Health system woes, or whose benefit should we be focusing on anyway?

It’s not easy to be a big healthcare system these days, what with all the new rules and incentives for spending less money and providing less unnecessary care. Medicare is leading this charge, with a variety of efforts, mostly recently contained in the 2015 Medicare Access and CHIP Reauthorization Act, fondly known as MACRA. This law extends previous efforts by Medicare to encourage consolidation and “shared savings” (spend less and you get to keep some) through the creation of “alternative payment models” (APMs), most of which emphasize increasing prospective payment (paying in advance for a basket of services to be delivered to a population) rather than fee-for-service (paying for each service provided).

In some ways, and particularly in some places, such large health systems are well-positioned for these changes; because they are big and provide the whole range of healthcare services (or most of it), and because many of them employ physicians, they should be able to take advantage of the efficiencies of scale, as well as understand their comprehensive costs. Many of them are; Kaiser, especially on the West Coast, and other early-adopters of this comprehensive model. Other payers are following Medicare’s lead, such as Blue Cross/Blue Shield of Massachusetts.

Still, it’s hard to change your business model. When your health system has been designed for decades to maximize income from fee-for-service by hiring lots of specialists who provide services (often procedures) that bring in a lot of money and supplying them with the expensive facilities and equipment to do them, it is scary to think that this entire investment could move from being a profit center to a cost center, where each of these procedures just chips off money already received in capitation rather than generating new revenue. Plus APMs create incentives to spend less overall, and you have spent decades gearing up to spend more – with the expectation and assumption that reimbursement would more than cover this investment.

And if you are not on a coast, but in the part of the country where such changes are happening more slowly, and in fact are mostly still in the future and you’re still making money the old way, it is a very scary and risky proposition to change your business model completely. The analogy of when it is time to put your second foot in a canoe is an apt one. The dock is a stable place to be, comfortable and familiar, but the canoe can take you off to new, and maybe wonderful, places. But there is only a limited amount of time that you can keep one foot on the dock and one in the canoe before the canoe moves off and you end up falling in the lake.

One of the big concerns confronting such health systems is the degree to which they should invest in expanding primary care capacity. The argument for doing so, put forward by most consultants and experts, is that it ensures a patient base loyal to their system and referring in to their hospital(s) and specialists and providing a more comprehensive ability to manage the spectrum of care. The other option is to “double down” and be providers of only high-end, high-cost (and hopefully high-profit) care, with the assumption that the community’s primary and secondary care providers will see you as a beacon for their complex problems and refer their patients to you. This latter position is especially popular among academic medical centers, hospitals tied to a medical school and a faculty practice group, and is much closer to the advice given by the University Health Consortium, the organization of such hospitals.

Along with this is the question of how income might be distributed. Most of the incentives in MACRA and prospective payment are for primary care; in addition to direct reimbursements for primary care providers, the shared savings come from a higher percent of conditions being managed by primary care and not subspecialists, fewer hospitalizations resulting from greater continuity of care, and fewer referrals for imaging (x-rays and the like) of questionable necessity but easy availability (because the capacity for doing them has been overbuilt). Kocher and Chigurupati discuss these issues in their July 14 piece in the New England Journal of Medicine, “The Coming Battle over Shared Savings — Primary Care: Physicians versus Specialists”.[1] The main point of the piece is how specialty physicians will respond to their incomes decreasing – they suggest the options are defensive (fight it and keep doing what they are doing) or offensive (sell themselves as more able to contain costs especially for certain disease conditions). Of course, what works for some specialists may harm others; if, say, a pulmonologist caring for chronic obstructive lung disease is very efficient and their patients need less imaging and fewer admissions, it can hurt others.

The average American is not going to have great sympathy for loss of income for such specialists. The authors cite the mean income for primary care doctors as $195,000, about 4 times the average US household income, and average for specialists $284,000, significantly more but deceptive in that many specialist make 2, 3, or more times that. Thus a $35,000 reduction in income, which is what the authors use in their example, is likely to mostly concern these doctors. The authors also note that primary care physicians “…account directly for a small percentage of health care costs. Yet they substantially influence the total cost of care through referrals and directing of their patients’ subsequent care.” They are, or could be, cost effective, provided that there is not pressure from the system to increase referrals – something that has usually been the norm, and even touted by primary care physician groups who talk about “downstream revenue” generated.

Of course, nowhere in these discussions is the question of what is best for the health of the American people. Implicitly, MACRA and the ACA before it (with its creation of accountable care organizations or ACOs), are intended to increase both access to care and its quality (two legs of the “triple aim”), but arguably have been put forward by both the federal government (Medicare) and adopted by other insurers to achieve the third leg – lower cost. And for insurers, including Medicare, the concern is lower cost to them. The issues addressed heretofore in this piece and by Kocher and Chigurupati and by consultants such as the Advisory Board and organizations like UHS, are how healthcare providers (healthcare systems, academic and otherwise, physicians and other individual providers) can most effectively respond to keep from losing money, from having the cost savings for insurers come at a big cost to them.

The health of the people should be the measure. And it needs to be the health of all the people, the poorest and sickest and most vulnerable and most easily left off, not just the high-yield, high-profit generally healthy, well-insured person who needs a single procedure and has no complicating conditions. Indirect incentives that seek to modify behavior by not demanding that all necessary health needs be provided to all people and no unnecessary care be provided to anyone are all bound to fail. Societies are, or should be judged, not by how they care for their most privileged but by how they care for their most needy (see the FDR epigram at the top right of this page).

And nowhere is this more true than when it comes to the people’s health.

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[1] Kocher R, Chigurupati A, The Coming Battle over Shared Savings — Primary Care Physicians versus Specialists, NEJM 375(2):104-106, July 14, 2016

Good enough for government work: Quality, Cost, and Gaming the System (Part 4 of 4)

This is the fourth and final part of the 23rd Charles Odegaard Lecture, "Good enough for government work:Quality, cost and gaming the system. I will put the entire talk up as an attachment soon.

Is this really true? Aren’t some of our costs “our fault”, or at least “their fault”, that is other people? What about those folks who are “gaming the system”, by holding out on buying insurance until they get sick? Aren’t they driving up costs? Insurers like Aetna and Anthem make the accusation that people are misusing Special Enrollment Periods (SEPs) for this purpose. This is debunked by the evidence, cited by Michael Hiltzik of the Los Angeles Times, but even if they were, they’re poor people trying to get by! Wondering if they can put off buying health insurance so that they can pay the rent! Who is really in a position to develop and implement strategies to “game the system”? 

Unsurprisingly, as Hiltzik also reports, it is the insurance companies (as well as big health system providers) who are masters of these strategies. Besides, if we have concern about “buying to use” behavior, the best answer is to get rid of the jumble of insurance companies and enrollment periods and have one national health insurance plan that has, in the words of the recently deceased Quentin Young, “everybody in, nobody out”.

