GLUT ECONOMICS

Wednesday, August 13th, 2014 10:39 AM by Christopher Gregory

Today’s commentary wasn’t planned, but a morning report changed my mind. It disturbed me and it should disturb everyone who pays for healthcare – patients, employers and employees alike.

I get a daily journal of what’s happening in Dallas Fort Worth healthcare, and today it was reported that Baylor Scott & White Healthcare will open a new freestanding emergency hospital in the nearby suburb of Colleyville. This facility will be located 5 miles – a 10 minute drive – from the Baylor Scott & White regional medical center in Grapevine. They have a nice big ER there at the Grapevine hospital. 

Baylor Scott & White is the newly created mega-healthcare system that certainly appears intent on becoming the local 900 pound gorilla. Recently it was reported that they are moving into alliances across Texas, as far away as Longview Texas to the east, and Midland Texas to the west. 

In Wisconsin, five major healthcare systems are linking their affiliations – that will cover 90% of individuals in Dairyland.

Dr Richard Young, my friend and a fellow campaigner for saner care, wrote a piece intended for distribution to DFW employers who gathered last year to hear ideas about collaboration smarts. He wrote:

“I’m sure many of you have seen these freestanding emergency rooms popping up all over DFW like mushrooms after a hard rain. Ask yourself this: if you were thinking about opening a healthcare business and you could get paid $1500 in one facility or $100 in another for the same product, which facility would you invest in? This is not a facetious question. It’s exactly the dynamic that is driving the growth of these freestanding ERs, and the urgent care centers before them. A recent article in the (Fort Worth) Star-Telegram about one of the freestanding ER companies stated that the average revenue per visit is $1500, which is completely believable. Another source I know in the ER business told me that it only takes 8 patients per day for these things to break even.”

Within short distances in my own community of Flower Mound and the very next community over, there are four freestanding ERs, a new Texas Health Flower Mound hospital and right across the street from the new hospital, an emergency hospital put up by the nearby competing HCA hospital. Then, I think at last count, there are four walk-in CareNow clinics. And the profusion of new ologist offices along the growing medical corridor in Flower Mound is impressive. This is all within a 10 or so minute drive

There’s a term to describe events when an overactive thyroid-controlled metabolism runs amuck. That term is “thyroid storm”, and it is described as a very serious condition that can be life-threatening. By all stretches of the imagination, do you see this seemingly exponential expansion of facilities, hospital system mergers, and hospital systems gobbling up doctors’ practices like Pac Man as a threatening sign? It feels as though healthcare as gone from overactive to amuck. It’s dangerous and there is a bad moon rising. I recall from a population ecology course in college, that when there are too many bugs in a box, or too many lab rats in a cage, things start to get ugly. Are we there yet? 

That’s why I coined the term “glut economics”, because the glutted health system is feeding more fuel into this healthcare revenue inferno. We hear and read all about the “system” (hospitals and insurance companies mainly) morphing into a new dawn of transparency and accountability. Is that bunk to make us feel ok? Yet all the while, we see insanity like these freestanding operations that are just huge moneymakers and hospitals grabbing up doctor practices to create subservient employees needed to feed more and more patients into the hospital mother ships.

C’mon – isn’t this a little scary?

 

 

CAN HEALTHCARE CHANGE FOR THE BETTER?

Wednesday, August 6th, 2014 4:30 PM by Christopher Gregory

A week ago, it was Infirmary Health System in Mobile, AL that got slapped with a $25 million fine to resolve a federal whistle-blower lawsuit that claimed its clinics routinely overpaid doctors to refer their radiology patients to hospitals. This week, Community Health Systems in Franklin, TN was ordered to pay more than $97 million plus interest to settle allegations that it submitted false claims for short-stay admissions that should have been billed as outpatient charges.

They settle up because they got caught. They pay and they get to wipe their slates without admitting wrongdoing. Then it’s  business as usual.

It happens all the time – as health systems get bigger by virtue of mergers, acquisitions and building new facilities. They get so big that they think they can get away with it. As the systems become more revenue-obsessed, they buy up more physician practices. This ultimately puts a financial squeeze on their communities (e.g., Partners Health Plan). Consider what happens to a doctor’s office charge, comparing the private practice charge before hospital employment and the charge after the doctor is employed and hospital facilities charges are added.

Tales (some stunning) abound about the unnecessary, wasteful and harmful healthcare that is done when healthcare systems apply pressure to do more. It hurts those who pay and it hurts those who should not be subjected to unnecessary treatments and procedures.

My good friend Tom Emerick and I have talked many hours on the subject of medical ethics, and how today’s institutional pressures on doctors constitute unwelcome influences.

