Bezos, Buffett, Dimon and Gawande: Better quality in health maybe; a solution, no

A big item of health news in recent weeks is the planned establishment of some sort of health delivery operation by three major corporations personified by their CEOs: Warren Buffett of Berkshire-Hathaway, Jeff Bezos of Amazon, and Jamie Dimon of JP Morgan. We have no details about what it will actually look like, but we are assured that it will be high-quality, efficient, and cost-effective, utilizing the most modern methods of achieving those goals, which our creaky, antiquated, and resistant-to-change health system does not. It will also be non-profit, important given that none of these companies are, but this is the most common model for health care in the US and in itself says very little. As the first concrete step toward its creation, and clue to what it may be, they have appointed Dr. Atul Gawande as its CEO. Presumably he will be instrumental in creating this new venture, and his views on quality and efficiency may provide guidance on what might characterize it.

Dr. Gawande, a Harvard surgeon and senior writer for the New Yorker, has provided us a prolific body of writing in that magazine and in several books, (including the best-seller about issues occurring at the end of life, “Being Mortal”), to help inform us of his views. He has a wide scope of interest in health care and a demonstrated willingness to learn from other industries. Perhaps his most famous article is “The Cost Conundrum”, which appeared in June 2009 and highlighted the wide variation on expenditures by Medicare for similar populations, focusing on the highest cost region, McAllen, TX, and comparing it to a similar population in El Paso, TX, where costs were much lower. Later, in January 2011 “The Hot Spotters” highlighted the work of Dr. Jeff Brenner in Camden, NJ, and others, to use modern geo-mapping techniques to identify the areas with the highest levels of emergency (911) utilization (unshockingly, in Camden, the two highest were a low-income senior citizens housing unit and a long-term care facility) and try to develop methods for addressing their health needs before they became emergencies. In “Big Med”, August 2012, he discusses application of some of the principles that work in restaurants such as the Cheesecake Factory to health care. The principles include enough variety to meet everyone’s needs without expensive unnecessary redundancy; he shows how this applies in orthopedic surgery and how quality is improved and costs saved when every surgeon in a hospital doesn’t use his (or, more rarely among orthopedists, her) favorite implant device and there is some standardization (commented on in this blog on August 24, 2012, Quality and price for everyone: Bigger may be better in some ways, but not all). A very good review of Gawande’s work and probable priorities has been done by the outstanding Dr. Don McCanne in his “Quote of the Day” on June 22, 2018 “Don’t wait for Atul Gawande”, and I will not repeat it here.

Of course, the employees of Berkshire-Hathaway, JP Morgan, and Amazon already have health insurance, so that this new scheme will not reduce the rate of uninsurance. It is possible that it – whatever “it” turns out to be – will allow enrollment from other employers, or possibly even individuals who are currently insured by another mechanism, whether through Medicare, the ACA-sponsored exchanges, or even Medicaid. This will depend in part on what “it” is – mostly an insurance plan, mostly a care delivery system, or a combination of both like many HMOs.

It is possible that this new operation may indeed succeed in achieving, or at least significantly moving toward, the “Triple Aim” of higher quality, greater patient satisfaction, and lower cost. Certainly the third of these is a major focus of businesses that provide health insurance to their workers, and we will grant these people the benefit of the doubt that they also wish to achieve the first two. Some HMOs have had significant success in doing so already, most notably Kaiser Permanente. Other HMOs that were once “consumer cooperatives” (eliminate the middleman and pay less for the same care or the same for more and better care) have almost all been bought by insurance companies, and it is obvious that the “save money” (or really “make more money”) leg of the #TripleAim is of far greater importance to their business model than patient satisfaction or quality. The bar, as has been demonstrated ad infinitum, including in the work of Dr. Gawande as well as other policy analysts from

academia, the foundation world, and journalism, is so low that large improvements in quality can come from things that it is we already know how to do. The major obstacle to this has always been how providers are paid, and this is where the behemoth strength of this new triumvirate may have significant impact.

Unfortunately, though, there is no suggestion that this new operation would do anything to help those currently either frozen out of the system (including poor people in states that have not expanded Medicaid, undocumented people, and those who cannot afford insurance premiums even with ACA support). The average salaries at JP Morgan and Berkshire-Hathaway are high since so many of the employees are high-level finance types, raising the mean and median. However, Amazon is a different story. Jeff Bezos may be the richest person in the world, he did not get there by paying his employees a living wage; the median income for an Amazon employee is $28,446. While they may have health insurance, it would not be surprising if many of Mr. Bezos’ employees qualify for food stamps, and have difficulty making their copays; that median salary is about the poverty level for a family of four, and if it is the median, many workers make less.

It could be argued that is unfair of me to criticize a program – especially one still in the planning stage -- for not achieving what it does not set out to achieve. However, there is nothing wrong – and indeed it is quite correct – to note that it is far from being a health care panacea. By not setting out to ensure access for everyone, it will not solve the basic problem in achieving the Triple Aim. I mean, it’s good to be focusing on quality, cost and patient satisfaction but without a plan to assure that everyone has access to care it can ring a little hollow.

As was observed by Schiff, Bindman, and Brennan more than 20 years ago, and quoted by me before (Medical errors: to err may be human, but we need systems to decrease them, August 10. 2012), denial of care – or lack of access to care for financial, geographic or other reasons -- is the “gravest of all quality defects”.

