Integrating health systems must be to improve quality, not increase cost

The February 13, 2014 article in the New York Times by Elisabeth Rosenthal, “Apprehensive, many doctors shift to jobs with salaries”, more or less just presents the facts. It notes that the medical placement firm, Merritt Hawkins, says that 64% of jobs this year are salaried as opposed to 11% in 2004, and that it expects it to go up to 75% in the next two years. She cites AMA figures that “…about 60 percent of family doctors and pediatricians, 50 percent of surgeons and 25 percent of surgical subspecialists — such as ophthalmologists and ear, nose and throat surgeons — are employees rather than independent.” In some places it is more dramatic; in Kansas City, there are no longer any cardiologists (a type of internal medicine subspecialist) who are not employed by hospital systems, and oncologists (cancer specialists) are not far behind.

So, is this a good thing? The article suggests yes, but maybe not entirely. It states that “Health economists are nearly unanimous that the United States should move away from fee-for-service payments to doctors, the traditional system where private physicians are paid for each procedure and test,” and I agree, and that “When hospitals gather the right mix of salaried front-line doctors and specialists under one roof, it can yield cost-efficient and coordinated patient care. The Kaiser system in California and Intermountain Healthcare in Utah are considered models for how this can work,” with which I also agree. However, not all health systems are Kaiser or Intermountain Healthcare. The article continues: “But many of the new salaried arrangements have evolved from hospitals looking for new revenues, and could have the opposite effect. For example, when doctors’ practices are bought by a hospital, a colonoscopy or stress test performed in the office can suddenly cost far more because a hospital ‘facility fee’ is tacked on.”

Rosenthal has written about facility fees before, as has Alan Bavley of the Kansas City Star in his “Doctors, Inc.” series (“’Facility fees’ add billions to medical bills”, Dec 29, 2013), and I have commented on it in Changing the structure of health care delivery systems: to benefit the patient, the providers, or the insurers?, January 14, 2014. The new arrangements promise more money, or at least stable incomes, to physicians, and continue to pay the currently-most-highly-paid specialists the most money, with primary care doctors getting less. This is not because hospital systems have anything against primary care, but rather that they are following the money, and these acquisitions have occurred precisely while we are still under fee-for-service reimbursement in most locations. If cardiology or orthopedic or radiologic or neurosurgical procedures bring in great amounts of money to the hospital (“technical fees”) the hospitals like this, and are willing to share some of that money with the doctors to ensure that they keep their patients in their hospital or health system. Primary care does not generate such largesse. Relatively intelligent systems recognize that they need a locked-in “primary care base” to create referrals to their subspecialists, but will pay as little as they can, and demand “high productivity” (which could be seen as “patient churning”), and it is not just primary care: “many doctors on salary are offered bonuses tied to how much billing they generate, which could encourage physicians to order more X-rays and tests.”

Bloomberg News has a more direct take on this phenomenon, stating firmly in an article by Shannon Brownlee and Vikas Saini that “Bigger hospitals mean higher prices, not better care”, February 18, 2014. They cite data from sources such as the Dartmouth Atlas of Health Care, a recent article in Health Affairs[1] which demonstrated that “On average, higher-priced hospitals are bigger, but offer no better quality of care,” and a variety of lawsuits by public agencies (such as the Massachusetts Attorney General) to demonstrate that hospital acquisitions are about market share and control of practices and, ultimately, about money, not quality. “If you think of value as some combination of needed services delivered for the right price, large hospitals are no better than small hospitals on both counts.” As I have written about before, doctors control a lot of costs in the health system, by choosing the tests that they order, deciding whether to admit to the hospital or not, and where they refer. By employing the physicians, hospitals can not only control the latter, but can set criteria requiring physicians to abide by hospital policies on the others. The doctors then become, in the words of this article,  “…another cog in the corporate machine, and many physicians have told us they feel they must skew their medical judgment to keep their jobs.”

