Our health system: Not equitable, not effective, and not even efficient. Bad business!

Over a year ago, deep in the pandemic, a close friend felt she had a bladder infection. She went to the local Urgent Care (run by the large hospital system that also runs our University Medical Center) to be sure; they did a test on her urine, verified it was a bladder infection, and gave her a prescription for an antibiotic. It got better.

Not long ago she began getting dunning notices for the bill for this visit. She was surprised, as her primary insurer (Medicare) and her Medicare Supplement policy should have covered it all. Hours on the phone, with the health system and insurers, she determined it was because the system had not submitted the bill on time. Note that they have a year to submit a bill to Medicare. She talked it out, and thought that it was resolved. More recently, she received another dunning notice, followed by more phone calls. The billing department did not have her insurance information on file. She was surprised, she noted, as the Urgent Care clinic had taken photocopies. “Oh,” she was told, “that’s the clinic. We’re the billing department. We don’t have access to those.” Wait, you’re the billing department for the Urgent Care, but you don’t have access to the photocopies of the insurance cards that they took solely for the purpose of billing? What kind of an operation are you running here?

Sadly, and perhaps surprisingly, an operation of health care in the US, and perhaps business in the US altogether. Not efficient, not effective, poorly designed, and, of course, set up to make the victim – in this case the patient or the client – take the blame. Spoiler alert: It is their fault, not yours!

Every few years the Commonwealth Fund assesses the performance of health systems in 11 high income countries around the world. Since 2014 it has been called “Mirror, Mirror on the Wall”, and each time it comes out the US ranks last in overall performance, and also last or near last in most sub-areas (Healthy Lives, Quality,  Access,  Efficiency, Equity). It is worth looking over the whole report from 2021, but I am going to focus on Efficiency. When I first looked at the 2006 and 2008 reports (then called “Dimensions of a High-Performance Health System”) I was a bit surprised that the US’ worst score was on efficiency. Access, yes, I could understand. Equity, yes, of course not. Even Quality, depressed as it would be by the lack of access and equity. But efficiency? I thought of the waste that came from so many private systems which had (especially in those days before Electronic Health Records,  EHRs) so ability to share information. So you got a lab test or x-ray at one place, maybe an ER, but the next place couldn’t access it, so they did it again. Inefficient, and costly. And not good for you.

 

So did it get better with EHRs? Well, not per the 2014 report, in which the US ranks 11 out of 11 in Efficiency (as well as in Equity and Overall). Maybe it takes time, but the 2021 report shows that the US is – still dead last, now presented with 3-digit scores rather than simple ranking. Even though our health system’s corporations are, as I have often said, about making money for themselves rather than taking care of your health, their business systems are poorly designed, inefficient, and cause you no end of grief even if you are insured and not too sick. Of course, woe to you if you are uninsured and very ill! THEN you really suffer!

 

 

I once sat on the Billing Steering Committee of a large practice plan, and one of the issues that kept coming up was people not paying their bills. As a patient there, I suggested that it was hard when you got a bill for, say, your doctor visit, paid it, and then a few days later got the bill for the lab test or x-ray or something else. Since one of the purposes of creating the practice plan was to have a unified bill, I asked why they didn’t send out a monthly bill, so people could pay everything at one time. We do, they said, but only after we send out the individual ones. Gee, I noted, one monthly bill works for credit card companies. Can you imagine if you got individual bills all month for all your MasterCard or VISA charges that indicated that you had to pay them then, rather than one monthly bill? T What, I thought, if you got a bill today for a lunch you had 3 days ago, and tomorrow for the shirt you bought last week, and a few days later for the vacuum cleaner you’d ordered? And each indicated you were to pay it today? What would be the point of a credit card? What is the point of integrated practice billing? he concept of not sending out each individual bill was not only foreign to them, but incomprehensible.

They remained unconvinced, and it was dropped. The reason that they remained unconvinced is it wasn’t how they did things. And management of health systems (and, to a large extent, US business) is doing things how they do things. And congratulating themselves on how well they do. And rewarding  themselves handsomely for it. And blaming someone else (usually the client or patient) when it doesn’t work. They are wrong, they are fooling themselves, the data is in, but they persist. Because they have the power.

