Tuesday, March 29, 2005

More on Responsibility for Fixing the System

This will continue the exchange with Leo Greenawalt on fixing the health care system.

In a March 7 posting, I suggested that this is a job that politicians may not be able to do. In the posting of March 22, Leo suggests that they can.

Perhaps a useful next step in the discussion would be to explore what is meant by “fixing” the system and what, therefore, the “fixer” would be expected to do.

Not being among those who see national health insurance as a solution likely to be adopted, I would offer the following as the initial steps of reform:

1. Clearly assign responsibility and accountability at the local level for the cost, quality, and safety of care. My candidates for that role are hospitals and large group practices.

2. Create an economic environment – a market structure, if you will – that rewards good performance and penalizes poor.

Both can proceed concurrently, but for a market system of rewards and penalties to work effectively, those responsible and accountable for the quality of performance must acknowledge and accept their role.

Suppose, then, that a politician came to me and said, “OK, I agree with you. What do you want me to do?”

On the market issue, there are several things I might say, such as “repeal all certificate of need laws” and “use Medicare and Medicaid to give managed care and global capitation a hard push” and “enforce anti-trust in the health field more strictly.”

But on the matter of responsibility and accountability, I don’t have a ready answer. It seems to me to be mainly an issue of culture. It requires, for example, that the traditional boundary between the professional (e.g., physician) and institutional (e.g., hospital) components of care be got rid of and everything gathered under a common corporate umbrella with institutional governance and management exercising jurisdiction over all aspects of care, including the practice of medicine. While the boundary is being steadily eroded, it is still very much there.

Except for the constraint of laws forbidding so-called corporate practice (which clever lawyers always seem able to find a way around) there are many institutions in which that sort of unified approach could be implemented already if there was the will and desire to do it. The Mayo Clinic, the Henry Ford Health System, and Kaiser Permanente come to mind as examples.

The problem is that the medical profession wants to maintain its traditional autonomy, the public supports its position, and so governance and management of health care institutions are reluctant to exert themselves in clinical matters.

So long as that is the case, it is a briar patch that no politician worthy of the name would want to jump into, particularly without knowing what he would do once he got in there.

What are your views?

Tuesday, March 22, 2005

Who Will Fix the System?

Below are comments received from Leo Greenawalt, executive head of the Washington State Hospital Association.

I’m working on a response and will post it soon.

“You continue to ask the question regarding a fix of the system as ‘What if politicians are not able to fix the system?’ You need to ask the second part which is, I believe, ‘What if business, labor, physicians, insurance companies (put in any group you want) is not able to fix the system?’ At some point, one comes to the conclusion that health care is going to grow at three times the rate of inflation forever and the number of uninsured will grow exponentially and nobody will act.

Of course, this cannot happen forever. Somewhere in this loop there is a fallacy of logic.

Health care costs cannot grow toward infinity. The answer cannot be that nobody will take responsibility - ever. I don't agree that politicians cannot fix the system. They eventually do ‘fix’ things.

For example, they found a way to vote on base closures. Experts said it would never happen. They will probably adopt a system to extend the life of social security. They may find a way to shed Medicaid and send it back to the states. Eventually, they will deal with the time bomb we defend: Medicare. None of us may like the fix, but I don't see any possiblity that they will not act when it gets painful enough. Talk about a ticking time bomb: the budget deficit and the trade deficit will eventually cause a severe reaction - and it will impact health care in a dramatic way.

HSAs and unsustainable Medicare drug benefits just bring the day closer, in my opinion.

Monday, March 21, 2005

What Is It About HSA’s That I Don’t Understand?

In 2004, a federal law was enacted authorizing Health Savings Accounts (HSA’s). These are tax sheltered accounts that people can use to pay their medical expenses.

The idea, as I understand it, is to restrain the cost of health care by giving people an incentive to (a) be more careful about using medical services and (b) shop for the best value when seeking care.

In the newsletter that accompanied a recent monthly bank statement, the Shelby County State Bank in my home town of Harlan, Iowa announced that it was offering HSA’s.

