Wednesday, September 30, 2009

Does Cost Need a Crisis?

Public support for the Massachusetts health care reform program is slipping and concerns about the cost of health care are growing. Those are the results of a survey reported in the September 28 issue of The Boston Globe. During the past year the approval rate for the program dropped from 69 per cent down to 59 per cent. So a substantial majority still approves. But 43 per cent believe that the state cannot afford to continue with the health insurance law as it now stands.

There are three main issues in health care reform: quality, cost, and coverage. Most of the public attention is being focused on cost and coverage,

There is a question of whether cost and coverage should be dealt with together or separately and, if separately, which should be addressed first. Considering that expanding coverage will increase cost, it would seem that the cost issue should take priority.

The logic of the subject matter may point that way, but the logic of politics may not. Commenting in the Globe article, Drew Altman, president of the Kaiser Family Foundation was quoted as saying “The fact that Massachusetts led with coverage and then turned aggressively to cost control will do more for costs in the next five years than national legislation will do in ten….because in Massachusetts, you are staring a real affordability issue in the face.”

Altman seems to believe that the way to get the public serious about cost is to create a financial crisis of affordability.

He may be correct. The evidence seems to be on his side. Double digit annual percentage increases in cost leading up to an economy in which health care represents one dollar out of seven has not elicited any significant public response up to now. So maybe what has to happen is enactment of a health care coverage plan that we can’t afford. Then when the inevitable cutbacks become necessary, the pain of doing it may prove great enough to make cost control an acceptable alternative.

Wednesday, September 23, 2009

No Health Care Reform Yet

I can’t be the only one who has noticed that what was once called health care reform and referred to often as overhaul of the health care system, is coming with some frequency to be referred to as health insurance reform, occasionally even by the White House.

It only goes to show how intractable our health care crisis really is. The core problem is that health care costs too much – significantly more than in many countries which spend much less on it than we do and are generally satisfied with what they get.

But the roots of that problem run deep – both historically and culturally – and are not well understood. And while it is popular to talk about how the system is “broken,” the reality is that most people are happy with the care they personally are getting They might like for somebody else to pay a larger share of the cost, but they don’t want the care itself, and the way it is provided, to be tinkered with. Evidence of that is found in President Obama’s frequent assurance that the only effect of his reform proposals on veterans, Medicare beneficiaries, and people satisfied with their health insurance will be to improve their coverage.

At the beginning of the current effort there was a lot of talk about cost and its threat to the financial well-being of individuals, corporations, and governments. But as the situation has developed, one hears less about that and more about providing coverage for the uninsured and improving coverage for everyone else – the effect of which will be to further accelerate increases in the cost of health care. Such reference to cost as there is tends to be pointed at health insurance companies despite that many of the insurance reforms proposed will increase health insurance premiums while making it more difficult for insurance companies to restrain rising costs.

The unpleasant fact is that the cost of health insurance is determined mainly by payments to doctors, hospitals, and other providers of health services, all of which are too expensive. Those providers need to find better and less costly ways of doing what they do, but that means change and change is unpopular.

So however the current so-called health care reform effort comes out, it seems that when it is all over, the need to reform our health care system will still be with us – perhaps even greater than before.

Monday, September 21, 2009

Flour, Coffee, LBJ and the Cost of Health Care

The September 20 issue of the Sunday New York Times carried a collection of quotations from President Lyndon Johnson. All were related to LBJ’s successful effort to enact Medicare.

LBJ had a colorful way of speaking and all of the quotations were interesting, but one in particular caught my eye. It was taken from a conversation with his Vice President, Hubert Humphrey.

“Don’t ever argue with me [about health]. I’ll go a hundred million or a billion on health or education. I don’t argue any more about that than I argue with Lady Bird [Mrs. Johnson] buying flour. You got to have flour and coffee in your house. Education and health. I’ll spend the goddam money. I may cut back some tanks. But not on health.”

