Update 12/16: comments below this post have added more detail and documentation.
On one level this is a happy post. On another level, it’s a storm warning.
The happy part:
Of all the amazing, inspiring, humbling things that have happened in this three year adventure, one of the best is being invited to participate in discussions with professional societies I respect. For instance, twice this year I’ve written for the SGIM Forum, published by the Society of General Internal Medicine. Real medical leaders are actively listening for the patient’s perspective on many aspects of the challenges facing health and care, especially in America.
For the current issue (December 2012 – click image at left) I was invited to write a post-election perspective for their Health Policy Corner on the outlook as reform rolls out. The angle I chose was to ask, as the new rules unfold and the business of medicine changes, will the best providers be protected?
It was a riff on the Institute of Medicine’s new report, Best Care at Lower Cost: The Path to Continuously Learning Health Care in America. The most-quoted item in that report is that we have $750 billion of excess spending in American healthcare.
And that’s a problem. A big one.
The storm warning:
$750 billion is an incomprehensible number; it’s impossible to imagine how much financial pain there will be as we work to fix it. So I put it this way: if Intel, Microsoft, Apple, GM, IBM, Ford, Chrysler and Dell all went out of business, it still wouldn’t add up to that much.
Or, try it this way: have you ever witnessed the debate and pain around the closing of a local military base? This July article cited closings that were touted as saving $8 billion … ninety times less than the excess in US healthcare.
So it’s predictable: as our spending starts to shrink, a whole lot of healthcare executives are going to hurt. And they’re starting to take action (right or wrong) to protect their organizations. As you’ll see in a moment, sometimes that conflicts with your family’s interests, so you need to be aware of what’s going on. I believe the best counterpoint to the coming crunch is informed, empowered, engaged consumers.
A few news items that disturb the crap out of me:
- The December 1 edition of 60 Minutes had a scathing depiction (see the segment here) of the HMA hospital chain. Numerous fired HMA doctors in several states say HMA put their emergency room docs on quotas to admit 20% of patients, even if only 10% need it – and that HMA expected 50% of Medicare patients to be admitted.
- One manager’s email is shown: “I’ll be blunt … I’ve been told to replace you if your numbers do not improve.”
- Aside from ethical issues, this puts patients at risk: over half of patients admitted experience some sort of medical error. Endangering patients for profit? Yup. (They deny it, but when the denying exec was shown printouts of the emails, he squirmed like a tobacco executive.)
- And check the part where they fired their own compliance director – a former 30-year FBI agent – and ordered him to destroy his own evidence. (Good luck with that.)
- There’s much media coverage (e.g. this New York Times piece) of assertions that hospitals are directing their physicians to use more expensive in-house services, when cheaper ones are available. This is especially coming to light as many clinicians become employees of hospitals.
- At a conference I attended in October a high tech executive said his company offered a major health system some technology (for free) to help Medicare patients not be re-admitted – to stay safely at home. They figured the hospital would gobble it up because Medicare is now penalizing excess readmissions within 30 days – but the hospital said (get ready for it): “We need them to come back after the 30 days.”
- Yes, the hospital said they need your mother or grandmother in the hospital. Think about that.
- When I tweeted about that, someone said the same thing had been discussed at a conference that week at Stanford: “Watch how many readmissions there will be on day 31.”
It’s a storm warning – a big one – to realize that the people charged with curing our loved ones may have really big reasons not to minimize care, to the point where sometimes management directs staff to do things that aren’t in your family’s best interest.
And that brings me back to the IOM’s report. I know plenty of doctors who are genuinely committed to providing “Best Care at Lower Cost,” and I want them to survive the change and be rewarded.
The Way Forward: Patient Engagement
The report shines a light on the path to the future, citing four cornerstones of the “Continuously Learning Health Care System” they say we need. It was thrilling to see #2:
- Science and informatics [IT] – Real-time access to knowledge, and digital capture of the care experience.
- Patient-Clinician Partnerships – Engaged, empowered patients. (They almost said e-patients!)
- Incentives – Incentives aligned for value; full transparency.
- Culture – Leadership-instilled culture of learning, and supportive system competencies.
#2 is an expression of what physician leaders have been saying for decades: Patients are the most underused resource in healthcare. I have many thoughts on how to activate that potential, and in 2013 I plan to start helping health systems and communities turn the potential into reality.
We must improve healthcare, and we must protect and preserve good providers. A new world is out there somewhere, with best care at lower cost, and it’ll make full use of patient engagement – both in health and in care.
Dave
The most quoted part of the report may be the estimated $750 billion in waste in the medical industry. can you inform us as to how this value was calculated? I couldn’t find their methodology in the study.
Hi Bill – I’ll see what I can find out.
Bill,
The full report is available free at the link in this post. You can download the PDF or read it online. Here are a few online page links from the summary:
Page S-7: “The IOM workshop summary The Healthcare Imperative: Lowering Costs and Improving Outcomes contains estimates of excess costs in six domains: unnecessary services, services inefficiently delivered, prices that are too high, excess administrative costs, missed prevention opportunities, and medical fraud (IOM, 2010). These estimates, presented by workshop speakers with respect to their areas of expertise and based on assumptions from limited observations, suggest the substantial contribution of each domain to excessive health care costs (see Table S-1).”
The table lists the six areas. “Based on assumptions from their areas of expertise” could be cause for doubt; my guess is that it wouldn’t change the big picture if some or all of the IOM’s speakers were off.
The next page says “Two other independent and differing analytic approaches—considering regional variation in costs and comparing costs across countries—produce similar estimates, with total excess costs approaching $750 billion in 2009 (Farrell et al., 2008; IOM, 2010; Wennberg et al., 2002).
