bring all that innovation to a screeching halt. Systems work best when they are developed from the ground up, not imposed from on high. In ground-up development, flaws can be detected and eliminated without much systemwide damage. Poor vendors can be removed without disruption to the whole system.
We do not yet know what the optimal system will be. Imposing federal standards on health IT in 2009 means the entire system will be locked in to those standards for very long time to come and innovation will not be rewarded.
The RAND study said "market forces" are an obstacle to health IT. Just the opposite is true. The market is the best way to test and refine new ideas. The process of repeated testing and refinement may seem slow to people who want instant solutions and shortcuts, but the failure to engage in that process often results in massive mistakes and wasted billions.’
Centralized comparative research to decide where to spend government health money, or reliance free markets to set those prices? Take your pick. Obama has made his choice.
Tuesday, February 24, 2009
Hospitals and doctors - Hospital-Based Doctorists
I see in the Boston Globe, “The Birth of a Notion,” that Cape Cod Hospital and other Massachusetts hospitals, are hiring “laborists,” board-certified obstetricians, to work regular shifts for the sole purpose of delivering babies.
The problem, in Massachusetts as elsewhere, is that obstetricians and gynecologists are giving up hospital deliveries because of overwork, fear of malpractice suits, and craving for a normal life style.
Hospitals, too, fear these suits. They fear for the safety of their patients as well. The arrival of obstetricians from their offices, may be delayed, and complications may develop while waiting.
This piece of news prompts these thoughts.
Laborists are just the latest in a string of hospital-based doctorists,
Spawned 13 years ago by announcement of a new breed of specialist cat, hospitalists.
Hospitalists were followed by intensivists, proceduralists, nocturalists, and weekendalists,
What drives these new waves of specialists?
It’s a combination of things – the desire of doctors for regular hours, the shortage of specialists, physician burnout, the search for a safer hospital environment, the need for consistent, immediately available physician services, fear of dreaded malpractice suits, and consolidation of hospital-physicians services due to regulatory and economic pressures,- says fundamentalists.
References
1. Wachter, R, and Goldman,R, “The Emerging Role of ‘Hospitalists’ in the American Health System,’ New England Journal of Medicine, 335, 514-517, 1996.
2. Kowalczyk, L, The Birth of a Notion: Hospitals Turning to Laborarists, : Boston Globe, February 23, 2009
The problem, in Massachusetts as elsewhere, is that obstetricians and gynecologists are giving up hospital deliveries because of overwork, fear of malpractice suits, and craving for a normal life style.
Hospitals, too, fear these suits. They fear for the safety of their patients as well. The arrival of obstetricians from their offices, may be delayed, and complications may develop while waiting.
This piece of news prompts these thoughts.
Laborists are just the latest in a string of hospital-based doctorists,
Spawned 13 years ago by announcement of a new breed of specialist cat, hospitalists.
Hospitalists were followed by intensivists, proceduralists, nocturalists, and weekendalists,
What drives these new waves of specialists?
It’s a combination of things – the desire of doctors for regular hours, the shortage of specialists, physician burnout, the search for a safer hospital environment, the need for consistent, immediately available physician services, fear of dreaded malpractice suits, and consolidation of hospital-physicians services due to regulatory and economic pressures,- says fundamentalists.
References
1. Wachter, R, and Goldman,R, “The Emerging Role of ‘Hospitalists’ in the American Health System,’ New England Journal of Medicine, 335, 514-517, 1996.
2. Kowalczyk, L, The Birth of a Notion: Hospitals Turning to Laborarists, : Boston Globe, February 23, 2009
Obama strategies - Obama - Too Much, Too Soon
David Brooks is worried. In his February 23 New York Times column, “The Big Test,” Brooks says President Obama may be trying to do too much too soon.
Obama and his aides “are unrolling a rapid string of plans: to create three million jobs, to redesign the health system, to save the auto industry, to revive the housing industry, to reinvent the energy sector, to revitalize the banks, to reform the schools – and to do it all while cutting the deficit in half.”
And Obama wants to do it all at once – fast - with one swipe of his magic political wand. My guess, as I write in this foreword to my book , Obama and Health Reform: The Health System, from Top-Down to Bottom-Up, as Seen Through Lens of Cultural Complexity, is that he will fail, at least in health care, at least that’s what I say in my foreword, which follows,
Foreword
President Barack Obama has vowed to overhaul the U.S. health care system. He wants to lower costs, expand access, increase efficiencies, and cut spending. I would place the odds for sweeping reform at 20/80, and odds for incremental changes such a coverage for children, stem cell financing, funding for electronic records, and extension of unemployment benefits to Medicaid as a slam dunk.
I expect other issues now being debated and demonstrated at Medicare – such as pay-for-performance, medical homes, bundling of hospital-physician bills, creating integrated groups, coordinating care, forming a Federal Health Board, creating a Comparative Outcome Institute, and mandatory use of EMRs as a condition for payment –to make slow, uneven, and unpredictable progress.
Otherwise, the debts incurred by the economic stimuli and the staggering federal deficit are simply too steep a hill to climb for those who crave universal coverage or single-payer.
How one at the same time covers more Americans while slashing costs eludes me. Expanding coverage always costs more. I only know one thing- and it’s a big thing. It will be impossible to superimpose a single-payer system on the current system.
I wish the President the best. The present state of affairs – unhappy patients, unhappy doctors, soaring costs, and 15% uninsured – cannot last. At least that’s what we keep saying. Health costs, mainly Medicare and Medicaid, consume 25% of the federal budget, and more cost rises are on the way and are unsustainable.
President Obama faces four towering obstacles to reform. I call them the four “Cs.”
• Culture, American style, abhors the word “rationing. ” Our culture cherishes unlimited choice, quick access to the latest and best in medical “cures, ” and lifestyle restoring technologies.
• Complexity, American health care is a whirling Rubik’s Cube, with millions of interrelated moving parts, institutions, and people, each with own agenda and axes to grind.
• Costs, Obama says prevention, electronic medical records, and paying only for what works, as established through comparative research, will save billions of dollars, yet little evidence exists that these measures work.
• Consequences, of curtailing health costs, may be worse than the cure, because health care institutions and private practices in many communities are the biggest and only growing employer in town. Collectively, health care has a profoundly positive economic impact and cannot be dismantled quickly – if at all.
Given these truths and consequences, I offer in this book my observations, gleaned in part from my writings, in part from conversations with health care people on the ground, and in part from public discourse in the media.
Obama and his aides “are unrolling a rapid string of plans: to create three million jobs, to redesign the health system, to save the auto industry, to revive the housing industry, to reinvent the energy sector, to revitalize the banks, to reform the schools – and to do it all while cutting the deficit in half.”
And Obama wants to do it all at once – fast - with one swipe of his magic political wand. My guess, as I write in this foreword to my book , Obama and Health Reform: The Health System, from Top-Down to Bottom-Up, as Seen Through Lens of Cultural Complexity, is that he will fail, at least in health care, at least that’s what I say in my foreword, which follows,
Foreword
President Barack Obama has vowed to overhaul the U.S. health care system. He wants to lower costs, expand access, increase efficiencies, and cut spending. I would place the odds for sweeping reform at 20/80, and odds for incremental changes such a coverage for children, stem cell financing, funding for electronic records, and extension of unemployment benefits to Medicaid as a slam dunk.
I expect other issues now being debated and demonstrated at Medicare – such as pay-for-performance, medical homes, bundling of hospital-physician bills, creating integrated groups, coordinating care, forming a Federal Health Board, creating a Comparative Outcome Institute, and mandatory use of EMRs as a condition for payment –to make slow, uneven, and unpredictable progress.
Otherwise, the debts incurred by the economic stimuli and the staggering federal deficit are simply too steep a hill to climb for those who crave universal coverage or single-payer.
How one at the same time covers more Americans while slashing costs eludes me. Expanding coverage always costs more. I only know one thing- and it’s a big thing. It will be impossible to superimpose a single-payer system on the current system.
I wish the President the best. The present state of affairs – unhappy patients, unhappy doctors, soaring costs, and 15% uninsured – cannot last. At least that’s what we keep saying. Health costs, mainly Medicare and Medicaid, consume 25% of the federal budget, and more cost rises are on the way and are unsustainable.
President Obama faces four towering obstacles to reform. I call them the four “Cs.”
• Culture, American style, abhors the word “rationing. ” Our culture cherishes unlimited choice, quick access to the latest and best in medical “cures, ” and lifestyle restoring technologies.
• Complexity, American health care is a whirling Rubik’s Cube, with millions of interrelated moving parts, institutions, and people, each with own agenda and axes to grind.
• Costs, Obama says prevention, electronic medical records, and paying only for what works, as established through comparative research, will save billions of dollars, yet little evidence exists that these measures work.
• Consequences, of curtailing health costs, may be worse than the cure, because health care institutions and private practices in many communities are the biggest and only growing employer in town. Collectively, health care has a profoundly positive economic impact and cannot be dismantled quickly – if at all.
Given these truths and consequences, I offer in this book my observations, gleaned in part from my writings, in part from conversations with health care people on the ground, and in part from public discourse in the media.
Friday, February 20, 2009
Physician payment, blogging doggerel, Raising Percent of Primary Care Pay
“Any Medicare payment boost to primary care without the infusion of new federal funding would require rate cuts to other physician services."
AMA Medical News, February 16, 2009
Medicare is raising the primary care physicians’ take,
Over five years to eighty percent of the specialists’ take,
That percentile is now roughly fifty five percent.
Just over half of what on other doctors is spent,
Now ain’t that new rate a more reasonable piece of the cake.
AMA Medical News, February 16, 2009
Medicare is raising the primary care physicians’ take,
Over five years to eighty percent of the specialists’ take,
That percentile is now roughly fifty five percent.
Just over half of what on other doctors is spent,
Now ain’t that new rate a more reasonable piece of the cake.
Universal coverage - Coverage for All, and All for Coverage
Uwe Reinhardt, the Princeton Health Economist guru, once observed people gathered in one room made most of the major U.S. health care decisions.
His remark sprang to mind when I read Robert Pear’s article in the February 19, 2009 New York Times, “Health Care Industry in Talks to Shape Policy.” Pear describes how 20 people gathered under the tutelage of Senator Edward Kennedy have been meeting regularly in one room to reach a consensus on how to achieve universal coverage.
The emerging consensus, according to Pear, is that every American – including the young invincibles, the unemployed between jobs, and others who choose not to carry insurance, and the poor, the newly arrived, and the sick, who may not be able to afford it – should be required to carry policies.
The only issues, all whoopers and possible stoppers, remaining to be resolved are:
--how to make care affordable to the uninsured,
--whether employers should be required to help buy insurance.
The people in the room represent:
• AARP
• Aetna
• AFL-CIO
• AMA
• American Health Plans
• American Cancer Society
• Business Round Table
• Easter Seal
• National Federation of Independent Businesses
• Pharmaceutical Research and Manufacturers of American
• United States Chamber of Commerce
Now if we can only get all twenty in the room.
To agree to cover all aplenty from womb to tomb,
To fund all possible situations,
To meet all high expectations,
Vroom! American Democracy will be in full bloom.
His remark sprang to mind when I read Robert Pear’s article in the February 19, 2009 New York Times, “Health Care Industry in Talks to Shape Policy.” Pear describes how 20 people gathered under the tutelage of Senator Edward Kennedy have been meeting regularly in one room to reach a consensus on how to achieve universal coverage.
The emerging consensus, according to Pear, is that every American – including the young invincibles, the unemployed between jobs, and others who choose not to carry insurance, and the poor, the newly arrived, and the sick, who may not be able to afford it – should be required to carry policies.
The only issues, all whoopers and possible stoppers, remaining to be resolved are:
--how to make care affordable to the uninsured,
--whether employers should be required to help buy insurance.
The people in the room represent:
• AARP
• Aetna
• AFL-CIO
• AMA
• American Health Plans
• American Cancer Society
• Business Round Table
• Easter Seal
• National Federation of Independent Businesses
• Pharmaceutical Research and Manufacturers of American
• United States Chamber of Commerce
Now if we can only get all twenty in the room.
To agree to cover all aplenty from womb to tomb,
To fund all possible situations,
To meet all high expectations,
Vroom! American Democracy will be in full bloom.
Thursday, February 19, 2009
Medical homes, Paul Grundy - Interview with Edgar Mounib,MD, and Martin Kohn, MD, of IBM, on the Merits and Challenges of Setting up Medical Homes
Prelude: A team of people at IBM are preparing a White Paper on the Medical Home under the title of “The Medical Home, Why Now – and How?” It is an ambitious project and will be based on findings of the team itself and interviews with thought leaders. Recently I exchanged views with Drs. Edgar Mounib and Dr. Martin Kohn, on the whys, whats, and hows of Medical Homes. What follows are selected fragments of our lengthy exchange. Dr. Mounib appears in the early part of this interview but had to leave early to tend to a medical problem. To keep this interview within bounds, I have shortened, omitted, or altered some questions and answers.
Doctor Edgar Mounib
Q: Dr. Mounib, tell me about yourself.
A: My background is in public health. I trained as an infectious disease epidemiologist. I have worked as an epidemiologist, in hospitals, and in health insurance. I went back to school and got a MBA. I was medical director at BC BS of Massachusetts for a number of years. I have helped with the NCQA accreditation process. I lead the health care portion for the Institute for Business Value, IBM’s think tank, one of world’s largest think tanks.
We produce fresh, compelling stories about what’s happening in the health care industry. We tell these stories from the business perspective. It’s important to tell these stories to policymakers and CFOs. It’s not an IT story, but a more of a holistic story.
With medical homes, we hope to make a compelling story of “Why now, and how?” We think the evidence is overwhelmingly positive for Medical Homes for care providers and for other stakeholders as well– hospitals, health plans, and others and why they should take part. As we look at medical home projects across the country, we ask ourselves – What has worked and what hasn’t?
Doctor Martin Kohn (the rest of this interview are exchanges between Dr. Kohn and myself)
Q: Dr. Kohn, your background?
A: I am an ER physician, an engineer, and I have a degree in health policy management. I have been with IBM for 3 ½ years.
Q: That’s a formidable collection of degrees.
A: Yes, I thought, I have all these credentials, and I ought to do something with them. IBM gave me the opportunity. I work in the clinical transformation area, where we help physicians and health care organizations get maximum benefit from health information technologies. I am also working in the patient-centered medical home practice area. And I do epidemiological research in Hawthorne, New York, on artificial intelligence and its possible role in clinical decision making.
Q: Sounds to me like you’re a Renaissance man for IBM.
A: Either that or an incurable dilettante.
Why Medical Homes Now
Q: Why now?