The most amazing thing about all of this, the way in which the system is gamed, is the way it transfers public money intended to provide healthcare for people into private pockets far in excess of the cost of providing that care. Himmelstein and Woolhandler provide us with data that shows that we already pay for a national health system, with over 50% of “health” costs being borne by government, far over 60% if we count the loss of revenue from employer contributions to insurance being tax deductible, but we still don’t come close to covering everyone, because our system is so inefficient, and so much boodle is being raked off.

Nowadays, when we hear the phrase “good enough for government work”, we tend to think of something that is poor quality, or only just meets the minimum standards set by government. The Urban Dictionary defines the phrase as “Probably not the best, but what the hell, at least we got the job done to minimally acceptable standards.” And, yet, when this phrase first came about it was a compliment; it meant that the government set minimum standards of quality that had to be met, and if you had someone (say a contractor) doing work that was “good enough for the government” it meant that it met those standards of quality, that they weren’t ripping you off by doing shoddy work. What we have now is our publicly-funded health system being cannibalized by profiteers, and enabled by a government that often seems to care more about cost than quality.

Charles Odegaard, the medieval historian and former University of Washington president after whom this lectureship is named was, and I quote from the Coastal Research website, “an impassioned proponent of the idea that every school within a university should be engaged in the advancement of society in the communities and regions that surrounded it. As a result of Dr Odegaard’s leadership, UW became a leader in the decentralization of medical education, including the unprecedented commitment to training physicians from and in the surrounding states of Alaska, Montana, Idaho and Wyoming.” [1]

There are great positives to decentralization, whether for education of doctors or for administration of social programs. It can decrease the cost of large, unresponsive central bureaucracies, and put control in local areas that are more knowledgeable about and responsive to the needs of their populations. There are, also, risks. Sometimes control at the local level is more about maintaining the power of one sector of the community at the expense of others; one just has to look at localities and states in the South in the Civil Rights era defying integration (or, perhaps, many states and localities more recently). More to the point of this talk, there is the risk that smaller, more decentralized activities can be more easily underfunded. Think about the deinstitutionalization of people with severe and persistent mental illness toward the end of the 20^th century. When I was in medical school, I was taught that 1 in 3 hospital beds was occupied by someone with schizophrenia. That is certainly not true today, because of deinstitutionalization. And so we do not have the horror of people with mental illness warehoused in enormous facilities, but we also do not have anywhere near the degree of community-based mental health services that would allow them to live successfully in the community. We have people with mental illness living on heating grates and under bridges and, according to a June 2015 article by Matt Ford in The Atlantic, our nation’s largest mental hospital is a jail (absolutely believable to anyone who has ever worked in one).[2]. It is only ok to decentralize when we can assure that necessary programs will be maintained and will be well funded. We have long since privatized the health care in most prisons, and there is a (to me) disturbing movement to privatizing prisons altogether. Cost, again, trumps quality. Especially, of course, if the prisoners are mostly “not us”. Seeing a trend?

So…is it possible to have quality and still reduce costs? Of course. Our system is not only financially inefficient, and the victim of massive skimming by the private companies, but it is one which is geared to care for individual patients rather than populations; where there is not rational allocation of resources to the areas where they will do the most good, but rather decisions made for each individual, often where the provider has a financial incentive to do more. Oregon’s CCOs, a kind of state-sponsored but decentralized (there are 15 in the state) ACO designed only for Medicaid patients, have provided some movement in this direction, but they are limited because they are, in fact, only for Medicaid patients. This permits skimming, as we see in recent data that shows that the places long touted for their efficiency and low cost for Medicare, like Grand Junction CO and Rochester MN, are among the most expensive for private insurance. The same characteristics, integrated health systems which control most of the care in a community, that allow them to be efficient with fixed Medicare funds, also allow them to raise the rates for private insurance. Gaming the system.

We could have a good health care system. It needs to be built upon quality, and quality has to be based on consensus, and has to apply to everyone, rich and poor, young or old. It cannot be segmented into different versions of quality for privately insured, Medicare, Medicaid, and uninsured people. The “how-to” is not hard; other countries have shown us how. The money is not hard, we are already spending excessive amounts. What we need is the will. 

 http://coastalresearch.org/2015/08/joshua-freeman-md-to-be-charles-odegaard-lecturer-at-27th-national-conference/

[2] (http://www.theatlantic.com/politics/archive/2015/06/americas-largest-mental-hospital-is-a-jail/395012/

“Good enough for Government Work”: Quality, cost, and gaming the system, Part 2 (of 4 parts)

This is part two of the Charles Odegaard Lecture, delivered at the 27th National Conference on Primary Health Care Access, April 6, 2016

We have all heard the business mantra “do more with less”, which, on the face of it, is either absurd or, perhaps, a very cynical indictment of how much is currently being “wasted”, waste being differently defined depending upon the point the user wishes to make. I, for example, would consider “waste” to be money designated as “health care dollars” going to excessive profits for private corporations rather than actually being spent delivering health care; others, perhaps in the insurance industry, might consider “waste” to be an excessive “medical loss ratio”, their quaint term for the money that they actually have to spend delivering health care and don’t get to pocket. Politicians, of course, are more malleable; “waste” is whatever is being spent on what they don’t like, provided of course, it doesn’t get them into trouble with their constituents (like the VA scandal), in which case switching definitions is always an option.

What might be waste in the provision of health care? One is providing, and charging for, services that are unnecessary or possibly even harmful. A current example is the performance of pelvic examinations (as distinct from collecting Pap smears) in asymptomatic women (without pain, discharge, or bleeding) just to see what we can find. The American College of Physicians (ACP), the internists’ group, recommends against them. ACOG, the American College of Obstetricians and Gynecologists, recommends doing them, or at least leaving it up to the physician. Guess which group stands to lose more financially? ACOG’s position includes the statement that “…the College continues to firmly believe in the clinical value of pelvic examinations, through which gynecologists can recognize issues such as incontinence and sexual dysfunction. While not evidence-based, the use of pelvic exams is supported by the clinical experiences of gynecologists treating their patients.”![1] Hm. Maybe the best way to discover issues like incontinence or sexual dysfunction is not to put one’s hands inside a woman, but, perhaps, to ask her!

The US Preventive Services Task Force (USPSTF), of course, makes no recommendations on whether to do a particular exam or procedure, as its recommendations are for or against screening for particular diseases (with, in that context, exams or procedures discussed). It recommends against (“D” recommendation) screening for ovarian cancer, a major “benefit” cited by some ob-gyns, because it is inadequately sensitive and specific and doesn’t save lives. In a recent survey of ACOG members, the “potential benefits” of pelvic examination in asymptomatic women were cited, but not the costs – in dollars or to patients in terms of discomfort and morbidity. 

