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Attack high cost, medicore quality - Health Care Rx Panelists

Attack high cost, medicore quality

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The single biggest issue with both the Senate and the House health-care reform bills is that neither meaningfully and comprehensively attacks either the drivers of higher cost and mediocre quality in our current health-care system. I strongly support an amendment to current Section 3502 in the Senate amendment to House Bill 3590, which would beef up the creation and spread of patient-centered coordinated care models for Medicare, Federal Employee Health Benefit Plan, and federal-established health insurance exchange patients.

The current Senate bill contemplates a grant program for the creation of community-based health teams to support primary care physicians, but it lacks several critical components:

• A mechanism for drawing on appropriated funding to get it done nationwide;
• A direction to Congress and HHS to make this available to all Medicare participants within a specified time frame;
• A requirement that a coordinated community care team use an integrated, interoperable electronic health record; and
• A decision to expand this concept beyond Medicare to the Federal Employee Health Benefits Plan.

The reason this type of amendment is so critical is that too much of the Senate and House focus has been on expanding insurance access and affordability and finding ways to pay for it. We need to find ways to reduce hospital readmissions and costs arising from poor care coordination, and to increase the use of modern technology tools that will reduce cost and improve care.

The Senate and House bills are too timid at this stage in attacking cost and quality issues. Without this kind of amendment, we will see more insured people being piled into an already dysfunctional system.

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Michael,
First...I cannot believe that you are not getting comments on your blog! For the most part, you have it right...as oppossed to most commentators, who are more interested in getting it read.

Cost is THE issue...and squeezing out waste, mismanagement and fraud should be the task of all participants and providers. It was not too many administrations ago that the now famous admonition to those trying to unravel the mysteries of Washington-itis was simply: "Follow the money". It is still true. Here's how...the healthcare stakeholder with the most influence on the cost of healthcare is the individual provider...the local doc...the PRIMARY physician. Giving them an incentive to keep BOTH a portion of cost savings they realize AND of revenue they generate will make them the jealous lover of the delivery system we are all trying to fix. With having economic equity in the delivery will come quality, resource prioritization and productivity...along with improved clinical outcomes. It's not just cost takeouts that are needed...it where and who takes out those costs. What you are advocating in coordinating care delivery is exactly right...but not by imposed external "creation of community-based health teams", as you call them...but by incenting the physicians themselves. Only then will the other "equity" players (pharmaceuticals, payers, institutional providers, etc.) be neutralized in their influence and their propensity to waste, fraud and abuse the system.
Through a not too terribly complicated refinement of the existing reimbursement formulae now in place and administered by CMS for federally funded programs, specific incentives for efficient delivery of cost effective procedures and/or prescribed drugs, devices or therapies...all this can be installed, tracked and trended starting tomorrow.

All cost containment - like politics - is local.

Appreciate your blogs and look forward to more!

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Improving health in the shorter term - Health Care Rx Panelists

Improving health in the shorter term

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Some of the relatively low-cost, high-return ways to improve health and reduce health care cost increases are relatively unglamorous and do not involve big government programs. For example, at Pitney Bowes, we reduced the rate of seasonal influenza and other infectious diseases by having an aggressive outreach on seasonal immunizations and on hand-washing and other hygiene-focused practices, such as more frequent cleaning of surfaces on which viruses or bacteria reside and spread. The rate of hospital-acquired infections, which cost our health care system dearly, could be reduced significantly if all hospitals focused similarly on infectious disease prevention.

Another relatively low-cost area of focus, which pays both significant short and long term dividends, is more aggressive outreach on prenatal counseling and lifestyle modification. Today, government programs are predominantly focused on the medical interaction required close to the time the mother delivers. However, the real benefit of prenatal counseling is at much earlier points in the pregnancy, at points during which an intervention can reduce the incidence of low birth-weight, premature babies. At Pitney Bowes, we used a program called Great Expectations, which provided financial incentives to get expectant mothers to participate, and we achieved lower incidence of premature births.

Any investment in getting children and adolescents to adopt better living habits pays back handsomely. For example, increasing the price of tobacco products by 10 percent reduces the percentage of teenagers who start smoking by 4 percent as a number of studies summarized in 2004 by Professor John Taurus of the University of Illinois at Chicago shows.

