Tuesday, June 26, 2018
Bezos, Buffett, Dimon and Gawande: Better quality in health maybe; a solution, no
A big item of health news in recent weeks is the planned establishment of some sort of health delivery operation by three major corporations personified by their CEOs: Warren Buffett of Berkshire-Hathaway, Jeff Bezos of Amazon, and Jamie Dimon of JP Morgan. We have no details about what it will actually look like, but we are assured that it will be high-quality, efficient, and cost-effective, utilizing the most modern methods of achieving those goals, which our creaky, antiquated, and resistant-to-change health system does not. It will also be non-profit, important given that none of these companies are, but this is the most common model for health care in the US and in itself says very little. As the first concrete step toward its creation, and clue to what it may be, they have appointed Dr. Atul Gawande as its CEO. Presumably he will be instrumental in creating this new venture, and his views on quality and efficiency may provide guidance on what might characterize it.
Dr. Gawande, a Harvard surgeon and senior writer for the New Yorker, has provided us a prolific body of writing in that magazine and in several books, (including the best-seller about issues occurring at the end of life, “Being Mortal”), to help inform us of his views. He has a wide scope of interest in health care and a demonstrated willingness to learn from other industries. Perhaps his most famous article is “The Cost Conundrum”, which appeared in June 2009 and highlighted the wide variation on expenditures by Medicare for similar populations, focusing on the highest cost region, McAllen, TX, and comparing it to a similar population in El Paso, TX, where costs were much lower. Later, in January 2011 “The Hot Spotters” highlighted the work of Dr. Jeff Brenner in Camden, NJ, and others, to use modern geo-mapping techniques to identify the areas with the highest levels of emergency (911) utilization (unshockingly, in Camden, the two highest were a low-income senior citizens housing unit and a long-term care facility) and try to develop methods for addressing their health needs before they became emergencies. In “Big Med”, August 2012, he discusses application of some of the principles that work in restaurants such as the Cheesecake Factory to health care. The principles include enough variety to meet everyone’s needs without expensive unnecessary redundancy; he shows how this applies in orthopedic surgery and how quality is improved and costs saved when every surgeon in a hospital doesn’t use his (or, more rarely among orthopedists, her) favorite implant device and there is some standardization (commented on in this blog on August 24, 2012, Quality and price for everyone: Bigger may be better in some ways, but not all). A very good review of Gawande’s work and probable priorities has been done by the outstanding Dr. Don McCanne in his “Quote of the Day” on June 22, 2018 “Don’t wait for Atul Gawande”, and I will not repeat it here.
Of course, the employees of Berkshire-Hathaway, JP Morgan, and Amazon already have health insurance, so that this new scheme will not reduce the rate of uninsurance. It is possible that it – whatever “it” turns out to be – will allow enrollment from other employers, or possibly even individuals who are currently insured by another mechanism, whether through Medicare, the ACA-sponsored exchanges, or even Medicaid. This will depend in part on what “it” is – mostly an insurance plan, mostly a care delivery system, or a combination of both like many HMOs.
It is possible that this new operation may indeed succeed in achieving, or at least significantly moving toward, the “Triple Aim” of higher quality, greater patient satisfaction, and lower cost. Certainly the third of these is a major focus of businesses that provide health insurance to their workers, and we will grant these people the benefit of the doubt that they also wish to achieve the first two. Some HMOs have had significant success in doing so already, most notably Kaiser Permanente. Other HMOs that were once “consumer cooperatives” (eliminate the middleman and pay less for the same care or the same for more and better care) have almost all been bought by insurance companies, and it is obvious that the “save money” (or really “make more money”) leg of the #TripleAim is of far greater importance to their business model than patient satisfaction or quality. The bar, as has been demonstrated ad infinitum, including in the work of Dr. Gawande as well as other policy analysts from
academia, the foundation world, and journalism, is so low that large improvements in quality can come from things that it is we already know how to do. The major obstacle to this has always been how providers are paid, and this is where the behemoth strength of this new triumvirate may have significant impact.
Unfortunately, though, there is no suggestion that this new operation would do anything to help those currently either frozen out of the system (including poor people in states that have not expanded Medicaid, undocumented people, and those who cannot afford insurance premiums even with ACA support). The average salaries at JP Morgan and Berkshire-Hathaway are high since so many of the employees are high-level finance types, raising the mean and median. However, Amazon is a different story. Jeff Bezos may be the richest person in the world, he did not get there by paying his employees a living wage; the median income for an Amazon employee is $28,446. While they may have health insurance, it would not be surprising if many of Mr. Bezos’ employees qualify for food stamps, and have difficulty making their copays; that median salary is about the poverty level for a family of four, and if it is the median, many workers make less.
It could be argued that is unfair of me to criticize a program – especially one still in the planning stage -- for not achieving what it does not set out to achieve. However, there is nothing wrong – and indeed it is quite correct – to note that it is far from being a health care panacea. By not setting out to ensure access for everyone, it will not solve the basic problem in achieving the Triple Aim. I mean, it’s good to be focusing on quality, cost and patient satisfaction but without a plan to assure that everyone has access to care it can ring a little hollow.
As was observed by Schiff, Bindman, and Brennan more than 20 years ago, and quoted by me before (Medical errors: to err may be human, but we need systems to decrease them, August 10. 2012), denial of care – or lack of access to care for financial, geographic or other reasons -- is the “gravest of all quality defects”.