A Guide to Accountable Care Organizations, and Their Role in the Senate’s Health Reform Bill

The accountable care organization has been a model for health care reform, yet its modest success has been limited to a handful of health care systems across the country. However, the accountable care organization model has recently taken on far greater significance since being introduced as one of Medicare’s pilot programs in the Senate’s health reform bill.

The phrase is attributed to Dr. Elliot Fisher of Dartmouth Medical School.  Dr. Fisher has led the Dartmouth Atlas Project — a project that has, for the last 30 years, painstakingly documented the variation in care across the United States. (Click here for an interactive map of some of the Dartmouth Atlas results). The Dartmouth Atlas has focused on both the quality of health care as well as its cost. More importantly, they have reported on the relationship between the two, and their findings are nothing short of an indictment of our current paradigm.

Specifically, their findings illustrate that there exists wide variations in the cost of care across the country, and profoundly, that the regions that spend more per patient do not necessarily obtain better outcomes. So what to do? Dr. Fisher believes he has found at least part of the answer: the Accountable Care Organization, known as an “ACO”.

What is an ACO, and How Does it Differ from Other Payment Reforms?

In his paper “Creating Accountable Care Organizations: The Extended Hospital Medical Staff,” Dr. Fisher acknowledges that the term ACO “grew out of an exchange between he and Dr. Glenn Hackbarth at a MedPAC meeting in November of 2006″. (Fisher, 2006 n. 7). Dr. Fisher’s purpose in writing the aforementioned paper was to help identify the proper “locus for shared accountability” for a patient’s health care. HMO’s and other health insurers are obvious candidates, but as Dr. Fisher notes, HMOs only comprise a small percentage of the current market, and health plans in general have focused on negotiating favorable prices within relatively open networks of providers. (Fisher, 2006, p. 45).  The “medical home” (also referred to as a Patient Centered Medical Home or PCMH) is another candidate, but is taken out of the running by Dr. Fisher because of the untested nature of medical homes, and their requirement of new payment mechanisms. (Id.).

Dr. Fisher notes that a better option already exists: “virtual” organizations consisting of the various physicians that are associated with local acute care hospitals. As Dr. Fisher notes, these physicians are either directly affiliated with such hospitals through their inpatient work, or through the care patterns of the patients they serve.  Dr. Fisher refers to these multi-speciality group practices that are bunched around local hospitals as an “extended hospital medical staff.” He argues that improving quality and lowering cost should be realized by fostering greater accountability on the part of this “extended medical staff.”

In a recent Urban Institute paper on ACOs by Kelly Devers and Robert Berenson (pdf summary here, full pdf here), the authors point to three essential characteristics of ACOs:

1. The ability to provide, and manage with patients, the continuum of care across different institutional settings, including at least ambulatory and inpatient hospital care and possibly post acute care;
2. The capability of prospectively planning budgets and resource needs; and
3. Sufficient size to support comprehensive, valid, and reliable performance measurement. (Berenson, p. 2.).

In exchange for investing in this reformed health care provider structure, the ACO members will  share in the savings that results from their cooperation and coordination. Thus, ACOs can–theoretically–act as a reform tool by incentivizing more efficient and effective care. This would help to combat the current perverse incentives of overutilization and overbuilding of health care facilities and technology.

In 2007, Dartmouth’s Institute for Health Policy and Clinical Practice headed by Dr. Fisher and Dr. James Weinstein, teamed up with the Brookings Institution’s Mark McClellan to create The Brookings-Dartmouth ACO Learning Network. The ACO Learning Network will serve as a support tool for providers looking to transition to the ACO framework. In the “Overview” section of their site (available as a pdf here), the Brookings-Dartmouth team provide a useful chart comparing the ACO model to other payment reform models such as “bundled payments,” “medical homes” and capitation. Click the image below to enlarge.

Various Extant Structures Utilized

Since Dr. Fisher’s introduction of the ACO concept, the idea has continued to be refined. In their 2007 paper “Accountable Care Systems For Comprehensive Health,” Dr. Stephen Shortell and Dr. Lawrence Casalino envision a broad range of ACOs in addition to the “extended medical staff” originally described by Dr. Fisher. Drs. Shortell and Casalino identify extant organizational structures that could be leveraged to create ACOs, including the Multi-speciality Group Practice (MSGP), the Hospital Medical Staff Organization (HMSO), the Physician-Hospital Organization (PHO), the Interdependent Physician Organization (IPO), and the Health Plan Provider Organization or Network (HPPO/HPPN). (Shortell et al., 2007, p. 10). Below is a table from their paper that organizes the different ACO models while comparing their capabilities. Click the image below to Enlarge.

ACOs In Practice

Building on the Physician Group Practice (PGP) demonstration project that rewarded the provision of quality care with a share of the savings, the Brookings-Dartmouth group propose a “voluntary and incremental” ACO program. (Fisher et al., 2009, p. 2).  The ACO would have to be a legal organization that can receive shared savings, and would have to incorporate primary care physicians who solely practice under the ACO. (Id.). Furthermore, the Brookings-Dartmouth group believes there would have to be at least 5,000 beneficiaries in the ACO for it to be viable. The ACO would provide CMS with a list of their providers willing to participate in the ACO. As discussed above, the beneficiaries would be determined by, among other things, the patterns of patient referrals in the region. However, beneficiaries would not be “locked in” to a given provider. (Fisher et al., 2009, p. 4). The ACO would receive savings if their risk-adjusted, per beneficiary spending levels were below their benchmark. Id.

An Ultra-Simplified Example

A hypothetical independent practice association (IPA) teams up with a community hospital to create an ACO. Medicare determines a benchmark, that is, what it will cost to treat the average beneficiary in that geographic area per year–let’s say $10,000. The physicians submit their traditional claims to Medicare under the RBRVS system while the hospital submits its typical DRG-base claim. Thus, the traditional fee-for-service system remains in place. At the end of the year, Medicare determines if the ACO has provided care for less than $10,000. If they have, the ACO is entitled to share in the cost savings, and the savings are divided among the providers and hospital. Though simple in theory, ACOs become more difficult when attempting to construct payment models that will distribute the savings of the ACO to the individual providers. Shortell provides another helpful chart that lays out some of the options; Click on the image to enlarge.

Criticism of the ACO Model

The strongest criticism that I am aware of is from Dr. Jeff Goldsmith PhD, president of Public Health Services at the University of Virginia. In his Health Affairs article entitled “The Accountable Care Organization: Not Ready for Prime Time,” Dr. Goldsmith recalls previous attempts to at implementing payment reform models based on shared risk:

The problem with this movie is that we’ve actually seen it before, and it was a colossal and expensive failure. During the 1990s, many hospitals and physicians believed that the Clinton health reforms would force them into capitated contracts with health plans. . . . Risk-bearing physician/hospital organizations and hospital-sponsored preferred provider organizations (PPOs) sprang up all over the country. . . . Some of these hospital/physician efforts actually succeeded and survive today. . . . However, these were outliers in an expensive failure.  Employers and patients preferred open panels managed by health insurers to closed panels managed by providers. Billions of dollars were lost.. . . Many of the practice acquisitions were reversed, as hospital systems sought to rein in their expenses and adjust to an open-panel world dominated by point-of-service style health plans

However, the 1990s left behind an expensive legacy:  highly concentrated local provider markets….There were numerous reasons for the 1990s collapse of at-risk hospital/physician partnerships, besides the failure to find willing buyers of their services. These efforts lacked infrastructure, experienced management, as well as reliable and timely cost information to support cost management. They assumed global risk but paid for care on a fee basis, just as Fisher and colleagues propose.  But these hospital-sponsored organizations could neither redistribute income nor exclude their high-cost providers (who inconveniently generate most hospital profits).

Some things have clearly changed in the ensuing decade. . . . A rapidly increasing percentage of physicians, particularly primary care physicians, are now hospital employees.  A larger percentage of the physician community receives hospital subsidies for call coverage. Many of these subsidies are, in fact, extorted from the hospital by specialists in scarce supply, destined to become scarcer.  An entire generation of 80-hour-a-week baby-boomer physicians are retiring and being replaced by younger physicians who want to work 30 hours a week.  You are not going to see a lot of these younger physicians in utilization review committee meetings after hours; they are going to be at their kids’ soccer practices.

What hasn’t changed is the fragmentation of care, the huge disparities in income and political power inside physician communities, and also the level of suspicion that physicians have of their now much more powerful local hospitals.  There is also, sadly, a thundering absence of collegiality – in my view, the central precondition of assuming risk and managing care. This absence is palpable in suburbs and even more pronounced in many “lifestyle dominated” resort communities in the sunbelt.. . .They are “collections” of physicians, not communities.

The hospitals in these areas appear formidable:  they have beautiful campuses,  prestigious boards, and deep financial reserves. . . . But these hospitals have been picked clean of vital outpatient services by their medical “communities.”

….Entire disciplines have disappeared from hospitals: ophthalmology, cosmetic surgery, gastroenterology, urology. Even community-based internists and family practitioners have stopped coming to the hospital; their patients are cared for by hospitalists who work full time inside the hospital.