A: Our primary care system is under duress. The shortage of primary care doctors is growing, and it’s growing fast. There’s also a decrease in job satisfaction, as doctors encounter more administrative complexities. There’s a reimbursement factor as well. We all agree primary care is critical to any health care system, whether it be in Spain, New Zealand, Denmark or the U.S.
Those are the key reasons for Why Now? Further, team care is important. Medical Homes differ from Pay-for-Performance and other initiatives. We think medical homes are a true advance in correcting flaws in the U.S. health care system and setting those flaws right.
The evidence is overwhelming that where primary care is pervasive , outcomes improve, costs go down, and satisfaction reigns. We believe in a Medical Home structure that supports primary care and patient relationships, and information systems that foster that bond and address the flaws in American health care – redundancies, duplications, and lack of wellness and prevention.
Q: So your White Paper is designed to convince policy makers and others that the Medical Home’s time has come?
A; Yes, but we don’t want to make this White Paper a rah-rah type of article. We want to make it realistic by interviewing people like yourself to get feedback about what’s likely to work.
Where the Medical Home is Now in Physicians’ Minds
Q: Let me tell you where I think you are now. A recent Healthleadersmedia survey of physician leaders gave the following picture (figures rounded).
Strongly positive, 6%
Slightly positive, 26%
Neutral, 60%
Slightly negative, 4%
Strongly negative, 4%
So 92% of physician leaders are either neutral or positive. That’s a good start. I don’t think there’s any organized resistance to Medical Homes.
Skepticism
I sense, however, and I talk to doctors all over the country, some skepticism.
One of these skepticisms is: Is the Medical Home just a super- or exalted gatekeeper model posing under a different name? What is your answer to that fear?
A: It’s an understandable fear. The distinction we’re making is to distinguish from “gatekeeper” is “gateway.” This is not a process based on denying access, but a process based on best practice and evidence-based medicine to make sure the patient gets what the patient needs and to avoid that which is not valuable.
Managed care denied access, but not based on quality or evidence. The Medical Home is a cooperative effort between doctor and patient to get access to care the patient needs and to protect the patient from care the patient doesn’t need.
American Culture
Q: Another one of your problems, as I see it, is American culture itself. Our culture is based on the individual’s freedom of choice. And patients may fear that their access to specialists will be restricted. The average Medicare recipient with chronic diseases sees five or six specialists. You might call it the Baskin-Robbins phenomenon. Do you anticipate it will be hard to change this cultural obstacle?
A: I think that’s an issue. Americans are accustomed to running their own shows and not accepting any limitations on freedom of choice. On the other side of that are surveys that show that despite all this freedom there is a fair amount of dissatisfaction and that patients involved in strong, trusting relationships with primary care doctors are amongst the happiest and trust recommendations made by their primary care physicians.
We have conflicting desires on the part of a large segment of the American public. They don’t want to be denied care , but they want the help of someone they trust. Our hope is we can rely on that trust and build upon it by making sure the best information is available from the health care team and that the outcomes will be improved and unnecessary risks will be eliminated without creating the feeling you’re being denied.
The Medical Home can be presented as having more benefit than loss of freedom by sharing information with patient rather than seeing, for example, an endocrinologist, pulmonologist, cardiologist internists in a diabetic with heart failure and COPD.
The Power of a Personal Physician
Q: As you know, I have an ongoing dialogue with Dr. Paul Grundy, IBM’s Director of Health Care Transformation, and he continually impresses upon me that a personal relationship with a primary care doctor has tremendous, underappreciated power for the good. Paul invariably brings up the example of Denmark, where everybody, without exception, knows and trusts their personal primary care doctor – to benefit of Danish society and its health system, which is one of the most efficient and cost effective in the world.
So the medical home concept can be done – and it’s being done, in Denmark, Spain, and New Zealand and in organizations in the U.S. like the Camden Coalition in New Jersey, Community Care in North Carolina, Geisinger in Pennsylvania, a coalition in Detroit, and by Blue Cross Blue Shield of North Dakota. I know doctors in North Carolina who think the Medicaid experiment with a quasi-medical home there has succeeded. Why is that?
Medical Homes Work from Patient and Doctor Perspectives
A. I think the Medicaid folks there, who don’t have some of financial considerations of other patients, perceive that there is someone who cares, who is paying attention, and who is doing the things that they need. They no longer feel the need to head to the emergency department. They have someone to whom they can speak to in the middle of the night or the weekend. There are strong testimonials that this works from patients.
Q: It also works from the doctor’s perspective. One of the concerns of doctors is: Who manages the patient once they leave the office? Doctors are concerned financially and practically and personally: who do I have to hire to coordinate care and who much do I have to pay them?
In the case of North Carolina, doctors are paid are paid a modest fee to see a panel of Medicaid patients, and Social Services division of State Government tracks and supports these patients on the outside. It’s a problem with doctors. They ask: who am I going to hire to coordinate care for those outside problems between visits?
What’s the North Carolina story from the IBM point of view?
A: We point to organizations that have done that successfully, such as Geisinger. We talk in our White Paper about what incentives are necessary for caregivers to participate in this fully expanded process with coordinators and health care teams, and a lot of it is financial incentives. Geisinger, as an example, gives the primary care physicians $1800 a month if they agree to participate in the medical home process to meet reporting and quality standards and an additional amount of money for the infrastructure – to hire coordinators and to train them.
EMRs
Q: What about the electronic records?
A: That’s a big part of making the Medical Home work within an integrated system, making sure everybody is working with the same information.
Q: At Geisinger, are these primary care doctors salaried employees of Geisinger?
A: in a large fraction of their initial effort, they were. Now they are expanding their effort to include the affiliated but not employed doctors.
Q: To me, it’s a big problem – how to handle independent physicians outside of integrated systems, who constitute 80% to 85% of American physicians. How do you address the problem of the independent physician who wants to become a functioning Medical Home?
A: That’s a big part of our White Paper. There are a variety of ways to do it. It becomes a major obligation of the payers. Money is a common denominator that indicates priorities for the primary care physician. The National Blue Cross Blue Shield Association and its constituents in the various states have different incentives to induce doctors to participate in medical home projects where doctors can show increased patient satisfaction and increased compliance with standards.
What it comes down to is: what kind of financial inducements are necessary to get these independent practitioners to participate? That initial funding is one of the major challenges we are addressing. There are 12 or 15 examples in states around the country where that has been successfully done – Medicaid in North Carolina, the Voice of Detroit Initiative, among them.
The idea is: providing coordinated and comprehensive care and to be measured by quality outcomes is to separate you from the counterproductive volume incentives is a key part of this. We think the financial incentives might include a blended compensation approach: fee-for-service, a patient panel management fee, and bonuses for patient-responsiveness – same day appointments and prompt email and phone answers.
IBM’s Multipronged Approach
Q: I notice in the New York Times that IBM is working with the UnitedHealth Group with IBM employees in Arizona in an experiment to prove the validity of the Medical Home concept and to win over the primary care doctors. That, I assume, is an example of IBM’s multipronged approach to solving problems.
A: I think that’s right. IBM likes to view itself as walking the talk as well as talking the talk. We provide, for example, in the Hudson Valley in New York, additional payments to payers who managed self-funded insurance programs to induce development of the medical home for IBM employees in that area.
Money is the common denominator and demonstrates the commitment. The financial upside is keeping people out of the emergency room, out of the hospital, and away from unnecessary and duplicate care.
Fear of More Bureaucracy
Q: One fear among practitioners are the bureaucratic barriers to qualifying for a medical home. Doctors wonder if the costs - psychological, financial, and time and energy involved - of surmounting those barriers will be offset by financial incentives, dollars per member per month, of whatever the payment mechanism is.
In the minds of practitioners, it’s vague what the incentives are. My advice is to clarify and simplify. Deep in the hippocampus is the fear of being entangled in another bureaucracy.
A: Sounds like good advice. Bureaucracy is the bane of practicing physicians.
Hypersensitive Doctors
Q: Doctors are hypersensitive to any health plan who they perceive to have designs to manipulate or influence them. My own view is that medical homes will work well in integrated systems like Geisinger. It’s the other 85% of physicians in independent practice.
I remember David Brailer, when he was appointed Czar of the national information system, saying the uptake of EMRs by doctors in small practices were the Elephant in the Room, I suspect that’s true here also. Brailer, by the way, resigned in frustration after two years on the job.
A: Do you have any thoughts about how we ought to address small practices?
Lack of Clarity – A Big Issue
Q; I think lack of clarity is a big issue, and that’s what your White Paper hopes to dispel. One clarifying point is decrease in cost, another is demonstrated patient satisfaction, yet another is what exactly is going to be the extra reimbursement.
It is best to keep your message simple and straightforward without preaching too much about meeting standards and improving quality. Your story has to be a continuing one, and you have to keep trumpeting your successes among similar practitioners. The Medical home is not a one-trick pony. It has to be continuing campaign to show positive benefits for patients and doctors alike.
The Physicians’ Foundation
I work closely with the Physicians Foundation, which represents about 500,000 practicing doctors in state and local medical societies. They have been issuing grants to physician organizations to induce them to adopt EMRs. It has been a disappointing effort because doctors in the field find installing EMRs is overwhelming in light of other practice demands.
The response has been negative and muted. For God’s sake, the doctors are saying, we’re already too busy coping with low reimbursements, crowded reception room,s and managed care hassles. This is just another straw that will break the camel’s back.
Doctors are groping for something that will make their lives easier, not harder. Any reassurance you can give them that medical homes will help simplify their lives and pay them more will be a winning argument. Doctors are looking for something that works, something puts them in closer contacts with their patients, something they can achieve under current working conditions.
Support of the Medical Home Concept
A: All major national primary care organizations support the medical home concept. I’m hearing there may be a difference between these organization’s official position and feelings at the grassroots.
Q: I think that’s true. Jeff Goldsmith, of Health Futures, described the chasm between those in the “adminisphere”, those in the executive suites, and doctors in the trenches, as a “chasm.” That may be overstating it, but a gap exists. It’s always tough to close the gap between top-down idealism and bottom-up realism.
Other Fears
A: How could we close the gap?
Q: It would help if you address the major fears – fears of bureaucratic entanglement, fears of inadequate payment, fears of radical change, and fears of when push comes to shove, whether the health plans are really going to ante up for medical homes.
Keep in mind deep-seated hostility exists between doctors and health plans, and the hostility may be bilateral. There’s a continuing war, the Hatfields versus the McCoy’s, going on between doctors and health plans, as evidenced most recently by UnitedHealth, Aetna, and Cigna settling in New York for underfunding of usual and customary out-of-network payments.
A; Do you think there’s any reaction among doctors against the idea of doctors in medical homes collaborating with patients to enact best practices?
Q: I do not think there is universal acceptance of the idea that universal evidence-based protocols, so-called cookbook medicine, will improve care. Nor do I think there is organized resistance. It’s a sensitive issue, and I doubt it will be resolved by “metrics” to assure quality.
A: Is it the fear that data-driven care will improve things, or the bureaucratic consequences of those measurements?
Q;: The latter. It’s the fear of doctors being reduced to mere medical technicians carrying out health plan and government mandates. It’s the fear that metrics are the benefit of the payers, rather than the benefit of doctors who bears the expense of implementing them.
A. It’s the fear of having arbitrary standards imposed upon them that don’t make a lot of sense.
Q; Speaking of sense, let me share with you a conversation I had with a seasoned family physician in North Carolina, who has run the gauntlet of solo practice, group practice, and staring a family practice program at a medical school in North Carolina.
What he said made sense to me. He said a lot of what’s going on is organizational overkill. He said the essence of a medical home is a personal family physician, trained in residency to coordinate and take care of his own panel of patients’ comprehensive needs, and an RN, who works closely with the doctor in the office to track their personal needs inside and outside the office.
It goes back, he said, to the doctor’s and the nurse’s training, and their confidence and skill in taking care and delivering common care, like pelvic exams , minor surgical procedures, injecting joints, or other procedures that can be done safely and proficiently by doctors and their nurses. This may be an ovesimplication but it ‘s worth thinking about.
A: I don’t think anyone would argue that a solo practitioner with attentive personal nurse would need to hire anybody outside the practice to coordinate care. On the other hand, there are environments where three or four physicians might need to hire an outside care coordinator.
Q: My North Carolina friend makes another distinction: he says the role of a solo rural doctor differs from that of an urban internist. As examples, he says the internists rarely does a pelvic and instead delegates that to gynecologist, and the internist rarely performs minor surgical procedures or colonoscopies.
Room for All Kinds of Practices
A: There has to be room for each kind of practices. The fact that the practices are different doesn’t mean the computer access to best practice information would be different. Also the Pitt County, North Carolina, rural doctor might have closer relationship with specialist consultants than the Park Avenue internist. Coordination and cooperation would be valuable for both of them.
Hospital-Based Primary Care Practices
Q: Another thing crops up in my mind. How does the medical home concept fit in with the primary care doctors whom the hospital has hired? Hospital acquisition of primary care doctors has become epidemic again, and hospitals are setting up networks of salaried primary practitioners who are encouraged to refer high-ticket items back to the hospital.
A: Your thoughts have been very helpful. They reflect the challenges of the current health system. One of the fundamental problems we’re addressing are unhappy patients and unhappy primary care doctors and escalating costs that do not stand up well against the rest of the world. Historically, private and federal bureaucracies have been used as punishment rather than as support for doctors. We’ve got to turn that around.
Not Like Europe
Q: I don’t think we’re going to become like Europe where a centralized bureaucracy can command compliance and induce doctors to manage medical homes. Ours is a more complicated situation. The hospital as an employer of squads of primary care doctors is one example. American corporations setting up worksite clinics, which they sometimes call Medical Homes, is another. By 2010 half of the Fortune companies will have worksite clinics, run by salaried primary care doctors using enbedded EMRs with best practice information.
I wish I had some sweeping advice to offer. I very much like the idea of a White Paper that summarizes the opportunities and problems of Medical Homes, which remain very much a work in progress.
A: We look upon the White Paper not as a cheerlead article or a sales brochure but a balanced and through review of all the issues along with ideas how to address the issue. Thank you for your help.
Doctor Edgar Mounib
Q: Dr. Mounib, tell me about yourself.
A: My background is in public health. I trained as an infectious disease epidemiologist. I have worked as an epidemiologist, in hospitals, and in health insurance. I went back to school and got a MBA. I was medical director at BC BS of Massachusetts for a number of years. I have helped with the NCQA accreditation process. I lead the health care portion for the Institute for Business Value, IBM’s think tank, one of world’s largest think tanks.