“While there are methodological issues with each method for estimating excess costs, the consistently large figures produced by each signal the potential for reducing health care costs while improving quality and health outcomes.”
The summary continues, putting those numbers in context in ways different from mine:
…could pay the salaries of all of the nation’s first response personnel, including firefighters, police officers, and emergency medical technicians, for more than 12 years.”
$750B in waste figure is from IOM study released Sept. 6 of this year, “Best Care at Lower Cost: The Path to Continuously Learning Health Care in America”.
Link to full report: http://bit.ly/TS5lEo
$750B figure is on slide #7 in Briefing Slides section.
signed,
The Research Desk =)
I was so riveted by the 60 Minutes piece, and the rest of the post, that I completely missed the fact that Dave has linked the IOM report. I’ll shut up now …
This is the unfortunate outcome when, for generations, an industry ignores its customers and pays more attention to the needs of its vendors. The defense industry learns this lesson frequently, too, but that’s not the topic on the table.
Unraveling the snake-ball that is cost and quality in healthcare is the stated purpose of efforts at healthcare reform, yet the group you rightly ID as the most under-utilized resource in the industry – patients – is still being thought of as powerless actors, or what I like to call “meat puppets”, by a visible percentage of said industry. Like, for example, the HMA honchos who appear to be mandating hospital admissions where none are necessary. And who also appear to be clueless enough to instruct a former federal law enforcement agent to destroy evidence. “Good luck with that” indeed.
Root cause of this mess? IMO, it’s the fee-for-service model where fees aren’t directly paid by those receiving the product, which is, in this case, healthcare services. We’ve had four generations to create consumption without relation to cost, and now we are very literally paying the piper. Costs are hidden from patients. They’re often opaque for providers, too, given that health insurers negotiate rates with health and hospital systems based on said system’s ability to negotiate.
Patients do indeed need to engage, and work with the system to heal itself, and our communities. And we need to storm the castle of any part of the system – be it providers, or payers/insurers – who aren’t fully transparent.
We can start by taking one simple step: ask “how much is that?” when/wherever you can when buying healthcare services.
Drip, drip, drip. The rock will crumble eventually.
Casey, yes, the rock will crumble; but I’m pretty sure it will scream in pain. Because it really is going to hurt.
Someone at an event last summer likened it to a cancer, which has no way of comprehending that it’s killing its host… it just grows and grows.
And I reallllly want things to unfold such that the really “good guys” (of all genders) emerge intact, respected, and rewarded for their goodness.
Another specimen, which I’m trying to confirm with friends in Colorado:
“Two of Colorado’s largest insurance companies refuse to pay for their clients to see independent advanced practice nurses in urban areas even though some patients want to see them and the care would cost less.
“Advanced practice nurses say the insurance companies, Anthem Blue Cross and Blue Shield of Colorado and Rocky Mountain Health Plans, are protecting doctors in a “turf war” instead of focusing on what’s best for patients and allowing free market choice. …”
(Advance practice nurses include nurse practitioners [NPs].)
It’s a long piece – click through, if you want.
Another example is interfering with the introduction of more consumer-friendly shops like Minute Clinics, which use NPs. I’ve used them in Minnesota and in Maryland, and it’s a hell of a lot more convenient than a regular appointment for routine care, as reflected in New clinics fill a niche for routine health care.
In Massachusetts, Minute Clinic fought its way in, over strong protests by the Massachusetts Medical Society. In Illinois the industry tried to get legislation to block clinics from using such dangerous tactics as advertising that their prices were better! (See page 13 of this PDF report.) (The FTC blocked that one…)
And I heard, but can’t document, that the Mass. Medical Society did get legislation passed that bans parents from getting a kid’s routine camp physical at a retail clinic.
As I say, I think we just need to have our eyes open and understand the large forces swirling around us, bigger than any of us as individuals … and express what we want, because otherwise regulators will have to take their best guess.
Hi Dave,
I enjoyed reading your post. Always love to see “patient-clinician partnerships” highlighted!
Would be interested in your thoughts on how to identify good primary care clinicians, how to help them survive the coming changes, and how to support them so that they can do their best work partnering with patients.
I hear a lot of talk about measuring outcomes, but unclear to me how we will measure PCPs who do a good job partnering with patients and families. And as you point out, powerful vested interests will be unhappy if those high quality PCPs reduce un-needed hospitalizations and specialty care…
Leslie, I apologize – somehow I only noticed your comment now, 6 weeks later:
> Would be interested in your thoughts on how to identify good primary care clinicians,
> how to help them survive the coming changes, and how to support them so that
> they can do their best work partnering with patients.
I don’t have answers yet – I could speculate but the last thing I want to do is be an arrogant guessing doofus. I say that because to me any metric (on how to identify good ones) has no credibility until it’s panned out at predicting what DOES create good outcomes, both medically and in the experience of having been cared for.
For me personally, a key indicator would be that someone truly is concerned about whether people’s needs are being met – in reality, not by some abstraction. And that can be hard for all because of perverse incentives: I know docs, perhaps including you, who sacrifice all the time to do things right although they don’t get paid accordingly.
What I hope to kindle and participate in is a sense of shared commitment to getting through these changes together. It’s the best I can offer since we don’t yet know how to do it.
Suggestions are welcome from others!
Dave, this is one of your best posts. Much needed discussion. Would like to see more in the future on the financial toll of preventable complications, over-prescribing, over-treatment, and unethical business practices (HMA and others). Maybe a book review and interview with author Rosemary Gibson would be just the thing.
Happy New Year and keep writing. We need you!