Thursday, March 25, 2004

Might Low Cost and High Quality Finally Pay Off?

Some time ago, during a meeting of a hospital committee on which I serve, I suggested that if a hospital had better outcomes and lower costs than its competitors, it ought to do all right.

It seems that is becoming more than a flip comment. This morning’s Boston Globe reports that as of next July 1, Massachusetts state employees who subscribe to the Tufts Health Plan will be given the choice of two groups of hospitals, labeled “tiers.” In the “top” group of 15 hospitals, there will be a co-pay of $200 for each overnight stay. In the “bottom” group of 51 hospitals, the co-pay will be $400. All of the academic medical centers, save Boston Medical Center and Baystate Medical Center in Springfield, are in the “bottom” tier. The “top” tier is considered to offer the most value in terms of both cost and quality.

Employees who choose fee-for-service coverage through a company called Unicare will pay $228.20 for family coverage if they choose a network that includes all hospitals, $168.16 if they choose one that includes mostly community hospitals.

Tufts will make its plan available to all employers next January 1. At that time it is scheduled to offer a third, even “lower,” tier that will have a co-pay of $600.

Harvard Pilgrim reportedly is developing its own “tiered” plan with higher premiums for workers who choose higher-cost primary care physicians. That plan is scheduled to be available to private employers next January 1 and to state employees six months later.

Tufts and Blue Cross and Blue Shield of Massachusetts first offered tiered networks three years ago, but they were based on cost only and the reaction was mixed. This time quality is being factored into the equation.

Richard Lord, president of the Associated Industries of Massachusetts, was quoted as saying that after three years of insurance premium increases, “Employers are really going to go for this.”

Referring to a meeting in Chicago yesterday of major employers pushing for uniform standards that allow them to push patients towards the best providers, Susan Connolly of the Boston office of Mercer Human Resource Consulting observed that “The momentum is building.”

So maybe hospitals with the lowest cost and the best outcomes will reap some benefit after all, regardless of how they rank on the scale of international fame.

Wednesday, March 24, 2004

The Health Care Intellectual Community and the Private Sector

In earlier postings I have bemoaned the intellectual community’s lack of interest in private sector solutions to the problems that face health care. So I was interested to read the featured topic in the March/April 2004 edition of Health Affairs under the title “Beyond Managed Care” and subtitled “Waning Confidence in Health Market Forces?”

The lead article reported the results of recent interviews of 1,000 leaders of local health systems in twelve randomly selected communities. The interviews were conducted by the Center for Health System Change as part of its nine-year Community Tracking Study. The general subject was the potential of competition to produce needed health care reform.

The general result of the interviews was that following the backlash that so severely dampened managed care as practiced in the 1990s, (a) the potential of competition by itself to reform health care is not encouraging, (b) some kind of government intervention will most likely be needed to get private sector market forces working again, and (c) such intervention is not likely to happen soon.

The barriers that intervention would face were identified as (a) providers continuing to hold the predominance of power in the health care market, (b) the persistent inefficiency of health care delivery systems, (c) the reluctance of employers to use their leverage in the health care market, and (d) the lack of effective competition among health plans.

Looking forward, those interviewed didn’t have much in the way of suggestions to offer. More aggressive anti-trust enforcement and some new but unspecified form of regulation were mentioned, but without much in the way of either hope or enthusiasm.

Two recognized health care gurus commented. Stuart Butler of the Heritage Foundation thought that tax policy ought to be changed to shift control of health coverage from employers towards consumers. Alain Enthoven of Stanford thought beneficiaries of employer-sponsored health insurance ought to be given a choice of plans with higher levels of employee contributions required for the more expensive ones. He thought there ought to be more standardization of benefit packages. He supported renewed enforcement of anti-trust laws. He expressed the view that a single payer system would just lock in the current inefficiencies, though he thinks we are likely to get it anyway.

None of this offers anything like a sweeping vision for the future, but at least somebody in the intellectual community is starting to talk about what it might take to make our private system work better.


Sunday, March 21, 2004

An Example of Critical Weakness in the Health Care System

The feature article in today’s Boston Globe Magazine is about Dr. David Arndt, the Orthopedist who won national recognition in September 2002 by leaving a patient open on the operating room table at the Mount Auburn Hospital in Cambridge, Massachusetts for 35 minutes while he went to the bank to deposit a check.