This is the nonsense that occurs when things are done piecemeal. Intermountain Health Care and Kaiser are not perfect, but they have used their status as integrated health systems to control costs and increase efficiencies. To the extent that they are also the insurer, it is in their interest to do so. Efforts by the federal government to have others emulate these models through the creation of Accountable Care Organizations (ACOs), without changing the manner of reimbursement, are bound to fail. As Paul Baladian is credited with saying “every system is perfectly designed to get the results that it gets.” If we are getting a system in which hospitals are buying up physician practices so that they can charge insurers, from Medicare to Blue Cross, more; if we are getting a system in which medical decisions are being made in the best financial interests of hospitals rather than the best health interests of patients; if we are getting a system in which we continue to favor some patient over others based upon their income, insurance status, or their type of disease (middle-aged well-insured person who needs a single joint replacement = “good”, older person with multiple chronic medical conditions and “just” Medicare or worse yet uninsured because they are under 65 or undocumented = “bad”), it is because we have perfectly designed it to be so.

Brownlee and Saini offer some suggestions for solutions. They suggest that Medicare expand its “Advance Payment Model,” a program that provides capital to small or rural physician groups, and also particularly about forming multispecialty Accountable Care Organizations driven by primary care.

“Until we give primary-care groups control over what happens to patients, large hospital systems and specialist-dominated groups -- those with greatest access to capital -- will be able to keep raising prices, even as they issue press releases about their plans to control costs and improve care.”

Sounds like a good idea to me. Combine that with a single-payer system that covers everyone, “everybody in, nobody out!” and we may be able to reverse the trend toward higher profit at the expense of lower quality.

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[1] White C, Rechovsky JD, Bond AM, “Understanding Differences Between High- And Low-Price Hospitals: Implications For Efforts To Rein In Costs”, Health Affairs, January 2014 10.1377/hlthaff.2013.0747.

Medical communication is indeed often "lost in translation"

I often write about the things that I believe make a big difference in the health of people. Some of these are access to the health system, particularly financial access in the US. The bizarre and inappropriate structure of the US health system in terms of overemphasis on high-tech, subspeciality care at the expense of adequate primary care is extremely important. I also believe that the “social determinants of health”, the characteristics of people’s lives that are not usually considered as part of the health system (socioeconomic status, environmental exposures, stress, education, housing, etc.) are major contributors to health.

I have also written about medicine in terms of recommendations for prevention and screening from different organizations (I tend to advocate for those from the US Preventive Services Task Force) and about treatments that are promoted but are often of minimal benefit and sometimes harm to people. Occasionally, I even venture into the area of medical research, trying to help folks understand how science progresses, and how there is rarely a “breakthrough” as big as the news media like to trumpet. As a medical educator, I am very concerned about how we train doctors, and have also frequently written on that topic.

Most of these themes are focused on “population health” rather than the management of individual patients with individual diseases, not because the latter is unimportant but because these issues are extensively addressed in many other outlets, and the ones that I have described are, I think, not as well understood both by the medical community and the general population. I believe that the almost exclusive emphasis in our country on treatment of individuals limits both our commitment to addressing population and system issues, and the resources available to do so.

However, sometimes there is an issue that is mostly about human behavior, something that could be changed, and would make a big difference in the healthcare experiences of most people. One of those I have touched on before (Medical schools are no place to train physicians, January 5, 2014), because I see it as a key part of medical education, is communication between health care providers and their patients. This was addressed in an outstanding “Opinionator” blog that appeared in the New York Times on February 9, 2014, "Lost in Clinical Translation" by Theresa Brown.

Ms. Brown is apparently a nurse, but what she discusses is at least as applicable to doctors and to other health professionals. Starting with a reference to the Gary Larson “Far Side” cartoon here, she gives excellent examples of failures of communication that were disturbing to patients, but did not, apparently, disturb the health professionals who, presumably, thought they were communicating as clearly as Ginger’s human owner does. One story is of her friend's husband, who a heart procedure called a “cardiac catheterization” to look for blockage in the arteries that supply the heart itself, which can cause a heart attack. (That description is, I hope, clear; when I told my residents, however, I just said “he had a cardiac cath”, which was very clear to them but would likely have mystified most patients.) As it turns out the test was completely normal, but this was not clear to the obviously very worried wife who understood almost nothing about what she was being told (for example, that he was being kept overnight in the intensive care unit because this is routine after such a procedure, not because his condition required intensive care!).