These external forces hurt the medical profession when they intrude in doctor-patient relationships. There are many ethical physicians who simply want to care for their patients the right way, doing so without the pressures and influences exerted by health systems seeking to maximize revenues. Lawsuits are being filed to end the pressure on doctors.

It’s discouraging that health systems can and do exert influences and force physicians to become unwilling parties to revenue objectives.

The Right Care Alliance is a movement started at the Lown Institute in Boston, aimed at curbing inappropriate overuse (and underuse) and refocusing on quality objectives that come from quality doctor-patient relationships. The Right Care Alliance is a movement focused on shifting medicine from “more is better” to the right care for patients. The Right Care Alliance was born out of the April 2012 Avoiding Avoidable Care conference. This was the first major medical meeting dedicated entirely to understanding the problem of overuse of medical services.

This will be challenging. With so many doctors becoming employed at big health care systems, can physician-employees take a stand and resist the incentives and pressures to do more treatments and procedures? Will big systems tolerate employees who are unwilling to do the unnecessary tests, treatments and procedures that contribute to revenues?

The first meeting on the road Improving Value, Reducing Harm: Right Care Alliance takes place in Denver at the University of Colorado Medical Center.

Denver, Colorado: October 11, 2014 (Register here)

 

HAVE WE HEARD ENOUGH?

Tuesday, July 22nd, 2014 4:56 PM by Christopher Gregory

A few years back, when the notion of a government health insurance challenger to the dysfunctional status quo was being discussed, all sorts of horror stories came out of the woodwork. The special interest bogeyman was working overtime to scare us all. During that period of tempest, I spoke with people I knew in Canada – specifically at the University of Manitoba Centre for Health Policy. The question they asked was “do Americans know that there is a noose tightening around their neck, and the out-of-control healthcare sector is the hangman?”

I don’t know how you evaluate your odds of enduring in our current healthcare system – both financially and physically and I sure as heck don’t know how the deep pockets people (employers) are reading the tea leaves. Overall, it just feels like the vise grip of the healthcare industry is tightening down to the point where there will be no room to squirm at all.

Health care systems are eating up almost every doctor practice in sight – even to the point that the Justice Department has to step in and say “no”, to a looming monopoly (i.e., Boise St Lukes). The dead aim of all of this is for doctors to be under the thumb of “employer” systems who can then pull the strings and plow patients into the hospital mother ships.

Does it hurt? How about the Mass General and Brigham & Womens’ Hospital debacle – the end result will hurt the market (payers and consumers) in the greater Boston area for years because these two behemoths decided they can crush any opposition at will.

I won’t go at length into my history written on all of the abuses – they are legion: hospitals charging outrageous sums for simple stuff like appendectomies, hospitals bribing doctors, doctors cutting healthy people up or prescribing chemo for healthy patients, hospitals disciplining ER docs for failing to admit (quotas) enough patients from the ER, docs getting paid huge amounts by drug companies to push products, doctors with their fingers in equipment manufacturing interests (PODs). The list never ends and so many roadmaps lead us to the conclusions that hospitals are at the center of profligate abuses.

Take today’s press, for example. Infirmary Health System in Mobile, Ala, one of Alabama’s largest health systems is paying $25 million to resolve a federal whistle-blower lawsuit that claimed its clinics routinely overpaid doctors to refer their radiology patients to hospitals, despite clear bans against paying for such referrals. Infirmary has just settled the allegations that since 2008, two of its clinics paid radiologists bonuses that were calculated based on how many patients were referred for services.

And the laugh line is always “XYZ has settled without admitting any wrongdoing.”

There is a lot of angst among physicians about their lot in the system, and rightfully so if we look at the practice of medicine. The practice of medicine is being dictated by guys in suits who think more bottom line than patients. And physicians are being shoved to the back of the bus – they are just cogs in the big grist mill grinding on us all.

Right now, my attention is focused on the work being done by Dr Vikas Saini and Shannon Brownlee at the Lown Institute. The Right Care Alliance mission statement is as follows:

“The Right Care Alliance is a network of clinicians, patients, and community leaders who work together to reduce overuse, underuse, and misuse of medical tests and treatments in the health care delivery system, and to restore the clinician-patient relationship.”

Let me make a point clear. While many, many physicians are getting sand kicked in their faces way too much, a lot of medical integrity is being bought and sold out there. Physician accountability has become suspect far too often. Too many hands are greasing palms, and too many palms are getting willingly greased.

What’s needed is this. First, employers have to get off their duffs and start demanding their due – honesty in pricing, ethical providers with their eyes on quality patient care (and not the profitability of the hospital systems), and a massed market force driving the elimination of waste, excesses, growing costs and medical harms being done at the hands of systemic institutional greed.

