Friday, February 27, 2004

Leapfrog – The Need for a Better Approach

In its Issue Brief No. 77 published earlier this month, the Center for Studying Health System Change (HSC) reported that “….few hospitals are close to meeting Leapfrog standards.” Leapfrog (formally The Leapfrog Group) was formed in 1999 by the Business Roundtable, an association of Fortune 500 CEOs, most of whose companies are large-scale purchasers of health care. Leapfrog was created in response to the celebrated finding by the Institute of Medicine that a shockingly large number of patients die each year as a result of medical errors. Its purpose was to improve patient safety, in pursuit of which it has focused on three initiatives – encouraging hospitals to implement computerized physician order entry, physician staffing of intensive care units, and minimum volume thresholds for six high-risk procedures.

The report is available at http://www.hschange.com.

Two conclusions worthy of note are implied in the report. One is that for any “outside group” to try to tell a complex industry like health care how to operate its business is presumptuous and almost certainly fruitless. The second (more disappointing, at least to me) is that the provider system cannot be counted on to take patient safety seriously unless it has a financial incentive to do so.

These conclusions, in turn, would seem to lead to a third one, which is that the most direct way for these large employers to address patient safety issues is to deal with hospitals, physicians and other providers of health care in the same way they presumably deal with all their other suppliers, which is to take their business away from the ones that don’t shape up and give it to the ones that do. (The alternative of “pay for performance,” which pays more to providers with good safety records, has other problems to be discussed in a future posting.)

In order to do that, there are three other issues that will have to be faced:

· Freedom of choice will be compromised for employees who are beneficiaries of employer-sponsored health insurance.
· The provider system must have enough unused capacity to allow purchasers of health care services to shift business from one provider to another.
· Purchasers must have the capability of deciding which providers are doing the best job.

The HSC report ought to convince the members of The Business Roundtable that creating an organization for the purpose of telling the provider system how to operate was a bad idea. Better that they should address the issues that stand in the way of doing what one supposes they are good at, which is picking vendors.

Saturday, February 14, 2004

Healthcare Economy – Planned or Market?

Don Cordes, longtime friend, colleague and head of Iowa Methodist Hospital in Des Moines, now retired, was good enough to send me clippings from the February 5, 2004 issue of the Des Moines Register, reporting and commenting on the decision of the Iowa Health Facilities Council to deny the application of Iowa Methodist Medical Center to build a hospital in West Des Moines.

In his cover note, Don referred to this action as showing “….the power of 5 uneducated citizens to control health services through government processes.”

It shows something else, too. As a nation, we remain ambivalent about whether health care should operate in a planned economy or a market economy.

Up until late in the twentieth century, health care was unquestionably a planned economy. Competition among health care providers was considered to be bad. Cooperation, on the other hand, was a virtue. Duplication of services was bad, as were unused or underused facilities. Concepts like monopoly and restraint of trade were thought not to be applicable. When in the late 1960’s and early 1970s it looked as though facility expansion was becoming excessive, government sponsored planning efforts and certificate of need requirements for proposed projects (some form of which is still in effect in many places - including Iowa, apparently) were legislated.

Signs of interest in a market economy for health care appeared in the early 1980’s. The State of California decided to allow MediCal, its Medicaid program, to negotiate and contract selectively for hospital services. Medicare implemented DRG’s (a lump sum payment per hospital admission rather than a separate charge for each item of service) that gave hospitals an economic incentive to reduce costs. The managed care movement of the 1980’s and 90’s was also based on market principles.

Interest continues. While the Iowa Health Facilities Council was deliberating over the proposed hospital in West Des Moines, the Bush administration was pushing legislation (touted as a cost reduction measure) to create competition between private health plans and Medicare.

We can’t have it both ways. In a market economy, a purchaser of care will negotiate for services and steer its business to the provider that offers the best deal. But if certificate of need prevents excess capacity, providers will have no need to negotiate since purchasers will have to use them.