After World War II, a statistician named W. Edwards Deming developed systems for enhancing quality in business and manufacturing, a data-driven approach that became known as Continuous Quality Improvement, CQI (there are a number of good books by and about Deming and his methods, some very easy to read). It caught fire in a Japan trying to rebuild after the war, but was ignored in the US because, in the 1950s and early 1960s, US businesses were doing great. The reason, of course, was that the manufacturing capability of every other developed country had been decimated by the war, so US business had essentially no competition. It could have been run by monkeys and would have done well. But the monkey-impersonators who were actually running it convinced themselves that it was because they were so good! Then, of course, by the late 1960s Japan and Germany were outperforming the US in terms of quality, and profit. US industry was still not that concerned about quality, but they did want profit, and many CQI models were adopted (famously at Ford, but also at other large companies).

But progress, as those who study history or at least are old enough to have lived through a fair portion of it know, is not linear. Traditional bad practices are hard to erase, and without continuous reinforcement of better ones continue to recur. Especially difficult to control are those which can be (and are) interpreted by the management (who like to call themselves “leaders” though that is rarely what they are) as showing how good and smart (and deserving of high pay) they are. So, they do recur. These attitudes, that things are best when Wise Managers are in charge, has permeated not only for-profit business but even non-profits and membership organization, not always to the good. In “Good to Great for the Social Sector” business guru Jim Collins has observed that while non-profits are often urged to operate “like a business”, since most businesses are poorly run and operate poorly this is not always a good idea!

Very recently I learned of a health system which contracted for the services of a doctor from a government agency. Since the doctor was not their employee, the system couldn’t bill for the doctor’s services. So, they assigned a nurse practitioner who was their employee to accompany the doctor and bill under the NP and health system’s name. Except the doctor worried that this would be Medicare fraud, and consulted the attorneys for their actual employer, who agreed. This surprised the health system; they worked – as almost all of them do – under the assumption that the whole thing is a game, to maximize their income and profit. Heck, they upcode all the time to get more money from Medicare and other insurers!

So, what is the upshot? Health systems (and US businesses in general) have a total focus on making money, even when they are pretty inefficient at it. This sometimes clouds their attention to obeying the law. It certainly is more important than the quality of your care, or your financial health. As always, while it affects everyone, the most disadvantaged – the poorest, worst insured, least educated, and least empowered suffer the most. So what can we do?

For starters, we need a universal health insurance system, like improved an enhanced Medicare for All (HR 1976 this year). This will not by itself bring us up to par with the other nations, but it is a necessary start.

 

Kickbacks, corruption, and graft are not models for efficiency in health care

‘The Trump administration has labored zealously to cut federal regulations, but its latest move has still astonished some experts on health care: It has asked for recommendations to relax rules that prohibit kickbacks and other payments intended to influence care for people on Medicare or Medicaid.’

So begins the article ‘Trump Administration Invites Health Care Industry to Help Rewrite Ban on Kickbacks’ by Robert Pear in the NY Times, November 24, 2018. The next sentence provides the ostensible motivation for the rule change: ‘The goal is to open pathways for doctors and hospitals to work together to improve care and save money,’ but the sentence immediately after goes to the meat of the issue: ‘The challenge will be to accomplish that without also increasing the risk of fraud.’

The reason that there are anti-kickback laws in any industry is, of course, to prevent fraud. It is bad enough when we discover that a supposed impartial reviewer of a film or a book, or an item we may want to purchase like a car or a computer, is in fact being paid by one manufacturer to recommend their product. It is even worse if it turns out that the product that they are recommending is us, and that someone that we have trusted with our lives and our health, like a doctor, is being paid to send us to a particular lab or x-ray facility or hospital or specialist. Maybe the one we are being referred to is the best one, but it is hard to trust that if we discover that the doctor has a financial interest in that facility, or is receiving a kickback for those referrals. Most people are afraid of this and thus support anti-kickback laws; the exception is always those within the industry who stand to benefit. Surprise! And, it should be noted, it seems to be a core part of the business model of the Trump Organization.