Dr. Arndt had both his hospital privileges and his medical license suspended as a result of that notable event, which turns out to be but one example of his aberrant behavior. In 1998 he pled guilty in a passport fraud case for having submitted a false affidavit in support of a passport application for his live-in partner Alfredo Fuentes, then an undocumented alien from Venezuela. During that same year he was charged with assaulting one Roger Valzer who had been sitting with Fuentes in Valzer’s home, but avoided prosecution by negotiating a settlement. Subsequently he has been indicted for molesting a male minor and for possessing methamphetamine with intent to distribute and now awaits trial on both counts.

In the process of exploring how Dr. Arndt was able to maintain a medical practice for as long as he did, the article’s author, Neil Swidey, interviewed Dr. John Fromson, a Harvard psychiatrist and president of Physician Health Services, the Massachusetts Medical Society subsidiary that provides support and monitoring services for doctors with substance abuse and mental health difficulties. Dr. Fromson is reported to have said that even when such difficulties become apparent “at the workplace,” by which he means hospitals, the problem may not be confronted because most doctors are self-employed and only loosely supervised, and hospital management is often hesitant to call doctors on questionable behavior for fear that they will take their patient base to a hospital across town.

Considering the central role that physicians play in the health care system, that observation, which will not be questioned by experienced hospital people, is a revealing commentary on the difficulties the system is having in the areas of quality and safety. The critical weakness that it identifies is one that must be addressed if significant progress is to be made in overcoming these difficulties.


Wednesday, March 10, 2004

Redesigning the Health Care System – Already Under Way?

For some reason, health care ranks higher on the interest list in Boston than it does in most other U.S. cities.

Today’s Boston Globe carried an article about the suspension of the medical license of an orthopedic surgeon who had appeared for surgery at the Caritas St. Elizabeth’s Medical Center in Brighton (a subdivision of the City of Boston) with liquor on his breath.

The event itself was not all that unusual. The surgeon in the story is by no means the first to have had a problem with alcohol.

The story focused on how such matters are dealt with in Massachusetts. But what struck me was its underlying assumption that the hospital and the Board of Registration in Medicine, the state’s medical licensing agency, are the parties responsible for dealing with them. There was no mention of the hospital’s medical staff, the local county medical society, the AMA, or the orthopedists’ professional organization. The only reference to the Massachusetts Medical Society had to do with a subsidiary of that organization that offers free substance abuse counseling.

I noted, in addition, that the spokesperson for the hospital was quoted as saying “Our reputation for clinical excellence is unsurpassed and any inferences to the contrary are untrue….The fact that we have the fastest growing orthopedic program in the city is a testimony to the many satisfied patients for whom we provided care.” The pronouns “our” and “we” in this quotation refer to the hospital as a whole, not just to the physicians on its medical staff.

So it seems that while we are talking about redesigning the health care system, it is taking place before our very eyes. Responsibility for the oversight of clinical medicine is being shifted from the professions to institutions, including hospitals and government regulatory agencies. In the case of hospitals, it is not a responsibility they have sought, wanted, or prepared themselves to accept. But it looks as though they are getting it anyway.

Tuesday, March 09, 2004

Inviting Patients to Judge Quality

Yesterday’s Boston Globe carried two articles about the plan of Massachusetts Blue Cross Blue Shield to sponsor a web page that will make it possible for subscribers to use outcomes data for the purpose of evaluating local hospitals. One article was on the front page and the other was the feature article in the Business section. Each was by way of follow up of a March 2 article that announced the plan (and was discussed in my posting of the following day.)

The front page article, headlined “Online rankings rankle hospitals,” reported the reactions of providers, insurers, and patients. The Business section article, headlined “Surfing for a hospital,” focused more on the technical aspects and the growing availability of this sort of information around the country.

As one might expect, there was a certain amount of grousing by providers but, all in all, the tone of the articles was that this is just another one of the things that is happening nowadays as part of the computer age.

Perhaps only old-timers like me can appreciate how profoundly important this is.