We have to refocus our efforts on improving health, as opposed solely to increasing insurance access. If we do not solve the health and health care access problems, and only give everyone an insurance card, we are effectively rearranging the deck chairs on the Titanic.

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Certainly one quick way to fix the health care system is to compare apples to apples. It is my understanding that the U.S. and Europe calculate infant mortality differently and in a way that skews comparisons in favor of the old world.

In the U.S., an infant is counted as "dead" if they die in the first 24 hours. In Europe, they are not counted as "dead" if they die within the first 72 hours. I guess they're just in limbo. This makes infant mortality, which is one of the important components of health care measures, seem higher in the U.S. than in Europe; creating the misconception that our health care ranks lower.

If you're going to compare systems to justify a major overhaul of our health care, then we should get the figures right.

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The Effect of Health-Cost Reform - Health Care Rx Panelists

The Effect of Health-Cost Reform

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Seniors are relatively pleased with Medicare, although more and more physicians are limiting the number of Medicare patients they are taking because of the drop in reimbursement. This drop will be exacerbated if the current bills make it to legislation since one of the sources of funding this "health-COST reform" movement (notice I did not say "health-CARE reform") is by further limiting Medicare and taking about $150 billion (depending on whose numbers are used) out of it. This will probably have the most impact on "boomers" turning 65 who will have difficulty finding a physician who will take a new Medicare patient.

On the positive side, seniors could benefit from "bundling" fees for services such as hip replacements because bundling would force better coordination among the health-care team since they would all need to work together to get payment.

Seniors see at least three problems. One is that there are so many renditions of bills floating around that it is impossible to get concise, clear answers about what the final product will look like and, because of that, the sources of financing for reform are vague and murky. In addition, seniors understand that there is an enormous amount of fraud and abuse in Medicare financials that the government recognizes but has been unable to fix. That lack of ability also makes them nervous.

Seniors "get it"-- they are seeking clarity about what changes are going to occur and how they will be paid for.

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The Prime Suspects - Health Care Rx Panelists

The Prime Suspects

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The Blue Dog Coalition is probably right. As is, the reform bill does not address cost-containment strategies. The truth is, if we don't deal with these cost drivers now, we'll certainly have to face them in a few years. Medicare is expected to go bankrupt by 2017, medical inflation is rising 7 percent a year, and cancer treatment costs alone are skyrocketing well beyond that -- having increased an estimated 267 percent from 1997 to 2004.

Many factors drive medical inflation, but some of the prime suspects include:

Expensive drugs/treatments. We need to improve clinical trial design to reduce the cost and time for drug development. On average, a new drug costs about $1 billion to create, test and introduce to market.

The practice of defensive medicine. In our current health-care system, physicians are given incentives to practice defensive medicine to protect themselves from liability. Unnecessary tests for patients means less time, less discussion and fewer resources that could otherwise be directed toward curing the ailment. A new system should encourage tools to improve clinical decisions, bring along the patient as a participant in care and protect the doctor's intentions to cure the disease.

Unnecessary/redundant services. We need coordinated care that rewards a health team for improved health outcomes in their patients. The current fractured reimbursement system, which pays for activities instead of performance, will continue to drive costs.

Emergency room visits for primary care services. We need to reduce emergency room services as a primary care option. Bringing coverage to more Americans will address this.

Administrative services. Health care encompasses a vast network of service providers, from primary care doctors, specialists and home health care to insurance carriers and pharmaceutical companies. Ensuring access to these services to all is not enough to constrain costs. A new system must remove administrative burdens such as needless tests, ineffective treatments and unfounded grievances. The system should support an information technology infrastructure that includes comparative effectiveness and health services research and rewards innovative treatments.

In addressing all of this, the practice of medicine must remain independent of political influences, be receptive to patients' needs, be worthy of the public's trust and be flexible enough to incorporate best practices and new procedures as they develop.

The new health care system's administrators also must reflect these traits as they reduce bureaucracy and improve efficiency. These benchmarks will ensure that the new system is in the best interest of the person it is designed to serve: the patient.

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"The practice of defensive medicine. In our current health-care system, physicians are given incentives to practice defensive medicine to protect themselves from liability."

Many studies (including the CBO in 2003) have shown that even when severe restrictions are placed on malpractice suits, physicians continue to order test and treatments many consider as unnecessary. I don't know how to stop this, but it appears that tort reform is not the answer.