Those remarks go far to explain the problems we are having with the cost of health care. The LBJ quotation cited eloquently encapsulates the way we have thought about the relationship between health care and money. The idea that we might spend too much money for health care – so much as to endanger the financial stability of government itself – not only had not occurred to anybody, but would have been, and to considerable extent still is, in violation of a deeply and widely held value.

When dealing with health care, the basic instinct both then and now is to spend more money on it. Our health care delivery system can be counted on to use every penny and ask for more. All of that is clear from the way the health care reform debate is going.

It is an issue of culture and we’ll not deal successfully with our health care cost problem until we face up to it.

Thursday, September 17, 2009

Primary Care Hospitals

Earlier this week I was visiting my home town of Harlan, Iowa (pop. c. 5500) when my almost-83-year-old prostate gland shut down my plumbing. In addition to the resulting discomfort, the incident caused more than a little anxiety since I was scheduled to fly back home to Massachusetts on the following day.

Needing care, I went to the Emergency Room of Myrtue Medical Center, some five minutes by car from where I was staying. Myrtue Medical Center is a 25-bed critical access hospital with a salaried medical staff.

I found a parking place (free) about 30 yards from the ER entrance. After a brief registration exercise, I was taken to an exam room where a nursing assistant hooked me up to a wall-mounted, digital, vital signs monitor. A urine sample (I was able to express enough for that - barely) was sent to the lab to check for infection. A nurse interviewed me. After the lab reported, I was visited by a Physician’s Assistant who interviewed me further (learning, among other things, of a recent cystoscopy that found my bladder normal) palpated my bladder area and ordered an ultrasound scan. Another nurse wheeled in a portable ultrasound machine (about the size of my laptop) and took a picture. The machine estimated that my bladder was holding about 640 ccs of urine.

The lab reported no infection. The nurse then inserted a Foley catheter and collected about 675 ccs of urine (pretty close to the ultrasound machine’s calculation). When that was finished, she fitted me out with a urine collection bag strapped to my leg for use until I arrived home in Massachusetts for further treatment by my doctor there. She gave me a copy of the medical record, together with a prescription for a prophylactic antibiotic (a precaution against infection at the catheter site) and sent me on my way.

I went across the street to a pharmacy that filled the prescription.

The entire episode lasted less than three hours.

Going over the experience with wife Marilyn afterwards, I realized that if a Harlan man had the same experience while visiting Boston and had gone to the internationally renowned, Harvard affiliated Massachusetts General Hospital, the clinical care would have been no better, the bill much higher, and the elapsed time a whole lot longer.

Those interested in the design of our health care system talk a lot about primary care physicians and medical homes. They ought also to talk about primary care hospitals (like Myrtue Medical Center) which can manage most medical situations just as well as the big places – maybe even better - with a lot less fuss and bother and at much lower cost.

Saturday, September 05, 2009

“Interfering” in Clinical Practice

Eugene Litvak, professor of health care management at Boston University, has made a name for himself by becoming an expert in the way patients move through hospitals and by showing hospitals how they can become more efficient by improving that movement.

His story was the subject of an article in The Boston Globe that appeared on August 30, 2009 under the byline of veteran health reporter Scott Allen.

Late in the article, reporter Allen suggested two reasons why hospitals were so late in adopting Litvak’s approach, which is commonplace in other types of work. The first was that their monopolistic status meant that they didn’t have to. The second was that doctors and nurses are oriented to helping people, not to efficiency.

There is a third reason that Allen missed. The culture of health care has drawn a hard line between management and clinical practice. Managers were supposed to deal with non-clinical matters like finance and facilities while doctors, nurses, and other health professionals looked after the clinical functions of caring for patients, activities that managers were to stay out of. No manager interested in job security would want to be accused of “interfering” in clinical matters.

There being no way to apply established management practices to patient flow or other clinical processes without “interfering” in what the professionals do, those aspects of patient care have in general not been subjected to “management” as that term is generally understood.