The result of our previous attempts at ACO-like integrated care, Dr. Goldsmith points out, is that…

. . . .while the hospital has become more involved in subsidizing physician practice, physician communities have drawn away from the hospital and function increasingly independently on a day-to-day basis. Wennberg’s own data show that something like 40% of physicians no longer have any Medicare hospital-related fee income. So squashing hospitals and physicians back together into economic interdependence in a joint hospital/physician economic pool makes no real-world sense.

Dr. Goldsmith goes on to note that there have been some successful ACOs, but that they haven’t been “virtual” in the sense that Dr. Fisher points out, rather, they are

. . . real organizations with P+Ls, medical directors, and management infrastructure. Prominent examples in my home region include Carilion Health System in Roanoke and the Bon Secours Health System in Richmond. Voluntary ACO arrangements, with Medicare and with private insurers, may find enthusiastic partnerships with many of these hospital-sponsored physician groups. . . .

The Senate Bill

In defense of the Brookings-Dartmouth model, the group has gone on record in favor of voluntary ACOs. To Dr. Goldsmith’s relief, the Senate’s health reform plan incorporates ACOs on a voluntary pilot program basis. You can read their rebuttal to Dr. Goldsmith here.  Section 3022 of the Senate bill — which amends Title XVIII of the Social Security Act (42 U.S.C. 1395) — introduces ACOs under the name “Medicare Shared Savings Program. (View a pdf of the extracted ACO part of Senate bill here).

The Senate’s plan is remarkably similar to the Brookings-Dartmouth model. Under the Senate’s plan, ACOs will be eligible to receive a percentage of the cost savings that they have realized under the traditional fee-for-service Medicare system. The requirements are set forth in section (B)(2). Furthermore, the ACO shall enter into a 3 year agreement with HHS whereby the ACO must agree to contain at least 5,000 Medicare beneficiaries, while being prevented from engaging in risk selection. The ACO must define processes to promote evidence-based medicine and patient engagement, report on quality and cost measures, and coordinate care, such as through the use of telehealth or other remote patient monitoring tools. The ACO must also demonstrate to HHS that it meets the yet-to-be defined criteria for “patient-centeredness”.

Whether ACOs will succeed is impossible to determine with certainty. The panopticon that would be ACO management looking over the shoulders of physicians may be enough to turn off many physicians. Nevertheless, as even Dr. Goldsmith acknowledges, some ACOs have thrived. Moreover, the voluntary ACOs in the Senate’s bill represent a measured approach towards reforming our system without a wholesale transformation. As Dr. Atul Gawande describes in a lesser-cited pre-”Cost Conundrum” article, the most sound approach is often “path-dependent,”  that is, it builds on what already exists. As Dr. Gawande notes:

. . .accepting the path-dependent nature of our health-care system—recognizing that we had better build on what we’ve got—doesn’t mean that we have to curtail our ambitions. The overarching goal of health-care reform is to establish a system that has three basic attributes. It should leave no one uncovered—medical debt must disappear as a cause of personal bankruptcy in America. It should no longer be an economic catastrophe for employers. And it should hold doctors, nurses, hospitals, drug and device companies, and insurers collectively responsible for making care better, safer, and less costly. . .

Whether the shared savings will entice physicians on a large scale is uncertain.  What is certain is that our current fragmented system incentivizes providers to offer neither cost-effective nor coordinated care. Though it is unlikely that physicians and hospitals will flock to ACOs from the start, the vision of ACOs conceived of by the Dartmouth-Group and described in the Senate bill may nevertheless prove itself a useful tool in a larger arsenal of approaches meant to salvage our unsustainable health care system. In other words, the Senate’s approach could provide a path-dependent solution toward the collective responsibility and better outcomes that Dr. Gawande mentions. And as described in the Senate bill, physicians and hospitals will not be offered a new path, but rather a resurfaced path that would retain fee-for-service, while providing a safer and smoother ride for the patient.

Why Primary Care in Medicare Matters

Why should we care about primary care in Medicare?  Early in the reform discussions, preventive and primary care was emphasized; in addition to extending medical care to all, reform would also implement preventive measures to keep them well.  In the current reform scrum, some are back peddling pretty fast, and in the course of finding “consensus” points (often focusing on cost-savings), we might lose conceptual coherence.

Ken Thorpe’s new Health Affairs article on chronic care patients in Medicare offers sound research and helpful analysis.  Thorpe’s data point toward a subtle explanation for health inflation keyed not to the increased cost of high-tech interventions, but to a shift in the conditions for which treatment is provided:

Our results highlight important changes in the medical conditions accounting for the rise in spending among beneficiaries over time. The most notable changes were in spending on a handful of chronic conditions: diabetes, kidney disease, hyperlipidemia, hypertension, mental disorders, and arthritis.

Thorpe has long argued that our health care delivery and finance system is stuck in a 20^th Century of acute care, while our 21^st Century needs have migrated toward chronic care.  As he has argued previously, these chronic care needs call for care at a human scale, including care management and supportive community-based care.  But he also points out that many chronic conditions are at least partially preventable, and that attention and resources should not be directed only to treating these conditions, but also to forestalling their incidence.

Prevention is, then, vital to any health care system.  But haven’t studies repeatedly shown that preventive care is not cost-effective?   Sorting this out requires that we step back and assess not only what “prevention” means, but also what we value in health care.

Preventive care can usefully be separated into three categories, as Ron Goetzel  (an Emory University colleague of Thorpe’s) has described.

• Primary prevention: Health promotion measures focus on lifestyle and simple interventions such as vaccinations to keep people from developing sickness; often cost-saving.
• Secondary prevention: Targeting people with preconditions for illness, including genetic or lifestyle markers, with screening technology, maintenance drugs, in order to forestall or prevent the manifestation of the condition; rarely cost-saving, in part because it is often applied to low-risk populations. Worth it? That depends on the design of the intervention and one’s metric for assessing health care value.
• Tertiary prevention: In this context, coordinated care management for those with chronic illness.  Properly implemented, chronic car management could “flatten the curve,” but is unlikely to be “cost-saving.”

So, whether “prevention” can save money (a claim Thorpe’s paper doesn’t make) is a complicated question.  In addition, it is often a poorly framed one. Explicitly or implicitly, cost-based objections to prevention often suggest that preventing one illness simply means that the person will die of something else, or less simplistically, that keeping people alive longer is cost-increasing, not cost saving.  Steven Wolf has elegantly responded to both objections:

[S]keptics of prevention argue that everyone dies of something; preventing demise serves only to allow a different disease to generate illness and spending. However, the aim of health promotion and disease prevention is not to prevent the inevitable but to “compress” morbidity, maximizing health until death.

Another common criticism is that prevention rarely saves money; it costs society if people live longer. The same applies to disease treatments. Health is a good; it is not purchased to save money. Health is a good that costs too much under the current medical care system, a problem of inefficiency that calls for wiser resource use, such as spending less per health unit gained (lower cost-effectiveness ratio). Disease prevention offers a way to improve health with low cost-effectiveness ratios and to also modulate disease rates. To reject health promotion and disease prevention because they do not save money (i.e., cost-effectiveness ratios are not negative) misses the point. (citations omitted)

Advocates who would shift our systemic emphasis to prevention and management of chronic illness, then, are not naïve about cost implications.  To the contrary, they address the issue head-on, with a three-step argument:

• The purpose of our system is or should be the maintenance of or restoration to high levels of functioning consistent with a fulfilling life.
• Our needs have largely shifted from acute to chronic interventions, and our system should shift to meet those needs.
• In preventing or managing chronic illness, as with all interventions, we should carefully examine the capacity of methods to meet our needs, and to demand value for those being served.

Applying this sort of argument to primary care, Goetzel elsewhere advocates skepticism of attempts by medicine to turn prevention into a high-tech enterprise:

We have medicalized prevention and health promotion in this country so that most people believe that only doctors in clinical settings can deliver these services. Although effective in many cases, this approach is the most expensive method of delivering prevention. If we expand our arsenal of potential interventions to include environmental, ecological, and policy changes, in addition to individually focused counseling and coaching programs, we can change the cost-effectiveness equation.

Thorpe’s article has garnered much-deserved attention, although it is tempting to think of his data in only cost-benefit terms.  That is not true to Thorpe’s conclusion, which is consistent with efforts to redirect attention from the business enterprise of health care to the health needs of Americans:

The U.S. health system remains predicated on providing acute, episodic care that is inadequate to address the altered patterns of disease now facing the American public. Our results highlight the need for prevention and care outside doctors’ offices and hospitals designed to address the changing needs of patients at risk for or living with chronic disease and, often, multiple comorbidities. As [reformers] continue their efforts to reshape the U.S. health system, they must address these changed health needs through evidence-based preventive care in the community, care coordination, and support for patient self-management.

Use of APRNs in Primary Care Settings

Some health care problems must be addressed whatever happens with reform. High on the list is the supply of primary care professionals.  Shortages have been reported in Massachusetts, and primary care access concerns have been raised in national reform discussions.  The shortage of primary care physicians is often tied to their low income, compared to specialists, and the consequent diversion of medical graduates to specialties.  The shortage of primary (and in some areas, specialty) physicians has prompted recommendations for increased medical school enrollment and residency slots for all areas of medical practice.

The wisdom of pumping up physician supply has been questioned.   It has been noted that, beyond a low threshold, increasing specialty physician supply is poorly correlated with better outcomes, and that previous efforts to increase supply has made the rich richer and the poor poorer, as graduates have flocked to locales and specialties already well-served by physicians.