“Good enough for Government Work”: Quality, cost, and gaming the system, Part 3 (of 4 parts)

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

The VA is an example of how quality can be and is compromised when public sector funding is cut. In the area of public health, it can have an even greater impact, and no fewer apologists. When, under cost-cutting mandates from the state of Michigan the city of Flint changed its water supply from treated Lake Huron water to the industrially-polluted Flint River, the complaints of citizens were ignored. When concerned health care providers, like Dr. Mona Hanna-Atisha (pictured), raised warnings about rising lead levels in the children of that city, she was attacked and vilified. But she was right and they were wrong, or, perhaps worse, lying. Poisoning our children to save money. If individual health care is jeopardized when those responsible are being rewarded for cost-cutting, we can do a truly impressive job of harm when we destroy the public health infrastructure. And let us not forget that a major reason this was able to happen was Racism; that they were not “our” children, at least not those of the state authorities.

We need more emphasis on quality. Indeed, quality, not cost-cutting, needs to be our primary metric. Spending less should only be acceptable when quality is not negatively impacted. I realize that this is also subject to interpretation; “quality” has almost as many different interpretations as “waste”, and is frequently (if, hopefully, usually unconsciously) associated with “what benefits me”. I am talking about health care that is of benefit to most people, and is considered basic – keeping patients clean and out of their own filth, feeding them, treating the diseases that we know how to treat, doing surgery when it is of clear benefit, not having excessive waits for specialty care that compromise outcomes. And, most importantly, not providing financial incentives for limiting care. From a cost-cutting point of view, money is fungible, whether it comes from ‘cutting the fat’ or cutting needed care; but from a healthcare point of view, there is a big difference. (I refer to healthcare here as “caring for people’s health”, not the industry of the same name!)

This is the big issue, and it is amazing to me that it sometimes seems like such a mystery. If most of our incentives are to cut costs, to keep our jobs or to make bonuses or to keep our agency functioning, costs will be cut. Even when those cuts negatively affect quality, in real and dramatic ways. The argument for privatization goes something like “the private sector can do it better because, motivated by the opportunity to make profit, they will discover efficiencies that government employees do not, and run a ‘leaner ship’”. The problem is that, while there may be some examples of this happening, what usually happens is that costs are cut by cutting services, and making off with the profit, or bonus. The ship is made lean by cannibalizing its parts, and the only thing which is certain to be maintained in fine working order is the lifeboat in which the parties responsible hope to escape in while the rest sinks. This scenario is repeated over and over again, whether services are actually provided by private and for-profit organizations (think drug companies, insurance companies, nursing homes, and increasingly hospitals) or whether “private sector incentives” are built into publicly provided services, as in England at Mid-Staffordshire, or, increasingly, in the US in Medicare.

Profit may not be a great incentive to provide better health care, and is an uncertain to very poor guarantee of quality, but it is an excellent incentive to generating profit. Think of drug companies like Turing and its former CEO, Martin Shkreli, the poster child for unfettered greed, and his 5000% increase in the price of pyrimethamine, or of Valeant, the Canadian pharmaceutical company that recently doubled the price of secobarbital, an 80 year old barbiturate, in anticipation of California’s assisted suicide law. Think of the increase in price of colchicine, a drug that was used (in its plant form) to treat gout in ancient Egypt 3500 years ago, from 10 cents to $5 a pill when the FDA “encouraged” its manufacturer to conduct new studies and banned the generic (finally reversed last year, with generic colchicine again available.) Think of the insurance companies whose profit was baked into the ACA, making it costly and still not covering everyone. The ACP has recently called for government controls on drug pricing. The fact is that you can’t count on private for-profits to provide quality, unless you really trust Martin Shkreli.

Interestingly, in contrast to the Triple Aim advocates, critics of Sen. Bernie Sanders’ proposal for National Health Insurance system, Medicare for All, assert his math must be wrong, that we couldn’t both save money and deliver quality health care to everyone. (The Chicago Tribune editorial endorsing no one in the Democratic primary says: “Sanders first amused Americans who know their fiscal math with proposals for free college tuition, expanded Social Security, $1 trillion in infrastructure spending, "Medicare for all" .... The nonpartisan Committee for a Responsible Federal Budget calculates that his economic plans would push the top federal tax rate to about 77 percent”).[1] (By the way, they really mean the top marginal federal tax rate, which was, for the record, 90% when I took civics in junior high.) I don’t know if they are disingenuous or purposely befogging the issue, since it is clear that every other developed country delivers care to all its people for, usually, 1/3-1/2 of what we spend per capita in the US, with much better outcomes by most or nearly all measures.

So why are cost estimates in the US so high, when other developed countries do it for so much less? A great deal of it is that profit is built into the system. When we read about the problems of our system, we hear from insurers, who think providers charge too much, and providers, who think insurers pays too little, and each with an army to try to get what it wants. It is not because we care too much about patients. In Canada, there is a single payer national health insurance program (called “Medicare”) where the government pays the bills for largely privately-delivered care. The fact that it is private delivered is part of why their costs have risen second only to ours, but there is some central control. In Switzerland, there are multiple payers, insurance companies that are, however, forced to charge the same amount and provide the same basket of services, and be non-profit. How do they compete then? Why, on service to their patients! What an incredible idea! If you call your company to complain and can’t get through, you switch to another! As long as our system is predicated on building in excessive profit for providers, insurers, and drug companies, it will be fantastically expensive, albeit a full-employment program for those people trained to try to get bills paid and, on the other side, to deny payment. And it will be about cutting costs, not improving quality.

---

[1] http://www.chicagotribune.com/news/opinion/editorials/ct-marco-rubio-tribune-endorsement-clinton-sanders-0310-md-20160309-story.html

“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]

---

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