We produce fresh, compelling stories about what’s happening in the health care industry. We tell these stories from the business perspective. It’s important to tell these stories to policymakers and CFOs. It’s not an IT story, but a more of a holistic story.
With medical homes, we hope to make a compelling story of “Why now, and how?” We think the evidence is overwhelmingly positive for Medical Homes for care providers and for other stakeholders as well– hospitals, health plans, and others and why they should take part. As we look at medical home projects across the country, we ask ourselves – What has worked and what hasn’t?
Doctor Martin Kohn (the rest of this interview are exchanges between Dr. Kohn and myself)
Q: Dr. Kohn, your background?
A: I am an ER physician, an engineer, and I have a degree in health policy management. I have been with IBM for 3 ½ years.
Q: That’s a formidable collection of degrees.
A: Yes, I thought, I have all these credentials, and I ought to do something with them. IBM gave me the opportunity. I work in the clinical transformation area, where we help physicians and health care organizations get maximum benefit from health information technologies. I am also working in the patient-centered medical home practice area. And I do epidemiological research in Hawthorne, New York, on artificial intelligence and its possible role in clinical decision making.
Q: Sounds to me like you’re a Renaissance man for IBM.
A: Either that or an incurable dilettante.
Why Medical Homes Now
Q: Why now?
A: Our primary care system is under duress. The shortage of primary care doctors is growing, and it’s growing fast. There’s also a decrease in job satisfaction, as doctors encounter more administrative complexities. There’s a reimbursement factor as well. We all agree primary care is critical to any health care system, whether it be in Spain, New Zealand, Denmark or the U.S.
Those are the key reasons for Why Now? Further, team care is important. Medical Homes differ from Pay-for-Performance and other initiatives. We think medical homes are a true advance in correcting flaws in the U.S. health care system and setting those flaws right.
The evidence is overwhelming that where primary care is pervasive , outcomes improve, costs go down, and satisfaction reigns. We believe in a Medical Home structure that supports primary care and patient relationships, and information systems that foster that bond and address the flaws in American health care – redundancies, duplications, and lack of wellness and prevention.
Q: So your White Paper is designed to convince policy makers and others that the Medical Home’s time has come?
A; Yes, but we don’t want to make this White Paper a rah-rah type of article. We want to make it realistic by interviewing people like yourself to get feedback about what’s likely to work.
Where the Medical Home is Now in Physicians’ Minds
Q: Let me tell you where I think you are now. A recent Healthleadersmedia survey of physician leaders gave the following picture (figures rounded).
Strongly positive, 6%
Slightly positive, 26%
Neutral, 60%
Slightly negative, 4%
Strongly negative, 4%
So 92% of physician leaders are either neutral or positive. That’s a good start. I don’t think there’s any organized resistance to Medical Homes.
Skepticism
I sense, however, and I talk to doctors all over the country, some skepticism.
One of these skepticisms is: Is the Medical Home just a super- or exalted gatekeeper model posing under a different name? What is your answer to that fear?
A: It’s an understandable fear. The distinction we’re making is to distinguish from “gatekeeper” is “gateway.” This is not a process based on denying access, but a process based on best practice and evidence-based medicine to make sure the patient gets what the patient needs and to avoid that which is not valuable.
Managed care denied access, but not based on quality or evidence. The Medical Home is a cooperative effort between doctor and patient to get access to care the patient needs and to protect the patient from care the patient doesn’t need.
American Culture
Q: Another one of your problems, as I see it, is American culture itself. Our culture is based on the individual’s freedom of choice. And patients may fear that their access to specialists will be restricted. The average Medicare recipient with chronic diseases sees five or six specialists. You might call it the Baskin-Robbins phenomenon. Do you anticipate it will be hard to change this cultural obstacle?
A: I think that’s an issue. Americans are accustomed to running their own shows and not accepting any limitations on freedom of choice. On the other side of that are surveys that show that despite all this freedom there is a fair amount of dissatisfaction and that patients involved in strong, trusting relationships with primary care doctors are amongst the happiest and trust recommendations made by their primary care physicians.
We have conflicting desires on the part of a large segment of the American public. They don’t want to be denied care , but they want the help of someone they trust. Our hope is we can rely on that trust and build upon it by making sure the best information is available from the health care team and that the outcomes will be improved and unnecessary risks will be eliminated without creating the feeling you’re being denied.
The Medical Home can be presented as having more benefit than loss of freedom by sharing information with patient rather than seeing, for example, an endocrinologist, pulmonologist, cardiologist internists in a diabetic with heart failure and COPD.
The Power of a Personal Physician
Q: As you know, I have an ongoing dialogue with Dr. Paul Grundy, IBM’s Director of Health Care Transformation, and he continually impresses upon me that a personal relationship with a primary care doctor has tremendous, underappreciated power for the good. Paul invariably brings up the example of Denmark, where everybody, without exception, knows and trusts their personal primary care doctor – to benefit of Danish society and its health system, which is one of the most efficient and cost effective in the world.
So the medical home concept can be done – and it’s being done, in Denmark, Spain, and New Zealand and in organizations in the U.S. like the Camden Coalition in New Jersey, Community Care in North Carolina, Geisinger in Pennsylvania, a coalition in Detroit, and by Blue Cross Blue Shield of North Dakota. I know doctors in North Carolina who think the Medicaid experiment with a quasi-medical home there has succeeded. Why is that?
Medical Homes Work from Patient and Doctor Perspectives
A. I think the Medicaid folks there, who don’t have some of financial considerations of other patients, perceive that there is someone who cares, who is paying attention, and who is doing the things that they need. They no longer feel the need to head to the emergency department. They have someone to whom they can speak to in the middle of the night or the weekend. There are strong testimonials that this works from patients.
Q: It also works from the doctor’s perspective. One of the concerns of doctors is: Who manages the patient once they leave the office? Doctors are concerned financially and practically and personally: who do I have to hire to coordinate care and who much do I have to pay them?
In the case of North Carolina, doctors are paid are paid a modest fee to see a panel of Medicaid patients, and Social Services division of State Government tracks and supports these patients on the outside. It’s a problem with doctors. They ask: who am I going to hire to coordinate care for those outside problems between visits?
What’s the North Carolina story from the IBM point of view?
A: We point to organizations that have done that successfully, such as Geisinger. We talk in our White Paper about what incentives are necessary for caregivers to participate in this fully expanded process with coordinators and health care teams, and a lot of it is financial incentives. Geisinger, as an example, gives the primary care physicians $1800 a month if they agree to participate in the medical home process to meet reporting and quality standards and an additional amount of money for the infrastructure – to hire coordinators and to train them.
EMRs
Q: What about the electronic records?
A: That’s a big part of making the Medical Home work within an integrated system, making sure everybody is working with the same information.
Q: At Geisinger, are these primary care doctors salaried employees of Geisinger?
A: in a large fraction of their initial effort, they were. Now they are expanding their effort to include the affiliated but not employed doctors.
Q: To me, it’s a big problem – how to handle independent physicians outside of integrated systems, who constitute 80% to 85% of American physicians. How do you address the problem of the independent physician who wants to become a functioning Medical Home?
A: That’s a big part of our White Paper. There are a variety of ways to do it. It becomes a major obligation of the payers. Money is a common denominator that indicates priorities for the primary care physician. The National Blue Cross Blue Shield Association and its constituents in the various states have different incentives to induce doctors to participate in medical home projects where doctors can show increased patient satisfaction and increased compliance with standards.
What it comes down to is: what kind of financial inducements are necessary to get these independent practitioners to participate? That initial funding is one of the major challenges we are addressing. There are 12 or 15 examples in states around the country where that has been successfully done – Medicaid in North Carolina, the Voice of Detroit Initiative, among them.
The idea is: providing coordinated and comprehensive care and to be measured by quality outcomes is to separate you from the counterproductive volume incentives is a key part of this. We think the financial incentives might include a blended compensation approach: fee-for-service, a patient panel management fee, and bonuses for patient-responsiveness – same day appointments and prompt email and phone answers.
IBM’s Multipronged Approach
Q: I notice in the New York Times that IBM is working with the UnitedHealth Group with IBM employees in Arizona in an experiment to prove the validity of the Medical Home concept and to win over the primary care doctors. That, I assume, is an example of IBM’s multipronged approach to solving problems.
A: I think that’s right. IBM likes to view itself as walking the talk as well as talking the talk. We provide, for example, in the Hudson Valley in New York, additional payments to payers who managed self-funded insurance programs to induce development of the medical home for IBM employees in that area.
Money is the common denominator and demonstrates the commitment. The financial upside is keeping people out of the emergency room, out of the hospital, and away from unnecessary and duplicate care.
Fear of More Bureaucracy
Q: One fear among practitioners are the bureaucratic barriers to qualifying for a medical home. Doctors wonder if the costs - psychological, financial, and time and energy involved - of surmounting those barriers will be offset by financial incentives, dollars per member per month, of whatever the payment mechanism is.
In the minds of practitioners, it’s vague what the incentives are. My advice is to clarify and simplify. Deep in the hippocampus is the fear of being entangled in another bureaucracy.
A: Sounds like good advice. Bureaucracy is the bane of practicing physicians.
Hypersensitive Doctors
Q: Doctors are hypersensitive to any health plan who they perceive to have designs to manipulate or influence them. My own view is that medical homes will work well in integrated systems like Geisinger. It’s the other 85% of physicians in independent practice.
I remember David Brailer, when he was appointed Czar of the national information system, saying the uptake of EMRs by doctors in small practices were the Elephant in the Room, I suspect that’s true here also. Brailer, by the way, resigned in frustration after two years on the job.
A: Do you have any thoughts about how we ought to address small practices?
Lack of Clarity – A Big Issue
Q; I think lack of clarity is a big issue, and that’s what your White Paper hopes to dispel. One clarifying point is decrease in cost, another is demonstrated patient satisfaction, yet another is what exactly is going to be the extra reimbursement.
It is best to keep your message simple and straightforward without preaching too much about meeting standards and improving quality. Your story has to be a continuing one, and you have to keep trumpeting your successes among similar practitioners. The Medical home is not a one-trick pony. It has to be continuing campaign to show positive benefits for patients and doctors alike.
The Physicians’ Foundation
I work closely with the Physicians Foundation, which represents about 500,000 practicing doctors in state and local medical societies. They have been issuing grants to physician organizations to induce them to adopt EMRs. It has been a disappointing effort because doctors in the field find installing EMRs is overwhelming in light of other practice demands.
The response has been negative and muted. For God’s sake, the doctors are saying, we’re already too busy coping with low reimbursements, crowded reception room,s and managed care hassles. This is just another straw that will break the camel’s back.
Doctors are groping for something that will make their lives easier, not harder. Any reassurance you can give them that medical homes will help simplify their lives and pay them more will be a winning argument. Doctors are looking for something that works, something puts them in closer contacts with their patients, something they can achieve under current working conditions.
Support of the Medical Home Concept
A: All major national primary care organizations support the medical home concept. I’m hearing there may be a difference between these organization’s official position and feelings at the grassroots.
Q: I think that’s true. Jeff Goldsmith, of Health Futures, described the chasm between those in the “adminisphere”, those in the executive suites, and doctors in the trenches, as a “chasm.” That may be overstating it, but a gap exists. It’s always tough to close the gap between top-down idealism and bottom-up realism.
Other Fears
A: How could we close the gap?
Q: It would help if you address the major fears – fears of bureaucratic entanglement, fears of inadequate payment, fears of radical change, and fears of when push comes to shove, whether the health plans are really going to ante up for medical homes.
Keep in mind deep-seated hostility exists between doctors and health plans, and the hostility may be bilateral. There’s a continuing war, the Hatfields versus the McCoy’s, going on between doctors and health plans, as evidenced most recently by UnitedHealth, Aetna, and Cigna settling in New York for underfunding of usual and customary out-of-network payments.
A; Do you think there’s any reaction among doctors against the idea of doctors in medical homes collaborating with patients to enact best practices?
Q: I do not think there is universal acceptance of the idea that universal evidence-based protocols, so-called cookbook medicine, will improve care. Nor do I think there is organized resistance. It’s a sensitive issue, and I doubt it will be resolved by “metrics” to assure quality.
A: Is it the fear that data-driven care will improve things, or the bureaucratic consequences of those measurements?
Q;: The latter. It’s the fear of doctors being reduced to mere medical technicians carrying out health plan and government mandates. It’s the fear that metrics are the benefit of the payers, rather than the benefit of doctors who bears the expense of implementing them.
A. It’s the fear of having arbitrary standards imposed upon them that don’t make a lot of sense.
Q; Speaking of sense, let me share with you a conversation I had with a seasoned family physician in North Carolina, who has run the gauntlet of solo practice, group practice, and staring a family practice program at a medical school in North Carolina.
What he said made sense to me. He said a lot of what’s going on is organizational overkill. He said the essence of a medical home is a personal family physician, trained in residency to coordinate and take care of his own panel of patients’ comprehensive needs, and an RN, who works closely with the doctor in the office to track their personal needs inside and outside the office.
It goes back, he said, to the doctor’s and the nurse’s training, and their confidence and skill in taking care and delivering common care, like pelvic exams , minor surgical procedures, injecting joints, or other procedures that can be done safely and proficiently by doctors and their nurses. This may be an ovesimplication but it ‘s worth thinking about.
A: I don’t think anyone would argue that a solo practitioner with attentive personal nurse would need to hire anybody outside the practice to coordinate care. On the other hand, there are environments where three or four physicians might need to hire an outside care coordinator.
Q: My North Carolina friend makes another distinction: he says the role of a solo rural doctor differs from that of an urban internist. As examples, he says the internists rarely does a pelvic and instead delegates that to gynecologist, and the internist rarely performs minor surgical procedures or colonoscopies.
Room for All Kinds of Practices
A: There has to be room for each kind of practices. The fact that the practices are different doesn’t mean the computer access to best practice information would be different. Also the Pitt County, North Carolina, rural doctor might have closer relationship with specialist consultants than the Park Avenue internist. Coordination and cooperation would be valuable for both of them.
Hospital-Based Primary Care Practices
Q: Another thing crops up in my mind. How does the medical home concept fit in with the primary care doctors whom the hospital has hired? Hospital acquisition of primary care doctors has become epidemic again, and hospitals are setting up networks of salaried primary practitioners who are encouraged to refer high-ticket items back to the hospital.
A: Your thoughts have been very helpful. They reflect the challenges of the current health system. One of the fundamental problems we’re addressing are unhappy patients and unhappy primary care doctors and escalating costs that do not stand up well against the rest of the world. Historically, private and federal bureaucracies have been used as punishment rather than as support for doctors. We’ve got to turn that around.