So what is the proper policy response to a shortage of primary care physicians?  Physicians claim exclusive control of a broad swath of professional practice.  They dominate primary care, and exclusively control a more and more finely differentiated series of specialty fields.  With power comes responsibility, one might think.  Richard Cooper, a leading analyst of physician supply, commented in 2002 (at a time when many saw a surplus, not a shortage, of physicians) in an article with colleagues on the ramifications of this broad near-monopoly in a profession with falling production and fixed supply:

The sociologist Andrew Abbott has observed that “a profession whose jurisdiction is excessive must increase its productivity or expand its numbers.” Conversely, “when a powerful profession ignores a potential clientele, paraprofessionals appear to provide the needed services.” These statements characterize the dilemma that physicians now face. Their ability to increase their productivity is limited by their declining work effort. Their ability to grow their numbers is hostage to the belief that surpluses exist. And organized medicine has embarked on a vigorous campaign to thwart expansion of the NPC [non-physician clinician] disciplines. Yet it was shortages in the past that motivated state legislatures to remove the barriers to licensure for NPCs and to enlarge their range of privileges, and it is perceived professional opportunities that stimulated the creation of new disciplines and the expansion of existing ones. (footnotes omitted)

So, health reform efforts have emphasized access to primary care for its beneficial effects, while the supply of primary care docs has suffered a flight to specialty practice.  Is it, as Cooper suggested, time to rethink the place of non-physician caregivers on the front line of primary care?  As advanced practice registered nurses (”APRNs”) have gradually increased their scope of practice, studies and meta-studies have found that outcomes are equivalent when services are provided by a physician or APRN, and patients satisfaction measures may favor nurse practitioners.

But what about the nursing shortage?  It may be that expanding the profile and responsibilities of APRNs could further efforts to recruit and retain nurses.  Talented, hard-working nurses have long been concerned that their career path is limited; their salary steps are few and shallow, and they are unable to gain responsibility and autonomy commensurate with their training and experience.  Facilitating RNs’ graduate education to allow licensure as advanced practice nurses would enrich their career paths and encourage then to remain in the profession.   To move in this direction, those states that have not done so could expand the scope of licensure of APRNs to permit more fully independent primary care practice options.   The length of time needed for education and training would be long, but not as long as for physicians; compensation would have to be increased to reflect a higher level of training and responsibility, but not to the compensation level of physicians.

The path to regularizing the scope of practice for APRNs is described in a 2008 consensus document endorsed by 39 national general nursing and nursing specialty organizations.  A 2009 report from the Connecticut Office of Legislative Research described that state’s APRN scope of practice:

Advanced practice registered nursing is defined as the performance of advanced level nursing practice activities that, by virtue of postbasic specialized education and experience, are appropriate to and may be performed by an APRN. The APRN performs acts of diagnosis, and treatment of alterations in health status and must collaborate with a Connecticut-licensed physician. In all settings, the APRN may, in collaboration with a licensed physician, prescribe, dispense, and administer medical therapeutics and corrective measures and may request, sign for, receive, and dispense drug samples.

The required “collaboration” with physicians was also described:

The law defines “collaboration” as a mutually agreed upon relationship between an APRN and a physician who is educated, trained, or has relevant experience that is related to the work of the APRN. The collaboration must address a reasonable and appropriate level of consultation and referral, patient coverage in the absence of the APRN, a method to review patient outcomes, and a method of disclosing the relationship to the patient.

The physician oversight rule is typical, and has been the source of tension with APRNs.   Physicians can be suspicious of APRNs, and it has even been suggested that physicians may avoid working with them as APRNs gain more autonomy — a reaction that could be fueled by concerns with APRNs’ competency and training, or by a desire to weaken a source of competition for control of the profession.

APRNs might fill the primary care end of the physician practice spectrum, should physicians continue to flee primary care for more remunerative specialties.  There are genuine professional competency issues to work out, but they ought not be resolved by physicians as a matter of naked market power.  In addition, the terms of appropriate collaboration between physicians and APRNs need to be ironed out, to protect patients while avoiding the possibility of anti-competitive refusals to deal with APRNs.  Many researchers and physicians welcome the emergence of APRNs as partners in primary care practice.  Further research on the proper autonomous practice settings for APRNs will serve the interests of patients, and can guide planning for the future of primary care.

Little Beds and Little Help at Jfk Hartwyck at Edison Estates

We speak here of health care and health care reform, most often in the larger, policy sense. This weekend I had occasion to witness the beast up close. My younger brother had his knee replaced earlier in the week at JFK Medical Center here in Edison, NJ. By all accounts the operation was a success; although he is only 45 years old (which I’m told is considered young for a knee replacement) he has had a history of knee problems initially ensuing from his having been struck by a car while working a number of years ago. After the surgery, his doctor asked him how he had even been walking– there was, he said, no cartilage left to speak of.

Initially his insurance company balked (perhaps pro forma?) at the prospect of my brother entering a convalescent center for physical therapy and rehab, citing his relatively young age, but relented under the demands of the doctor. He was initially to have been transferred to the rehab center on Thursday, but was inexplicably delayed until Friday late afternoon. He was sent to Jfk Hartwyck at Edison Estates, which seems to function primarily as a Nursing Home– but not a particularly highly rated one.

On Saturday at around 1:30 pm, as I set out to see him, I called to a) make sure he had in fact been transferred and was there; and, b) find out his room number. After three call transfers and three fairly frustrating conversations I was finally able to confirm that he was there; I also learned that he was on the third floor. I gave up on the room number.

To say the place is a bit run down is not to engage in hyperbole; to say that there was an absence of care is merely to mimic the US News Report on the Nursing Home and Rehab Center.

My brother is a big man– 6′ 3″ or 4″ tall, and having lost some weight, scales in at about 295lbs. Despite the fact that his chart says such, provisions were not made to accommodate him. He did not fit in the bed: his head struck against the headboard and his feet crushed against the footboard if he tried to lay straight. Presumably, with his knee having just been replaced, this matters even more than it would normally. There is a contraption that he was supposed to put his leg and knee in– it would not fit on the bed. Furthermore, the foam mattress that came with his too-short bed was so old and beat up that he sunk into the bed’s metal slats tossing and turning (though not laying straight) while trying to sleep. In doing so,  he had actually been cut.

In addition, no one had thought to give him an elevated toilet seat; his knee precluded him from reaching a standard seat.

He had made these problems known to staff earlier, and was told that they would fix them. This did not happen.

After I arrived and reiterated these needs to various levels of staff, I was told of a number of different, but conflicting remedies and the schedules for such. They did not have a bed long enough but would  remove the footboard so that his feet would hang off the bed??? until they could fasten an extender or buy or rent a bed to fit him– which could take either a few hours or a few days.  I said I could live with a few hours, but that a few days was patently unacceptable. The contraption would have to wait.

He is 6′ 3″ or 4″ tall, he is not 7′ 2.” It is decidedly not a new facility. They have 280 beds. Surely, from time to time they get patients taller than 6′ 2″? They acted as though they never had.

The shoddy mattress was soon replaced, though, inexplicably, no one entered the room to assist my brother as he struggled to get out of the bed and hoist himself precariously onto the walker as the mattresses were exchanged. Throughout the four or so hours I was there, this absence of assistance was a recurring theme. Having been trained as a lawyer, this willingness on the part of staff to court, if not embrace, liability was, quite frankly, appalling. I assure you, somewhere there’s an in-house attorney prematurely gray.

As for the elevated toliet seat? I had to ask again, but urgently, as he had to go. The nursing assistant unable to find one elsewhere, ultimately snatched one from another patient’s room and hurried to clean it as my brother, the outcome uncertain, anxiously waited.

The truth is, they ultimately moved in response to my demands formulated in accord with my legal training. Otherwise, I imagine he’d still be lying there with a too-short bed, presumably covered in his own fecal matter as he vainly attempted to make his new knee bend and descend to an unprepared toliet.

In the end, they gave up on removing the footboard as they realized while taking it apart that it would actually disable the bed controls by doing so. When the rental bed came, they had no mattress to fit it but, tired of it all, we assented to pillows shoved in at the end. When the bed was set up, after the rental bed man told the nurse that she was going to want to go over the bed– which had different controls than the former bed– with my brother–and to make sure we set up the height of the bed to accommodate him–the nurse nodded her head and promptly walked directly out of the room. We managed without her.

I won’t bore you with more, but I will say that the attending doctor had briefly visited my brother earlier in the day and, without so much as asking him his relative pain level, apparently changed his pain prescription for the afternoon, but didn’t bother to actually tell my brother that she was doing so. Tentative about leaving the direct care of his surgeon, before he left the hospital my brother actually asked his surgeon if he would continue on this particular prescription that seemed to be working–the surgeon assured him that this prescription was “the law” and would remain in place wherever he went to combat the pain. Apparently, the rehab’s attending had not heard of the law and by the evening it became apparent that something was wrong. My brother, who is tough as nails and has worked a harsh blue collar job all his life, began to cry. The nurse informed us soon thereafter that his prescription had been changed. A lengthy explanation/argument with the nurses and phone call to the doctor filling in for the attending resulted in a reinstatement of “the law.”

