Healthcare Efficiency

An article in today’s Washington Post offers a hint at where healthcare IT is headed.  In an effort to control costs, insurance companies have begun to rate physicians on how much money they spend taking care of patients.  Those who generate large bills for insurers are dropped to a second tier to discourage patients from seeing them.  On the surface, this seems like a perfectly reasonable approach.   Problem is, sometimes the data are wrong, and there’s no opportunity to correct it.  Like trying to get your name off the government’s no-fly list.  (Take the train.)

Some of the questions are based on the NQF standards (beta blockers for heart attack patients), but insurance companies are interested in money, so the aim is to reduce their costs.  Patients are discouraged from seeing lower doctors by higher co-pays.  Nothing wrong with rating products and services for consumers.  Consumer Reports has been doing this for years.  However, the consumer is free to decide that “beta blockers aren’t important to me”, patients are not.  They get punished for choosing a doctor other than one recommended by their insurance company.  Back to the HMO concept of limiting choice to promote profits.

All of this is made possible by electronic medical records.  The interoperability of these records enables insurance companies to peruse the records in your doctor’s office.  Problem is, these records may be wrong or incomplete.  Doctors have been dinged for not doing PAP smears in patients with hysterectomies or mammograms in patients who’ve had mastectomies.  As more offices acquire electronic record systems, such scrutiny will become more pervasive--and invasive.  

Again, patients have been left out.  None of the ratings is of any interest to patients.  For sites that do collect patient ratings, see HighlightHealth.com.  As with other systems, it’s OK to collect data and perform measures.  It’s the use of the resulting data that’s critical.  Would you believe that some physicians are not overwhelmed with joy?  Yep.  Some have even sued.  

The key discussion in Washington now is how to attribute healthcare costs among the various physicians taking care of a given patient.  Who gets the blame for that unnecessary MRI?   

Posted by Dr. Robert Burney at 10:06 PM | Permalink | Comments (2)

James Robinson, Health Affairs editor, interviewed Gary Kaplan, Virginia Mason Medical Center (VM) CEO about his “efforts to redesign care” and the related article, available briefly in Health Affairs.   Kaplan came to VM to restore profitability and was shortly greeted by demands from Aetna to reduce costs for services.  He had already embarked on a “lean” focused system to reduce waste and looked to this as the answer to Aetna.  This looks like a purchaser demanding lower prices of a supplier and should have resulted in greater efficiency.  

Aetna is not a key player in the Seattle scene, and VM could have just blown them off.  What VM actually did was to reduce the volume of healthcare services they provided in response to a limited set of diagnoses.  For example, patients with low back pain no longer get MRIs as part of their work up.  VM also reduced the number of “unnecessary” studies for patients with cardiac diagnoses and switched to cheaper generic drugs for some conditions.  

And the result was . . . well, it’s not clear.  Everyone walked away happy, but the article doesn’t present any data or details on results.  It seems as if VM agreed to provide fewer services related to 3 or 4 diagnoses, and Aetna agreed to keep VM on their list of preferred providers.  Other than that, it’s not clear that anything changed.  Certainly, the cost for an MRI scan did not change.  They’re just not doing as many for low back pain in Aetna patients.  In a broad or macro sense, that’s efficiency--lower cost for treating a given diagnosis.  However, neither the cost (to VM) nor the charge (to Aetna) for an MRI changed.  No efficiency there.  

The article’s authors wring their hands over the lost revenue to VM because of fewer MRI studies.  What???? That’s an opportunity to do more MRIs on other patients.  Remember, in the last episode, we established that the demand for healthcare is essentially infinite.  “A hospital bed built is a bed occupied.”  In confirmation, radiologists reported no “decline in volume, because demand remained high.”  And with fewer resources required per case, VM was able to see more back pain patients per week.   

What’s interesting about all this is that no one asked the patients what they thought.  Not VM, not Aetna, and not the authors of the HA article.  Why?  Well, patients don’t really count.  They don’t pay the bill, so no one cares.  The telling remark in the article is that this plan has produced “little effect on overall market dynamics.”  In other words, the changes did not provide VM with any competitive advantage, probably because their prices did not change.  