This is relevant here because when costs, both potential for harm as well as dollars, are not considered, everything could be potentially of benefit. Another recent study showing mild benefit from the use of the diabetes drug pioglitazone to prevent strokes or TIAs in people who have previously had them shows some benefit, but at the cost of an increase in the number of fractures requiring surgery or hospitalization; the editorialist in Journal Watch General Medicine emphasizes the benefit rather than the risk of harm, but is a neurologist, not an orthopedist. Should we do an MRI on everyone every week, just to see what we can find? Certainly there could be some things found! What about CT scans for screening for lung cancer (USPSTF “B” rating)? The best study, from the US, shows absolute risk reduction for death in 6.5 years of 0.33%; some smaller recent studies from Italy and Denmark show no benefit for mortality, and even in the US the frequency being recommended is moving to less than annually.  Should we be on track to weekly MRIs?

So, I just wanted to be clear that it is not true that I am for anything that could improve quality whatever the cost. That is ridiculous. But there is a baseline of quality which not only can, but regularly is, compromised when there is a potential for financial benefit from doing so. 

More recently, and wildly popular in health care, is the Triple Aim. The idea is to improve quality, improve patient satisfaction, and cut costs, all at once. It is difficult to find anyone, regardless of political affiliation or medical specialty, politician, provider, or consumer advocate, who doesn’t think that this is a good idea. To some degree, even I think this is a good idea, but I also believe that, like a lot of good ideas, the devil is in the details, the proof is in the pudding, where the rubber meets the road, or whichever is your favorite saying. While I am certain that many well-meaning pundits and providers, such as the leaders of family medicine, the experts at the Institute for Healthcare Improvement (IHI) and others are serious about improving quality, the reality, as M. Gregg Bloche notes in his NEJM piece (see Part 1, ref #3), is that almost all of the rewards are for cost-cutting. Yes, ACA has given us some modest revenue enhancements for meeting quality goals, although in general they are either very broad or very precise, and in either case poor measures of actual quality, and thus of limited impact. But almost all of the rewards, on either side of the Atlantic, in the NHS, or the VA, or for the ACOs created by the ACA, are for reducing costs. And it is almost always in the public sector that the impact is the greatest.

For example, outside the VA, we have our RACs, the bounty hunters licensed by Medicare to come into hospitals to find “fraud and abuse”. This usually manifests as discovering that some Medicare patients have been “admitted” to the hospital, rather than placed on “observation” status, which costs Medicare less. We have been well-socialized by our institutions, prompted by Medicare, into ensuring that we have reason to believe a patient will be in for “two midnights” (a bizarre conception with regard to health, much easier to achieve when a patient is admitted at 11pm than at 1am!), but how many of us realize that it is our patients who pay, literally with dollars? The excess cost is because “observation” is officially outpatient and paid by Medicare Part B, which requires much higher co-pays than the Medicare Part A that covers admissions. I have to admit that it was only relatively recently, when I heard a cousin being admonished by a friend to “make sure that your mom is admitted, not put on observation, or she’ll go bankrupt”, that I realized this.

[part 3 next week: The VA, the private and public sector, and the profit motive]

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[1] http://www.acog.org/About-ACOG/News-Room/Practice-Advisories/ACOG-Practice-Advisory-on-Annual-Pelvic-Examination-Recommendations

Gaming the system: Integration of healthcare services can just raise costs, not quality

My last blog post addressed the promises, and challenges, posed by the creation of integrated health care plans (or their new incarnation,Accountable Care Organizations, or ACOs, as defined by the Affordable Care Act, ACA), I summarized some of the good and the bad aspects of health care integration. The good often relate to the efficiency that can arise from a single organization which, in theory, can result in financial savings to both individuals and the health “system” as a whole. Unfortunately, this does not always happen, as demonstrated in the article “A hospital war reflects a bind for US doctors”, New York Times, December 1, 2012 (Nov 30 “online”; while in the “Business Pages” online, it is front page, even continued in the first section, in the print edition).

The article, by Julie Creswell and Reed Abelson, begins by focusing on the “picturesque” city of Boise, ID, where the two hospital systems in town have been buying up physician practices in order to more effectively “compete” with each other. St. Luke’s Health System, the larger, has been doing much more of the buying, so much so that the other, St. Alphonsus Regional Medical Center, is suing to prevent them “…from buying another physician practice group, arguing that the hospital’s dominance in the market was enabling it to drive up prices and to demand exclusive or preferential agreements with insurers.” Yes, driving up prices. They noted that the charge for colonoscopy has quadrupled and the charge for laboratory services is much higher. 

The CEO of St. Luke’s argues that not all prices have gone up, and, anyway, the ones that did were “underpriced” previously. This, of course, is hard to demonstrate in an industry where pricing is largely a fiction, where there are no “posted” prices and the charge to different payers varies enormously.  It is not like buying a car, where the dealer pays a certain amount to the manufacturer and you, as a customer, try to get them to charge you as close to what they paid as possible. Nor is it like buying a video game online as described in another Times article (“Retail frenzy: prices on the web change hourly”) in which you can find out if, for example, Target will respond to Amazon’s price cut by dropping its price even lower.

In health care, the “cost” to a provider (hospital or health system) includes both the “marginal cost” (what it actually costs to run that one more lab test or do that one more colonoscopy) and some percentage of their “fixed cost” for running the entire operation. Thus, ironically, by integrating and consolidating into a larger organization with a larger fixed cost, that overhead built into the price increases. The single lab test done by the health system lab has to pay part of the cost of that new MRI scanner and the technician that runs it and the super new invasive radiologist, while the price charged by the independent laboratory does not. Of course, the overall actual cost, in total, to all organizations may be going down, but the amount that the patient or their insurer pays for a low-cost test goes up!

This, as should be obvious, is not an issue limited to Boise. The Federal Trade Commission (FTC) has also gotten involved in investigations of pricing at St. Luke’s and other hospitals and health systems. The Times article quotes Jeffrey Perry, an assistant director in the FTC’s Bureau of Competition: “We’re seeing a lot more consolidation than we did 10 years ago….Historically, what we’ve seen with the consolidation in the health care industry is that prices go up, but quality does not improve.” Higher prices and the same (or lower) quality. Not exactly what we want to hear.

“Hospitals,” says Steve Messinger, president of ECG Management Consultants, an organization the Times indicated advises on physician acquisitions, “are constructing compensation in ways that are based on productivity and performance.”  Sadly, the “performance” piece only sometimes is tied to either quality of care for the patient or cost-effectiveness for the payer, but much more often to “productivity”, and particularly in how it increases revenues for the hospital. One of the ways that this can happen is by “churning” patient – increasing the number of admissions, for which hospitals get paid, but not keeping them too long because (since hospitals are paid by Medicare, at least, a fixed amount for a given diagnosis, based on a system called “DRGs”) shorter stays cost less and thus make the hospital more money. On the front end, the Office of the Inspector General of the Department of Health and Human Services is investigating whether hospitals are tying reimbursement of emergency physicians to how many patients they see per hour and the increasing the percent of ER patients who are admitted. Regarding “productivity”, one hospital noted that patients expect to be seen in a timely manner; of course, patients also expect to get appropriate and thorough care once seen, which can be inhibited by having to increase throughput. On the back end, there are several lawsuits from physicians charging that they receive bonuses if their patients are out of the hospital in less than 3 days. Now, no one wants to be in the hospital longer than necessary, and in fee-for-service payment structures there is financial incentive for doctors to keep their patients in longer as they can bill for each day, but no one wants to be rushed out of the hospital before they are well enough in order to meet a certain target length of admission.