This sort of thing happens a lot. Daily. Hourly. There are many reasons for poor communication to occur between health professionals and patients. Some are that people, when they are scared and sick and in a strange place, have difficulty listening to strange words and understanding unfamiliar concepts. They may have to be told again and again, just as, I tell my students and residents, we all had to study to pass exams even though we'd be "told" everything once, in the lecture. But there are a lot of other things that are our fault, and can be remedied by different behaviors.

One, we – doctors, nurses, and other health professionals -- are very comfortable in the hospital, and we take it in stride; it is our "briar patch" and we're at home, but for patients and families it is a scary place full of thorns. I ask doctors and nurses to think about they would feel if they had to go to court, as witness or defendant or plaintiff, and look at how easily the attorneys comport themselves. It is a good reminder of how patients feel in a hospital.

Two, we speak "medical" fluently. We have such familiarity with both words and concepts that we assume that they mean something to regular people (which is, by the way, the correct English term for "patients" and "patients’ families"). But usually they don't; words that mean very different things sound a lot the same; even if people have heard them before they usually have only a vague idea of what they mean, and the difference between "is" and "is not" is, while obviously very significant, not always clear to folks. I point out, just for an easy one, how often we use "negative" when we are describing a normal test. We should ALWAYS use "normal" or "not normal". "Negative" sounds bad. "Positive" (which is often bad) sounds good!

Three, we often use obfuscating words, unnecessarily medical words when regular ones will do fine, and use lots of modifiers and adverbs that make what we are saying even more unclear. The use of such modifiers ("probably", "likely", "potentially", 'possibly") may make what we say more technically accurate, but can obscure the message. Similarly, we are often uncomfortable giving bad news, and when we use such modifiers we may think we are lightening the load a bit for the patient, but really we are being more unclear. When we hide behind medical words, we are protecting ourselves from having a long and perhaps difficult discussion; completely subconsciously, I'm sure, we expect that maybe they won't understand, and thus won't ask hard questions. Also we tend to speak in the third person, kind of distancing both ourselves (first person) and the patient (second person) from what we are saying. All these are illustrated by thinking about how a statement like "The biopsy result showed that the tumor was probably malignant" conveys a very different (and probably incomprehensible) message than "you have cancer".

It is a lot to think about, but the good part is that these behaviors can change. We just have to want to, and work at it.

NOTE: The Medicine and Social Justice blog will appear less often than it has, intermittently or maybe not at all, for some time. I am on sabbatical and will be engaged in writing a book, more or less on the themes described in the first two paragraphs of this piece, the themes that have been the subject of this blog.

Health care systems should not be run for profit, but rather for people's health

I wrote in a recent blog (“How can a health care system lead not to ruin but to, actually, health?”, December 28, 2013) that our health care system ”…is a parallel to our financial services industry: private enterprise is given a license to make money from everyone, and the government finances it. The only difference is that for financial services, the government steps in to bail them out only after they have already stolen all our money, while in health services the profit margin is built in from the start.” A recent article in the New York Times, “Hospital chain said to scheme to inflate bills”, by Julie Creswell and Reed Abelson (January 24, 2014) takes this a bit farther.