Most of the other items you mention will be extremely difficult to effect because of physicians' resistance to change.

You do, however omit, what should be one of the most important changes we can make in our system. A well run for profit corporation has one and only one goal--to make money for share holders. In the case of health insurers this conflicts with the goal of quality effective health care. They waste $400 Billion each and every year on high overhead and compliance costs designed to raise their stock price by lowering their medical cost ratios.

The reason we have so many different and complicated proposals is because the first principle of all of these proposals is to preserve the riches going to insurance company executive and shareholders. These proposals run 1,000 pages. HR676, Medicare for All, is 70 pages long. It gives quality health care to everyone. It solves problems like pre-existing conditions and like lose job=>lose insurance and since it picks up the $400 Billion mentioned above, it will cost no more than we are now spending, probably less.

Won't you help us support HR676?

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Proven Savings From Prevention, Early Intervention - Health Care Rx Panelists

Proven Savings From Prevention, Early Intervention

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Yes, it is possible to substantially rein in costs to "bend the cost curve." There are many proven techniques to do this. However, preventing things from happening continues to be undervalued even though we know it significantly reduces future costs. By making wise investments now and choosing program and policy options that move the system toward prevention, we can reduce our spending in the future and give greater value to the health system. Two methods that accomplish this include:

• Change the system to provide care as far upstream as possible by enhancing provider reimbursement for primary care, prevention and early intervention, as well as utilizing more allied health providers and physician extenders to provide care. This will reduce costs by identifying problems early and then managing them to reduce or eliminate the need for more costly care in the future.

• Invest in and utilize more community-based interventions that have been shown to save money. A study by the Trust for America's Health showed that for every "$10 per person per year invested in proven community-based disease prevention programs saved more than $2.8 billion annually in health care costs in one to 2 years, more than $16 billion annually within 5 years, and nearly $18 billion annually in 10 to 20 years (in 2004 dollars)."

That's real savings. Unfortunately the Congressional Budget Office, the scorekeeper for Congress, has not designed a methodology to fully capture and credit this benefit. This needs to be corrected if the true costs savings are to be captured.

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The Heavy Lifting of Health Reform - Health Care Rx Panelists

The Heavy Lifting of Health Reform

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There's no way to cut spending in American health care without re-engineering how care is delivered. This is the heavy lifting of health reform that we haven't heard much about -- that is, re-imagining how health care can be delivered based on a strong foundation of primary care where every American has a medical home. From there, a person's continuum of care can be managed to exploit the most effective and most appropriate services for their case at the right time in the right place.

The approach is bolstered through electronic health records that store data and allow a patient's information to freely flow where care decisions are being made. This is the concept of data liquidity: digital health information that is based on standards that allow the bits and bytes to move where they need to for enhanced clinical decision-making. Over time, as many patients' data are aggregated in EHRs, evidence mounts that separate clinical wheat from chaff -- and then trustworthy cost-effectiveness decisions can be made that prevent costly, non-productive services and products to be used.

This is anathema to certain special interests: namely, specialty physicians and life sciences companies, who fear "rationing" or "rationalizing" services and products under a primary-care led system. The latest ad campaigns from every stakeholder association has begun to fracture health alliances as they have done whenever Congress gets down to the serious business of health reform.

The financial give-backs promised by hospitals, health plans and pharmaceutical companies are one-time spends which don't do much to change health delivery in favor of rewarding the best providers, products and services. That will require re-engineering -- true re-imagination of how great health care delivery could be in America.

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"There's no way to cut spending in American health care without re-engineering how care is delivered."

This is what private insurers want you to believe. In my youth, the car companies kept pointing to speeding and drunk driving to keep the spotlight away from the unsafe cars they were building. This situation is similar. It is certainly true that the big savings are in delivery, but there are substantial savings in the elimination of private insurance that should not be ignored.

We can save $400 Billion each and every year by simply passing to a system like Medicare for All (HR676). These savings come from the 20% - 25% overhead of private insurers and the outrageous compliance costs they impose on physicians and patients. In addition we can save another $100 Billion a year by cracking down on the huge sums spent by Big Pharma on marketing. This $500 Billion is more than enough to pay for the expansion of Medicare so we would need no additional sources of funds as all of the current proposals require.