Many of the worst “abuses” come from for-profit hospital or health care companies, such as some of those mentioned in the Times article. This is obvious; their incentive is to make money for shareholders, not to provide quality care except to the extent that it is necessary to make profits, and given the arcane nature of health care reimbursement, the association is not all that strong. Integrated health systems that have done a better job of decreasing costs and increasing quality, such as Kaiser, are usually not-for-profit. However, not-for-profit status is not a guarantee; especially when such hospitals have to compete with for-profits, they end up playing by the same rules. In addition, the Boards of Directors of non-profits are still looking at the bottom line, and are certainly not interested in losing money.

The key problem is the patchwork of rules and reimbursement systems that govern healthcare, and the opportunity for healthcare providers (hospitals, health systems, and even doctors – although they are, as the article points out, increasingly employees of those hospitals) to “game” the system, to find the holes, legal (or sometimes not) that permit them to make the most money. More admissions? Fewer readmissions? Shorter stays? More procedures? Higher prices for colonoscopies and lab tests? Whatever works for the bottom line, not for the highest quality of care of individual patients or communities.

This is nonsense. The goal should be to provide excellent health care, that which is needed by the patient and not more, at a reasonable price – and a price that can be identified. Our current payment system discourages that, and this is not right. The big, arguably necessary, step to a solution, is a single-payer (or highly regulated multi-payer) health system that provides hospitals with global budgets, not reimbursing per service item, while holding them responsible for providing quality health care to the patients in a particular community. Similarly, global (capitation) payments to physicians can permit them to rationally assign their time, staff, and resources to meeting patient needs in the most appropriate and effective manner. If a telephone call is all that is needed, why should someone take off a half-day of work to come in? Well, because that’s the only way doctors get paid, the current answer, goes away. If these global payments are combined into an integrated health system, perhaps we can have more results like Kaiser’s.

This would not solve all problems but it is the necessary if not sufficient starting point. And certainly, the profit driver is a major negative toward enhancing quality and limiting cost in healthcare.

Just thought I'd add this picture:

The Primary Care Conundrum

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The primary care conundrum:

We need more primary care doctors.

We treat primary care doctors relatively poorly, thus discouraging medical students from entering the field.

This issue has been one of the recurring themes in the discussion of health reform, and I have written about it often. People argue around the edges of the conversation:

·         It is not only primary care doctors that are relatively underpaid; so are many non-procedural specialists.

·         There is not going to be an increase in the payment to physicians, so higher-paid specialists are going to have to take less money.

·         It is not just about money; it is about lifestyle. Primary care doctors have to work too hard.

·         It is not just about money; it is about status. Primary care doctors have lower status.

·         It is not just about money; it is about intelligence. Primary care is just too easy.

·         It is not just about money; it is about unrealistic expectations. Primary care is just too complex.

And on and on. These are not silly or spurious or even inaccurate statements, although the last two might be considered another “primary care conundrum”, the one to which medical students are often subjected. All of these are things that family medicine and other primary care specialties have to think about, and address to the extent that it is within their control. I have, for example, talked about the selecting medical students who are likely to be more interested in primary care and underserved (both rural and urban) practice, as well as about making the curriculum more supportive of primary care. However, it is, ultimately, not the responsibility of the primary care specialties, or even the medical educators, but rather of the overall society to develop policies of reimbursement that encourage primary care – if that is what the society wants and needs.

Thus “Payment reform for primary care within the Accountable Care Organization”,[1] by Goroll and Schoenbaum in the August 8, 2012 JAMA is appropriately subtitled “A critical issue for health system reform”. While it may not really be all about the money, a good part of it certainly is. One doesn’t have to be an economist who believes that everything can be reduced to, or expressed in terms of, money, to recognize that lifestyle and status are just other manifestations of money. If you make more (or, more to the point, if the services that you render are reimbursed at higher levels), you can work (if you choose) less, or a health system employing you can hire more people to do that work. Status is measured by many yardsticks, but most of them, at least in our society (since we do not have inherited titles) have to do with money.

Goroll and Schoenbaum, from, respectively, the Massachusetts General Hospital and the Josiah Macy, Jr. Foundation, focus their discussion on Accountable Care Organizations, or ACOs. These are a centerpiece of the health reform law (ACA), but most experts believe that, whether ACA survives or not (it has survived the Supreme Court, but there will be continuing challenges, particularly if the Republican Party takes the Senate and/or White House in 2012) it is the wave of the future. This is because it is both a framework for increasing quality and for saving money; saving money is the main thing that virtually all politicians and pundits talk about in regard to health care. Even providers do so, although they mostly focus on saving it on other aspects of the health system.

In a sense, this last is what ACOs seek to avoid; by assigning patients to an ACO that provides comprehensive care – ambulatory, hospital, post-hospital – for lives (in insurance parlance) or people (in English) it seeks to avoid “blaming the other”:

·         We took good care of them, but when they went to the hospital they received poor care or unnecessary procedures.

·         The “local doctor” didn’t provide adequate care, but luckily we in the hospital could save the patient.

·         We did great care in the hospital, but the nursing home (or patient’s family) didn’t, so the patient suffered, or had to be readmitted, or died.

·         They discharged the patient – home or to the nursing home – too soon, so despite our excellent care the patient suffered, or had to be readmitted, or died.

The devil, as always, is in the details. How will this be different from the managed care of the past? (“I heard this all back in 1995,” says a colleague.) In order to avoid some of the politically unpopular characteristics of “managed care”, the ACA does not contain a requirement that patients receive care only from the ACO to which they are assigned. However, if they are cared for elsewhere, how can the ACO ensure either the quality or the cost? Who will care for the uninsured? How will (and they will) providers (including hospitals, doctors, nursing homes) game the system to maximize their advantage by passing the buck, cherry picking the relatively health, emphasizing high-reimbursement and de-emphasizing low reimbursement care? How will (and here “Will it?” is still a question) that be rectified?

The important point of the JAMA article is made in the beginning: that “Primary care, the foundation of the ACO, requires payment reform to enable and make durable its transformation into a high-performance model such as the patient-centered medical home.” Primary care is the foundation of the ACO, just as it is the foundation of any effectively-functioning health system. The authors cite 3 main obstacles to increasing payment for primary care: 1) Inertia. It is not the way our incredibly elaborate and expensive payment system is currently structured, and changing it will be hard; 2) Resistance. The development of new systems and funding will require, particularly in a setting in which overall funding will not appreciably increase, the reallocation of money from one set of groups to others, and this certainly will (and already has) meet with resistance by those who will lose money. 3)  “Motivation 2.0”. “…many health care executives (including some physician managers) believe that physicians work harder under fee for service and that productivity is at risk of faltering under payment systems that do not maintain a strong, volume-based incentive.”