For nearly all of the twentieth century, one of the firm tenets of health care has been that only doctors are competent to make judgments about the quality of clinical aspects of patient care. For “lay” people, including hospital administrators, hospital trustees, and patients, to engage in such judgments has been considered presumptuous at best, intolerable at worst. The basic organizational structure of the hospital, with its “self-governing” medical staff, and the fundamental ethos of both trustee governance and executive management has been firmly rooted in this principle. It is for this reason that, even today, it would be the rare hospital trustee who would dare inquire as to the number of patients who died in the hospital during the past year due to medical error. For the CEO to do so might well prove to be a career limiting experience.

For years, all of that was accepted and supported by the public. No longer. Before the year 2004 is out, Massachusetts Blue Cross Blue Shield subscribers will be invited – even encouraged – to make judgments about patient care quality and will be given information to use in doing so. And what is more, these subscribers will be invited to judge not which doctors, but which hospitals offer the best care.

The implications are significant and include nothing less than fundamental change in the power structure of health care. The exclusive right to make quality judgments on clinical matters has been a major factor in support of the dominant role the medical profession has played in the health care delivery system. Removing that exclusivity shifts power from the physicians to hospitals. Thus, when a hospital shows up poorly in these future comparisons and pressures arise to do something about it, the onus of responsibility will fall more on the trustee and executive leadership and less on the medical staff.

This is not, strictly speaking, an issue of system design. It is more one of culture. But that won’t make it any easier to deal with. Nor will it make the implications less revolutionary.


Wednesday, March 03, 2004

Measuring Outcomes – Something New Under the Sun

Almost my entire career in health care management was spent in teaching hospitals, which, during the early years, I was confident offered the “best care.” It was a common belief, based on the highly qualified doctors and advanced technology usually found in those institutions.

Later on, I began to have doubts. For one thing, community hospitals were being staffed increasingly by the highly trained, board certified specialists that teaching hospitals were turning out in large numbers and every year found those hospitals better equipped. For another, I came to realize that teaching hospitals had problems of their own and that things happened in them that were not always so favorable.

In due course, US News & World Report began offering a rankings of hospitals and teaching hospitals tended to show up well. However, those rankings relied on reputation and other factors that I found less than fully convincing.

Apparently, my doubts were warranted. Yesterday’s Boston Globe carried an announcement that Massachusetts Blue Cross Blue Shield had contracted with an organization called HealthShare Technology to offer a web site that will provide subscribers with data on hospital performance (based on outcomes) in 175 areas, ranging from cancer treatment to obstetrical deliveries. In an early analysis, HealthShare Technology ranked hospitals in the Boston area according to their performance in treating the victims of heart attacks. The results were as follows:

1. Winchester Hospital
2. Melrose-Wakefield Hospital
3. South Shore Hospital
4. Brockton Hospital
5. Massachusetts General Hospital (5)
6. Beth Israel Deaconess (23)
7. New England Medical Center
8. Brigham and Women’s Hospital (3)
9. Boston Medical Center
10. Beverly Hospital

Numbers in parentheses show the hospital’s most recent national ranking by US News & World Report.

The implications are obvious. Some relatively obscure suburban hospitals may be doing better work than people have thought, even to the extent of out-performing hospitals that have long been world-renowned for excellence.

The practice of measuring and reporting health care outcomes is both new and important. For one thing, it means that the right to make judgments about the quality of care is no longer restricted to doctors. For another, the focus on hospitals rather than on doctors implies that responsibility for the quality of care is shifting from the professions to institutions.

These are factors that will have a significant effect on the design of the health care system of the future.

Tuesday, March 02, 2004

More on Competition vs. Collaboration

The following comes from Don Arnwine, longtime toiler in the vineyards of healthcare management and erstwhile executive head of VHA and other organizations:

I full well understand the debate of competition vs. collaboration but the burning issue to me is the development of the niche installations and specialty hospitals, particularly those owned by our medical staff. I am on the board of two hospitals and this captures a lot of our time [and money]. We hear a lot about the issues, particularly from the hospital's point of view. The thing that worries me most that we don't hear about is what this is "quietly" doing to the delivery of care for patients. The hospital is the best mechanism yet devised to coordinate the capability that we have in its application to the "whole" person. Irrespective of the "good competition" argument, I cannot believe that a delivery system based on organs and body parts will be of proper service to those of us, and our patients, who have one body that happens to come together with integral working parts overseen by a mind and spirit. Who is concerned about that?

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