Thursday, March 17, 2011


It is always gratifying to see opinions in public print that agree with one’s own.

Last Sunday’s New York Times gave me that pleasure in an editorial commenting on an agreement that had been reached between the administration of recently elected Governor Cuomo on the one hand and, on the other, the state’s hospitals and the union that represents many of the hospitals’ workers. The agreement basically had to do with limiting Medicaid spending, but included a provision capping payments awarded for non-economic damage in malpractice lawsuits.

The editorial first expressed concern that the agreed-upon provision would “unfairly punish patients badly injured by medical negligence.” It went on to suggest the use of expert reviewers and specialized courts.

But then, much to my surprise and delight, it said “The best solution is to greatly reduce the errors and bad outcomes that can lead to malpractice suits.” It mentioned a “rigorous safety program” implemented in 2003 at the New-York Presbyterian Hospital/Weill Cornell Medical Center that reduced the cost of malpractice in that institution by more than 90 per cent.

I have long argued that the problem with malpractice is that there is too much of it and that prevention would be the best solution. My position is supported by the savings experienced by New-York Presbyterian, which are is far and away greater than advocates of reforming the law could ever dream of.

Friday, March 11, 2011

The Real Nature of Non-Profit

Blue Cross Blue Shield of Massachusetts, a non-profit organization, it taking some public flak over the eight-figure golden parachute it recently awarded to departing CEO Cleve Killingsworth and also over the five figure stipends it has been paying to members of its Board of Directors.

One of the Board’s responses has been to suspend its stipends for the rest of the year, during which it will be reviewing its so-called charitable status.

That reminds me of a common misunderstanding about the organizations we refer to as being non-profit and charitable.

The distinguishing characteristic of such organizations does not arise from either charity or profit. Instead, it is based on ownership.

For-profit organizations are owned by their investors, such as stockholders. Non-profits are owned either by the public; i.e., the citizens of the state in which they are incorporated, or by another non-profit, such as a religious organization. In the latter case, ownership is vested in the entity with authority to name the organization’s governing board.

Every organization is ultimately responsible to its owners. I get my Medicare Part D drug insurance from Humana, a for-profit company. So far as I can tell, Humana does a good job of providing me value in my Part D coverage. But its main purpose is to generate a financial return for its stockholders.

I get my Medicare Parts A and B supplemental insurance from Massachusetts Blue Cross Blue Shield, a non-profit. That organization has been very active in a variety of health care issues in Massachusetts and it is clear from the current brouhaha that the public expects it to act in the interests of the general public, not in the interests of its directors and executives.

As we look forward to health care reform and the restructuring of the delivery of care, this difference in ownership forms and the patterns of behavior that result is something that needs to be kept in mind. For example, if my health care is going to be in the charge of an Accountable Care Organization, I think I would rather it be owned by and responsible to the fellow citizens of my state and controlled by a board made up of my friends and neighbors than to an anonymous group of financial investors trying to make money.

Friday, March 04, 2011

The High Cost of Ignorance

While we live in a time of great erudition with space travel, miracle drugs, artificial intelligence and all the rest, great gaps of ignorance remain.

The February 28, 2011 issue of The Boston Globe included an editorial decrying the “inoperability” among electronic medical records created at different locations and with different software. This results in different records being unable to communicate with each other, which, for example, prevents an emergency room doctor from electronically gathering all of the previously generated medical information that might be pertinent to the care of a particular patient.

The editorial claimed that “Had the betterment of public health been the primary goal, hospitals would have developed electronic record systems that produced easily transferable information.”

The Health Information Technology for Economic and Clinical Health Act provides several billion dollars to support the development of electronic medical records. The Globe editorial goes on to say that in the implementation of that Act, one of the first goals should be “….to make sure all hospitals across the nation can seamlessly read and transmit electronic medical records from and to any source.”

With all due respect, the authors of those remarks know not whereof they speak. It is as though they were writing about the accomplishments of the Wright brothers at Kitty Hawk and insisting that the next set of aviation goals should include space travel.

There are an enormous number of things that have to happen before the stated goal of “operability” of electronic medical records can be reached. They include basic changes in the way health care is organized and managed – changes that will not come either easily or quickly.

Given the general level of ignorance in this area, it is unfortunate but likely that quite a few billions will be spent unnecessarily and unproductively along the way to the day of “operable” medical records when all of everyone’s medical information is available everywhere.

Tuesday, March 01, 2011

Getting Over It

The left-leaning, policy guru elite of health care have never been very fond of hospitals, which are seen as a bureaucratic, financially-oriented part of the corporate world. Under the control of the bankers, lawyers and industrialists who populate their governing boards, they have the image of catering more to wealthy donors and affluent doctors than to the common and needy people of the community.

So it comes as no surprise that there is a pervasive reluctance to recognize hospitals as the prime candidates to assume the role of Accountable Care Organization (ACO). An ACO is a legal entity that incorporates the basic elements of health care, including the physician and hospital components, and is able to provide all the care a patient needs for a fixed sum of money, the amount of which is determined in advance.

There is much vague speculation about the corporate nature of an ACO – whether a physician group might qualify, whether “virtual organizations” might be created to play the role, whether insurance companies could do it, etc. etc.

All of this ignores the reality that hospitals are by a wide margin the best qualified to be ACOs and that many of them would be able to do so with few legal and organizational changes. They have the financial capital and administrative structure needed. The number of physicians they employ or otherwise relate to on a full-time basis is large and increasing. In their pursuit of safety and improved outcomes, they are steadily gaining experience in designing and implementing the kind of clinical management for which ACOs are intended.

So to those who are hesitant to assign the ACO role to hospitals, I have three words of advice:

Get over it.

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