The first two are obvious and will have to be strongly and persistently addressed if there is to be any success in re-engineering the health care system; there is no one who will fight so hard as a group whose privileges, no matter how unfairly earned, are being threatened. However, the third is more questionable. Another colleague asked “is there any evidence that this is not true?” Indeed, there is some evidence that it is; in the 1990s when hospitals and health systems bought out physician practices, they often found that the physicians, now salaried, were less productive than when they were in practices where their income came from productivity. The flaw there is that the same standards were being used for measurement: how many patients were seen, how many wRVUs (a measure, albeit imperfect, of physician productivity). It was not measured by whether the quality of patients’ health was improved. Perhaps by seeing fewer patients-per-day, for longer visits when they need them, or providing care in teams and by phone and email when appropriate, fewer return visits would be needed (bad if reimbursement is all fee-for-service) and delivered in teams.

Goroll and Schoenbaum do not, actually, use the phrase “Motivation 2.0”. This comes from Daniel H. Pink, a business management author, from his book “Drive”, published in 2009 and one of the most influential management books in recent years.[2] Pink contrasts the management style based on this sort of motivation (2.0, not the “1.0” that was ancient man’s – survival), the dominant one of the 20^th century and into the 21^st with a new understanding of what motivates people and what kind of management is most effective. He draws on decades of psychological and sociological and business research, as well as actual implementations in management practice, to clarify what this new appreciation, “Motivation 3.0” is. I recommend reading the book, quite short and easy.

But understanding and implementing effective motivational practices will certainly not, in itself, solve health care. Making sure that there are systems to ensure quality, and that they are available to everyone, is the sine qua non.

  

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[1] Goroll A H and Schoenbaum SC, “Payment reform for primary care within the Accountable Care Organization”, JAMA 8Aug2012;308(6):577-8.

[2] Pink, Daniel H, “Drive: the surprising truth about what motivates us”, Riverhead Books, New York 2009.

"Eggs Benedict" and "Choosing Wisely": often the best thing to do is nothing

Years ago (OK, decades ago), when Woody Allen was a standup comic, he did a short, famous bit called “Eggs Benedict”. The narrator (let’s say “Woody”) is having pain in the chestal area (a great formulation which has long been popular in my house). He is pretty sure it is heartburn, but is worried and doesn’t want to pay the $25 to see a doctor (I told you it was a long time ago). Luckily his friend, Eggs Benedict, is having the same kind of pain. He figures if he can get Eggs to go to the doctor, he can find out what it is and save money. It works, and Eggs finds out it is heartburn. Two days later, he discovers Eggs is dead. He immediately checks into the hospital, has all kinds of tests, and discovered he has – heartburn. The bill is $110 (it was a really long time ago!) He goes to see Eggs’ mother and asks if his friend suffered much. “No,” she says, “the car hit him and that was it!”

I was thinking about this story when I was asked to call into a local radio talk show to comment on “Choosing Wisely”, an initiative of the American Board of Internal Medicine (ABIM), which calls on medical specialty societies to list 5 tests or treatments frequently performed in their specialty that they recommend not be done, or not be done on most patients. In the recently released report, 9 medical specialty societies are represented, for a total of 45 recommendations, which can be found here. The 5 for my own specialty, Family Medicine, listed by the American Academy of Family Physicians’ (AAFP), were:

1.  Don’t do imaging for low back pain within the first six weeks, unless red flags are present.

2. Don’t routinely prescribe antibiotics for acute mild-to-moderate sinusitis unless symptoms last for seven or more days, or symptoms worsen after initial clinical improvement.

3.  Don’t use dual-energy x-ray absorptiometry (DEXA) screening for osteoporosis in women younger than 65 or men younger than 70 with no risk factors.

4.  Don’t order annual electrocardiograms (EKGs) or any other cardiac screening for low-risk patients without symptoms.

5. Don’t perform Pap smears on women younger than 21 or who have had a hysterectomy for non-cancer disease.

Each is backed by the evidence, and is accompanied by a summary of the reasons. For example, for #2: “Most sinusitis in the ambulatory setting is due to a viral infection that will resolve on its own. Despite consistent recommendations to the contrary, antibiotics are prescribed in more than 80 % of outpatient visits for acute sinusitis. Sinusitis accounts for 16 million office visits and $5.8 billion in annual health care costs.” Big money for a treatment that doesn’t work, and can cause bad side effects (allergies to the antibiotics and increased resistance of bacteria to antibiotics, for two).

The talk radio hosts had questions, especially about treatment of cancer. One of the American Society of Clinical Oncologists’ (ASCO) recommendations is “Don’t use cancer-directed therapy for solid tumor patients with the following characteristics: low performance status (3 or 4), no benefit from prior evidence-based interventions, not eligible for a clinical trial, and no strong evidence supporting the clinical value of further anticancer treatment.”  That seems like a no-brainer to me, but they wanted to know “What if a patient wants treatment for cancer anyway?” I said I thought it was the responsibility of the doctor to point out that the treatment would not help, and would not only cost money but would have a lot of toxic side effects; I said that I thought most people, if they knew they were going to die from their cancer and the treatment would not help, would not wish to spend their last days and weeks nauseated, losing their hair, and being unable to interact comfortably with their loved ones.

The radio hosts also said “We are always told patients should be self-advocates. What if advocating for ourselves we say we want antibiotics for our sinusitis?” I said that self-advocacy was really important, because no one but the patient and their family could really identify what their health goals were. But this was different from deciding what treatment you wanted; going to the doctor is not going to the grocery store with your shopping list that may include both healthful and bad-for-you foods. It is critical that you identify where you want to go and work with the doctor, or other provider, to come up with a plan that is mostly likely to get you there safely and effectively.

Coincidentally, the same week I facilitated the discussion about futile treatment at the end of life for a group of third-year medical students in their medical ethics course. They had just received a lecture from a distinguished medical oncologist, who presented the four core principles of medical ethics: Autonomy, Beneficence (do good), Non-maleficence (do no harm), and Justice. They also read several articles documenting cases in which end of life decision-making did not go smoothly or well, and the article “How Doctors Die” by Ken Murray, that I have previously discussed (How people die, and how should we?, April 7, 2012). One of the cases involved a patient with terminal cancer who had already failed treatment, and for whom further treatment would be futile (although not without adverse effects). He had agreed to hospice, and to comfort care, until a relative (a physician!) came to town and demanded additional treatment for him, and convinced him to as well.