Economic and other pressures are causing that to change, if ever so slowly. For reasons only lightly explored in the article, Professor LItvak has managed to become engaged in activities that heretofore have been off-limits to non-clinical “outsiders.”

Those seriously interested in reforming the cost of health care ought to study Professor Litvak’s work in order to learn how to go about expanding the sort of work he is doing.

Thursday, September 03, 2009

A Suggestion on Rationing

Long-time friend Peter Kilborn submitted the following comment in response to my posting about the Massachusetts proposal to abandon fee-for-service as the way of paying for health services in favor of “global” payments; i.e., capitation.

“Capitation immediately raises the fear of increased rationing. If the provider gets only a fixed sum to treat me, it will want to limit what I receive. I believe that is exactly opposite the present system, where the incentive is to provide more. But I have no thoughts on how to reconcile the two regimes.”

Here is my suggestion:

I would consolidate my local hospital (in my case, South Shore Hospital in South Weymouth, MA) and its medical staff into a single entity and give it the capitation payment for me. South Shore Hospital is a non-profit organization operated under the control of a board of trustees consisting of my friends and neighbors. I would hold the board responsible for overseeing a system of care that continually tried to find the “right” balance point between cost and care – “right” being in the eyes of the beholders, in this case the good burghers of the Boston South Shore.

I would also want an alternative possibility that I could drive to within an hour or so in case I felt that my local provider was not managing well.

There has always been rationing and always will be. A line has always been drawn by doctors and their patients at the point where further testing or treatment is thought to be not “worth it.” It now becomes clear that things are structured in such a way as to inflate the perceived benefits of further testing and treatment while obscuring the perception of cost.

The question is, can things be structured differently so as to create a better balance? I believe they can. Personally, I am not enthused about having government making the determination of what is “right.”. I don’t want it done by insurance companies, either. I have more confidence in my fellow citizens who make up the board of my local non-profit provider institution.

Tuesday, September 01, 2009

Real Health Care Reform

Almost everyone who comments on health care is critical of the fee-for-service system of paying providers. They agree that paying separately for each lab test, office visit, CAT scan, etc. gives hospitals, doctors, and other providers an incentive to use more of these services, even when the benefit to the patient is marginal or perhaps lacking altogether.

When Massachusetts undertook health care reform on its own, it dealt first with the issue of coverage, but made provision for addressing cost later. Cost reform has been under study by a special commission which issued a report a few weeks ago. The main recommendation of the report was that Massachusetts commit itself to replacing fee-for-service with some form of “global” payment.

“Global” payment is a euphemism for what used to be known as capitation. It refers to a system in which patients are assigned to a provider organization – like an HMO. The patient’s insurance company then pays that organization a negotiated fixed amount per month or year, in return for which the provider organization is responsible for providing all the health care services covered under the patient’s health insurance policy during that period.

As can be quickly seen, that exactly reverses the financial incentives for the provider. Under fee-for-service, the provider has an incentive to do more to make more money. Under capitation, the incentive is to do less, since the amount of income is fixed.

Among the many implications of the Massachusetts recommendation, three stand out.

The first is that it requires providers to get organized. The “global” payment has to be made to somebody with the ability to provide the health services covered by the policy and to do so within the amount of money being paid. If the payment is truly “global” and covers hospital as well as physician services, that somebody will almost always be a hospital. Few physician organizations are capitalized at the level needed to take on the financial responsibility of buying the hospitalization needed by a group of patients. The exception would be the ones (like Leahy Clinic in Massachusetts) that operate their own hospitals.

The second is that hospitals accepting global payment will be responsible not only for providing the physician services needed by the covered patient, but also for making sure those services are managed within the amount of funds available. In other words, they will have to manage those physicians – something they have never been anxious to do.

The third is that the provider organization would have to restrict the ability of patients assigned to it to use outside doctors or other providers. It would not want any open-ended obligation to pay for services it did not control. In other words, freedom of choice would be compromised.

Now that would be real health care reform.

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