I come down on the side of a market economy (properly designed and with appropriate checks and balances) because I think that only economic pressures are strong enough to break down the entrenched traditions and power structures that stand in the way of reforming the provider system.

Others will see it differently. But if a redesigned system of health care is to be coherent, it has to go in one direction or the other.

Saturday, February 07, 2004

Quality of Care: Whose Job?

During the popularity of Total Quality Management in the 1980’s, the Ford Motor Company adopted the slogan Quality is Job One.

Quality is moving in that direction in health care, but the question seems to be not so much where it stands on the priority list, but whose job it is.

Jeff Tieman recently had two articles on this topic in Modern Healthcare. The first, in the January 5, 2004 issue, reported on the recently issued AHRQ (the HHS Agency for Healthcare Research and Quality) annual report on healthcare quality. After reviewing the contents of the report, Tieman concluded that “….who ultimately accepts responsibility for better quality – patients, hospitals, health plans or the government – is still undetermined.”

The second appeared in the January 20, 2004 issue. That one discussed the activities of the various national organizations that are attempting to promote improved quality in health care. In this case, Tieman concluded that “….there is no broad agreement on how the industry and its stakeholders should move forward and what the exact goals should be.”

There were nuggets in both articles, however, that suggested how all of this ultimately might get clarified. The first article ended by quoting Don Berwick of the Institute for Healthcare Improvement as saying “In the end, only those who provide care can improve that care.” In the second article, Tieman observed “If healthcare is indeed still mostly local, as many argue, federal directives aren’t as important as what communities, hospitals and even individual caregivers can do to improve.”

But all of that remains very tentative. On the matter of building community coalitions to improve care, Nancy Foster, senior associate director of policy at the AHA is quoted in the second article as saying “We don’t have any precise recommendations for hospitals right now.”

Well, I do. For starters, here are two things that a hospital’s Board of Trustees could do:

· Become informed about patients killed in its hospital due to medical errors and about malpractice claims filed against the hospital and hold its executive leadership accountable for reducing the incidence of both.

· Hold its executive leadership accountable for assuring that there are clinical protocols in the emergency room for treating strokes and heart attacks and that all physicians follow them.

Speaking of how to go about improving quality, Walter Ettinger, President of UMass Memorial Medical Center is quoted in Tieman’s second article as saying, “This is not rocket science.”

How true.

The Single Payer Concept – Both Futile and Pernicious

It is probably about forty years ago that I first predicted that we would not in our lifetime see a single payer system for financing health care (then more plainly called national health insurance).

My reason was simple enough. Public financing of a social service always has the purpose – or, at least, the consequence – of increasing the amount of money devoted to the support of that service. But a central problem with the American system of health care is that we spend too much money on it already. So spending even more would make that problem even worse.

That consideration helps to explain the fate of the Clinton Health Care Reform proposals of the early 1990’s. Many reasons have been given, but the possibility I find most convincing is that the Congress was not willing to vote the funds needed to fund the Clinton plan. Apparently the logic of reducing cost by spending more money was not persuasive.

So the single payer concept has so far proved to be futile. But it has also been pernicious in the sense that too many people – including leaders and intellectuals in the field - have been fixated on it to the exclusion of the alternatives.

I was reminded of this recently when I undertook to search for a thoughtful critique of the provisions of the recently enacted Medicare Prescription Drug act that are directed towards reducing cost by creating competition between Medicare and private health plans. I have made inquiries in a number of directions and so far have come up with nothing. Competition being a private sector solution, the leading minds of health care seem not to think it worth their attention.

If we are going to make progress in addressing the problems that face health care, we need the help of progressive thinkers in the intellectual community and in industry leadership. They need to apply their minds to possibilities other than single payer, which, it seems all but certain, is simply not going to happen.

This page is powered by Blogger. Isn't yours?

FREE counter and Web statistics from sitetracker.com