It is also worth mentioning that although we were told by the nurses that standard protocol for incoming sub-acute was a physical therapy evaluation within at least, the very next day– that never happened. And although I was assured that although there must have been some form of communication failure which deprived him of his evaluation, he would be evaluated very first thing the next morning. That did not happen either. My brother was told this morning that “no physical therapy staff work on Sundays.” Obviously, he has received no physical therapy yet. At best, he will be evaluated for such come Monday morning– he got there on Friday. His knee and leg have further swollen. Insurance will only pay for so many days stay. It is also my understanding that the first few days of rehab are crucial to an effective recovery.

I routinely villify insurers (as they deserve it), but I can’t help but see at least one of their points here. My question is this: exactly what will this medical facility be charging the insurer for this weekend? Therapeutic Services? Rehab? He was warehoused– and poorly at that.

I’ll keep you posted.

Cost, Choice, and Value

The Massachusetts Massacre has everyone stepping back a bit.  The President says that we should “coalesce around those elements of the package that people agree on,” but it is unclear just which elements those might be, given the extreme polarization that has defined the debate.  He suggests that points of agreement might center on insurance reform and cost containment, which are both important goals.  I’m skeptical that a sudden flowering of bipartisanship will allow such agreement, however.  Ezra Klein, on the other hand, has a paring proposal that goes in another direction, and reminds us of why we got into this in the first place: to extend coverage to the uninsured.  If we must narrow our focus, Klein says we should extend Medicare to those over 50, and expand Medicaid to those under 200% of poverty.  This would get lots of people insured, and could well be accomplished through budget reconciliation if no Congressional coalescing is to be had.

However the parsing, paring, and palavering goes, cost control is and will be at or near the health reform debate for years to come.  Two recent articles are worth a look for those interested in analysis of cost-containment strategies.

In his health care speech to Congress, the President suggested that one component of an effort to lower health care costs should be to empower a commission of “doctors and medical experts” to identify and,

encourage the adoption of  . . . common-sense best practices by doctors and medical professionals throughout the system. Wrapped up in that suggestion are notions of adhering to expert guidance in treatment decisions.

The stimulus bill passed in February pushed for scientific assessment of modes of care, providing $1.1 billion for comparative effectiveness research.  The current reform bills further emphasize CER, and would encourage the adoption of proven and promising treatments through professional education and some payment reform.  Harvard Medical School professor Jerome Groopman writes on evidence-based medicine in the latest New York Review of Books.   In his 2007 book, How Doctors Think, Groopman did a great job of explaining the complex and fraught process by which doctors make decisions, and he is fully on board with the notion that there is ample room for improvement.  His new article, however, cautions that the use of panels of experts with authority to impose or even recommend best practices is a dangerous way to go.

Groopman acknowledges the need for health policy folks to consider the bounded rationality of both doctor and patient.  He examines the Obama Administration’s policies on evidence-based practice by contrasting the views of two key advisors: Cass Sunstein, whose view of “libertarian paternalism” incline him to favor gentle “nudges” that may encourage certain behavior while leaving people free to reject the advice if they wish, and Peter Orszag, who is more inclined to employ forceful regulatory standards and financial incentives to achieve cost effective medical practice.  Groopman is compellingly  skeptical of expert claims of definitive standards on what “works” in health care, and cautions that such standards can result in harm to patients who fit uncomfortably into the hard categories defined in such best practices.

Groopman’s analysis seems incomplete for two closely intertwined reasons, and surely as a result of space constraints.  First, he suggests that the administration is faced with a stark choice between

aggressively pushing doctors and patients to do what the government defines as best, or [being] respectful of their own autonomy in making decisions.

Surely there is much middle ground between tying doctors’ hands and respecting complete clinical independence.  And it is not enough to say, as does Groopman, that

Most physicians seek data and views on treatments from peers and, as needed, specialists, and then present information and opinion to patients who ultimately decide.

Maybe so, but physicians are sometimes self-interested, and patients’ choices  are sometimes influenced by advertisements or other considerations disconnected from quality concerns.  For these and other reasons, spending decisions are no longer consigned to the doctor/patient dyad, but increasingly must accommodate the cost-containment interests of third party payers — government, employers, or insurers.

Second, Groopman describes two exclusive categories of procedures: “mechanical procedures” such as the  insertion an intravenous catheter (where he argues that enforcing standards to avoid infections is proper) and all other procedures, where the individual patient’s condition becomes relevant, and where he argues that coercing clinical choices is out of bounds.  It is not obvious that the universe of procedures is so divisible; it is even less clear that the dividing line between the two categories is uncontroversial.

Many questions remain.  Groopman is surely right that we must be cautious in enforcing categorical “best practices;” it is important to create public processes for vetting their accuracy and usefulness.  He is also surely right that public and private health finance rules must accommodate variation in medical needs, and must bend readily when a “best practice” is not suitable for a particular case.  But cost is relevant, and encouraging efficient practice can reduce the cost (and therefore the extent) of coverage.

So, how might a balance between financial constraints and patient protection work?  In a Health Affairs article posted  yesterday, Michael Chernew and coauthors examine the growing phenomenon of “value-based insurance” — a structuring of insurance co-payments responsive to the needs of people with chronic illness.  The co-payments imposed by insurers are, of course, intended to reduce demand for health care services (an Orszag, not a Sunstein tool, you might say).  Value based insurance reduces or eliminates these co-payments for services of “high clinical value.”  That is, if an insurer determines that it would rather not discourage utilization for a particular service, it reduces or removes the patient cost-sharing, presumably increasing usage, for cost as well as clinical reasons.  As the authors explain,

The belief that a value-based insurance program will lower health care spending rests on the recognition that the use of high-value health care services reduces the probability of adverse events related to chronic disease and that on a population basis, these events are much more costly than the services aimed at preventing them.

The authors found some evidence that such programs are cost effective, even in the narrow sense of reducing a plan’s health care expenditures.  They suggest that widening the economic lens to consider broader societal goals would only strengthen those conclusions.

The article acknowledges the reality of economic coercion in the clinical setting, and measures attempts to shape the tools of cost containment in a way that protects patients while maintaining cost containment.  One doesn’t have to accept the general wisdom of patient cost-sharing to value attempts to protect patients from untoward effects of its use.

The need to obtain “value” for health care spending and to take steps to restrain health inflation will persist however we come out of the current reform debate.  The discussion will benefit from both the erudite analysis of Groopman and others warning us away from answers that are too easy, and that of Chernew and others who can shine a light on the efficacy of particular cost containing measures.

Dollars and Sense & Health Care Reform

With health care reform approaching its culmination point, like all things most memorable of the past year, the overarching question remains, “How much will this cost us?”  As it currently stands, the House version of health reform will cost an estimated $1 trillion over a decade, while the Senate version comes in at $871 billion.  Next, comes the obvious second question, “How will the government pay for it?”  As Kaiser Health News summarizes in its recently released guide to health reform:

Both bills hit up the wealthy, but in different ways. The House would impose a 5.4 percent income tax surtax on individuals who earn more than $500,000 a year and couples that earn more than $1 million. The Senate would increase the Medicare payroll tax rate from 1.45 percent to 2.35 percent for people who earn more than $200,000 a year and families that earn more than $250,000.

To raise money to pay for the legislation, the Senate would impose a 40 percent tax on the portion of most employer-sponsored health coverage that exceeds $8,500 a year for individuals and $23,000 for families. The Senate also would raise the threshold for deducting medical expenses to 10 percent of income, up from 7.5 percent.

Overall, the financing provisions could spur a pitched battle; the House hates the Senate tax on high-cost policies, while the Senate opposes the House’s income-tax surcharge.

In addition, many Americans worry that efforts to contain costs within the bills will lead to decreased standards of care.  As a New York Times piece reveals, however, this may not be the case.  The article examines the health system in Richmond, Virginia, where there are stringent state infrastructural expansion guidelines placed on health care practices and hospitals to contain costs.  The state requires large medical infrastructural expenditures by health care providing institutions– in the form of hospital expansion or even major equipment purchases– to be approved by the state through a “certificate of need.”  Neither of the House or Senate bills  includes such a provision, but there is a great deal of speculation that the oversight and cost-cutting measures in both will have a deleterious impact on the quality of health care.

While Richmond spends less than average per capita on Medicare than other metropolitan areas, patient outcomes are better than average. The Times reports

The quality of care in Richmond is better than in most American metropolitan areas, according to various measures, and it continues to improve. Medicare data, for example, shows that Richmond hospitals do a better-than-average job of treating heart attacks, heart failure and pneumonia.

But perhaps the most interesting aspect of the Times’ analysis relates to those states that do not police their health care infrastructure expenditures– or, as in South Dakota, had done so formerly, but ceased to do so.  When South Dakota “scrapped” its certificate of need program, one chief operating officer reported going on an expansion binge. In such cases, the number of patients that providers treat is said to correspond proportionally to the level of health care resources available.  One medical officer found this “supply-sensitive” phenomenon to mean that the more hospital beds a hospital has, the more patients it is likely to see.  Build it and they will come– or perhaps more to the point– they will be sent. At our expense.

Does the VA Cost Less Than Private Health Care?