Second, doctors need to stop complaining and forcefully assert certain realities to the whole system, i.e., “we are the doctors, we are in charge of our patients’ care, we are in the critical relationships with our patients and we won’t continue to take orders from guys in suits with profit-first motives, when those conflict with or threaten patients’ well-being.

That’s what the Right Care Alliance aims to do, and it is going on the road. Dallas Fort Worth, just like everywhere else, needs a good dose of Right Care thinking.  

 

 

 

HAS DISRUPTIVE INNOVATION IN HEALTHCARE RUN ITS COURSE?

Friday, July 11th, 2014 11:26 AM by Christopher Gregory

disruption

 

Clayton Christensen is the Kim B. Clark Professor of Business Administration at the Harvard Business School. He is regarded as one of the world’s top experts on innovation and growth and his ideas have been widely used in industries and organizations throughout the world. In 2011 in a poll of thousands of executives, consultants and business school professors, Christensen was named as the most influential business thinker in the world.

I read his book The Innovator’s Prescription for Health Care – A Disruptive Solution for Health Care. In his book, coauthored with two physicians, he wrote about disrupting nearly everything in health care – hospital models, physician practices, caring for chronic diseases, disrupting reimbursements and disrupting manufacturers of drugs and devices.

In today’s issue of Knowledge at Wharton, there is an article entitled Has Disruptive Innovation Run Its Course? The article debates whether the notion of disruption is “ a theory of history founded on a profound anxiety about financial collapse, an apocalyptic fear of global devastation and shaky evidence.” It’s a Wharton School dissection pro and con.

Will disruption in healthcare  trigger global devastation? Probably not (maybe, if we have a global pandemic). But how about financial collapse – at least in the United States? Consider that health care gobbles up 18% of our GDP which will grow and creates an economic burden on American companies that makes them less competitive in world markets. That isn’t stopping – as the health care industry does its best to innovate more ways to pull the wool over our eyes, corners markets and take control of a noble human profession with a well-oiled business model centered on – you guessed it – profits.  Everyone pays.

The challenge we all face from the the health care industry is that it can and will innovate and evolve into an ever-increasing black hole into which more and more dollars will flow. We’ve seen a lot of that, with ACOs, PCMHs, mergers and consolidations and a whole raft of other acronyms that signal structuring by hospitals, physicians and manufacturers to extract more money from the other side of the equation – those who pay. Think about the Mass General – Brigham & Women’s boondoggle in Massachussetts, and how the market-cornering bullying of the Partners Healthcare System will hurt consumers for a long time.    

The biggest populations of payers getting fleeced from innovation in the healthcare industry are the employers who pay most of the health care bills through their insurance plans and employees who are being exposed to more costs all the time: the biggest cause of personal bankruptcies remains medical bills. And don’t forget the government – the amount of money passing through Medicare and Medicaid is staggering (including mistaken payments and fraud). And yet employers think feeble efforts and procrastination in concert with the healthcare industry is going to work. Remember the definition of insanity – doing something over and over and expecting different results. Sometimes it seems like paying through the nose is preferable to taking a stand.

We need disruptive innovation on the other side – the side that pays. We need committed, ethical physicians to once again be seen as the authors and traffic cops in our flow of health care dollars – not business suits who see statistics, charts, graphs and profit statements. (CEOs of health care systems are doing very well – compensationwise.) We desperately need concrete ideas and methods to go after the tremendous amounts of excessive, unnecessary and wasteful spending that the healthcare industry thrives on.

As long as corporate individuals with a say in health care benefit plans choose to remain comfortable and safe on bold steps, the innovation (and advantage) will remain with the healthcare industry.

 

BUSINESS LEADERS: CASE IN POINT

Wednesday, July 9th, 2014 1:01 PM by Christopher Gregory

 My colleague Brian Klepper, CEO of the National Business Coalition on Health referred me to this blog below, referencing what I wrote about in yesterday’s commentary. I publish this today because I am hopeful that business leaders (especially in Dallas Fort Worth) will take note of what happened in Massachussetts and what is taking place all around the country as hospital systems seek to exert more leverage and control.                                                                                                                                                                            

NOT RUNNING A HOSPITAL is a blog by a former CEO of a large Boston Hospital to share thoughts about hospitals, medicine and healthcare issues.

 

Sunday, July 06, 2014

Arithmetic

An editorial in the New York Times prompts me to take a moment to present some arithmetic to that editorial board, our Attorney General, the Boston Globe, and the businesses and individuals who will pay for health care in Massachusetts under the terms of the recently announced deal between the AG and Partners Healthcare System. The deal allows PHS to have rate increases “only” equal to the rate of inflation for ten years.  The Times mistakenly characterizes this provision by stating that the agreement “would at least slow the increases in Partners’ prices.” Well, maybe so and maybe not, but it is not the absolute level of the PHS rate increases that matters:  It is the wide disparity between its rates and that of other providers.