The medical students, who had  all been through clinical experiences and most of whom had been part of teams that confronted dealing effectively with dying patients, were in agreement with the physician in the article, and with each other, that the treatment was futile and would be a bad idea. However, several felt that, if the patient demanded it, the principle of Autonomy required that it be given. Others noted that this might violate the principle of Non-maleficence. I pointed out that that there were many areas in which we do not allow the patient to pick his/her treatment of choice. For example, we do not allow people to walk into a pharmacy and buy narcotic pain relievers without a prescription, no matter how much they might want them. Certainly the effects of chemotherapy poisons were at least as great.

These are not always easy decisions, but it is one of the reasons being a doctor is hard, respected, and well-paid. If everything were a simple algorithm and one could just memorize the right answer as these medical students were expected to do so often on their multiple-choice tests, it could be done by someone with much less training. Sure, it is possible that someone getting antibiotics for viral sinusitis to get better – indeed they usually do, with our without the antibiotics. Temporal association is not cause. Thus, even when you do the right thing, based on the evidence, and do not get a test or treatment, it is still possible that you will end up worse.

As Eggs and Woody discovered.

It’s definitely not about the bike – but is it even about ACOs?

One of the major features of the Affordable Care Act (ACA) is the idea of Accountable Care Organizations (ACOs). The final regulations from Medicare were issued in October, 2011, so the creation of ACOs seems to be moving forward. ACOs will be groups of primary care doctors, specialists, hospitals, and possible other providers who act together to provide comprehensive care, and receive either more money from Medicare (and probably, eventually, other payers) or, at least, smaller reductions in payments. The only thing that is definitely required to form an ACO is a group of primary care doctors, but since groups of primary care doctors rarely have sufficient capital to fund the necessary infrastructure, so it is likely that almost all will include at least one hospital.

The stated purpose behind encouraging ACOs is to increase quality. It is easy enough to see how quality could be improved in our non-system of health. Because the bar is so low, there are tremendous opportunities that come from lack of organization and coordination of care. Hospitals get paid for caring for people who are admitted. Thus, up to a point (the point at which payments do not exceed costs), they want admissions. Patients prefer to stay healthy, or at least healthy enough to not have to be admitted to the hospital, and hopefully their primary care doctors support this goal. Hospitals have already started being financially penalized by not receiving reimbursement from Medicare for readmissions for the same problem they were discharged for, or complications of that problem. Managing this issue will require the ACO to have not only financial relationships with primary care doctors, but often with long-term care facilities as this is where patients are discharged to – and return to the hospital from.

Fisher, McClellan, and Safran, in their New England Journal of Medicine article “Building the Path to Accountable Care”  (December 29, 2011; may require subscription)[1], identify five “challenges” to implementing ACOs with suggestions for how to overcome them. The challenges are providing timely and useful data, overcoming transition costs, gaining consumer support, learning what works and using that knowledge to inform policy and practice, and clarifying the path forward. Their suggested approaches to solving them are largely based upon what is being done in existing integrated health systems (such as Kaiser and Geisinger). This makes sense, as these systems were the model for ACOs and are often relatively cost effective, but it will require major restructuring for other such systems to develop in ways that can work as well. The authors do not address a major challenge for ACOs, which is that every patient will be identified with a particular ACO (based on the physician from whom they receive the majority of their primary care) and that ACO will be held financially responsible for that patient’s costs, but that the patient will be free to receive service from outside that ACO. This is a political decision, intended to avoid the criticism that the ACO program is just “managed care” in new clothes by ensuring that the program will not “restrict” people. Of course, it is a huge flaw. If a patient is not happy with the care they receive from members of their “identified” ACO, whether that is for “good” reasons (denying unnecessary, excess, risky procedures, hospitalizations, etc.) or “bad” reasons (less than the best quality), the patient can go elsewhere and receive that service from someone else. And if Medicare deems it unnecessary or excessive, it is the “identified” ACO that will receive the financial penalty, not those providing the service.

The authors’ final challenge, the vaguely worded “clarifying the path forward”, is about future changes, including (from their table) “Create meaningful alternatives to fee for service for all providers.” This is a good idea, and not a new one. It means that rather than have the provider (hospital or doctor) paid for each particular service, the payment is tied to something else. Most simply, it could be a global fee for providing care to a patient, as the capitated payments in traditional HMOs. This allows practices to budget their resources, and also allows patients to get care in the way they need it. If a doctor is being paid a set amount in advance, there is no financial incentive for them to require a person to have to take off from work, travel, park, and wait to be seen when that person has a question that can be answered by phone or email. You would only have to be seen in person if either you or the doctor thought that there was a reason to do so. The disincentive under the current fee-for-service system is that the doctor doesn’t get paid unless you are seen in person. In addition, the ACA law envisions paying more for higher quality (or less for lower quality). So why were these “meaningful alternatives” not included in ACA? Again, political, and the question is “what will change the politics in the future?”

In another NEJM “Perspective”, “Achieving accountable care – “it’s not about the bike” (published online on December 28, 2011), Walker and McKethan argue that it is the skills and competencies of providers, rather than the structure of the systems, that will determine the success of ACOs. Their metaphor is from Lance Armstrong’s memoir, in which Armstrong acknowledges the importance of having a great bike but says that “Although advanced equipment is very important, winning depends more on athletes' riding skills, physical conditioning, and race-day effort.” Cute, but obvious; any athlete with enough money (and all top cyclists have backers with enough money) can buy the best bike, but it is his or her skill and dedication that leads to victory – or not. Is it, however, a good metaphor for medical care? “If an ACO were a bicycle,” Walker and McKethan write, “its wheels, spokes, and gears would be the criteria used by payers such as Medicare to determine providers' eligibility, the methods used to assign patients to a given ACO, and the manner in which financial bonuses are calculated.” They then go on to discuss at some length what ACOs will need to do to “…compel and equip the athletes riding them…” (meaning providers) to do what is necessary, for “…accountable care will depend on a care team's identification of and action on the specific needs and preferences of the individual patient, deploying the most relevant, tailored interventions and supportive services to address patients' specific needs, circumstances, and preferences.”

Sound good? It is an appropriate metaphor in that structure alone will not guarantee success, but it loses strength after that. ACOs are not bicycles, and providers are not athletes. Most important, “success” in the arena of healthcare should not be about “winning”, about “beating” the other “competitors”, but about development structures, methods, practices, and reimbursement procedures in which everyone receives the best, most appropriate care. In which we all win.

And that is going to be one of the big challenges, because neither of these commentaries addresses the fact that not everyone in our country is going to be part of an ACO, and not everyone in our country has health coverage. Those people who do have coverage have found their premiums, co-pays, and deductibles increasing and their benefits diminishing.  ACOs are (at least initially) a program for Medicare recipients, but all we hear from Congress and pundits is that “Medicare costs too much” and that these costs need to be scaled back, so unquestionably the emphasis of programs like ACOs will be on reducing cost.