Taking a break from law, this post is about whether the Veterans Health Administration provides care more efficiently than the private sector.  Paul Krugman and others have held the VA out as a shining example of the government’s ability to provide high quality care efficiently, as well as the private sector’s need to lower costs and improve quality through electronic medical records, comparative effectiveness research, reduced overhead, salaried physicians, and integrated delivery systems — all issues that are central to current health reform debates.  It would be a huge blow if it turns out none of this is true — but that’s precisely what’s suggested by an article published by VA researchers earlier this year.

Wm. Weeks, MD (at Dartmouth and the VA’s regional  center) reported that, from 2001-2006, the VA cost 33% more than equivalent care in the private sector, and its quality was not notably better.  Here, I focus on the cost findings, since they diverge dramatically from the prior, state-of-the-art, study by Nugent, Hendricks et al (also from the VA), which found that, in 1999, the VA cost about 20% less than Medicare.  Since Medicare itself costs 25-30% less than the private sector, Dr. Weeks reports the VA costs about twice what Dr. Nugent and other VA colleagues  previously reported.  What makes this discrepancy even more remarkable is that Weeks did not even cite this prior work of VA colleagues, published in multiple articles in leading journals.

What gives?  I’m not expert, but its clear their methods differed sharply.  Nugent et al. took all care delivered at 6 VA centers and valued the services at actual Medicare fee-for-service rates, comparing the total with costs borne by the 6 VA centers.  Thus, the measures and comparison are direct, apples-to-apples.  Weeks, on the other hand, compared total VA medical costs (excluding nursing homes) per user with per person costs reported by VA users in the Medical Expenditure Panel Survey (MEPS), which values those services at private sector rates.  MEPS is a national survey that contains only a small subsample of 500 VA users, about 1 of every 50,000 VA user.  Extrapolating from such a small sample is a much more indirect comparison, so merits closer scrutiny, which reveals many potential flaws:

1. The 500 VA users in MEPS  are probably not an accurate reflection of 5 million total users.  MEPS surveys people living at home who respond to surveys.  This entirely excludes people who are homeless, institutionalized, or have died earlier in the year, and it under-represents mentally ill or substance abusers.  All of these categories have worse health, and regrettably are prevalent among vets, so MEPS almost certainly omits vets who reflect the highest burden of illness.
2. This sample may lacks much statistical validity, even for the vets it does include.  MEPS weights responses to make them nationally representative for demographic characteristics, but not for veteran status.  Without this weighting, the chance of random error is much greater.  This is suggested, for instance, by the fact that the value of VA care reported over this six-year study ranged two-fold from year to year, with no discernible pattern (the sixth year was twice the fifth year, which was half the third year, etc.)
3. Even for those whom MEPS does represent, it underreports actual health care costs.  Exactly how much and why is somewhat unsettled, but what seem to be the most recent studies conclude that MEPS underreports by 14% - 19%, in large part because reports of both utilization and costs are understated.    Weeks acknowledges these possible flaws, but asserts that studies he and others have done show MEPS is reasonably accurate — again without citing any of the leading studies to the contrary.

Moreover, even Weeks’ self-selected cites do not fully support his accuracy claim.  For instance, he says a RAND study reports that “MEPS expenditure estimates ‘agree quite well’ with estimates from other databases.”  But, the RAND study (p. 34) spoke in that phrase only to utilization, not to expenditures, and even for utilization it said MEPS underreports by 85% for outpatient hospital use.  For expenditures (use X price), RAND (on the very next page) said that MEPS underreports hospital costs by 21% and physician costs by 54%.

What is this Journal of Health Care Finance that would publish a flawed use of MEPS?  It is hardly a leading health research journal.  According to its website, it is

devoted solely to helping you meet your facility’s financial goals. . . . Make easier, better decisions, with advice from industry experts. . . .  Experts in the field share their experiences on successful programs, proven strategies, practical management tools, and innovative alternatives, . . . including hospital/physician contracts, alternative delivery systems, generating maximum margins under PPS, improving productivity, taxation management, health care insurance, employee benefit cost-containment, joint ventures, mergers and acquisitions, employee incentive systems, and more.

An e-mail from its editor states that most articles are reviewed only internally, by its editorial board whose members are drawn primarily from industry.

It appears the Weeks article did not receive peer academic scrutiny, but what about scrutiny from the study’s own coauthors, who are affiliated with Dartmouth and Washington & Lee?  The second author happens to be Weeks’ wife, and the third appears to be their son.  As for Weeks himself, he is deeply embroiled in two serious legal controversies with the VA.

On balance, the Nugent, Hendricks et al. study remains unrebutted. In my view, the Weeks study suffers from too many serious flaws, and is too lacking in objective critique, to hold much or any credence in this important debate.

Originally posted at the O’Neill Institute for National Global Health.

Here’s an Idea: Asking Doctors about Health Care Reform

The New York Times just published a very interesting article that ties the efforts of the medical community to bring about change in the American health care system with Congress’s attempts to reform health care through legislation.  The article, which details the research of a team of health care providers in the Intermountain Healthcare system in Utah and Idaho, offers insight into what doctors are doing on their own to effect change while waiting for our nation’s leaders to implement the means to better health care for Americans.

As can be seen by American Medical Association’s recent endorsement of the Democratic House bill, and the long time call of the National Physician’s Alliance for reform, there is a consensus among  health care providers for health care reform.

Of course, essential in that reform is delivery system reform. Part of delivery reform is likely to emphasize not only preventive care, a cornerstone of Obama’s plan, but also a careful monitoring and consideration of the outcomes of health care practices.  Although there is debate about the best way to monitor and measure such practices, and some bridle at the prospect of being “confined” to protocols derived from large studies,  the evidence-based medicine model is emerging  as a favored tool with which to analyze how health care providers themselves can produce more cost-effective, life-preserving results. Evidence-based medicine puts protocols in place (which may be overridden at a doctor’s discretion) and relies heavily on the statistical analyses of a health care system’s performance (i.e., patient outcomes from particular practices).  Such is the model executed by the Intermountain Healthcare system highlighted in the Times article.

The protocols ultimately implemented sometimes differ from the usual course of treatment offered by some doctors. The physicians at Intermountain Healthcare admit that it is often hard for doctors to hear that they are doing something wrong– or perhaps “not optimally” would be a better choice of words.  The Executive Director of Intermountain Healthcare Institute for Healthcare Delivery and Research, Brent James, relates that some doctors do not believe the results of the statistical research because doctors are reluctant to change their ways, but that oftentimes when presented with clear statistical evidence doctors change their practices.  He gives the example of obstetricians who were performing elective inductions prior to 39 weeks for pregnant women for the sake of convenience, as the inductions save hours of labor for the mothers and therefore hours of hospital time.  However, an analysis showed that babies born prior to the 39th week of gestation were far more likely to wind up in intensive care. After doctors saw the data, and protocols were put in place, James found that the rate of elective inductions fell dramatically. A similar protocol developed for the treatment of one form of pneumonia was said to have cut the rate of death for that condition by 40% over several years.

Some doctors contend, however, that the medical metrics of evidence-based models are not the best way to bring change in health care practice, both because doctors will feel pressured to follow set protocols without considering other possible treatments and because humans are not statistical data that can be remedied through calculations and formulas. The danger, of course, is in negating the healing art– in throwing the proverbial baby– independent critical thought– out with the bathwater.  Doctors of this school of thought often espouse  revamped medical education as a better way to reform health care practices; after all, the basis of how health care providers develop their practices is the way in which they were/are taught.

And one wonders if there isn’t room for both approaches. If the education of medical students can be changed to incorporate better and cost effective practices based on studied outcomes (perhaps in part culled from the Health IT initiatives), and changed to incorporate greater emphasis on preventive care (coupled of course with a pay system which rewards patient wellness), while still respecting doctor autonomy so as not to prepare a generation of medical robots. It doesn’t sound “un-doable.”

Interestingly enough, medical schools have seen an increase in students applying to their programs.  In response, four new American medical schools have opened.  With the older generation of health care practitioners on its way to retirement, the need for more doctors is imminent.  But, we need doctors that are able to help carry the new ideals and practices of a reformed health care system; reaching into the med school curriculum would seem to make a lot of sense.

Reform Rodeo

1. Kaiser Health News discusses the details of the House’s latest iteration of their Health bill.

2.  Ezra Klein analyzes whether the public plan will cost insureds more than private insurance.

3.  The New England Journal of Medicine circles back to a reform issue that is often overlooked: primary care and accountable care.

4. Jonathan Cohn at The New Republic looks at how two of the biggest players in the U.S. health care system–the medical device industry and the pharmaceutical industry–are affected by the House bill.

5.  The Healthcare Economist reports on a study released by the Urban Institute that breaks down how the House Bill will affect the number of uninsured.

6.  Wild Card: Eugene Volokh highlights on a case involving one company’s desire to patent a physician’s thought process.

7. In Case You Missed It: The Cost of (Not) Implementing Chronic Care Management by Professor John V. Jacobi.

The Cost of (Not) Implementing Chronic Care Management

Health reform’s primary beneficiaries will be the uninsured, but it should also benefit those with “good” insurance.  We all know horror stories of well-insured relatives and friends driven from pillar to post in attempts to get good treatment for serious chronic conditions.  It too often seems that no one is in control: doctors aren’t paid to talk to patients, but rather to do things to them, and the roles of other professionals (e.g., advanced practice nurses) are sometimes minimized.  As I’ve described earlier, there is some good news regarding medical practice reform in the bills, particularly for people with Medicare or Medicaid.