Not Like Europe
Q: I don’t think we’re going to become like Europe where a centralized bureaucracy can command compliance and induce doctors to manage medical homes. Ours is a more complicated situation. The hospital as an employer of squads of primary care doctors is one example. American corporations setting up worksite clinics, which they sometimes call Medical Homes, is another. By 2010 half of the Fortune companies will have worksite clinics, run by salaried primary care doctors using enbedded EMRs with best practice information.
I wish I had some sweeping advice to offer. I very much like the idea of a White Paper that summarizes the opportunities and problems of Medical Homes, which remain very much a work in progress.
A: We look upon the White Paper not as a cheerlead article or a sales brochure but a balanced and through review of all the issues along with ideas how to address the issue. Thank you for your help.
Data, use and misuse - Use and Misuse of Medical Data
In God we trust, all others bring data.
W. Edwards Deming, Quality Improvement Pioneer
The false statistics trap can be quite damaging to the quest for knowledge. For example, in medical science, correcting a falsehood may take decades and cost lives.
Misuse of Statistics, Wikipedia
Malcolm Gladwell, staff writer for New Yorker, has written three best selling nonfiction best sellers - Tipping Point, Blink, and Outliers. These three books, in one way or another, are about data.
• In Tipping Point, Gladwell likens massive social change, like the sudden drop in crime in New York City, to social epidemics. Social epidemics are often triggered by small and seemingly insignificant events that reach a critical point that are counterintuitive and unpredictable by data alone.
• Blink is about rapid cognition, thinking that occurs in the blink of an eye, in which the mind reaches rapid conclusions based on gut feelings based on intuition and accumulated experience rather than on numerical data.
• Outliers suggests extraordinary success and accomplishment in individuals is a product of luck meeting opportunity and inbred qualities of some people to grasp their chance quickly and rise to the peak of society in a way that are outside of the realm of normal human experience that data could not have been predicted.
Two events of yesterday brought Gladwell to mind.
• First was an email from a Chicago software entrepreneur who asked if I had done any recent thinking about “data mining,” a field in which experts mine data to predict how doctors have or will perform or be influenced in a given state of circumstances. In the case of the Chicago entrepreneur he was “aggregating data” for an IPA so that IPA might gather more bonuses by complying with Pay-for-Performance criteria.
• Second was the arrival of the February 19 issue of the New England Journal of Medicine. From the cover, I could immediately tell, with a blink of the eye if you will. i.e., from a glance at the table of contents that this issue was about use and misuse of data.
The first article,” Prescribing Records and the First Amendment – New Hampshire’s Data Mining Statute” – was about a court opinion on sales reps misusing prescription data to influence how doctors prescribe.
A second article, "Commercial vs. Social Goals of Tracking What Doctors Do,“ “urges physicians and policymakers to better define the benefits to society of various uses of health information going forward.”
A third and four article, “CABG vs. Stenting : Clinical Implications of the SYNTAX Trial,“and “Quality of Life after Late Invasive Therapy of Occluded Arteries,” debates what data showing conservative medical therapy vs. more aggressive stent or bypass surgery means for physicians.
What this is all about, in my mind, is the merits of the use and misuse of individual clinical judgments versus aggregated data. Such arguments will form the basis for a proposed Comparative Research Outcome Institute, administired by a Federal Health Board. This Board and Institute are essential parts if a $1.1 billion reform initiative proposed by Congress as part of the stimulus package.
I respect data, but I believe in inspecting principles and motives governing data gathering and applications, their use and misuse, before reaching conclusions. Data is not impersonal. Data has human dimensions and reflects clinical decision-making in individual circumstances at the point of care, sometimes in urgent life-saving situations, Data, no matter how purposefully "aggregated," should not miss theis point. Data is a complement, not a substitute, for human judgment.
W. Edwards Deming, Quality Improvement Pioneer
The false statistics trap can be quite damaging to the quest for knowledge. For example, in medical science, correcting a falsehood may take decades and cost lives.
Misuse of Statistics, Wikipedia
Malcolm Gladwell, staff writer for New Yorker, has written three best selling nonfiction best sellers - Tipping Point, Blink, and Outliers. These three books, in one way or another, are about data.
• In Tipping Point, Gladwell likens massive social change, like the sudden drop in crime in New York City, to social epidemics. Social epidemics are often triggered by small and seemingly insignificant events that reach a critical point that are counterintuitive and unpredictable by data alone.
• Blink is about rapid cognition, thinking that occurs in the blink of an eye, in which the mind reaches rapid conclusions based on gut feelings based on intuition and accumulated experience rather than on numerical data.
• Outliers suggests extraordinary success and accomplishment in individuals is a product of luck meeting opportunity and inbred qualities of some people to grasp their chance quickly and rise to the peak of society in a way that are outside of the realm of normal human experience that data could not have been predicted.
Two events of yesterday brought Gladwell to mind.
• First was an email from a Chicago software entrepreneur who asked if I had done any recent thinking about “data mining,” a field in which experts mine data to predict how doctors have or will perform or be influenced in a given state of circumstances. In the case of the Chicago entrepreneur he was “aggregating data” for an IPA so that IPA might gather more bonuses by complying with Pay-for-Performance criteria.
• Second was the arrival of the February 19 issue of the New England Journal of Medicine. From the cover, I could immediately tell, with a blink of the eye if you will. i.e., from a glance at the table of contents that this issue was about use and misuse of data.
The first article,” Prescribing Records and the First Amendment – New Hampshire’s Data Mining Statute” – was about a court opinion on sales reps misusing prescription data to influence how doctors prescribe.
A second article, "Commercial vs. Social Goals of Tracking What Doctors Do,“ “urges physicians and policymakers to better define the benefits to society of various uses of health information going forward.”
A third and four article, “CABG vs. Stenting : Clinical Implications of the SYNTAX Trial,“and “Quality of Life after Late Invasive Therapy of Occluded Arteries,” debates what data showing conservative medical therapy vs. more aggressive stent or bypass surgery means for physicians.
What this is all about, in my mind, is the merits of the use and misuse of individual clinical judgments versus aggregated data. Such arguments will form the basis for a proposed Comparative Research Outcome Institute, administired by a Federal Health Board. This Board and Institute are essential parts if a $1.1 billion reform initiative proposed by Congress as part of the stimulus package.
I respect data, but I believe in inspecting principles and motives governing data gathering and applications, their use and misuse, before reaching conclusions. Data is not impersonal. Data has human dimensions and reflects clinical decision-making in individual circumstances at the point of care, sometimes in urgent life-saving situations, Data, no matter how purposefully "aggregated," should not miss theis point. Data is a complement, not a substitute, for human judgment.
Wednesday, February 18, 2009
Massachusetts, Universal coverage -Rats! Single-Payer Foiled Again!
From The Health Care Blog, February 18, 2009
Massachusetts doctors say single-payer or bust
By SARAH ARNQUIST
Massachusetts members of the Physicians for a National Health Program released a report today faulting the state's experiment with health reform for failing to achieve universal coverage, being too expensive and draining funds away from safety-net providers.
The doctors' punch line is that the reform has given private insurance companies more business and power without eliminating vast administrative waste. In fact, it says, the "Connector" in charge of administering the reform adds about 5 percent more in administrative expenses.
In summary, nothing less than single-payer national health reform will work, according to authors Drs. Rachel Nardin, David Himmelstein and Steffie Woolhandler, all professors at Harvard Medical School.
The report criticizes the Urban Institute's report that found only 2.6 percent of Massachusetts' residents were uninsured in mid-2008 because it failed to sufficiently reach non-English speakers in its survey.
The insurance products despite being skimpy, high-deductible plans, are not affordable, making the mandate that individuals buy them regressive, the report says. And moreover, it says, peoples' experiences have shown that insurance does not guarantee access to care. The Boston Globe chronicled the long wait for primary care last September.
A final criticism the 19-page report offers is that the reform is financially unsustainable, as it does "nothing about a major driver of high health care costs, the overuse of high-technology care such as CT scanners and surgeries, and the underdevelopment of primary care."
Last winter, Himmelstein spoke about health reform to students at Johns Hopkins School of Public Health. I asked him if single-payer advocates would work against any national reform effort that wasn't single-payer, as the single-payer camp did in California.
Himmelstein said that if the reform plan looked like the Massachusett's reform he probably would prefer the status quo. He believes the reform has made most vulnerable patients in Massachusetts worse off.
It looks like health reform is going to be a battle on the Left and Right.
Comments
Let me suggest that the headline is a little misleading (though it follows the press release that PNHP put out.)
"Massachusetts Doctors" are not calling for Single-Payer.
A small group of Massacusetts doctors who belong to Physicians for a National Health Plan (PNHP) are calling for single-payer.
PNHP has been dedicated to pushing for single-payer for years. This is not news.
Yet the way the press release (and this post) presents it, it seems that things have gotten so bad under Mass.health reform, that physicians are rising up, statewide, to call for single-payer.
As the Boston Globe has made clear, a major problem that is making Mass healthcare so expensive is NOT INSURERS but hospitals (specifically Partners) insisting on charging 30% more than other hospitals simply because they are a brand name. And because the public sees these hospitals as a "brand" INSURERS HAVE BEEN POWERLESS TO DO ANYTHING ABOUT IT.
(Frank Pasquale wrote a very good guest-post about this on HealthBeat http://www.healthbeatblog.com/2009/02/partners-in-power.html (He's a visiting law professor at Yale who specializes in healthlaw, and he has his facts straight. Maybe you could cross-post, just to balance things out?)
Let me be clear: I am not opposed to single-payer as a concept. But at this point in time it is very, very clear that it is Not Going to Happen. The majority of the public does not want to give up the insurance it has for Single-Payer.
So, at this point, the single-payer advocates are simply dividing progressive health care reformers at a time when we need to be united against the conservative opposition.
Giving the single-payers a platform on THCB by spreading the idea that Insurers are the problem making Mass care so expensive and that Mass Doctors are calling for single-payer seems to me--in my humble opinion--a mistake.
Mass health care is the most expensive care on earth because there are more hospital beds and specialists per capita than in any other place in the U.S. Jack Wennberg's Dartmouth research has made that clear (As has THCB). This is why per-capita health care spending is so high in Massachusetts--it is supply-driven. This has nothing to do with insurers.
Posted by: maggiemahar | Feb 18, 2009 12:32:14 PM
Harvard professors Nardin, Woolhandler and Himmelstein’s remorse about the U.S. not following the Canadian single payer model reminds me of the Robert Browning story of the “Pied Piper of Hamelin City.”
Great rats, small rats, lean rats, brawny rats,
Brown rats, black rats, gray rats, tawny rats,
Grave old plodders, gay young friskers,
Fathers, mothers, uncles, cousins,
Cocking tails and pricking whiskers,
Families by tens and dozens.
Brothers, sisters, brothers, wives –
Followed the Piper for their lives.Only in the case of U.S. health reform,
It’s single payer and multiple payer rats,
blue and red state rats,
Policy and practice rats,
Left-leaning and right-leaning rats,
liberal and conservative and connector rats,
private and government payer rats,
hospital and outpatient rats,
primary care and specialty rats,
Who is to be the Piper?
Who is to call the Tune?
Who will run the health care Saloon?
I thought Massachusetts had the Pilot Balloon,
But say single-payer loons, Massachusetts is not even Canadian Picayune.When.
When, oh when! will we have a post-partisan, one-for-one, all-for-one, completely level , free playing field for all in this individualistic nation? Some of us non-utopian rat hopes never.
Moral: Rats! Single Payer foiled again !
Massachusetts doctors say single-payer or bust
By SARAH ARNQUIST
Massachusetts members of the Physicians for a National Health Program released a report today faulting the state's experiment with health reform for failing to achieve universal coverage, being too expensive and draining funds away from safety-net providers.
The doctors' punch line is that the reform has given private insurance companies more business and power without eliminating vast administrative waste. In fact, it says, the "Connector" in charge of administering the reform adds about 5 percent more in administrative expenses.
In summary, nothing less than single-payer national health reform will work, according to authors Drs. Rachel Nardin, David Himmelstein and Steffie Woolhandler, all professors at Harvard Medical School.
The report criticizes the Urban Institute's report that found only 2.6 percent of Massachusetts' residents were uninsured in mid-2008 because it failed to sufficiently reach non-English speakers in its survey.
The insurance products despite being skimpy, high-deductible plans, are not affordable, making the mandate that individuals buy them regressive, the report says. And moreover, it says, peoples' experiences have shown that insurance does not guarantee access to care. The Boston Globe chronicled the long wait for primary care last September.
A final criticism the 19-page report offers is that the reform is financially unsustainable, as it does "nothing about a major driver of high health care costs, the overuse of high-technology care such as CT scanners and surgeries, and the underdevelopment of primary care."
Last winter, Himmelstein spoke about health reform to students at Johns Hopkins School of Public Health. I asked him if single-payer advocates would work against any national reform effort that wasn't single-payer, as the single-payer camp did in California.
Himmelstein said that if the reform plan looked like the Massachusett's reform he probably would prefer the status quo. He believes the reform has made most vulnerable patients in Massachusetts worse off.
It looks like health reform is going to be a battle on the Left and Right.
Comments
Let me suggest that the headline is a little misleading (though it follows the press release that PNHP put out.)
"Massachusetts Doctors" are not calling for Single-Payer.
A small group of Massacusetts doctors who belong to Physicians for a National Health Plan (PNHP) are calling for single-payer.
PNHP has been dedicated to pushing for single-payer for years. This is not news.
Yet the way the press release (and this post) presents it, it seems that things have gotten so bad under Mass.health reform, that physicians are rising up, statewide, to call for single-payer.
As the Boston Globe has made clear, a major problem that is making Mass healthcare so expensive is NOT INSURERS but hospitals (specifically Partners) insisting on charging 30% more than other hospitals simply because they are a brand name. And because the public sees these hospitals as a "brand" INSURERS HAVE BEEN POWERLESS TO DO ANYTHING ABOUT IT.
(Frank Pasquale wrote a very good guest-post about this on HealthBeat http://www.healthbeatblog.com/2009/02/partners-in-power.html (He's a visiting law professor at Yale who specializes in healthlaw, and he has his facts straight. Maybe you could cross-post, just to balance things out?)
Let me be clear: I am not opposed to single-payer as a concept. But at this point in time it is very, very clear that it is Not Going to Happen. The majority of the public does not want to give up the insurance it has for Single-Payer.
So, at this point, the single-payer advocates are simply dividing progressive health care reformers at a time when we need to be united against the conservative opposition.
Giving the single-payers a platform on THCB by spreading the idea that Insurers are the problem making Mass care so expensive and that Mass Doctors are calling for single-payer seems to me--in my humble opinion--a mistake.