The rules as summarized in the newsletter are:

· you have to be less than 65 years old (i.e., not covered by Medicare)
· you must either be uninsured or covered by a High-Deductible Plan

A High-Deductible Plan is one with a deductible of at least $1,000 ($2,000 for a family) and an annual out-of-pocket limit of $5,000 ($10,000 for a family).

The annual contribution to the fund can be the amount of the deductible up to $2,600 for an individual, approximately twice that for a family. Those 55 or older can contribute an additional $600.

I got in touch with Mark Woodring, the CEO of the local hospital, and asked him how the hospital would charge HSA patients. He said they hadn’t decided for sure, but the thinking was that any patient with insurance coverage would get the same discount that the insurance company did. Patients without insurance would have to pay full charges. I suspect that most hospitals will do something like that.

Trying to think all of this through gets a little complicated.

Somebody without insurance would presumably have been careful about using health care and shopping around already, so the HSA wouldn’t affect that.

Most insured patients would have gotten coverage through their employers, so there wouldn’t be any shopping by them for insurance.

One wonders how many people would go to the bother of finding the providers where the insurance company had the best rates (assuming that the company would be willing to tell them) and matching that up with a physician who used those providers, all for saving some percentage of the deductible.

So the rationale for all this seems a little dubious. Most likely, the main motivation for using an HSA will be to get the tax exemption (although employer-provided health insurance is already tax exempt). The bank presumably will get some fees out of it and providers will get another complication added onto an already incomprehensible system of billing and collection. Whether the total effect of all of that will be to raise or lower the cost of care is hard to tell.

Or is there something about this I don’t understand?

Friday, March 18, 2005

More on Single Payer

Still another relevant quote by way of Ed Parkhurst, this time from Philip A. Pizzo, M.D., Dean of the Stanford School of Medicine as taken from the Winter 2005 edition of the Stanford Medicine Magazine.

I concluded more than thirty years ago that this country would not have national health insurance in the foreseeable future. The reason was (and is) that public financing is a remedy for underfunding. The Medicare prescription bill, designed to help financially pressed seniors pay for their expensive drugs, is the latest example. But the general cost problem in health care means that the system as a whole is overfunded, a condition that public financing would only worsen.

Herewith the quote:

”It's hard to fathom why our nation, with its great financial and intellectual capital, has a health-care system that's so far from world class. Much of the trouble comes from the belief that health care must be run like a business - as if personal health were a commodity. This notion, promoted over the past two decades by our leaders in Washington, posits that the free market will restrain costs and bring high-quality care to all.

Obviously, this strategy has failed miserably.I do not believe that modifications around the edges of our health-care quagmire are going to do it. We need sweeping change. I personally favor a single-payer model incorporating support for medical training, innovation and discovery. But I'm not convinced that our political leaders can muster the will to overcome the obstacles from special interests with stakes in supporting the status quo.”

The full article can be found at:http://mednews.stanford.edu/stanmed/2005winter/letter.html

Monday, March 07, 2005

Settling for a Broken System

Herewith another pithy quote provided by Ed Parkhurst, this one from an article by Michelle Brandt, the Media Relations Manager of the Office of Communication and Public Affairs at Stanford University Medical Center. The article, “Why Americans settle for a broken health-care system.” appeared in the Winter 2005 edition of Stanford Medicine Magazine, a publication of the Stanford School of Medicine.

My only comment in response to the quote would be “But what if fixing the system is not something politicians can do?”

"The whole thing is broken," says David Magnus, PhD, director of the Stanford Center for Biomedical Ethics. "The core problem is that we have a completely irrational way of paying for and delivering health care."

Our national leaders haven't adequately addressed the issues, and - despite survey after survey showing that Americans believe our health-care system needs reform - the public hasn't taken them to task for it. Health care hasn't reached critical mass as a political issue, experts say, because Americans are worried about the future but not concerned enough with their current situation to clamor for change.

Yet many continue to push for reform, including medical student Graham Walker, who is hoping to soon begin a documentary on the health-care system. He's among those who feel confident that change is coming. Says another believer in change, advocate Don McCanne: "I personally suspect it will happen in years, rather than decades.