How do we get people into medical settings where their chronic conditions can be well-managed?  Interesting work is being done in many quarters on this issue.  In a recent Health Affairs paper, Steven D. Pizer and coauthors reported that people with chronic conditions in regions of the country with thin Medicaid programs are likely to be uninsured, notwithstanding Medicaid’s strong orientation toward disability and chronic care.  In a companion article,   Andrew P. Wilper and coauthors reported on high levels of uncontrolled — often undiagnosed — chronic conditions (hypertension, diabetes, and elevated cholesterol) among  people without insurance.  Public insurance expansions in pending reform bills would assist these low-income people with chronic illness get coverage, and the chronic care provisions have the capacity to provide appropriate medical management of their most pressing conditions.

Structure is emerging on best practices for the delivery of sound coordinated care.  The NCQA has worked with physician groups to create tools to evaluate practice settings according to their ability to serve as therapeutic homes for all, but in particular for those with chronic conditions.  The Physician Practice Connections - Patient-Centered Medical Home program provides tools for public and private payers to evaluate a physician practice before designating it a “medical home” - and compensating it accordingly.  The tools evaluate prospective medical homes on factors such as their active support of patient self-management; use of non-physician staff for patient management; employment of procedures to maintain high levels of patient communication; and adoption and use of evidence-based care management protocols for chronic illness.

So how much does it cost to do this right?   A recent study from Commonwealth Fund sheds some light on this complex issue.  In the study, Stephen Zuckerman and coauthors take on the difficult task of examining the marginal cost of converting a 20^th Century practice to a 21^st Century medical home.  It makes interesting reading, and tentatively suggests that the cost could be modest.  Zuckerman et al. are attempting to compute cost. They recognize that cost is only a component in a more important calculation: what is the value of creating medical homes?  They cite to a 2008 Deloitte report that gathers research tending to show that the cost is probably worth it, even in purely economic terms.  That is, it appears that the savings achieved in avoided hospitalizations and other expensive interventions is significant, washing out the cost of supporting sound chronic care management.  It is not, of course, only about efficiency; ending the chronic care horror stories is the true goal.

Expanding insurance is only the first step in delivering the care people need.  For people with chronic illness, the finance and delivery system needs to work with the whole person, family, and community, and not slice the patient into 8 minute blocks and procedure codes.  A consensus statement of the American Academy of Family Physicians, the American Academy of Pediatrics, the American College of Physicians, and the American Osteopathic Association describes a commendable principle of care coordination that has particular application for people with disabilities and chronic illness:

Care is coordinated and/or integrated across all elements of the complex health care system (e.g., subspecialty care, hospitals, home health agencies, nursing homes) and the patient’s community (e.g., family, public and private community-based services).  Care is facilitated by registries, information technology, health information exchange and other means to assure that patients get the indicated care when and where they need and want it in a culturally and linguistically appropriate manner.

Practice follows payment.  Payment reform must facilitate the adoption of practices that serves chronic needs.

The Call for Medical Malpractice Reform as Health Care Reform: Sound and Fury? (Redux & Remix)

In Obama’s speech before Congress, he mentioned (to booming and overwhelmingly Republican applause) the prospect of medical malpractice reform– particularly as it relates to “defensive medicine” and patient safety:

Now, finally, many in this chamber — particularly on the Republican side of the aisle — have long insisted that reforming our medical malpractice laws can help bring down the cost of health care. (Applause.) Now — there you go. There you go. Now, I don’t believe malpractice reform is a silver bullet, but I’ve talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs. (Applause.) So I’m proposing that we move forward on a range of ideas about how to put patient safety first and let doctors focus on practicing medicine. (Applause.) I know that the Bush administration considered authorizing demonstration projects in individual states to test these ideas. I think it’s a good idea, and I’m directing my Secretary of Health and Human Services to move forward on this initiative today. (Applause.)

A few months back we covered the issue of malpractice reform and “defensive medicine” here on HRW.  Not much has changed since then (see below), but as we speak of those things which can make patients safer– including the prospect of doctors and hospitals being subject to suit– this article from the NY Times’ Prescriptions, “A Hospital Hand-Washing Project to Save Lives and Money,” is worth considering. In it, we are told of a study undertaken, for the chief hospital accrediting agency (the Joint Commission), by eight prominent hospitals to ascertain whether or not hospital staff were washing their hands  in accord with the central standards of the World Health Organization and the Centers for Disease Control and Prevention. They were not. Egregiously not. NY Times’ Prescriptions reports:

Hand-washing is considered vital in health care settings to prevent the spread of potentially-infectious pathogens, like Methicillin-resistant Staphylococus aureus. And close attention to such basic hygiene could be a way of reducing the nation’s hospital health care bill by billions of dollars.

To create a baseline, each hospital agreed last spring to carefully measure its current compliance, using trained unidentified observers. To the surprise of many administrators, the hospitals found that caregivers on average washed their hands fewer than half the times they entered or exited a patient’s room.

and that

The low compliance rates, which ranged from about 30 percent to 70 percent at individual hospitals, “are hallmarks of processes that are not in control,” said Dr. Mark R. Chassin, the Joint Commission’s president.

Findings of shockingly poor hand-washing compliance are not new in hospitals. Other studies have produced comparable figures, and the stories of fatal consequences have become tragically routine.

The disease control agency estimates there are 1.7 million infection cases a year in hospitals and that 99,000 patients die after contracting them (although infection may not be the sole cause). It projects the cost of treating those patients at $20 billion a year.

As I say in the post below, “Seemingly, one would define “defensive medicine” as that which a doctor [or hospital] does, which he or she would not do, if solely exercising his or her [or its] discretion without the fear of being sued. Therefore, might I suggest that “defensive medicine” is only excessive if the doctor’s [or hospital's] best estimation of the situation is correct.”

Apparently, contrary to the Joint Commission, the World Health Organization, and the Center for Disease Control and Prevention, the best estimation of a great many hospital staff is that they need not wash their hands.

REDUX, June 09. In case you missed it.

“THE FIRST THING WE DO,  LET’S KILL ALL THE LAWYERS.”
–Wm. Shakespeare, King Henry VI, Part II, (Act IV), Scene 2

[Today's post comes from a Bloomberg.com article I found via Kevin Giordano at http://twitter.com/SHHealthcareLaw -- a great source for Health Law news.]

The familiar refrain of “medical malpractice reform” has once again begun to echo through the popular landscape. It is being proffered as a means of achieving health care reform. But recent studies seem to show, as Bloomberg reports, that we might be better served to look elsewhere:

Protecting doctors from lawsuits may do more to gain political cover for President Barack Obama’s health-care overhaul than to rein in medical costs.

While Obama vowed to address physicians’ malpractice worries in a speech yesterday, annual jury awards and legal settlements involving doctors amounts to “a drop in the bucket” in a country that spends $2.3 trillion annually on health care, said Amitabh Chandra, a Harvard University economist. Chandra estimated the cost at $12 per person in the U.S., or about $3.6 billion, in a 2005 study. Insurer WellPoint Inc. said last month that liability wasn’t driving premiums….

“Medical malpractice dollars are a red herring,” Chandra said in a telephone interview. “No serious economist thinks that saving money in med mal is the way to improve productivity in the system. There’s so many other sources of inefficiency.”

The relative cost figures regarding the costs associated with malpractice are worth noting –as reported by Bloomberg:

About 10 percent of the cost of medical services is linked to malpractice lawsuits and more intensive diagnostic testing due to defensive medicine, according to a January 2006 report prepared by PricewaterhouseCoopers LLP for the insurers’ group America’s Health Insurance Plans.

2 Percent of Spending

The figures were taken from a March 2003 study by the U.S. Department of Health and Human Services that estimated the direct cost of medical malpractice was 2 percent of the nation’s health-care spending and said defensive medical practices accounted for 5 percent to 9 percent of the overall expense.

A 2004 report by the Congressional Budget Office also pegged medical malpractice costs at 2 percent of U.S. health spending and “even significant reductions” would do little to reduce the growth of health-care expenses.

Defensive Medicine

As is, I believe, readily apparent, defensive medicine comprises a great deal of that estimated expense associated with malpractice. It may benefit us to consider for a moment just what defensive medicine is. Seemingly, one would define “defensive medicine” as that which a doctor does, which he or she would not do, if solely exercising his or her discretion without the fear of being sued. Therefore, might I suggest that “defensive medicine” is only excessive if the doctor’s best estimation of the situation is correct.

Bloomberg reports that “The U.S. Institute of Medicine found a decade ago that medical errors kill 98,000 Americans a year” according to Les Weisbrod, president of the Washington-based trial lawyers’ group, the American Association of Justice.

According to Medical News Today, the medical error fatality figures above were supported by “Dr. Chunliu Zhan and Dr. Marlene R. Miller in a research study published in the Journal of the American Medical Association (JAMA) in October of 2003. The Zhan and Miller study supported the Institute of Medicine’s (IOM) 1999 report conclusion, which found that medical errors caused up to 98,000 deaths annually and should be considered a national epidemic.

A study by HealthGrades found more than twice that number in “potentially preventable deaths.”