While we know we need to change our delivery system and we have good ideas what changes we want, we have no idea how to get the medical professions to adopt the changes. Once we get a nation health care program, we will be in a much better position to gather data and put pressure on the participants to re-engineer the system. Every other country provides an example to show this works.

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How Do We Fund What We Are Committed To? - Health Care Rx Panelists

How Do We Fund What We Are Committed To?

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There are many dramatic failures in our current health-care system and the most striking is the inexorable rise in the number of uninsured in our nation. Further, we know that this group is complex and, to some extent (meaning that some individuals -- and we can quibble with exactly who and how many they are), must receive some subsidy to afford health insurance. How do we pay for this? We can continue to transfer our liability to our children and grandchildren or we can pay for it as we go.

Since I refuse to continue to transfer our generation's obligations to future taxpayers, I am forced to believe we should pay for it now. I would hope the cost of this program can be held to the minimum possible. I believe, strongly, that there are enormous savings that can be reaped from true reform. But, to the extent that we can not get to these savings immediately, we need to be fiscally prudent and generate appropriate revenue to pay our bills.

How then to generate revenue in a manner that does not stifle our economy? Perhaps the most appealing (but apparently politically-challenging) proposal is to "tax" employer-purchased health benefits that exceed a certain level. We have no obligation to federally-subsidize expensive health benefits when we do not provide any direct subsidy to the uninsured. I do not see this as taxing the rich, but rather merely reducing their federal subsidy. And I include myself in this group: my employer (Yale University) provides me with access to a generous health benefit and flexible spending account. Combined, I am receiving a federal subsidy that exceeds $3000 per year.

As a side-effect to reducing this generous federal subsidy, we might even find our workforce becoming more sensitive to insurance costs and medical decision making. This would not be a bad thing. Together with provider payment reform and better information to assist medical decision making, we might even be on track to achieving better health, rather than merely more health care!

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An Economic Rationale - Health Care Rx Panelists

An Economic Rationale

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The economic rationale for a mandate (individual, employer-based or a hybrid) is based on avoiding adverse selection: consumers will logically opt out of the system if they feel their personal health (past predicting future) is better than average and insurance companies will overprice the product, expecting only the highest-risk customers to enroll. In the absence of some mandate, the individual insurance market devolves to the current state: many individuals rationally choosing to be uninsured, not because they don't value health insurance, but because they refuse to overpay for the offered product.

But beyond the economics of this mandate, there is a cultural change that might follow. Perhaps if everyone knows that they will always need to be insured (rather than planning for that day in the future when they anticipate the "need"), they will become more informed consumers. Perhaps they will also take health preservation and illness prevention more seriously. Perhaps our health-care providers will find greater motivation to incorporate preventive measures in their day-to-day delivery of care. And with more healthy risks in the insurance pool, perhaps we will actually stand a better chance of truly preventing disease and/or detecting it at a stage when we can affect positive change.

While some of the narrative bears proof-of-concept, there is little risk and a huge potential reward. Mandates are a necessity if we can make this work.

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But why stick with a system that is fundamentally wrong?

Every other industrialized country in the world gets better health care as measured by all the bottom line public health statistics (there are 16), and they do it at less than half the cost per person as we spend? And they all have government run systems, mostly single payer.

We could give a super Medicare to everyone and it would not cost a penny more than we are now spending because of high overhead and enormous compliance costs of private insurance and high drug prices caused by vast expenditures on Marketing. A public option would not use these savings.

Why not support HR676?

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Change from Within - Health Care Rx Panelists

Change from Within

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President Obama gave a thoughtful speech to the American Medical Association on Monday and did what a President should do: he tried to inspire change among a group who collectively has resisted it.

Real change only happens if health care changes from within. Not surprisingly, the President was booed when he announced adjustments to federal reimbursement schemes for physicians. Could it be that physicians would rather have 50 million uninsured Americans than get to the real business of changing the way they practice? I don't think so. The physicians I work with every day believe in the President's principles for reform and understand their own role in cutting costs and improving quality.

However, there were several important omissions. One was obvious - there was lots of information about various arguments in support of the need to slow the growth rate of U.S. health-care costs but there were few specifics about how to actually achieve it, and the devil is in those details.