But what about that middle sentence? The one that says that ‘the goal is to open pathways for doctors and hospitals to work together to improve care and save money’? Isn’t that a worthwhile goal? And both the American Medical Association (AMA) and American Hospital Association (AHA) are supporting the proposals. Am I saying that they are crooks or corrupt? Doesn’t it make sense that there can be not only savings but enhanced quality from the efficiencies that can come from such arrangements? How can we realize the efficiencies if doctors and hospitals are prevented from coordination of care?

The answer, as I see it, is “yes, but..”. There should not be unreasonable restrictions to care coordination, provided that they are upfront and obvious to the consumers (patients) such as in health maintenance organizations (HMOs) and the like which use limited panels of doctors, or public hospitals where care is often provided by employed physicians. The core issue, in health care, is to ensure that these arrangements are truly for the benefit of the health of patients, and not mainly to make more money for the providers. When your physician, Dr. Smith, refers you to a particular specialist (Dr. Jones) because they know them and think they are smart, competent and do good work even though another physician across town may have better results by some measures, it may be good or bad but it is honestly being done by Dr. Smith for your benefit. But if you discover that Dr. Jones is paying Dr. Smith for referrals, you might well be chary of the motivation.

There are several important things to remember in this discussion:

1.     Not everyone is, or is likely to become, a crook. There are many, maybe most, individual health care providers (like doctors) who actually care more about people’s heath than profit. There are even some institutional health care providers, hospitals and health systems, that may.

2.     There will always be people and institutions who “push the envelope”, and game the system. They will do everything that is legal, even if it violates the spirit and intent of the law, if it makes them more money. “Give them an inch and they’ll take a mile”.

3.     The looser the rules, the more these people and institutions will game it. There is no reason to suspect that money-grubbing cheaters will be satisfied if given a little more. Think about those (maybe me and you) who routinely feel ok about driving 5-10 MPH above the speed limit on a highway. If the speed limit is 65, we may drive 70 or 75. But if it is 75, we drive 80 or more. Raising the limit on what constitutes corruption will not obviate it.

4.     Carrots don’t work very well to change such behavior, although sticks might work a little better.

Don McCanne recently discussed a study from RAND called ‘Effects of Health Care Payment Models on Physician Practice in the United States’ which described the many different models being employed by various health systems and physician groups in the US, but alertly appened a reference to a NY Times article on October 27, 2018 by Alfie Kohn titled ‘Science Confirms It: People Are Not Pets: Research on the efficacy of rewards tells us that we can’t bribe others into doing what we want’. It reviews the psychological science that there is a difference ‘between intrinsic motivation (wanting to do something for its own sake) and extrinsic motivation (for example, doing something in order to snag a goody). The first is the best predictor of high-quality achievement, and it can actually be undermined by the second. Moreover, when you promise people a reward, they often perform more poorly as a result.’ Indeed, Kohn shows that sticks are not that effective either at changing behavior; I advocate them to some degree because at least they can put the biggest violators in jail!

The Pear article on kickbacks, trying to describe what its supporters see as the good side of loosening restrictions on them, says: ‘‘Federal law generally prevents insurers and health care providers from offering free or discounted goods and services to Medicare and Medicaid patients if the gifts are likely to influence a patient’s choice of a particular provider. Hospital executives say the law creates potential problems when they want to offer social services, free meals, transportation vouchers or housing assistance to patients in the community. Likewise, drug companies say they want to provide financial assistance to Medicare patients who cannot afford their share of the bill for expensive medicines.’ First of all, this is not “likewise”; drug companies who want new customers (and fend off efforts to regulate prices) are different from a hospital or provider offering free or discounted services; extra benefits to attract patients (as opposed to, say, free lunches to attact doctors) are quite different,  provided that these are really free, and the cost is not passed on to Medicare or Medicaid!

There is, in fact, a difference between ‘coordinated care’ and ‘graft’.

Pear also writes ‘‘The Justice Department in April accused Insys Therapeutics of paying kickbacks to induce doctors to prescribe its powerful opioid painkiller for their patients. The company said in August that it had reached an agreement in principle to settle the case by paying the government $150 million. The line between patient assistance and marketing tactics is sometimes vague.’

Vague? This is not vague at all. Creating efficiencies to improve care to patients, and reduce costs, especially to patients, is fine. Kickbacks and graft are not.