"We want our technology, we want great advances in health care. When we see only the wealthy can get them, that's not going to be acceptable."

Sociology professor Donald Barr agrees and predicts that increasing numbers of "horror stories" will eventually cause people to vote only for those politicians who address the health-care issue. And that's exactly what we need to have happen: only when the public puts the pressure on legislators - and becomes entrenched in the fight like Walker and others will the nation get real reform.

The entire article can be seen at

My How Things Do Change

The greater part of my career in hospital administration was spent in teaching hospitals. During that time, I and my colleagues were proud to work in that setting because we believed that academic medicine was the primary source of leadership in the improvement of health care.

Apparently that is no longer the case.

In an article in the February 14, 2005 issue of Modern Healthcare, James Anderson and Uma Kotagal of Cincinnati Children’s Hospital Medical Center (CCHMC) reported on a quality improvement initiative being carried out at that institution. CCHMC is affiliated with the University of Cincinnati College of Medicine and its pediatric faculty members staff the College’s Department of Pediatrics. It is one of seven hospitals participating in the Pursuing Perfection project sponsored by the Institute for Healthcare Improvement and the Robert Wood Johnson Foundation. The goal of Pursuing Perfection is to transform the quality of care.

In describing some of the challenges they faced, the authors made this statement: “It is hardly surprising that faculty members who are balancing responsibilities for clinical care, teaching and research feel they cannot give time to quality-improvement initiatives, much less make the transformation of patient care their highest priority.”

So it seems that things have changed. In the search for leadership in fixing our health care system, it looks as though we will have to look elsewhere than to academic medicine.

Friday, March 04, 2005

A Sobering Thought

Ed Parkhurst, friend, erstwhile business partner, and head of the hospital consulting firm Prism is plugged into a quoting service and periodically sends me some of the more pithy ones on health care. Recent quotes came out of a discussion at the Employee Benefits Research Institute (EBRI) on the subject of controlling health costs and improving quality.

Commenting on the day’s debate, Jim Bentley, Senior Vice President for Strategic Policy Planning for the American Hospital Association commented that public policy, regulation and even legislation by Congress have had little success in stemming the steady rise of health care costs. Instead, he argued, much of what is claimed as spending reductions are only reallocations to other sectors: “A lot of people who look at cost control are really just looking at cost shifting, from somebody to somebody else," he said.

Another quote, this one attributed only to the EBRI brief, is as follows:

"The quest for a better health care system is a process that has no end. The challenge lies in creating a climate where there is momentum to fuel the continuing quest for progress. A major challenge is that the health care system is extremely fragmented. Trying to fix separate parts of the system, rather than approaching it as a whole, seems destined to failure."

So it seems that the entire system needs fixing but government can’t do it.

A sobering thought.

Tuesday, March 01, 2005

Abdication of Professional Duty?

The Special Report of the February 7, 2005 issue of Modern Healthcare discussed “External Review” programs - legislated mechanisms by which subscribers can appeal decisions by health insurance companies to refuse payment for services that they determine to be unnecessary or otherwise not covered by their health insurance policies.

Two things about the article caught my attention.

The first was the casual way in which denial of payment was treated as denial of service. Perhaps some will consider that to be hair-splitting. But I think the distinction is important for reasons that bring up the second thing, which was the nearly total lack of any reference to the role of providers in these disputes.

It seems to me that a health care provider who decides that a patient needs a particular service has a professional obligation to make sure that the patient gets it. On that basis, denial of payment by the insurance company on the grounds that the service was unnecessary not only creates a financial issue in which the provider ought to be active on the patient’s behalf, but also, in effect, accuses the provider of incompetence – not something to be taken lightly.

On the other hand, if such a denial is upheld by competent reviewers, then the provider ought to wonder if a mistake was made that calls for corrective action.

Apparently the provider community doesn’t see it that way. The article reported that providers were often reluctant to furnish the medical records needed by the patient for an appeal, considering it “just another administrative hassle.”

That sounds like an abdication of professional duty to me.

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