In a post entitled Surgical Checklist Said to Save Lives & Money, we noted the following:

The use of a basic checklist was shown to be associated with a substantial decrease in surgical deaths and complications. In what the A.P. referred to as a “a large international study of how to avoid blatant operating room mistakes,” researchers found a 47 per cent decrease in death and a more than one third decrease in complications-from 11% to 7%- concomitant with the use of a 19 point checklist designed by the World Health Organization.

A.P reports that regarding the elements on the list (many of which concern matters such as verifying the patient’s identification, marking the area to be incised with a magic marker, discussing patient allergies and surgical team member responsibilities, and accounting for all needles, sponges and instruments after the surgery) U.S. hospitals have been required since 2004 to take some of these precautions. But the 19-item checklist used in the study was far more detailed than what is required or what many institutions do.

The researchers estimated that implementing the longer checklist in all U.S. operating rooms would save at least $15 billion a year. The study, which was conducted in both “wealthy” and “poor” nations in eight city hospitals across the world (including Seattle, Washington), was published in the New England Journal of Medicine; its results were said to have “startled the researchers.”

Finally, it should be noted that as someone with a J.D. after his name who has read more malpractice cases than I care to remember, I don’t claim to be unfettered by professional bias. And to make the case for fact-based reflection upon a subject is not to dismiss the underlying concerns of the subject as unwarranted– it is merely a call for appropriate perspective: given the number of yearly fatalities due to error (not to mention injuries due to the same), I am not prepared to categorize what doctors refer to as “defensive medicine” as a wholly unfounded expense.

As for the Shakespeare quote, “First thing we do, let’s kill all the lawyers,” I’ll leave that in the more than capable hands of Attorney Howard L. Nations:

Those who use this phrase pejoratively against lawyers are as miserably misguided about their Shakespeare as they are about the judicial system which they disdain so freely.

Even a cursory reading of the context in which the lawyer killing statement is made in King Henry VI, Part II, (Act IV), Scene 2, reveals that Shakespeare was paying great and deserved homage to our venerable profession as the front line defenders of democracy.

The accolade is spoken by Dick the Butcher, a follower of anarchist Jack Cade, whom Shakespeare depicts as “the head of an army of rabble and a demagogue pandering to the ignorant,” who sought to overthrow the government.  Shakespeare’s acknowledgment that the first thing any potential tyrant must do to eliminate freedom is to “kill all the lawyers” is, indeed, a classic and well-deserved compliment to our distinguished profession.

Reform Rodeo II

1. On the Public Option Developments:

The New Republic has an optimistic assessment of the recent developments which are said to have forced the Obama administration to adopt a more centrist strategy.

2. On Exercise:

An interesting article in Time Magazine describing the counter-intuitive results that exercise–particularly strenuous exercise–may have on weight gain. However, see this article in the New York Times, describing a Finnish study which found that strenuous physical activity–and not moderate physical activity–reduced the risk of a suffering from a number of different types of cancer.

3. On Treatment Guidelines:

The New York Times also has an interesting discussion of the difficulties of implementing national treatment guidelines that aim to help health care providers utilize best practices. (Note: The article may require a free New York Times account).

4. On Payment Reform:

A recent piece in the New England Journal of Medicine explores the implementation of alternatives to the fee-for-service model.

5. On Taxing Health Benefits:

Merill Goozner frames the taxing of health benefits, arguing as others have, that taxing health benefits may in fact be regressive.

6. On the Best Health Care In the World:

Ezra Klein has a nice discussion of (and link to) an interesting post by the Urban Institute where they explore the (un)truthfulness of claiming that the U.S. has the best health care in the world.

7. In Case You Missed it:

Professor Tim Greaney  in The Health Care Blog: “Market Entry by Health Care Cooperatives: Neither Quick Nor Easy” (Originally posted here on Health Reform Watch, then picked up by THCB).

8. In Case You Missed it:

Professor Timothy S. Jost in The Health Care Blog ,”Are Cooperatives a Reasonable Alternative to a Public Plan?”  (Originally posted here on Health Reform Watch, then picked up by THCB).

9. Wild card Pick: If you haven’t heard about the astounding medical applications of a pooch’s powerful snout, this short video (with an accompanying transcript) from National Geographic is definitely worth watching.

Will Conflicts of Interest Sabotage Health Reform?

With health care reform in full gear, one crucial question is that of prioritization. Where should we focus our efforts? Who needs greater treatment, and what type of care is missing from the everyday lives of everyday Americans? Unfortunately, the politicians crafting the legislation may be swayed–not surprisingly–by stakeholders and lobbyists who are concerned with how reform will affect their bottom line. Interestingly, it is not just private insurance companies and pharmaceutical companies that are influencing the legislation.

A recent New York Times piece underscores how the emerging landscape of physician-owned hospitals is helping to shape congressional legislation.

The Times article states that one of the largest sources of campaign contributions for the Senate Democrats Campaign Committee is from the Doctors Hospital at Renaissance for a not-so-paltry sum of $500,000. Ironically, the event that raised the sum was at the home of Alonzo Cantu, a real estate developer in–you guessed it–McAllen Texas. Another event at Cantu’s house “brought in at least $800,000 for the committee’s House counterpart, the Democratic Congressional Campaign Committee.”

McAllen became (in)famous as the town depicted by Atul Gawande in his now oft-cited piece exposing the framework of incentives available to providers and hospitals to perform a greater number of tests and procedures in order to increase their bottom line, even when the greater volume of tests and procedures does not necessarily correspond to an increase in quality of care. Health Reform Watch has discussed the “cost conundrum” before.  Nevertheless, the incessant media and blog coverage of our inefficient system does not seem to have dissuaded those with a stake in that inefficient system from advocating for the status quo. As the Times points out that:

…like others here, he [Mr. Cantu] is not pleased about the president’s depiction of health care in McAllen.

“What’s so upsetting,” he said, “is that to make his case he threw McAllen under the bus.”

One might ask–given Gawande’s seemingly accurate portrayal of the overly-entrepreneurial nature of McAllen’s health care system–why we shouldn’t throw McAllen under the bus, especially when we can put a face on a problem undermining our system? Mr. Cantu and other Doctors Hospital officials are said to have offered the following argument for why Doctors Hospital and other physician-owned hospitals were beneficial and shouldn’t be singled out:

They have argued they are being unfairly grouped with boutique specialty hospitals that do not have emergency departments and that cater to privately insured patients. Eighty-eight percent of Doctors Hospital patients are either on public insurance or uninsured, 750 babies are delivered there a month, and no one is turned away because of inability to pay, they said.

Physician ownership, they added, has meant major investments in the latest equipment and good staffing ratios for nurses. Appealing to local pride, the hospital markets itself as the first in the area to offer services like PET scans, robotic surgery and breast imaging, which once required trips to Houston or San Antonio.

It is perhaps important to remember, as the McAllen boys attempt to mitigate the damages of the Gawande article, just what Gawande found. As we wrote prior:

Gawande writes that McAllen “is one of the most expensive health-care markets in the country. Only Miami-which has much higher labor and living costs-spends more per person on health care. In 2006, Medicare spent fifteen thousand dollars per enrollee here, almost twice the national average. The income per capita is twelve thousand dollars. In other words, Medicare spends three thousand dollars more per person here than the average person earns.”

El Paso, Texas, similarly situated, spends significantly less– half as much.

Might I suggest that there is little consolation in the fact that the largesse found in McAllen is largely funded through “public insurance,” or that there are “boutique hospitals” which charge even more?

In addition, “Local pride” aside, the real question is whether McAllen needs a PET scan facility or robotic surgery. Importantly, Texas is not a Certificate of Need (C.O.N.) law state. Therefore “local pride” (i.e. desire of a local, often private, facility) may often trump the actual “need” of the community. This idea is reinforced when taking into account that a PET scanner may have an annual operational cost of over $1 million, in addition to the upfront construction costs that can also venture into the millions. Altruism aside for the moment (or perhaps, it seems, longer), the investors in those machines will seek to recoup their cost plus profit. To do so, they simply must use that machine.

Thus, as it stands, the allocation of expensive high-tech machinery in physician-owned hospitals is based upon the government subsidized decision of private investors regarding the liklihood of turning a profit (for the subsidies, think “depreciation” and “expensing” for business equipment; think “public insurance” for billables). Perhaps we should not be quite so surprised when they then comport themselves in a way which ensures such a profit. But, it certainly may be argued that with our health care system in its precarious state, without a showing of actual need, the trip to Houston or San Antonio for very advanced high-tech procedures is a price we must be willing to pay and that the allocation of medical resources (and government subsidies for such) should be based on public need and not private profit.

In addition, given the overlap between physician-owned hospitals and single specialty hospitals, as Professor Frank Pasquale points out, these single specialty hospitals may siphon scarce health resources and undercut the care that community hospitals provide.

In a previous post, I discussed comparing a health care system to a pyramid, the foundation of the pyramid requiring a solid base of primary, preventive, and wellness care, that tapers to the top of the pyramid where we find the specialists utilizing, for example, advanced equipment and procedures like robotic surgery. However, a stable foundation for the pyramid is necessary, and the favoritism described above may stymie actual reform–reform that will provide Americans with the basics that they need at an affordable price.