Discussing the Department of Justice’s decision to join several whistleblower (“qui tam”) lawsuits against the for-profit hospital chain HMA (not to be confused with the nation’s largest, HCA) for aggressive policies that seek to maximize profits by “encouraging” (at threat of termination) doctors to over-admit patients, they quote Sheryl R. Skolnick from CRT Capital, who wrote “Investors seem to think that D.O.J. investigations, qui tam suits and allegations of serious Medicare fraud are simply a cost of doing business.” That’s right. Illegal activity has a price – fines – but the fines are small enough that they do not discourage the illegal activity. The authors write “Many settlements run only into the tens of millions of dollars. That’s a corporate slap on the wrist for companies whose stocks typically soar when executives push the profit envelope. Only if the penalty is at least $500 million, Ms. Skolnick said, are corporations likely to find the cost a deterrent.” Or, of course, if the heads of these corporations are sent to prison, but in another parallel with the financial services industry, this is not happening. Not to Lloyd Blankfein of Goldman Sachs or other financial titans (such as CEO Jamie Dimon of JPMorgan, featured in the same issue of the Times, “JPMorgan, fined billions, approves raise for its chief”!), or to Rick Scott, former head of Columbia/HCA when it was fined $1.7 billion in 2003 for massive Medicare fraud). Scott, of course, is now the Governor of Florida.

It is difficult to imagine the hubris and arrogance of the “masters of the universe” who run the financial services industry, or the large hospital corporations. At least, it is for me, and possibly for other people who believe that the health care system should be first, second, third, and last about benefiting people’s health. It does not seem to be for the C-suite executives of even moderate-sized hospitals, who often come from accounting and finance backgrounds. The argument is that if there is “no margin” there is “no mission”, and that in the competitive environment of health care it is necessary to have good business managers to make it possible for a hospital – or hospital system – to even survive, not to mention to prosper.

Good management is important. Good management means the ability to run an organization efficiently, to create effective systems and effective working relationships, to enhance quality and limit unnecessary costs. It is absolutely necessary to build a system that is about benefiting the health of people. This includes financial knowledge and financial management ability. But increasing profit, increasing market share, taking “desirable” customers away from “competitors” has no such place; the health system has no business in being organized in such a way that these things are even possible.

This statement is so completely at odds with the way the health system is currently structured that it bears repeating. There should be no financial incentive for competition in health care. There should not be more services available than a community needs because every hospital wants to provide it and take “customers” from their competitors. If, for example, a community is large enough that it needs one MRI scanner, there should be only one (or 2, or 3, or whatever the medical need is). In the current structure, however, the hospital with that one would have a competitive advantage over other hospitals in the community, so everyone needs one. The same is true for any profitable service: cancer treatment, heart procedures, neurosurgical procedures, etc. Profitable “product lines” are, thus, in oversupply, and this means that they are overused, often with risk to the recipients, and certainly the cost to everyone is increased. Conversely, necessary services that are not profitable, such as burn and trauma care, are rarely in oversupply, frequently relegated to the community’s public hospital, and sometimes not available at all.

A community should have all the health care resources its people need, but should not duplicate – and triplicate – services so each can compete. It is bad in terms of the overall cost, and the oversupply of profitable services, and it is arguably worse in that all these hospitals are competing to get the same patients – those who are well-insured with “high profit” diseases, and to not care for others – uninsured, poor, and those needing services that are not well reimbursed.

This is craziness. Health care is not luxury condominiums, or expensive watches. It is something that every single person should get all of that they need, and no one should get what they do not need. There should be competition between hospitals to be excellent, and measures of excellence should include comprehensiveness, quality, cost-effectiveness, and caring for everyone equitably (not equally, but based upon their health care needs). And, if there are to be financial rewards, they should come for doing this well. There must be no services that are particularly “high-profit”, nor patients whose economic status makes them “undesirable”.

We have a long way to go. Various strategies have been tried in the past, from certificate of need (CON) programs that decided whether a community needed a new pieceof capital equipment in the 1970s and 1980s, to disproportionate share funding for hospital caring for higher percentages of uninsured people and quality improvement organizations more recently. But all of these efforts have been gamed, because there was no comprehensive plan in place to ensure that no patient, and no disease, was more or less profitable than another. We need to have a system in which each person with a health care problem is provided the care that they need. No gold cards. No profitable conditions. Not hard to understand.

The time for this to happen is now.