For its part, Aetna will be a candidate for the cowardly lion award.  They had an opportunity to press for lower prices and they blew it in favor of reducing their annual cost--a very different concept.  VM may have improved their efficiency and thus increased their margin on these diagnoses, but that’s not clear from the article.  

The authors seized the opportunity to throw a gratuitous jab at the fee-for-service concept, as if that had any relevance here.  

All in all, and interesting foray into normal market play that didn’t accomplish anything.  But they thought about it.   Maybe next time.

Posted by Dr. Robert Burney at 08:48 PM | Permalink | Comments (0)

In 1994, Ken Kizer became head of the VA and transformed the system from worst care to best care--demonstrably better, because they had measurements to prove their excellence.  He defined the value equation as including technical quality AND customer satisfaction divided by cost.  He saved money in part by closing underused facilities and still provided the least expensive care in the country.  This, in spite of the fact that the VA patients were sicker and needed more healthcare than those in any HMO.  

There are some footnotes, and the dice were somewhat loaded, but nevertheless, they did a good job at a low cost per patient.  You’d think that the government would want to move patients into this system  from, say, Medicare which buys care on the commercial market.  But no, they tightened the eligibility rules, so people like me can’t go there (I’m a vet).  Then they cut the budget, then Ken Kizer left.  

But, that’s the way it is with government sponsored health plans.  Politicians who know or care nothing about patient needs take money out of the health system budget to spend on wars and tax breaks and graft and corruption.  And that’s the defining argument against government run healthcare.  Lines up to six weeks for a CAT scan.  People are leaving their eligibility for surgery to their children in their wills.

In the last chapter we’ll review, Longman also talks about the worst care.  In a quest for the best, we often wind up with the worst.  On page 84, he writes, “Generally, the more prestigious the hospital you check into, and the more eminent and numerous the physicians who attend you, the more likely you are to receive low-quality,  or even dangerous and unnecessary care.”  Something of an exaggeration, even for a cynic like me, but there is an element of truth there.  An anecdote:  I encountered a 16 y.o. male with a broken femur in the ER.  His anxious parents were trying to decide whether to leave him in the small community hospital or transfer him to the Mecca.  I pointed out the this hospital was within a mile of their home, had competent orthopedic surgeons who could easily handle a femur fx, and that treatment could begin within the hour.  The helicopter trip would not be comfortable, and no one at Mecca U would see him on a  Sunday nite.  They stayed.  And later thanked me for the advice.  Sometimes you need sophisticated care, but sometimes you need a simple job done well.

Longman goes on to discuss Wennberg’s work on geographic variance in health care services.  This was partially explained by Milton Roemer, who pointed out that the demand for healthcare is essentially infinite.  The amount of healthcare provided is limited only by the number of providers.  This, of course, is the reason that Canada doesn’t buy more CAT scanners and limits the number of physicians in the country.  (RI tried that once, but lost a restraint of trade suit.)

The rest of the book should have been left out of the book. 

Posted by Dr. Robert Burney at 09:12 PM | Permalink | Comments (0)

In chapters three and four, Longman makes much of the VISTA, the VA’s electronic healthcare record (EHR) system.  Interesting that it developed as a guerilla system that was banned and condemned by the IT elite in Washington.  Setting fire to someone’s office and destroying a car are a bit extreme, but not beyond belief.  Usually, such disputes occur between civil service and political appointees, and the consequences are limited to getting fired.  (Anyone want to be a US attorney?  Or work for the Park service?)  If you think this doesn’t happen in the private world, read about (or see the movie) Karen Silkwood.  Those who defy authority are not welcome.

In this case, however, the guerillas won, but only after someone from Central Command dared to actually look at what they had been fighting.  In part, this was a war between the users and the nerds.  VISTA was developed by users--one of its great strengths.  It is also “open source” software, which some see as another advantage.  (Think Linux.)  Finally, it represents “distributed computing.”  When I was a kid, all computing power was housed in a mainframe at  “the computer center.”  A few labs were fortunate enough to have terminals, but the programs ran at the CC.  Steve Jobs and later IBM moved that power to desktops, and the IT people have been working ever since to return to the days of a mainframe (theirs) and dumb terminals (users).  