I have often noted that much of the excess cost in this country is from providing unnecessary, or even harmful, care, and so there is not necessarily a conflict between saving money and increasing quality. But people are different, with different diseases and needs and wants, so there will need to be flexibility. And those who are most disenfranchised will remain outside the pale.

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[1]Fisher ES, McClellan MB, Safran DG, “Building a path to accountable care”, N Engl J Med 29Dec2011;365:2445-2447

Family Medicine in the era of health reform

At the recent Primary Care Access Conference in San Francisco, I was given the opportunity to present the 21^st G. Gayle Stephens lecture. It was a real honor, because it is named for one of the giants of family medicine, and one of the great thinkers on health and medicine of the last half century, in any field. Dr. Stephens was the first director of one of the nation’s first family medicine residencies, at Wesley Hospital in Wichita, KS, and later Chair of the Family Medicine department at the University of Alabama. He was an early and long-time member of the American Board of Family Practice (later Family Medicine) and the author of several of the most seminal articles and books in the field, including “The Intellectual Basis of Family Practice” and “Family Medicine as Counterculture”.  Both of these pieces, along with many others, are discussed in the outstanding “festschrift^;[1; put together by another giant of the discipline, John Geyman, in the January 2011 issue of Family Medicine.

Dr. Geyman says of Dr. Stephens that “He has been, and remains, by far the most original, thoughtful, and elo­quent voice in our field and among the few who best represents the mor­al conscience of the entire medical profession.” I have been privileged to have met, corresponded with, and even to a limited extent collaborated with both Dr. Stephens and Dr. Geyman. I can only hope that my talk was worthy of being associated with Dr. Stephens’ name. In this piece, I  would like to discuss a few of the points I made in that talk related to health care reform, or the Affordable Care Act (ACA); in a later blog I will discuss this in terms of the impact on primary care and family medicine.

Unquestionably the health care reform act, or ACA, is the biggest change in health coverage since Medicare and Medicaid in 1965. It remains deeply flawed, but is nonetheless the touchstone of the opposition to the current administration, as President Obama’s opponents apparently see in it everything that we don’t! The fact is that, rather than bringing us a health system in which everyone is covered, like Canada, or the UK, or Germany, or Switzerland, or Taiwan, it is in large part a big bailout of health insurance companies. And the price that for this – the requirement that everyone have to buy health insurance, the “individual mandate”, is what we hear being attacked, not the insurance companies that demanded it as the price for supporting ACA.

There are some of the parts of ACA that are rather non-controversial (except to the extent that they might not be funded as part of the “don’t fund anything” movement), and are good for family medicine, in the sense that they are good for the health of the American people. These include the increased funding for Federally-Qualified Health Centers (FQHCs), the creation of a panel to review the evidence of effectiveness, if it is left in, and the Primary Care/Health Extension services (which thus far have received no appropriation), among others.

One important component of ACA is the creation of “Accountable Care Organizations”, or ACOs, initially for Medicare patients. They are an effort to promote health by having health providers financially responsible for the health of their patients, that is, to have ambulatory care facilities and doctors, hospitals, nursing homes, and community care facilities coordinate their efforts to prevent illness, treat effectively, and have people cared for in the most appropriate setting, rather than perverse “gaming of the system”, where a failure of ambulatory health care can be a “win” for a hospital when a patient is admitted (as long as they don’t stay too long, or get re-admitted too soon). This kind of structure works well in HMOs, such as Kaiser, or other integrated health systems, but there are likely to be flaws in its implementation; for example, Center for Medicare and Medicaid Services (CMS) administrator Dr. Donald Berwick recently published guidelines for Medicare ACOs in the New England Journal of Medicine, “Launching Accountable Care Organizations — The Proposed Rule for the Medicare Shared Savings Program”.  He says that the ACOs will be “Held to rigorous quality standards (see table). Proposed Measures for ACO Quality-Performance Standards.), ACOs will be expected to be proactive in their orientation and to regularly reach out to patients to help them meet their needs for preventive and chronic health care.”

However, Berwick immediately adds that “Patients who seek care at their ACO will know that their physicians are part of that ACO, but as beneficiaries of fee-for-service Medicare, they will continue to be free to seek care from any Medicare provider they wish. They will not be locked into seeing only particular health care providers.” This sounds relatively benign, and certainly politically wise, but could completely undercut the effectiveness of the program. The reason that Kaiser and other HMOs are effective in managing care that delivers high quality at low cost is because their patients are restricted to where they can seek services; if a Medicare patient who is part of an ACO does not like that they have been “denied” any form of care by their doctor or hospital, no matter how appropriately, can now go “outside the system” to another doctor, hospital, emergency room or pharmacy-based urgent care clinic, all efforts at cost control are at risk. This is, of course, the conundrum: control of costs requires some degree of restriction of unlimited options. It is quite parallel, in fact, to the “individual mandate” that the insurance companies demand, and in this sense they are correct. It will not work to require insurance companies to insure everyone if everyone is not required to have insurance, because then only those who need care will demand coverage, risk goes way up, and so would premiums.

Some politicians and pundits have compared ACOs to the managed care era of the 1990s, and supporters worry it will receive the same backlash from the public that occurred then. I believe that in that period it was not managed care that was at fault but two major characteristics that happened in conjunction with it. The most important was that the entire operation was taken over by for-profit companies, largely insurance companies, that saw benefit to their bottom line by restricting care. The efficiencies of consumer cooperative HMOs had benefited their members; these new entities denied care to benefit their stockholders. It was the corporate for-profit control, not the management of care, that led to consumer dissatisfaction with restrictions on access to care.

The second big problem is related to one that I have discussed before (Red, Blue, and Purple: The Math of Health Care Spending, October 20, 2009), the fact that most people are not sick. In an effort to control costs, everyone was made to jump through hoops, such as gatekeepers and prior authorization, which made them angry but did not do much for the cost, since most people do not use much medical care. Indeed, for at least half the population, you could let them do whatever they want, and they wouldn’t use any significant number of health care dollars. To illustrate this, I am reproducing the graphs from the previous blog.

While there are some things we can do to reduce the risk of unexpected crises –cancer, multiple trauma from car accidents, infants in NICUs – and control the costs of caring for those who have them, the most obvious benefit will be achieved by pre-emptively working with people whose chronic diseases have gotten so bad that they are frequently admitted, often to Intensive Care Units. These are the people who should be targeted for intensive intervention, not only medical but in terms of the social determinants of health, such as in the programs highlighted by Atul Gawande in his February 2011 New Yorker piece, “The Hot Spotters”. Needless to say, such interventions are being funded on a shoestring, while the high-tech interventions get all the money.

 It doesn’t have to be this way. We could have a rational, cost-effective health care system if we start with coverage for all through a single-payer mechanism. We might be able to back into quality despite not having one, but it will be much harder.