Mass health care is the most expensive care on earth because there are more hospital beds and specialists per capita than in any other place in the U.S. Jack Wennberg's Dartmouth research has made that clear (As has THCB). This is why per-capita health care spending is so high in Massachusetts--it is supply-driven. This has nothing to do with insurers.
Posted by: maggiemahar | Feb 18, 2009 12:32:14 PM
Harvard professors Nardin, Woolhandler and Himmelstein’s remorse about the U.S. not following the Canadian single payer model reminds me of the Robert Browning story of the “Pied Piper of Hamelin City.”
Great rats, small rats, lean rats, brawny rats,
Brown rats, black rats, gray rats, tawny rats,
Grave old plodders, gay young friskers,
Fathers, mothers, uncles, cousins,
Cocking tails and pricking whiskers,
Families by tens and dozens.
Brothers, sisters, brothers, wives –
Followed the Piper for their lives.Only in the case of U.S. health reform,
It’s single payer and multiple payer rats,
blue and red state rats,
Policy and practice rats,
Left-leaning and right-leaning rats,
liberal and conservative and connector rats,
private and government payer rats,
hospital and outpatient rats,
primary care and specialty rats,
Who is to be the Piper?
Who is to call the Tune?
Who will run the health care Saloon?
I thought Massachusetts had the Pilot Balloon,
But say single-payer loons, Massachusetts is not even Canadian Picayune.When.
When, oh when! will we have a post-partisan, one-for-one, all-for-one, completely level , free playing field for all in this individualistic nation? Some of us non-utopian rat hopes never.
Moral: Rats! Single Payer foiled again !
Personal Physician, Paul Grundy - The Importance of Personal Primary Care-Patient Relationships
Prelude: What follows is the text of a speech Dr. Paul Grundy, Director of Healthcare Transformation at IBM, is giving as he crusades around the country, speaking to legislators, governors, policy makers, physicians and anyone who will listen about the importance of personal primary care physicians for patients, as embodied in the concept of the medical home.
Last year, Dad died in Houston, Texas, at age 87 of congestive failure with complications. He had multiple specialists but no personal primary care physicians. Dad had no personal doctor to whom I could turn to help me and my family understand the totality of what was going on.
As Director of Healthcare Transformation at IBM, Dad’s death brought home to me why I am fighting so hard to change the care we buy for our employees and dependents. That change is the patient centered medical home. The medical home focuses on providing better and more comprehensive primary care. For our employees, this case will serve as a “fence” to reduce the “ambulance fleet” of expensive specialists at the bottom of the expense cliff. Present care costs are unsustainable at IBM and the U.S. as a whole.
In a February 6 New York Times piece “UnitedHeath and IBM Test Health Care Plan “, I called the present care IBM buys as “garbage.” Perhaps “garbage” overstated the case. But the lack of coordination in my father’s case frustrated me.
We have to make healthcare, institutions, and industries smarter. Not just at moments of crisis like we see today, but integrated into our day-to-day reality. Our current healthcare processes are not simply not smart enough to be sustainable.
Think about how many of the medications we prescribe that go untaken or interact badly with other medications anoth er doctorgives you. We lose tens of thousands of lives every year because we do not have the data and systems in place to address the simple issue of medication.
Here’s where technology can help. A computer can provide connection and memory for a doctor’s brain. Just as an x-ray allows the doctor’s vision to expand, it’s health IT that allows his mind to expand and be connected in real time to thousands of other minds and to real data thatmakes a difference.
In truth, the health care system isn’t a “system” at all. It’s antiquated. It doesn’t link diagnosis, drug discovery, healthcare deliverers, insurers, employers, and employrs. Meanwhile, personal expenditures on health now push more than 100 million people worldwide below the poverty line each year.
Smart healthcare can lower therapy costs as much as 90 percent. That’s what ActiveCare Network, based in Columbia, South Carolina, is doing for more than two million patients in 38 states. ActiveCare monitors delivery of people’s injections and vaccines so they can lead active and independent lives.
The single most important part of healing is=2 0the patient-personal physician RELATIONSHIP. It’s healthcare’s backbone. Smart healthcare supports that relationship by improving communication, allows expanded communication with a patient, and empowers the doctor.
Personal doctors tend not forget to ask an important question, be it about the patient’s personal life or a key fact to the healing process. Smart healthcare can send little reminders of care compassion and express a doctor’s investment in a person who needs a healer and healing.
A smart healthcare system can help with compassion by reminding the patient of important things that would otherwise be missed in a busy doctors life like e-reminders of a visit, or that mammogram that was forgotten to be completed.
Smart healthcare makes sure that the right drug is used on the right patient at the right time, taking into account the person’s genetic makeup other medications they are taking. It ensures authenticity of pharmaceuticals and security of patient information. It changes everything from how healthcare organizations do business to how they enable their employees to collaborate and innovate.
In the U.S., we at IBM estimate that smart healthcare will generate lots of new jobs in companies small and large, but most will=2 0be small. In a recent conversation with the Obama administration, IBM’s CEO Sam Palmisano estimated that widespread adoption of personal health records will create 212,000 jobs.
I’m not just referring to large enterprises, but also to smaller and mid-sized companies— engines of economic growth. When we think about systems like healthcare supply chains, healthcare delivery, care management, prevention, we’re really talking how hundreds, even thousands of companies, most of them are small, interact.
In the Mid Hudson valley here in New York, we’re already on the path to deliver integrated health IT to all doctors and hospitals. This has created small companies like Med Allies in Fishkill, whose 40 employees work with doctors’ offices to get them up and running with health IT and keep them connected in a powerful and useful way for the patient. In North Dakota, there is a small company called MDdatacore that provides the register for all the doctors in North Dakota. It now employs 42 folks.
Smart healthcare is giving rise to a new model for primary care, the “medical home.” About three years ago, the people at IBM started talking about all the things that large employers in the U.S. have done to reduce costs and improve quality. We realized we were failing to address a fundamental issue: primary care and the doctor patient relationship.
Shortly after that, I helped found the Patient-Centered Primary Care Collaborative (link PCPCC), a coalition of large employers, consumer organizations and medical providers.
We developed a healthcare model based on the premise that more holistic. Primary care saves money by cutting the incidence of major health problems like heart disease or diabetes later in life. It’s a back-to-the-future approach to the family doctor, enabled by IT.
In the medical home model, a primary care physician acts as a healthcare coach – leading a team that manages a patient’s wellness, preventative and chronic care needs. The doctor spends more time with the patient in person, is available for consultations via email or phone, and has expanded hours and coordinates across an entire care team – nurses, specialists,
pharmacists and hospitals.
A diabetic could give daily blood test readings by phone, email or remote monitoring device and get instructions the moment she needs them, rather than wait for an appointment. Her care team would have a holistic health plan that focuses on diet and exercise as well as monitoring glucose levels.
This is already happening outside the U.S. In the U.K., they have adopted a similar “family doctor” model that makes healthcare more accessible and effective – and makes patients happier.
Electronic health records – central in the U.S. healthcare stimulus bill – are pivotal to making medical homes work. EHRs are the single source of information that can be shared across a network of providers and specialists. There are other IT tools that can help patients and doctors alike – online portals to make appointme nts or look up lab results, or e-prescribing.
Health analytics can look across a patient’s history and pick up trends that provide insight into the treatment of a disease. The list goes on. But it is important and cannot be stressed enough. That technology supports the care and compassion in the doctor patient relationship but will not replace that or even get in the way of it.
Over the next couple of years, there will be winners, and there will be losers. And though it may not be easy to see now, I believe we will see new leaders emerge who win not by surviving the storm, but by changing the game.
The importance of this moment, I believe, is that the key precondition for real change now exists: People want it.
Last year, Dad died in Houston, Texas, at age 87 of congestive failure with complications. He had multiple specialists but no personal primary care physicians. Dad had no personal doctor to whom I could turn to help me and my family understand the totality of what was going on.
As Director of Healthcare Transformation at IBM, Dad’s death brought home to me why I am fighting so hard to change the care we buy for our employees and dependents. That change is the patient centered medical home. The medical home focuses on providing better and more comprehensive primary care. For our employees, this case will serve as a “fence” to reduce the “ambulance fleet” of expensive specialists at the bottom of the expense cliff. Present care costs are unsustainable at IBM and the U.S. as a whole.
In a February 6 New York Times piece “UnitedHeath and IBM Test Health Care Plan “, I called the present care IBM buys as “garbage.” Perhaps “garbage” overstated the case. But the lack of coordination in my father’s case frustrated me.
We have to make healthcare, institutions, and industries smarter. Not just at moments of crisis like we see today, but integrated into our day-to-day reality. Our current healthcare processes are not simply not smart enough to be sustainable.
Think about how many of the medications we prescribe that go untaken or interact badly with other medications anoth er doctorgives you. We lose tens of thousands of lives every year because we do not have the data and systems in place to address the simple issue of medication.
Here’s where technology can help. A computer can provide connection and memory for a doctor’s brain. Just as an x-ray allows the doctor’s vision to expand, it’s health IT that allows his mind to expand and be connected in real time to thousands of other minds and to real data thatmakes a difference.
In truth, the health care system isn’t a “system” at all. It’s antiquated. It doesn’t link diagnosis, drug discovery, healthcare deliverers, insurers, employers, and employrs. Meanwhile, personal expenditures on health now push more than 100 million people worldwide below the poverty line each year.
Smart healthcare can lower therapy costs as much as 90 percent. That’s what ActiveCare Network, based in Columbia, South Carolina, is doing for more than two million patients in 38 states. ActiveCare monitors delivery of people’s injections and vaccines so they can lead active and independent lives.
The single most important part of healing is=2 0the patient-personal physician RELATIONSHIP. It’s healthcare’s backbone. Smart healthcare supports that relationship by improving communication, allows expanded communication with a patient, and empowers the doctor.
Personal doctors tend not forget to ask an important question, be it about the patient’s personal life or a key fact to the healing process. Smart healthcare can send little reminders of care compassion and express a doctor’s investment in a person who needs a healer and healing.
A smart healthcare system can help with compassion by reminding the patient of important things that would otherwise be missed in a busy doctors life like e-reminders of a visit, or that mammogram that was forgotten to be completed.
Smart healthcare makes sure that the right drug is used on the right patient at the right time, taking into account the person’s genetic makeup other medications they are taking. It ensures authenticity of pharmaceuticals and security of patient information. It changes everything from how healthcare organizations do business to how they enable their employees to collaborate and innovate.
In the U.S., we at IBM estimate that smart healthcare will generate lots of new jobs in companies small and large, but most will=2 0be small. In a recent conversation with the Obama administration, IBM’s CEO Sam Palmisano estimated that widespread adoption of personal health records will create 212,000 jobs.
I’m not just referring to large enterprises, but also to smaller and mid-sized companies— engines of economic growth. When we think about systems like healthcare supply chains, healthcare delivery, care management, prevention, we’re really talking how hundreds, even thousands of companies, most of them are small, interact.
In the Mid Hudson valley here in New York, we’re already on the path to deliver integrated health IT to all doctors and hospitals. This has created small companies like Med Allies in Fishkill, whose 40 employees work with doctors’ offices to get them up and running with health IT and keep them connected in a powerful and useful way for the patient. In North Dakota, there is a small company called MDdatacore that provides the register for all the doctors in North Dakota. It now employs 42 folks.
Smart healthcare is giving rise to a new model for primary care, the “medical home.” About three years ago, the people at IBM started talking about all the things that large employers in the U.S. have done to reduce costs and improve quality. We realized we were failing to address a fundamental issue: primary care and the doctor patient relationship.
Shortly after that, I helped found the Patient-Centered Primary Care Collaborative (link PCPCC), a coalition of large employers, consumer organizations and medical providers.
We developed a healthcare model based on the premise that more holistic. Primary care saves money by cutting the incidence of major health problems like heart disease or diabetes later in life. It’s a back-to-the-future approach to the family doctor, enabled by IT.
In the medical home model, a primary care physician acts as a healthcare coach – leading a team that manages a patient’s wellness, preventative and chronic care needs. The doctor spends more time with the patient in person, is available for consultations via email or phone, and has expanded hours and coordinates across an entire care team – nurses, specialists,
pharmacists and hospitals.
A diabetic could give daily blood test readings by phone, email or remote monitoring device and get instructions the moment she needs them, rather than wait for an appointment. Her care team would have a holistic health plan that focuses on diet and exercise as well as monitoring glucose levels.
This is already happening outside the U.S. In the U.K., they have adopted a similar “family doctor” model that makes healthcare more accessible and effective – and makes patients happier.
Electronic health records – central in the U.S. healthcare stimulus bill – are pivotal to making medical homes work. EHRs are the single source of information that can be shared across a network of providers and specialists. There are other IT tools that can help patients and doctors alike – online portals to make appointme nts or look up lab results, or e-prescribing.
Health analytics can look across a patient’s history and pick up trends that provide insight into the treatment of a disease. The list goes on. But it is important and cannot be stressed enough. That technology supports the care and compassion in the doctor patient relationship but will not replace that or even get in the way of it.
Over the next couple of years, there will be winners, and there will be losers. And though it may not be easy to see now, I believe we will see new leaders emerge who win not by surviving the storm, but by changing the game.
The importance of this moment, I believe, is that the key precondition for real change now exists: People want it.
Tuesday, February 17, 2009
Alternative theapy - The Greatest Slogan and Marketing Innovation In History
“Have you been taking your vitamins lately?"
Slogan attrubuted to Henry Sell
In the late 1930s, Henry Blackman Sell (1889-1974) – a Chicago-based glove salesman, president of his own marketing agency, CEO of a food processing company, inventor of Sell’s Liver Pate, and at various times editor of Harper’s Bazaar and Town and Country – commercialized marketing of vitamins on a massive scale with the slogan, “Have you been taking your vitamins lately?” His name “Sell” matched his marketing genius perfectly.
It was a stroke of marketing genius. After all, even though vitamins might not help your health, they can’t hurt and they might just help. They are cheap and don’t require a prescription. Besides, you can use them to treat yourself. They are the ultimate in feel-good care.
In any event, ever since I read a biography of Henry Sell, “A Talent for Living: The Story of Henry Sell, An American Original (1970)," I have suspected that vitamins are a product of salesmanship rather than an adjunct to good health.
A February 16 New York Times article, "Vitamin Pills: A False Hope?” confirms my suspicions.
It reports several recent high quality studies failed to show extra vitamins in pill form did not prevent disease or prolong life. Studies of 161,000 older women and 15, 000 of male physicians showed no differences in rates of cancer or heart disease.