Fortunately for the VA (and the rest of the healthcare world), someone recognized the value of what the users were doing.  There was once an active program in the VA to distribute VISTA to others.  One impediment was that it was written in MUMPS--an obsolete programming language.  Database software has gotten better over time.  Remember here, we’re talking about 1970.  

Probably the most important advantage of VISTA is that it allowed the VA to move on and address quality of care and patient safety issues with the EHR behind them as infrastructure.   

Will VISTA work for everyone?  It’s available.  HHS is pushing it.  Remember, though, that the VA is a healthcare system.  Inpatients, outpatients, office patients, nursing homes--the whole banana.  They own their patients forever, making investments in health and disease management feasible.  They also own the hospitals and everyone who works there.  If you have a system like that, perhaps VISTA is for you.  If not, well, maybe.  It’s worth looking at, but don’t just jump in.  

Hospitals and doctors’ offices have computers for sending bills, because there is a strong business case for them.  Some larger hospitals and a few doctors’ offices have EHRs, but the business case is less clear.  It’s not purely because of the cost--it’s the small return on investment.  As Longman chronicles, when done well, with strong user input, EHRs make sense.  The VA has done this well, with outstanding results.

Posted by Dr. Robert Burney at 05:43 PM | Permalink | Comments (0)

The VA is, was, or has been all of these.  (Continuing the reading of Phillip Longman’s book.)  One key distinction that Longman (PL) fails to make clearly is that the VA is a system.  It cares for a defined population, employs the providers, and owns the hospitals.  This vertical integration defines the VA and a few smaller systems in the US as well as national healthcare systems in some other countries.  It is thus unfair to compare the VA system with “fee for service Medicare patients.”  One certainly can compare VA hospitals, as isolated units, with other hospitals.  And, when you do so, the VA does really well.  They wrote the book on patient safety and have done well on many studies of quality in healthcare.  Be careful, tho, to look carefully at the measures of “quality.”  Make sure they are relevant to “healthcare”  (life expectancy is not) and to the setting being examined.  Compare hospitals to hospitals and primary care practice to primary care practice.  You can’t compare primary care in the VA to Medicare patients or to any other insurance company’s population.  

The VA also has low costs per patient--they have to.  Congress keeps cutting their budget.  That, of course, is the strongest argument against government control of healthcare--the money in the system is determined by political whim, not by need  or by how well a facility is managed.  There’s a reason why there are more MRI machines in Detroit than in all of Canada.    

PL mentions (chapter two) the NCQA.  A fine organization, but remember, they exist to advise employers on which HMO to select for their employees.  Their standards do not look at providers from the patient’s point of view.  Remember also that doing poorly on a given measure may not mean you do poorly on that measure.  It may mean you don’t have a good system to document how well you are doing.  It costs more to document that you gave an aspirin to the patient with chest pain than it does to give the aspirin.  

None of this should detract from the good job the VA is doing.  Their patients are older, sicker, smoke more, etc., etc., that the average US population, yet the VA does an excellent job taking care of them at a cost below that of any other HMO.  Surprising then that the Republican Congress severely limited access to the VA to the point of denying previously promised access.  One other fact not mentioned is that the VA bargains hard for drugs.  Congress will not allow Medicare to do that.  

All this good news may not continue.  Current veterans are getting older and sicker and fatter, and going to need more healthcare.  In addition, many Iraq war veterans are returning with injuries that would have killed them in prior wars.  Their needs for care will go on forever.  Congress seems disinclined to provide a budget for the VA that is related to the needs of their patients.  (No government ever does.)  So we’ll probably see care deteriorate, followed by news reports of poor care, followed by a flurry of activity pretending to address the problems.  Been to Walter Reed lately?

Posted by Dr. Robert Burney at 10:11 PM | Permalink | Comments (1)

Phillip Longman wrote “Best Care Anywhere” about the VA healthcare system.  He liked it.  His book raises many of the key issues in healthcare today, and this will be e pluribus unum of blogs from this source.