He also built the speech on the assumption that our health-care system is physician-centric. In fact, it is and must be patient-centric. Physicians have been voting with their feet for a number of years and leaving primary care for a number of reasons, including the excessive administrative burdens and the steadily increasing overhead costs that have reduced their income. The primary care physician role models for students have simply dwindled and these physicians are generally not particularly happy. Yet medical schools are being urged to increase enrollment to produce over 5,000 more MDs per year in order to increase access, especially primary care access. This increase is not 1) possible 2) feasible in a timely fashion or 3) necessary and it is unlikely that production of more physicians will have any impact on the shortage of physicians in poor neighborhoods or rural settings.

There is much discussion about the need for many more primary care and specialty care physicians but this is only if we try to preserve the status quo and do not re-configure and systematize how health care is delivered, by whom and in what settings. For example, part of the re-configuration would be to develop rapid national consensus on how to manage the most costly chronic diseases -- diabetes, hypertension, depression -- publish the standards and be paid only for care that follows the standard.

However, there is currently a shortage of health-care services, and many of those services are not best offered by a physician, but by a nurse practitioner, a nurse, a nurse-midwife, a nutritionist, a pharmacist, a physician's assistant, a psychologist, a health coach, etc. These providers organized in teams would be far more productive and see far more patients than a single physician. Today, physicians are paid piecemeal for the number of patients and procedures they do. We need to move to a system where they are paid for their unique expertise and additional skill sets beyond those of other members of the team. If all health professionals were allowed to independently practice at their full level of competence and legal scope in a future cost-effective, team-based health-care delivery system, there may not even be a shortage of health-care providers. An important part of providing care at a reasonable cost is assuring that consumers have access to a wide range of health-care services delivered by the right licensed provider at the right time, for the right reason, in the right setting and for the right cost.

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Gutsy, But Frank and Fair - Health Care Rx Panelists

Gutsy, But Frank and Fair

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In one speech, President Obama confirmed what had become obvious in the past few weeks: He not only wants to lead on health-care reform but also wants to define the terms of engagement. Quite to the contrary of most pundits, the President has preemptively stated which parts of the upcoming legislation is open to compromise and which are not. Further, he took a nominally supportive stakeholder and showed a real willingness to take them seriously if they will meet the challenge.

While he could have spent the entire speech with feel-good talk about fixing the sustainable growth rate (Sustainable Growth Rate legislation, in place since 1997) , financial incentives for adoption of the electronic medical record and reducing regulatory and billing complexity, he plunged directly into the hard and cold facts of reform.

Importantly, he opened the door to real malpractice reform, but surprisingly drew a line in the sand at capping non-economic damages (the basis for most state-based reforms). He did not shy away from other topics with considerably controversy: shifting government support toward primary care (training and reimbursement) and reducing low-value health care (controversial only if you are practicing low-value medicine!)

On a personal level, I was impressed that he did not only address the concerns of the membership. He reminded the audience that there are real people with real problems out there. And that the problems will only get worse through inaction.

Winning over the membership of the American Medical Association may not be necessary, but it certainly would help. The AMA may only represent a very small fraction of all physicians, but they can be quite monolithic and passionate. While the President may very well just miss Chicago, he made a strong statement in making this trip. Only time will tell whether the public groundswell will push the AMA to truly engage in this process--or whether the AMA's current tepid support will ultimately hurt the chances of passage.

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Facts on Malpractice:

1. The total of all malpractice insurance premiums amounts to 0.56% of health care costs.
2. The CBO has examined the idea of defensive medicine. They found no difference in practice between states with limits on tort settlements and those with no limits.
3. There is no correlation between the price of malpractice premiums and the amount given out in malpractice settlements.
4. The price of premiums does (anti) correlate with interests rates.
5. If you take all the money given out in malpractice settlements over $250,000 in NJ ( a state without caps) in a year and give it to physicians, each doctor would get $15.

The first four come from the book The Malpractice Myth by Peter Baker (U of Chicago Press) while I believe the last is from Uwe Reinhardt (sounds like him).

Thus the doctors are wrong on almost every count. Malpractice premiums are not a significant factor in health costs. Physicians order unnecessary tests and treatments even when there are draconian limits on lawsuits as in Texas. Caps would save us nothing. The price they pay for insurance has nothing to do with the large settlements given out, and the total amount of money involved in these settlements is trivial. What they believe is a fantasy.

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About this Archive

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Prevention is the previous category.

Public option is the next category.

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