                                                               

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<!--[if !supportFootnotes]-->[1]<!--[endif]--> Festschrift: “A volume of learned articles or essays by colleagues and admirers, serving as a tribute or memorial especially to a scholar”

ACA, ACOs, and Meaningful Competition

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Criticisms of the new health law, the Affordable Care Act (ACA), have come from all sides. While many of them are justified, they also miss many of the law’s positives. It doesn’t assure the reliable, cost-controlled security of a real universal health insurance program, but it will lead to coverage of tens of millions of more Americans, and will eliminate the ability of insurance companies to engage in health risk underwriting, the practice that allows them to deny coverage to those with pre-existing conditions. These are points that the President made in his recent interview on Jon Stewart’s Daily Show. "Individual mandates", i.e., forcing everyone to buy insurance, while it is a touchstone for the right and is the issue found unconstitutional by a Virginia federal judge (and which will probably go to the Supreme Court), was the price that insurance companies demanded for assuring coverage for everyone. As I have often written, you have to have all the healthy people in if you are going to cover the sick; there are many more healthy, but all of us can become sick.

Apparently, a lot of people understand this. A recent poll by Marist College and McClatchy newspapers shows a majority (51%, but still a majority) of Americans want to continue (16%) or increase (35%) the benefits of ACA, with 44% going the other direction. “Among groups with pluralities who want to expand it: women, minorities, people younger than 45, Democrats, liberals, Northeasterners and those making less than $50,000 a year. Lining up against the law, 11 percent want to amend it to rein it in; 33 percent want to repeal it. Among groups with pluralities favoring repeal: men, whites, those older than 45, those making more than $50,000 annually, conservatives, Republicans and tea party supporters.” OK, these are the “usual suspects”, except that it amazing and saddening to me that older people who are receiving Medicare can be opposed to expanding benefits to others. Maybe they are just ignorant of Medicare and the current law (as reflected in “Keep the government’s hands off my Medicare!”); this is also sad, but would explain what would otherwise be an enormously, almost immoral, selfishness. Yes, more educated Medicare recipients are concerned that the benefits for that program will be scaled back (and there are unquestionably threats to do so!) but this does not justify opposition to extending those benefits to the rest of the country.

A new set of problems is described by Robert Pear in the New York Times, on Sunday, November 21, 2010, “As health law spurs mergers, risks are seen”. The focus of his article is the planned “accountable care organization” (ACO), a relationship between one or more hospitals (or “health systems”), doctors, nursing homes, and home health care agencies. The idea behind creating ACOs is that, by coordination of care and sharing of information, people’s health can be improved and money can be saved. There is a lot of sense to this approach. If a patient is discharged from a hospital to home, or to a nursing home, and there is more sharing of information with the home health agency, or nursing home, or the primary care doctor who will be responsible for care when they leave the hospital, there is greater likelihood that there will not be lapses in the patient’s care. Similarly, if the person’s health deteriorates to the point of needing to be re-admitted, it would be best if 1) all that could have been done in the non-hospital setting to possibly prevent that from happening was done, and 2) all the information about what was done was transmitted to the hospital.

The organizations most cited by health reformers as having been successful in controlling costs and improving quality are those that are already “integrated”, where the system that owns the hospital(s) also employs the physicians and controls the nursing homes and home health care agencies, or else has very close and dependent financial relationships with them, such as Intermountain Health Care, Geisinger Health System, and Kaiser-Permanente. Information – and money, including money saved by having fewer expensive readmissions, is shared among the various participants. So ACA creates financial incentives for others to create such relationships, the ACOs. The issue raised in Pear’s article are that many forms that these ACOs might take run the risk of violating existing laws that are in place to prevent kickbacks, monopolistic practice, and other forms of corruption. For example, it is illegal for a health system for offering contingency payments a physician who is not an employee – such as for admitting patients to the hospital, keeping stays shorter, etc. This makes sense too.

So we have two conflicting things that “make sense”: greater collaboration and aligned incentives can create greater efficiency and save money, but they can also lead to oligopoly and corrupt relationships. Monopoly is more efficient, but creates the opportunity for exploitation. Modern business practices, based on the work of people such as W. Edwards Deming[1], emphasize the importance of long-term relationships with suppliers so that they can learn and better meet your needs over time, something there would be no incentive to do if doing so cost them money, and you were likely to pull your business the next year because someone else bid lower. Governments usually have policies requiring contracts given to the lowest bidder, but there is a danger that the work will be of lower quality.

Much of the criticism of ACA from the “right” has been about lack of “choice”, but as we look at implementation of the health care law, we need to be careful that ideology does not trump actual health outcomes. Two recent studies show the risks of the “law of unintended consequences” of policies that encourage consumer choice and a market approach to health coverage. In “Health care use and decision making among lower income families in high-deductible health plans”[2], Kullgren and colleagues demonstrate that, in fact, as might be anticipated, poor people who choose to spend less out-of-pocket money by enrolling in such high-deductible plans pay the price later in not accessing health care and having poorer outcomes. Millet, et al, in “Unhealthy competition: consequences of health plan choice in California Medicaid”[3], show that, perhaps less intuitively, Medicaid (Medi-Cal) patients in California counties where they have a choice of plans are less likely to be enrolled all year than where they do not have such choice, and “Potential benefits of health plan choice may be undermined by transaction costs of delayed enrollment, which may increase the probability of hospitalization for ambulatory care-sensitive conditions.”

Ideally, a single-payer, Medicare-for-all, system eliminates the risks that people will not enroll or have gaps in enrollment, that there will be people left out, that people will, for understandable and reasonable short-term financial reasons, make choices that can have long-term adverse effects on their health, and that there will be different standards for quality of care for people with different insurance. But even that does not address the system of provision of care. The ACA law seeks to encourage communication and efficiency, but critics see danger in merger and oligopoly, which could limit options for consumers and in itself create risks to health care access and quality.

What could the solution be? One might be to have cooperative relationships with open-source access to information. Thus, your health information would not be in the control of a given hospital, health care system, or doctor, but rather be controlled by you, and made available to whichever provider – hospital, doctor, nursing home, etc. -- that you chose to provide your care. The information would not be in proprietary electronic medical record format, but rather in an interoperable format that could be utilized by any provider. Incentives could exist globally, not simply within a single organization, to produce the highest quality care rather than the highest profit margin. This would be an excellent example of real competition.

[1] See Mary Walton, The Deming Management Method, Berkeley Publishing Group, New York (originally published Dodd Mead, NY, 1986).
[2] Kullgren JT et al., “Health care use and decision making among lower income families in high-deductible health plans”, Archives of Internal Medicine, 2010;170(21):1918-25. (Hyperlink is to abstract as full text not available free on line.)
[3] Millet C, Chattopadhyay A, Bindman AB, “Unhealthy competition: consequences of health plan choice in California Medicaid”, American Journal of Public Health Nov2010;100(11):2235-40. (Hyperlink is to abstract as full text not available free on line.)
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