Longman begins by chronicling his wife’s dealings with Georgetown University during her terminal illness.  It isn’t pretty but not unexpected or unusual for University hospitals anywhere.  Why is this?  You would think that a group of smart people could get it right, at least some of the time.  I think the answer is that no one cares.  Longman didn’t pay the bills for his wife’s treatment, and it’s pretty hard to get attention when you’re not putting money on the table.  And no one else really cares either.  If the oncologist doesn’t have the test results, he just orders another test, and the insurance company pays for it.  There is no accountability and no recognition of the patient as a customer who’s needs should be considered.  Why would we expect anything different?  GTU (and others) gets paid the same, whether they provide good service or not.  Actually, they get paid more for doing a bad job—they are paid for correcting their mistakes.  Her blood tests “had perhaps a 50 percent chance of being misplaced . . . and never finding their way into Marjorie’s chart.”  Because “CT scans would be misfiled perhaps 30 percent of the time” he purchased personal copies.  He finally throws up his hands and comments that his wife’s condition was hopeless, so nothing mattered.  

But it might have.  And that thought sent him on a search to find a good healthcare system.  When he finally concluded that the VA was the best, Fortune magazine declined to publish his contracted article, so he wrote a book.

Longman makes some interesting economic comparisons with the 1960s, when the average American worked 78 hours to pay for healthcare.  In 2004, that had jumped to 390 hours.  Contrast that with the gains in productivity in virtually every other industry.  Have we gained value for this expenditure difference?  Well, yes, at least some.  I had all the diseases (except polio) that my grandchildren are now immunized against.  That’s value.  In my field of anesthesiology, there have been huge advances in equipment and drugs that make anesthesia safer, faster, and better for the patient than anesthesia in 1960.  At a price, yes, but, trust me, you don’t want to go back.  A few studies about 1990 showed that new, expensive anesthesia drugs were worth the cost.  (Since then, I don’t know.)  Most of healthcare has improved since 1960, and most—but not all-- of those improvements increased the cost.  The real question is whether the value received is commensurate with the price paid.  I’m not sure.  Much of today’s healthcare (particularly in universities) comes under the heading of “heroic, weird, and wonderful.”  Heroic at the extremes of life in the sense of desperate and futile, but fully covered by insurance.  As we have commented before, all this is done without any consideration of how much it costs to provide this service.  There is no restraint on the technological imperative.  And no one will ever care about efficiency until there is  price competition at the individual service level.  

Next time, chapter two. 

Posted by Dr. Robert Burney at 06:14 PM | Permalink | Comments (1)

Sarah Dine comments on Michael Moore’s movie in the Health Affairs blog and raises interesting points about our obligation to provide for “the needy ones ‘at clusters all about.”  One problem with all such discussions is that they equate providing healthcare for the needy to buying health insurance for the uninsured.  So what’s the problem?

First, not all the uninsured are needy.  Estimates up to 30% just choose to self-insure.  Some of us think that the system would be better if everyone did that, as long as they had some umbrella for disasters.  That’s what I do with my car.  

Another problem is that we’re already paying for healthcare for the uninsured in the form of excess payments in our health insurance.  There is a kicker in every premium for that purpose.  There are also funds in most jurisdictions to compensate hospitals for healthcare they provide the uninsured.

Throwing more money into the system (by purchasing more insurance policies) would enrich the insurance companies and providers at all levels but would do nothing to reform the healthcare system.  In fact, it would probably get worse.  If what you’re doing isn’t working, doing more of it won’t improve the situation.

Welfare programs like Medicaid and SCHIP overlap with each other and with private insurance, so it’s hard to evaluate changes in benefits.   The challenge is to provide access to healthcare for everyone without increasing what we are paying today.  The only way to do this is to make our present system more efficient.  For that, we need motivation, a.k.a. competition.  

There are intimations in Dine’s blog (and in MM’s movie) that “government” should “provide for our sick.”  But the biggest problem with Medicare today is Congress.  The Medicare payment scheme is perverted by special interests.  There is a reason we have so few public hospitals today--the city fathers couldn’t keep their hands out of the till and off the tiller.   Government is good at collecting taxes and raising armies.  We should keep them out of healthcare decisions.  (They don’t do well at fighting wars, but that’s another story.)

Posted by Dr. Robert Burney at 09:11 PM | Permalink | Comments (1)