But will these studies deter buying or consuming of extra vitamins in pills, foods, or various dietary supplements? I have to stop now. It’s time for daily multivit. My wife reminds me I haven’t been taking them lately.
Have you taken your vitamins lately?
No? Don't be a Johnny-come-lately.
Seize the bottle by the cap.
Unscrew it like a good chap.
The vitamin maker will appreciate it greatly.
Slogan attrubuted to Henry Sell
In the late 1930s, Henry Blackman Sell (1889-1974) – a Chicago-based glove salesman, president of his own marketing agency, CEO of a food processing company, inventor of Sell’s Liver Pate, and at various times editor of Harper’s Bazaar and Town and Country – commercialized marketing of vitamins on a massive scale with the slogan, “Have you been taking your vitamins lately?” His name “Sell” matched his marketing genius perfectly.
It was a stroke of marketing genius. After all, even though vitamins might not help your health, they can’t hurt and they might just help. They are cheap and don’t require a prescription. Besides, you can use them to treat yourself. They are the ultimate in feel-good care.
In any event, ever since I read a biography of Henry Sell, “A Talent for Living: The Story of Henry Sell, An American Original (1970)," I have suspected that vitamins are a product of salesmanship rather than an adjunct to good health.
A February 16 New York Times article, "Vitamin Pills: A False Hope?” confirms my suspicions.
It reports several recent high quality studies failed to show extra vitamins in pill form did not prevent disease or prolong life. Studies of 161,000 older women and 15, 000 of male physicians showed no differences in rates of cancer or heart disease.
But will these studies deter buying or consuming of extra vitamins in pills, foods, or various dietary supplements? I have to stop now. It’s time for daily multivit. My wife reminds me I haven’t been taking them lately.
Have you taken your vitamins lately?
No? Don't be a Johnny-come-lately.
Seize the bottle by the cap.
Unscrew it like a good chap.
The vitamin maker will appreciate it greatly.
Saturday, February 14, 2009
Interview, HSAs, Health Care Agent - Interview with Greg Datillo, Underwriter of the Year In Minnsota and Co-author of Why Health Care Costs So Much
Prelude: The time is long overdue to consider the role in health reform of agents, brokers, and third party administrators who grease the sleds and seek to make health care work from the bottom up. These agents, after all, sell the health care policies that most employed Americans use, and at their point of view is vital if we are to make health care work at the local employer level. Employers supply nearly half of health benefits for U.S. citizens.
Backdrop
Q: What is your official title?
A; Owner of Datillo Consulting and ClientServe.
Q: And what is the nature of that company?
A: We do employee benefits for employers, and we administer those benefits. I prefer to be called an agent, since the insurance company is the underwriter.
Q; Give us a little background of your education, where you live, and how you came to be who you are.
A: I have a family of three adult children, and the same spouse for 30 years who made me who I am. I went to the Univesity of Wisconsin Stout, and I earned my CFL (Certified Financial Planner) degree in 1986, and in 1992 I earned from the Wharton School of Business a degree as a Certified Employee Specialist and became a Fellow a year later, and I’ve been a Fellow ever since.
Q: What do you do in the course of your day?
A; My job is to insure the uninsured. Find people who don’t have insurance and make sure they get insurance. And I also want to make sure the doctors get re-imbursed at the private market rate rather than the low government-subsidized rate.
Point of View and Mindset
Q; You and your close associate, Dave Racer, a publisher and writer, recently published a book Why Health Care Costs so Much. The subtitle is The Solution : Consumers. From this I gather you favor a market-driven rather an government-driven solution. Would that be fair?
A: No doubt, no doubt.
Q: With that mindset, I’m sure you’re in synch with consumer-driven care, as manifested by health savings accounts linked to high deductible plans.
A; Yes, because it gets consumers engaged in communication with physicians. And it keeps physicians on their toes in regard to different options. To get from point A to point B, there is usually more than one way to get there. If consumers are given options, and picks their option, the chances for success are much greater because they think of it as their idea.
Presentations
Q. When you go into give a presentation, to whom do you present? Who is in the room – the employer and the employee?
A: Both.
Q: What do you tell them?
A: I give them a dual option. They can pick the traditional option, an HMO or PPOs, or they can consider high deductible plan , usually linked to a health savings account. It’s essential for the employees to feel they are part of the decision-making. Take it or leave it doesn’t work. It’s up to you – which way do you want to go is much better psychologically. America is a land that covets freedom of choice, and we give them a choice.
Track Record
Q: When you go out to sell an HSA with a high deductible, what’s your track record? And when they have it a year, do they return to it.
A; Right now, we have something between 120 and 130 employers with high deductible health plans. That’s out of 180, and we are now in our fifth year. And not one employers has ever gone back to the old traditional model When you offer it to an employer with less than 50 employees, after three years, nobody has ever returned to the old HMO or PPO.
The Right Way and The Wrong Way
Q; What is your secret?
A: There is right way of setting up these plans, and there’s a wrong way.
Q: What is the right way?
A; The right way is to tell the employee we don’t care if you take the traditional plan or the new plan. The payroll reduction to pay for the premium is exactly the same. Consumers can buy a $20 office visit plan with an 80/20 hospital component, or they can buy a $2500 deductible with 100% after that. Consumers invariably ask: Why would I buy a $2500 deductible plan? The reason is your employer is going to give you between $1000 and $1500 in your HSA account.
Q; Is it customary for the employer to chip for the deductible?
A: In all of our plans, yes. That’s the right way. The wrong way of doing it is to tell the employees you can take the HMO or PPO, and it’s going to cost you $50 a paycheck. Or you can take this high deductible , and it will only cost you $10 a paycheck. That’s wrong because the employee never puts $40 into their HSA.
We tell the employer to stay neutral but to put back the $40 into the employee’s HSA. If you pay the insurance company $100,000 for an HMO or PPO plan, you will save $40,000 with a high deductible. But instead of pocketing the $40,000, give it back to the employee in their HSA.
Reaction of Employer
Q: And what has been the reaction of the employer?
A: Usually when we start these things, the employer is neutral between the traditional and HSA plan. Let’s say the HMO costs $100,000, and the HSA plan costs $60,000. The employer is going to charge $20,000 to this employees. So if the premium is $100,000, and the employee gives $20,000 out of payroll reductions to the employer, the net cost to the employer is $80,000.
Now if the high deductible health plan cost $60,000, and the employee is still going to pay the same amount, the $20,000, the net cost to the employer is only $40,000, compared to the $80,000, we tell the employer to give $400,000 back to the employee so the employee see it as a pay raise instead of a pay decrease. So we tell the employer, don’t get greedy. Instead of paying the traditional plan for overutilization, give the money to the employee and let them spend it.
The Other Side of the Coin
Q: Let’s look at the other side of the coin – the critics’ side. The critics say what’s good for the employer is bad for the employee. It’s a win-lose because the employer is saving money, and the employee is having to spend hard-earned dollars out of pocket. But you say it’s a win-win.
A: It is a win-win because the employees determine what they want to do. If the employer does it the right way, the employee understands the high deductible health plan with the employee giving them cash in their health savings account.
It’s a much better solution because the employee now has control of the money and now they start asking what things cost. The employer understands now he is turning employees into consumers instead of entitled employees who think there’s an endless amount of health care that somebody else should pay for it.
You have to shift the employee mindset, and you do it with dollars. The whole mindset changes overnight. Employees will suddenly say when shopping for care. Wow! I didn’t know it costs this much. Wow! They start buying generics rather than brand names.
Q: Are employees willing consumers? Do they resent spending their own money?
A: No, because they see it is the employer’s money because the employer is putting money into their account. With the HSA plan, you’re better off because the maximum out of pocket is only $1250 because they employer is putting in the other $1250 – even if your operation or illness episode costs $50,000, or even $100,000.
HSA Critics
Q: Now let’s go into the more rarified, ethereal world of the policy wonk critics.
Let me sum up what they’re saying. I just read this in a recent Health Affairs article by Paul Ginzberg of the Center for Studying Health System Change and Jamie Robinson, a Professor of Health Policy at the University of California in Berkley. They say health savings accounts with high deductibles favor the healthy and the wealthy, are inadequate for those with chronic disease, cause ill patients to quickly wipe out their savings accounts, delay treatment because HSA-holders are reluctant to part with their own cash, motivate patients to forego preventive tests, and because of these factors and employee skepticism, the growth of HSAs has been “anemic.” What do you think about these policy elites? Are they living in a different world?
A: Look, Minnesota, a liberal state, has more HSAs per capita than any other state. Furthermore, because of reduced hospitalizations, nurses are being laid off. I think this is because people are becoming much better consumers. They are not rushing into the hospital like they did when they thought care was free. Further, Minnesotans are still in the top two in life expectancy. Minnesotans are now going to WalMarts and Target to get $4 prescriptions People who are criticizing HSAs may be influenced by those who have been price gouging consumers.
Q; I doubt that, and I don’t think you we can attribute that long life expectancy to HSAs, which are only five years old. Life expectancy is related to the culture, genes, and lifetime of behavior. It’s more likely critics deeply believe in health care as in entitlement. Other than getting rid of entitlement syndrome, what are you arguing?
Asking What Things Costs is a Powerful Antidote to Bringing Down Costs
A: All we’re asking is for people to ask: How much do things cost? You can’t judge quality until you know the cost. That’s what starts useful conversations with doctors when they ask: How much does this cost?
Q: For consumers, it’s not only what it costs in general. It’s what does it cost me?
A: Right, and asking those questions is how you create affordable health insurance. That’s how I would answer the critics – HSAs create affordable insurance by creating cost awareness among those spending their own money and the money of their employer . I have yet to see an employer or employees turn back the clock to traditional plans once they understand how fast the cost clock is ticking.
Chronic Disease
Q: Let’s take the example of diabetics. There are 20 million diabetics, and they spend three or four times more than non-diabetics. Do diabetics complain about HSAs?
A; I can tell you this. At our first meeting, we get 30% to 50% to sign up for the high deductible plan. The second year I say : Everybody who has an HSA please raise their hand and tell me if you are having trouble paying claims?
Seldom do I hear diabetics or others with chronic disease complain. With HSA Bank and other HSA companies, filing claims is all electronic. It’s easy. There’s no paper, no filing claims, no fuss.
I ask non-HSA workers to talk to HSA-holders, and before you know it, by the third year we have between 90% and 100% participating in the HSAs. I agree with the critics if HSAs are set up the wrong way, with employers not giving choice, or not contributing to HSAs for their employees, or not clearly explaining the options. But if you do it the right way, no one complains, not even those with chronic disease.
Little Appreciated HSA Realities
Q: Two things that’s generally not known or publicized, one, that is some 25% to 30% who sign up for HSAs were previously uninsured, that in five years, HSA plans and their variations – HRAs and cafeteria plans – have captured 20% of the employer market. Does that mirror your experience?
A: Yes, in diverse markets, too – Minnesota is number one, Louisiana is number two, and Washington, D.C. is number three. When people realize they are accumulating money by being cost-efficient, it catches on even faster. I did a group meeting last week, and the aggregate account balance was $4400 per employee in a blue collar manufacturing company in which the employer threw in ½ of the deductible.
I have yet to any single employer go back on the HSA to an HMO or PPO – not one. And that’s out of 120 to 130 employers. I have about 60 other employers with traditional plans.
Most of those previously uninsured come from the small market with 2 or 3 employees or among individuals , who suddenly realize they can afford the premiums. They quickly learn they can also now pay for their dental and eyeglasses thorough HSAs and a pre-tax basis.
The Government’s Role
Q; We’re now in the high season for health reform. As you know, the Obama administration has high hopes of transforming and reforming health care from on high. Is expanding the tentacles of government through passing SCHIP, shifting the unemployed and others to Medicaid, and having mandatory EMRs and a federal comparative effectiveness institute the way to go?
A; This massive stimulus package of $789 billion is a signal the administration wants to go to a European or Canadian type delivery system. With a stimulus package of nearly a trillion dollars and other programs costing an aggregate of more than $1 trillion, I simply don’t think there will be enough money left over for “sweeping reform.” Instead, I foresee massive micromanaging with consolidation of hospitals and other systems into monopolies.
Q; I understand your book Why Health Care Costs So Much, which emphasizes the role of the consumer, is just the first of a series of six books, with those to follow being on roles of Government, employees, health care provides, insurance companies, and the faith community. I will look forward to reading those. Thank you for your time.
Backdrop
Q: What is your official title?
A; Owner of Datillo Consulting and ClientServe.
Q: And what is the nature of that company?
A: We do employee benefits for employers, and we administer those benefits. I prefer to be called an agent, since the insurance company is the underwriter.
Q; Give us a little background of your education, where you live, and how you came to be who you are.
A: I have a family of three adult children, and the same spouse for 30 years who made me who I am. I went to the Univesity of Wisconsin Stout, and I earned my CFL (Certified Financial Planner) degree in 1986, and in 1992 I earned from the Wharton School of Business a degree as a Certified Employee Specialist and became a Fellow a year later, and I’ve been a Fellow ever since.
Q: What do you do in the course of your day?
A; My job is to insure the uninsured. Find people who don’t have insurance and make sure they get insurance. And I also want to make sure the doctors get re-imbursed at the private market rate rather than the low government-subsidized rate.
Point of View and Mindset
Q; You and your close associate, Dave Racer, a publisher and writer, recently published a book Why Health Care Costs so Much. The subtitle is The Solution : Consumers. From this I gather you favor a market-driven rather an government-driven solution. Would that be fair?
A: No doubt, no doubt.
Q: With that mindset, I’m sure you’re in synch with consumer-driven care, as manifested by health savings accounts linked to high deductible plans.
A; Yes, because it gets consumers engaged in communication with physicians. And it keeps physicians on their toes in regard to different options. To get from point A to point B, there is usually more than one way to get there. If consumers are given options, and picks their option, the chances for success are much greater because they think of it as their idea.
Presentations
Q. When you go into give a presentation, to whom do you present? Who is in the room – the employer and the employee?
A: Both.
Q: What do you tell them?
A: I give them a dual option. They can pick the traditional option, an HMO or PPOs, or they can consider high deductible plan , usually linked to a health savings account. It’s essential for the employees to feel they are part of the decision-making. Take it or leave it doesn’t work. It’s up to you – which way do you want to go is much better psychologically. America is a land that covets freedom of choice, and we give them a choice.
Track Record
Q: When you go out to sell an HSA with a high deductible, what’s your track record? And when they have it a year, do they return to it.
A; Right now, we have something between 120 and 130 employers with high deductible health plans. That’s out of 180, and we are now in our fifth year. And not one employers has ever gone back to the old traditional model When you offer it to an employer with less than 50 employees, after three years, nobody has ever returned to the old HMO or PPO.