Democrats are surely not the only ones to blame, and money has flowed to Republicans as well. As we discussed in an earlier post, a Common Cause report finds that $1.4 million dollars per day is being spent by healthcare interests lobbying Congress this year. From the perspective of the physician-owned hospitals and private health insurance companies, donating to both sides of the aisle makes sense; it ensures that both political parties have a financial stake in preventing legislation that would limit physician-owned hospitals from being subject to greater restrictions (like CON laws), or tightly regulating insurer practices. Though there are some restrictions governing physician-owned facilities in the House bill, these have been watered down, and will now allow facilities like Doctors Hospital to maintain their current structure, and even expand in certain future circumstances. As the Times reports:

The Senate Finance Committee has yet to release its final draft, but bills passed by two House committees would prevent the opening of new physician-owned hospitals by disqualifying them from receiving Medicare reimbursements. Existing facilities like Doctors Hospital would be grandfathered in.

One key provision would limit a hospital’s ownership by doctors to the level in place at the time of enactment. That is a change from previous language in House bills to restrict physician ownership to 40 percent. It would have forced Doctors Hospital, where physicians have an 82-percent stake, to be sold or required some of its owners to divest.

The future disallowance by Congress of Medicare funding for procedures performed at physician-owned hospitals is a tacit acknowledgment that the structure is one in which conflicts of interest abound; that he who owns a machine and will profit from its use is apt to refer patients for its use–regardless of actual need. It is the acknowledgment that the foxes are essentially guarding the henhouse–and that hens cost money. The exception made for Doctors Hospital and others of its ilk, however, considering the large campaign contributions, gives rise to other questions about conflicts of interest.

The problem is not simply the amount of money that is being funneled to Congress by the health care industry. The more pertinent issue at this point is: Read more

Competition in the Health Insurance Marketplace and its Effect on Quality: Intriguing Findings Should Influence Reform Debate

In a previous post I discussed the relationship between the competitiveness of health insurance markets and the cost of insurance. Though the inverse relationship between competitiveness and cost is not unexpected, the studies revealed a complex relationship between the two variables that should be taken into account when reforming our health care system.

In that prior post, I promised to follow up with a discussion of current knowledge concerning the relationship between competitiveness and quality.  Much of the research out there is conflicting. This is somewhat unexpected, as one would assume as a matter of basic market economics that greater competition would force plans to compete on quality. However, as Professor Frank Pasquale has pointed out, there are a variety of activities that insurers engage in to compete, such as “cream skimming” or “cherry picking” their customer base, denying coverage based on preexisting conditions, and remaining largely opaque in their operations. In other words, it appears that a great deal of the competition seems to take the form of mitigating exposure to cost risk.

Instead of competition playing an important role in improving quality, the biggest impact may be the level of HMO penetration. Below I will provide a brief explanation of the “tools of the trade” used in these studies, as well as a brief description of some recent findings.

It is not uncommon to hear that “a public plan is needed because there is no competition in the marketplace” or conversely that “the public plan will destroy the competition that presently exists between private insurers.” Regardless of which of these statements may, or may not, be correct, there is a lingering question that must be answered: how do we know what level of competition exists, and how does competition affect the quality of health care?

Competition

There are three main ways that researchers measure competition in the health insurance market. One way is to simply count the number of insurers in a given market. This method, though instructive in some measure, may give the same weight to an insurer with a few policies as it does to one with a 100,000. Another method is to utilize the Herfindahl-Hirshman Index (HHI).  Simply put, HHI is an index based on the sum of the squares of the market share percentages of the competitors.  If the market share is primarily focused in one competitor, while scattered throughout the rest, then the HHI will tend to be large, since squaring that one large participant’s share greatly increases the resulting sum. Alternatively, squaring the shares of many smaller market participants produces a smaller HHI sum. Thus, a lower HHI corresponds to, at least in theory, a more competitive marketplace.

There are, however, problems with the HHI index. As mentioned in my prior post, health insurers often offer a variety of plans, many of which offer different benefits and heterogeneous provider networks. Therefore, even if a market’s HHI is numerically low, the HHI formula may nevertheless inflate the degree of competitiveness. In other words, we may not be comparing apples to apples.

A third way to look at competition, Read more

Health Reform & The President

Courtesy of the American Presidency Project, a collaboration between John Woolley and Gerhard Peters at the University of California, Santa Barbara, we bring you this “Special Message to the Congress Proposing a National Health Strategy” delivered by the President of the United States– Richard M. Nixon, February 18, 1971.

Nearly 40 years ago, and I am struck not so much by the money and imprimatur heaped upon the HMOs as the next best solution (though, considering the problematic result, the compelling and laudatory rhetoric has a sort of disconcerting affect),  as I am struck by the familiarity of the language–and the problems. The piece is relatively long so I’ll leave you, somewhat uncharacteristically,  utterly to your own impressions.

A final note: The Bureau of Labor Statistics through its “Inflation Calculator,” shows that $1.00 in 1971 had approximately as much buying power as $5.25 in 2009. The calculator uses the Consumer Price Index (CPI) which includes “medical care.” However, as Mr. Nixon readily notes below, the inflation rate for medical care has surpassed the CPI over the years.

The American Presidency Project

John T. Wooley & Gerhard Peters
University of California at Santa Barbara

Richard Nixon Special Message to the Congress Proposing a National Health Strategy
February 18, 1971

To the Congress of the United States:

In the last twelve months alone, America’s medical bill went up eleven percent, from $63 to $70 billion. In the last ten years, it has climbed 170 percent, from the $26 billion level in 1960. Then we were spending 5.3 percent of our Gross National Product on health; today we devote almost 7% of our GNP to health expenditures.

This growing investment in health has been led by the Federal Government. In 1960, Washington spent $3.5 billion on medical needs–13 percent of the total. This year it will spend $21 billion–or about 30 percent of the nation’s spending in this area.

But what are we getting for all this money?

For most Americans, the result of our expanded investment has been more medical care and care of higher quality. A profusion of impressive new techniques, powerful new drugs, and splendid new facilities has developed over the past decade. During that same time, there has been a six percent drop in the number of days each year that Americans are disabled. Clearly there is much that is right with American medicine.

But there is also much that is wrong. One of the biggest problems is that fully 60 percent of the growth in medical expenditures in the last ten years has gone not for additional services but merely to meet price inflation. Since 1960, medical costs have gone up twice as fast as the cost of living. Hospital costs have risen five times as fast as other prices. For growing numbers of Americans, the cost of care is becoming prohibitive. And even those who can afford most care may find themselves impoverished by a catastrophic medical expenditure.

The shortcomings of our health care system are manifested in other ways as well. For some Americans–especially those who live in remote rural areas or in the inner city–care is simply not available. The quality of medicine varies widely with geography and income. Primary care physicians and outpatient facilities are in short supply in many areas, and most of our people have trouble obtaining medical attention on short notice. Because we pay so little attention to preventing disease and treating it early, too many people get sick and need intensive treatment.

Our record, then, is not as good as it should be. Costs have skyrocketed but values have not kept pace. We are investing more of our nation’s resources in the health of our people but we are not getting a full return on our investment.

BUILDING A NATIONAL HEALTH STRATEGY

Things do not have to be this way. We can change these conditions–indeed, we must change them if we are to fulfill our promise as a nation. Good health care should be readily available to all of our citizens.

It will not be easy for our nation to achieve this goal. It will be impossible to achieve it without a new sense of purpose and a new spirit of discipline. That is why I am calling today not only for new programs and not merely for more money but for something more–for a new approach which is equal to the complexity of our challenges. I am calling today for a new National Health Strategy that will marshall a variety of forces in a coordinated assault on a variety of problems.

This new strategy should be built on four basic principles.

1. Assuring Equal Access. Although the Federal Government should be viewed as only one of several partners in this reforming effort, it does bear a special responsibility to help all citizens achieve equal access to our health care system. Just as our National Government has moved to provide equal opportunity in areas such as education, employment and voting, so we must now work to expand the opportunity for all citizens to obtain a decent standard of medical care. We must do all we can to remove any racial, economic, social or geographic barriers which now prevent any of our citizens from obtaining adequate health protection. For without good health, no man can fully utilize his other opportunities.

2. Balancing Supply and Demand. It does little good, however, to increase the demand for care unless we also increase the supply. Helping more people pay for more care does little good unless more care is available. This axiom was ignored when Medicaid and Medicare were created-and the nation paid a high price for that error. The expectations of many beneficiaries were not met and a severe inflation in medical costs was compounded.

Rising demand should not be a source of anxiety in our country. It is, after all, a sign of our success in achieving equal opportunity, a measure of our effectiveness in reducing the barriers to care. But since the Federal Government is helping to remove those barriers, it also has a responsibility for what happens after they are reduced. We must see to it that our approach to health problems is a balanced approach. We must be sure that our health care system is ready and able to welcome its new clients.

3. Organizing for Efficiency. As we move toward these goals, we must recognize that we cannot simply buy our way to better medicine. We have already been trying that too long. We have been persuaded, too often, that the plan that costs the most will help the most–and too often we have been disappointed.

We cannot be accused of having underfinanced our medical system–not by a long shot. We have, however, spent this money poorly–re-enforcing inequities and rewarding inefficiencies and placing the burden of greater new demands on the same old system which could not meet the old ones.

The toughest question we face then is not how much we should spend but how we should spend it. It must be our goal not merely to finance a more expensive medical system but to organize a more efficient one. Read more

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