The Right Way and The Wrong Way
Q; What is your secret?
A: There is right way of setting up these plans, and there’s a wrong way.
Q: What is the right way?
A; The right way is to tell the employee we don’t care if you take the traditional plan or the new plan. The payroll reduction to pay for the premium is exactly the same. Consumers can buy a $20 office visit plan with an 80/20 hospital component, or they can buy a $2500 deductible with 100% after that. Consumers invariably ask: Why would I buy a $2500 deductible plan? The reason is your employer is going to give you between $1000 and $1500 in your HSA account.
Q; Is it customary for the employer to chip for the deductible?
A: In all of our plans, yes. That’s the right way. The wrong way of doing it is to tell the employees you can take the HMO or PPO, and it’s going to cost you $50 a paycheck. Or you can take this high deductible , and it will only cost you $10 a paycheck. That’s wrong because the employee never puts $40 into their HSA.
We tell the employer to stay neutral but to put back the $40 into the employee’s HSA. If you pay the insurance company $100,000 for an HMO or PPO plan, you will save $40,000 with a high deductible. But instead of pocketing the $40,000, give it back to the employee in their HSA.
Reaction of Employer
Q: And what has been the reaction of the employer?
A: Usually when we start these things, the employer is neutral between the traditional and HSA plan. Let’s say the HMO costs $100,000, and the HSA plan costs $60,000. The employer is going to charge $20,000 to this employees. So if the premium is $100,000, and the employee gives $20,000 out of payroll reductions to the employer, the net cost to the employer is $80,000.
Now if the high deductible health plan cost $60,000, and the employee is still going to pay the same amount, the $20,000, the net cost to the employer is only $40,000, compared to the $80,000, we tell the employer to give $400,000 back to the employee so the employee see it as a pay raise instead of a pay decrease. So we tell the employer, don’t get greedy. Instead of paying the traditional plan for overutilization, give the money to the employee and let them spend it.
The Other Side of the Coin
Q: Let’s look at the other side of the coin – the critics’ side. The critics say what’s good for the employer is bad for the employee. It’s a win-lose because the employer is saving money, and the employee is having to spend hard-earned dollars out of pocket. But you say it’s a win-win.
A: It is a win-win because the employees determine what they want to do. If the employer does it the right way, the employee understands the high deductible health plan with the employee giving them cash in their health savings account.
It’s a much better solution because the employee now has control of the money and now they start asking what things cost. The employer understands now he is turning employees into consumers instead of entitled employees who think there’s an endless amount of health care that somebody else should pay for it.
You have to shift the employee mindset, and you do it with dollars. The whole mindset changes overnight. Employees will suddenly say when shopping for care. Wow! I didn’t know it costs this much. Wow! They start buying generics rather than brand names.
Q: Are employees willing consumers? Do they resent spending their own money?
A: No, because they see it is the employer’s money because the employer is putting money into their account. With the HSA plan, you’re better off because the maximum out of pocket is only $1250 because they employer is putting in the other $1250 – even if your operation or illness episode costs $50,000, or even $100,000.
HSA Critics
Q: Now let’s go into the more rarified, ethereal world of the policy wonk critics.
Let me sum up what they’re saying. I just read this in a recent Health Affairs article by Paul Ginzberg of the Center for Studying Health System Change and Jamie Robinson, a Professor of Health Policy at the University of California in Berkley. They say health savings accounts with high deductibles favor the healthy and the wealthy, are inadequate for those with chronic disease, cause ill patients to quickly wipe out their savings accounts, delay treatment because HSA-holders are reluctant to part with their own cash, motivate patients to forego preventive tests, and because of these factors and employee skepticism, the growth of HSAs has been “anemic.” What do you think about these policy elites? Are they living in a different world?
A: Look, Minnesota, a liberal state, has more HSAs per capita than any other state. Furthermore, because of reduced hospitalizations, nurses are being laid off. I think this is because people are becoming much better consumers. They are not rushing into the hospital like they did when they thought care was free. Further, Minnesotans are still in the top two in life expectancy. Minnesotans are now going to WalMarts and Target to get $4 prescriptions People who are criticizing HSAs may be influenced by those who have been price gouging consumers.
Q; I doubt that, and I don’t think you we can attribute that long life expectancy to HSAs, which are only five years old. Life expectancy is related to the culture, genes, and lifetime of behavior. It’s more likely critics deeply believe in health care as in entitlement. Other than getting rid of entitlement syndrome, what are you arguing?
Asking What Things Costs is a Powerful Antidote to Bringing Down Costs
A: All we’re asking is for people to ask: How much do things cost? You can’t judge quality until you know the cost. That’s what starts useful conversations with doctors when they ask: How much does this cost?
Q: For consumers, it’s not only what it costs in general. It’s what does it cost me?
A: Right, and asking those questions is how you create affordable health insurance. That’s how I would answer the critics – HSAs create affordable insurance by creating cost awareness among those spending their own money and the money of their employer . I have yet to see an employer or employees turn back the clock to traditional plans once they understand how fast the cost clock is ticking.
Chronic Disease
Q: Let’s take the example of diabetics. There are 20 million diabetics, and they spend three or four times more than non-diabetics. Do diabetics complain about HSAs?
A; I can tell you this. At our first meeting, we get 30% to 50% to sign up for the high deductible plan. The second year I say : Everybody who has an HSA please raise their hand and tell me if you are having trouble paying claims?
Seldom do I hear diabetics or others with chronic disease complain. With HSA Bank and other HSA companies, filing claims is all electronic. It’s easy. There’s no paper, no filing claims, no fuss.
I ask non-HSA workers to talk to HSA-holders, and before you know it, by the third year we have between 90% and 100% participating in the HSAs. I agree with the critics if HSAs are set up the wrong way, with employers not giving choice, or not contributing to HSAs for their employees, or not clearly explaining the options. But if you do it the right way, no one complains, not even those with chronic disease.
Little Appreciated HSA Realities
Q: Two things that’s generally not known or publicized, one, that is some 25% to 30% who sign up for HSAs were previously uninsured, that in five years, HSA plans and their variations – HRAs and cafeteria plans – have captured 20% of the employer market. Does that mirror your experience?
A: Yes, in diverse markets, too – Minnesota is number one, Louisiana is number two, and Washington, D.C. is number three. When people realize they are accumulating money by being cost-efficient, it catches on even faster. I did a group meeting last week, and the aggregate account balance was $4400 per employee in a blue collar manufacturing company in which the employer threw in ½ of the deductible.
I have yet to any single employer go back on the HSA to an HMO or PPO – not one. And that’s out of 120 to 130 employers. I have about 60 other employers with traditional plans.
Most of those previously uninsured come from the small market with 2 or 3 employees or among individuals , who suddenly realize they can afford the premiums. They quickly learn they can also now pay for their dental and eyeglasses thorough HSAs and a pre-tax basis.
The Government’s Role
Q; We’re now in the high season for health reform. As you know, the Obama administration has high hopes of transforming and reforming health care from on high. Is expanding the tentacles of government through passing SCHIP, shifting the unemployed and others to Medicaid, and having mandatory EMRs and a federal comparative effectiveness institute the way to go?
A; This massive stimulus package of $789 billion is a signal the administration wants to go to a European or Canadian type delivery system. With a stimulus package of nearly a trillion dollars and other programs costing an aggregate of more than $1 trillion, I simply don’t think there will be enough money left over for “sweeping reform.” Instead, I foresee massive micromanaging with consolidation of hospitals and other systems into monopolies.
Q; I understand your book Why Health Care Costs So Much, which emphasizes the role of the consumer, is just the first of a series of six books, with those to follow being on roles of Government, employees, health care provides, insurance companies, and the faith community. I will look forward to reading those. Thank you for your time.
Friday, February 13, 2009
The Power of Proximity: Interview with Lynn Jennings, CEO of Alliance Underwriters and Proponent of Worksite Clinics.
The American entrepreneurial economy distinctly differs from that of socialistic European economies. American organizations must be able to make decisions based on proximity to performance, the market, technology, society, environment, and demographics. In Europe, on the other hand, distance from the market of centralized systems makes innovation and responsiveness difficult.
R. Reece, Innovation-Driven Health Care: 34 Key Concepts for Transformation, Jones and Bartlett, 2007
Background
Q: What is your position?
A: I am CEO of Alliance Underwriters. It has two subsidiaries. One is called Medwatch. The other is called WeCareTLC. Alliance Underwriters is a managing general underwriter for stop-lost insurance for self-funded employers on their health insurance. We have been in business for over 20 years. Medwatch is a utilization management company doing case management and disease management. It has been in business over 20 years. WeCareTLC is an on-site employer clinical management company, and it has been in business about three years. In these three companies, we have a total of about 100 employees, and our fee revenues are about $8 million. We are located in Orlando, Florida.
Thoughts on Health Reform
Q: I am interested in your thoughts on health reform. Personally, I believe health reform is more likely to market-driven rather than policy-driven. Do you agree with my view?
A: Yes. For the most part, I don’t think there is legislative or regulatory solution. These solutions tend to create more problems than they solve. There are a lot of tough questions you have to ask when you start talking about the uninsured,. What do you do with someone who has the wherewithal to be insured and chooses not to?
The bigger issue is: What do you do with those who want to be insured, but who have health issues that cause them to be uninsured? Some states have high risk pools that address that issue. Perhaps there ought to be a federal high risk pool. A significant number of the uninsured are uninsured by choice, and a significant number are uninsured for only a short period of time. There are probably between 5 and 10 million people who have a significant need for health insurance and can’t get it because of their medical conditions.
WeCareTLC, Inc
Q: Your company, WeCareTLC, interests me. I assume TLC stands for Tender Loving Care. Does it not?
A; Yes, but it also stands for Total Livestyle Counseling.
Q: Give us your thoughts about how that company came to be, and what your thoughts were behind it.
A: Obviously, being in the employer-based health insurance business, and looking at the rising costs and various solutions, I started following the various outside clinic programs about 6 or 7 years ago, but I didn’t think they were being as aggressive as they could be. So we opened on onsite clinic for our own employees about 3 ½ years ago. We ran that for about a year, then built the model that we use today for other employers.
Worksite clinics are one of the few things that has arisen in the last 20 or 30 years that stand of a chance of materially reducing the cost of health care.
Removing Cost Barriers
Q: Why is that?
A: Because you address the employees need for medical care by removing all the barriers for getting that care. First of all, the clinics are free so there is no financial reason not to get care. Two, they are convenient, being at the worksite. Three, they are focused on getting the employees the care they need, the tests they need, the medications they need, the life style changes they need to make to reduce downstream costs.
Q;. Perhaps at this point, you ought to describe the model.
The Worksite Model
A: Well, we put a physician-based clinic on site or near on sight. The model is very scaleable. It can be as small as several hundred employees to no limit. Most of our competitors focus on the Fortune 500 companies, but we think there is a significant opportunity in the smaller employee market.; The hours are scleable, based on size. They can be open as few as 4 hours to as much as 40 hours.
The clinics have a full electronic medical record. We have internet-based scheduling for those interested in using it. Those who use the clinic can go online to see their clinical records and lab values and medication summaries, and they can print it out and take the summaries with them.
One thing we do differently is that we work diligently to manage the referral process. Our primary doctor interacts with the specialist to coordinate care and to bring patients out of the specialist market back into the primary care market.
The other thing we do differently is to provide disease management, or lifestyle counseling. Nearly all of it is done by others telephonically. We staff a nurse in the clinic to do field-based face-to-face counseling . The data shows only face-to-face counseling has any chance of success. We have a three pronged approach: the physician, the nurse, and the patient working together to get the maximum impact.
Q: The government is slow in picking this up. A recent JAMA article indicates that all 15 Medicare demonstration projects using a remote nurse communicating by telephone failed to save money and 13 of 15 failed to reduce hospitalizations. Nurses , working telephonically, without close proximity to the doctor, had little effect. (“Effects of Care Coordination on Hospitalizations, Quality of Care, and Health Care Expenditures,” JAMA, February 11, 2009).
A: Doesn’t surprise me.
Q: My concept of the worksite clinic, working in near proximity to employees has these key elements. The worksite clinic, in a large enough setting to make it work, is run by a salaried primary care physician; dispenses free generic drugs or brand drugs if necessary; has an embedded electronic medical record containing best practice information; offers preventive and lifestyle counseling by an onsite nurse; and refers to a pre-selected network of specialists based on their performance and value.
A; That’s essentially correct, but we don’t always have the data on the specialists, so we simply try to avoid the worst, which can save you 10%.
Money Savings
Q; In your little experiment in your company, how much money did you save?
A: Roughly 50% of what the actuaries would have predicted. For most businesses, savings are in the 20% to 40% range.
Q; How many worksite clinics do you currently manage?
A: We have a dozen clinics right now.
The Mix of Worksite Clinics
Q: What is nature of organizations using these clinics. What is the mix?
A: School boards, manufacturing, unions, country governments, city governments.
Q. That's a real power of this concept. You can apply it to almost any organizations with a sufficient number of employees.
A; Yes, assuming they have enough employees in the vicinity, assuming they have health insurance, and assuming they want to save money. It is one of best things an institution can do. And the participants, the employees, really appreciate it. It’s voluntary. When it’s free and it’s convenient, the vast majority will use it.
Worksite Clinics and Dependents
Q: How does this apply to the dependents of these employees?
A: We definitely want to make the worksite clinic available to them. You can do it in a number of different ways. One way is just to fluctuate your hours, with some evening hours and weekend hours. Most of these clinics do not treat the pediatric, well-child portion. Generally speaking, we think pediatrics should be done by a pediatrician, unless there'ssome urgent problem,
The Power of Business to Cut Health Costs
Q: It is my belief business can move more decisively than government to control costs. After all, business survival and employee jobs are at stake. One of great potentials of worksite clinics in the large number of corporate sites available. I have read that there are more than 7600 sites in America with over 1000 employees, and that half of the Fortune companies will have sites working by the end of 2010.
A: I’m not sure of the numbers, but 1000 employees on site is definitely enough to support a full-time clinic working 40 hours a week. With fewer employees, you have to scale it back to fewer hours. One of the things we are doing is developing a coalition or collaborative clinics with multiple employers sharing the same clinic. The more bodies you can get into the clinic, the more hours you can be open.
Q; One word that keeps coming up is “scalable.”
A; By that we mean worksite clinics work nearly as well for businesses with 200 lives as on 1000 lives.
Desperation for Change
Q; In the businesses to whom you talk, do you sense desperation for change?
A: Yes. If costs double one more time, the whole system will collapse. The biggest challenge in Corporate America is convincing the CEO and CFO that cost of health care is really something that they can do something about. Too many have a fatalistic attitude that it is what it is, and there’s nothing I can do about it. That’s the biggest hurdle to overcome.
HSAs, High Deductibles, and Worksite Clinics
Q; Do you sense a movement towards health savings accounts and high deductible plans among your constituency?
A: I think they are moving that way. We have one among our own employees. And among our clients, about one third have them. They are not the total answer, but they are part of the solution. Having a clinic serving a high deductible plan undoubtedly makes the high deductible plan more palatable. When we put our clinic in, we went from a $300 deductible to a $2000 deductible.
Q: So it brings employees who are skeptical about high deductibles coupled with HSAs across the line?
High Costs, Lack of Transparency, Not Access, is the Big Issue
A: Yes, but the biggest problem in the health care environment that is talking about is the access issue, but the real barrier is the cost. And the cost factor, in my opinion, will never be solved until there is full transparency. If the providers had to post their prices, and you could shop based on price, now you have enough information to make a quality decision. When you don’t have the price, you don’t have the ability to make that decision.
Q: So the worksite clinic helps clarify transparency?
A; No, it doesn’t but we try to get the employer in the best specialist at the best price. But getting doctors to tell you what it is going to cost ahead of time is still a challenge. But there’s no competition when you don’t have price transparency. When I go to my local hospital about an employee who needs a hip transplant, I may go to a local hospital and finds it costs $10,000. But if I had an Internet comparative pricing site, I might find someone is Kansas City does it for $7500, or in Thailand or Costa Rico for $2200. Now I can start looking for their outcomes and results in making a value decision. Based on anecdotal evidence, when doctors are faced with the decision to compete on price, they do. If the costs started to dop significantly, a lot of the other issues would start to go away.
Small Businesses and Worksite Clinics
Q: Do think small businesses are going to coalesce to access worksite clinics?
A: Yes, I think they will, but there are challenges. If you’re a large employer you can be self-insured which saves the employer money. Small businesses can’t self-fund.
Doing Business with Brokers
Q; You’re in the health underwriting and reinsurance business, do you give presentations to employers about introducing wrok site clinics or deciding between health plans?
A; I do some of that, but generally we work through third parties about bring the message to their clients. It’s always a challenge whether the broker is a commissioned broker working for an insurance company. He is somewhat conflicted about finding ways to reduce the costs. If the costs go down, his commission goes down. I always tell the employer if you don’t pay your broker directly with a check, then he really doesn’t work for you.
Q; With regard to the future and the current state of health reform, are you a glass half full or a glass half empty man?
Corporate America Can Fix It – If Prices are Posted
A; If the regulatory and legislative environment will leave health care alone, corporate America will fix it out of desperation. If the government passed a law saying you’ve got to post your prices and charge everybody the same amount of money, that is one piece of legislation that would have the biggest impact. Price controls have never worked in any environment, and I don’t think they will work in health care.
If you had a totally free market environment with everybody posting their prices, that would work. If Florida, if you want your car fixed, they have to tell you exactly what it will cost. But in health care, they can charge you six figures, and you never have a clue. I like to use the example of the salesman. You tell him to go out and get a car, and he comes back with a Mercedes. If you tell him, here’s $400, go out and get a car, I can guarantee you he won’t come back with a Mercedes. If you don’t have cost, there is no opportunity to make a value judgment.
The Effect of Walgreens Entering the Worksite Market
Q: With Walgreens entering the worksite clinic marketplace and saying they plan to set up 500 clinics, has that changed the market for you?
A: It has given worksite clinics more visibility which is good. The more companies offering these clinics, the more diversification you get within the clinics. It makes it easier for everyone of us. If you go into an area, and nobody has ever heard of the concept, the first sale is pretty tough. But if they’ve heard of it and know somebody who has done it, you’ve overcome the hurdle of What is it? You have the opportunity of saying, here’s where my product differs.
Q: What are your growth projections for WeCareTLC?
A: In the next two or three years, we could blow it out pretty significantly and cover may be 50,000 lives Being an intra\epreneur, I’m not sure I want to direct a multibillion dollar corporation, but I wouldn’t mind building it and selling it to someone who does.
R. Reece, Innovation-Driven Health Care: 34 Key Concepts for Transformation, Jones and Bartlett, 2007
Background
Q: What is your position?
A: I am CEO of Alliance Underwriters. It has two subsidiaries. One is called Medwatch. The other is called WeCareTLC. Alliance Underwriters is a managing general underwriter for stop-lost insurance for self-funded employers on their health insurance. We have been in business for over 20 years. Medwatch is a utilization management company doing case management and disease management. It has been in business over 20 years. WeCareTLC is an on-site employer clinical management company, and it has been in business about three years. In these three companies, we have a total of about 100 employees, and our fee revenues are about $8 million. We are located in Orlando, Florida.
Thoughts on Health Reform
Q: I am interested in your thoughts on health reform. Personally, I believe health reform is more likely to market-driven rather than policy-driven. Do you agree with my view?
A: Yes. For the most part, I don’t think there is legislative or regulatory solution. These solutions tend to create more problems than they solve. There are a lot of tough questions you have to ask when you start talking about the uninsured,. What do you do with someone who has the wherewithal to be insured and chooses not to?
The bigger issue is: What do you do with those who want to be insured, but who have health issues that cause them to be uninsured? Some states have high risk pools that address that issue. Perhaps there ought to be a federal high risk pool. A significant number of the uninsured are uninsured by choice, and a significant number are uninsured for only a short period of time. There are probably between 5 and 10 million people who have a significant need for health insurance and can’t get it because of their medical conditions.
WeCareTLC, Inc
Q: Your company, WeCareTLC, interests me. I assume TLC stands for Tender Loving Care. Does it not?
A; Yes, but it also stands for Total Livestyle Counseling.
Q: Give us your thoughts about how that company came to be, and what your thoughts were behind it.
A: Obviously, being in the employer-based health insurance business, and looking at the rising costs and various solutions, I started following the various outside clinic programs about 6 or 7 years ago, but I didn’t think they were being as aggressive as they could be. So we opened on onsite clinic for our own employees about 3 ½ years ago. We ran that for about a year, then built the model that we use today for other employers.
Worksite clinics are one of the few things that has arisen in the last 20 or 30 years that stand of a chance of materially reducing the cost of health care.
Removing Cost Barriers
Q: Why is that?
A: Because you address the employees need for medical care by removing all the barriers for getting that care. First of all, the clinics are free so there is no financial reason not to get care. Two, they are convenient, being at the worksite. Three, they are focused on getting the employees the care they need, the tests they need, the medications they need, the life style changes they need to make to reduce downstream costs.
Q;. Perhaps at this point, you ought to describe the model.
The Worksite Model
A: Well, we put a physician-based clinic on site or near on sight. The model is very scaleable. It can be as small as several hundred employees to no limit. Most of our competitors focus on the Fortune 500 companies, but we think there is a significant opportunity in the smaller employee market.; The hours are scleable, based on size. They can be open as few as 4 hours to as much as 40 hours.
The clinics have a full electronic medical record. We have internet-based scheduling for those interested in using it. Those who use the clinic can go online to see their clinical records and lab values and medication summaries, and they can print it out and take the summaries with them.
One thing we do differently is that we work diligently to manage the referral process. Our primary doctor interacts with the specialist to coordinate care and to bring patients out of the specialist market back into the primary care market.
The other thing we do differently is to provide disease management, or lifestyle counseling. Nearly all of it is done by others telephonically. We staff a nurse in the clinic to do field-based face-to-face counseling . The data shows only face-to-face counseling has any chance of success. We have a three pronged approach: the physician, the nurse, and the patient working together to get the maximum impact.
Q: The government is slow in picking this up. A recent JAMA article indicates that all 15 Medicare demonstration projects using a remote nurse communicating by telephone failed to save money and 13 of 15 failed to reduce hospitalizations. Nurses , working telephonically, without close proximity to the doctor, had little effect. (“Effects of Care Coordination on Hospitalizations, Quality of Care, and Health Care Expenditures,” JAMA, February 11, 2009).
A: Doesn’t surprise me.
Q: My concept of the worksite clinic, working in near proximity to employees has these key elements. The worksite clinic, in a large enough setting to make it work, is run by a salaried primary care physician; dispenses free generic drugs or brand drugs if necessary; has an embedded electronic medical record containing best practice information; offers preventive and lifestyle counseling by an onsite nurse; and refers to a pre-selected network of specialists based on their performance and value.
A; That’s essentially correct, but we don’t always have the data on the specialists, so we simply try to avoid the worst, which can save you 10%.
Money Savings
Q; In your little experiment in your company, how much money did you save?
A: Roughly 50% of what the actuaries would have predicted. For most businesses, savings are in the 20% to 40% range.
Q; How many worksite clinics do you currently manage?
A: We have a dozen clinics right now.
The Mix of Worksite Clinics
Q: What is nature of organizations using these clinics. What is the mix?
A: School boards, manufacturing, unions, country governments, city governments.
Q. That's a real power of this concept. You can apply it to almost any organizations with a sufficient number of employees.
A; Yes, assuming they have enough employees in the vicinity, assuming they have health insurance, and assuming they want to save money. It is one of best things an institution can do. And the participants, the employees, really appreciate it. It’s voluntary. When it’s free and it’s convenient, the vast majority will use it.
Worksite Clinics and Dependents
Q: How does this apply to the dependents of these employees?
A: We definitely want to make the worksite clinic available to them. You can do it in a number of different ways. One way is just to fluctuate your hours, with some evening hours and weekend hours. Most of these clinics do not treat the pediatric, well-child portion. Generally speaking, we think pediatrics should be done by a pediatrician, unless there'ssome urgent problem,
The Power of Business to Cut Health Costs
Q: It is my belief business can move more decisively than government to control costs. After all, business survival and employee jobs are at stake. One of great potentials of worksite clinics in the large number of corporate sites available. I have read that there are more than 7600 sites in America with over 1000 employees, and that half of the Fortune companies will have sites working by the end of 2010.
A: I’m not sure of the numbers, but 1000 employees on site is definitely enough to support a full-time clinic working 40 hours a week. With fewer employees, you have to scale it back to fewer hours. One of the things we are doing is developing a coalition or collaborative clinics with multiple employers sharing the same clinic. The more bodies you can get into the clinic, the more hours you can be open.
Q; One word that keeps coming up is “scalable.”
A; By that we mean worksite clinics work nearly as well for businesses with 200 lives as on 1000 lives.
Desperation for Change
Q; In the businesses to whom you talk, do you sense desperation for change?
A: Yes. If costs double one more time, the whole system will collapse. The biggest challenge in Corporate America is convincing the CEO and CFO that cost of health care is really something that they can do something about. Too many have a fatalistic attitude that it is what it is, and there’s nothing I can do about it. That’s the biggest hurdle to overcome.
HSAs, High Deductibles, and Worksite Clinics
Q; Do you sense a movement towards health savings accounts and high deductible plans among your constituency?
A: I think they are moving that way. We have one among our own employees. And among our clients, about one third have them. They are not the total answer, but they are part of the solution. Having a clinic serving a high deductible plan undoubtedly makes the high deductible plan more palatable. When we put our clinic in, we went from a $300 deductible to a $2000 deductible.
Q: So it brings employees who are skeptical about high deductibles coupled with HSAs across the line?
High Costs, Lack of Transparency, Not Access, is the Big Issue
A: Yes, but the biggest problem in the health care environment that is talking about is the access issue, but the real barrier is the cost. And the cost factor, in my opinion, will never be solved until there is full transparency. If the providers had to post their prices, and you could shop based on price, now you have enough information to make a quality decision. When you don’t have the price, you don’t have the ability to make that decision.
Q: So the worksite clinic helps clarify transparency?
A; No, it doesn’t but we try to get the employer in the best specialist at the best price. But getting doctors to tell you what it is going to cost ahead of time is still a challenge. But there’s no competition when you don’t have price transparency. When I go to my local hospital about an employee who needs a hip transplant, I may go to a local hospital and finds it costs $10,000. But if I had an Internet comparative pricing site, I might find someone is Kansas City does it for $7500, or in Thailand or Costa Rico for $2200. Now I can start looking for their outcomes and results in making a value decision. Based on anecdotal evidence, when doctors are faced with the decision to compete on price, they do. If the costs started to dop significantly, a lot of the other issues would start to go away.
Small Businesses and Worksite Clinics
Q: Do think small businesses are going to coalesce to access worksite clinics?
A: Yes, I think they will, but there are challenges. If you’re a large employer you can be self-insured which saves the employer money. Small businesses can’t self-fund.
Doing Business with Brokers
Q; You’re in the health underwriting and reinsurance business, do you give presentations to employers about introducing wrok site clinics or deciding between health plans?
A; I do some of that, but generally we work through third parties about bring the message to their clients. It’s always a challenge whether the broker is a commissioned broker working for an insurance company. He is somewhat conflicted about finding ways to reduce the costs. If the costs go down, his commission goes down. I always tell the employer if you don’t pay your broker directly with a check, then he really doesn’t work for you.
Q; With regard to the future and the current state of health reform, are you a glass half full or a glass half empty man?
Corporate America Can Fix It – If Prices are Posted
A; If the regulatory and legislative environment will leave health care alone, corporate America will fix it out of desperation. If the government passed a law saying you’ve got to post your prices and charge everybody the same amount of money, that is one piece of legislation that would have the biggest impact. Price controls have never worked in any environment, and I don’t think they will work in health care.
If you had a totally free market environment with everybody posting their prices, that would work. If Florida, if you want your car fixed, they have to tell you exactly what it will cost. But in health care, they can charge you six figures, and you never have a clue. I like to use the example of the salesman. You tell him to go out and get a car, and he comes back with a Mercedes. If you tell him, here’s $400, go out and get a car, I can guarantee you he won’t come back with a Mercedes. If you don’t have cost, there is no opportunity to make a value judgment.
The Effect of Walgreens Entering the Worksite Market
Q: With Walgreens entering the worksite clinic marketplace and saying they plan to set up 500 clinics, has that changed the market for you?
A: It has given worksite clinics more visibility which is good. The more companies offering these clinics, the more diversification you get within the clinics. It makes it easier for everyone of us. If you go into an area, and nobody has ever heard of the concept, the first sale is pretty tough. But if they’ve heard of it and know somebody who has done it, you’ve overcome the hurdle of What is it? You have the opportunity of saying, here’s where my product differs.
Q: What are your growth projections for WeCareTLC?
A: In the next two or three years, we could blow it out pretty significantly and cover may be 50,000 lives Being an intra\epreneur, I’m not sure I want to direct a multibillion dollar corporation, but I wouldn’t mind building it and selling it to someone who does.
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