Some of us have argued that this agreement is a nullity because it will cement in the current rate disparity for years to come.  This, combined with other features of the agreement, virtually guarantees PHS a continued revenue windfall for years to come.

To illustrate, let’s take the case of 1% annual inflation.  Assume that PHS rates are currently 20% above its competitors. (That is conservative in many cases.  For example, it reportedly receives over 40% more than Massachusetts Eye and Ear Infirmary to carry out the exact same procedures.)  Let’s present a chart showing what happens to the rate differential against other doctors and hospitals under three cases: They all get a 1% increase (red), 2% increase (gray), or a 3% increase (yellow).

Here’s the chart:

 

Let’s now assume inflation is 2% for the ten years, and the other hospitals and doctors get raises of 2% (red), 3% (gray) or 4% (yellow).  Here’s that chart:

Hmm, in the best of cases, where the percentage rate increase granted to others is two or three times that received by Partners, the catch-up takes 10 years.

But recall that insurance companies have no requirement to give others more than they have given Partners.  In fact, their pattern has been to give less. (Also, please recall that all hospitals are subject to legislation that keeps rate increases below the rate of GDP growth in the state.)

Check my numbers.  Use your own assumptions if you don’t like mine.

BU professor of health care Alan Sager said it exactly right:

The harm to the public will accrue more slowly under this deal, but the harm will occur.”

Posted by Paul Levy at 7/06/2014 

AN OPEN LETTER AND A WARNING TO EMPLOYERS EVERYWHERE

Tuesday, July 8th, 2014 12:41 PM by Christopher Gregory

American employers are the biggest source of private funding for this nation’s overheated healthcare system. Last year, seven out of ten CFOs said health care costs are their biggest concerns.

The tectonic plates of health care continue to grind relentlessly on bottom lines everywhere – employers, consumers, and government. At what point will the resulting damage cease? Right now, it doesn’t look too good.

A July 6 New York Times article, wrote about the mistake that was made when the Massachusetts General Hospital merger with Brigham and Women’s Hospital was allowed, forming Partners Health Care. The article includes:

“Investigations by the state attorney general’s office have documented that the merger gave the hospitals enormous market leverage to drive up health care costs in the Boston area by demanding high reimbursements from insurers that were unrelated to the quality or complexity of care delivered.”

In a Bloomberg article written by Shannon Brownlee and Vikas Saini, MD, entitled Bigger Hospitals Mean Bigger Hospitals with Higher Prices. Not Better Care, the authors included the following:

“The Dartmouth Atlas of Health Care and other sources have shown time and time again that some of the biggest and best-known U.S. hospitals are no less guilty of subjecting patients to useless tests and marginal treatments.”

The authors go on to write:

“The disconnect between price and value has many causes, but the flurry of mergers and acquisitions in the hospital industry is making it worse. Hospitals command higher prices when they corner market share. They gain even more leverage when they gobble up large physician practices.”

I want to emphasize a point that has been written about repeatedly, and was reiterated in a conversation with someone at what I consider the nation’s leading health care data analytics firm. That point is that – everywhere – in both large and small markets, hospitals are seeking to consolidate their market influence and, accordingly, their ability to command pricing. Here in Dallas Fort Worth, that is exemplified by the merger of Baylor and Scott & White, and the just announced affiliations all over Texas through the Texas Care Alliance. Is a Texas-sized black hole forming?

In this commentary, I want to directly address employers. My message is this – price is an illusory game that many will play for profit. There are those firms around the country that will woo employers with promises to deliver great pricing and pricing transparency. One of them in town is aligning contracts with Baylor Scott & White. Will that become a pricing boondoggle for employers as Baylor continues to corner the market? Will pricing hyperbole in DFW fix the problem(s) for major national employers with employees all over the U.S.?

I won’t snub my nose at any attempts to secure pricing concessions. If an employer or vendor can get a pricing concession on big ticket spine surgeries, or joint replacements, or cardiac procedures – great. (As an aside, how much better can an outside vendor do than what the prime insurers have already gotten locally?)

The message is this – still. Gaining control over spiraling health costs is not just about  the price of an episode of care (e.g., a spinal procedure). It’s how many costly episodes are taking place unnecessarily, wastefully and potentially harmfully.

 

 

 

 

WILL THE REAL EVIDENCE-BASED MEDICINE PLEASE STAND UP

Tuesday, July 1st, 2014 12:20 PM by Christopher Gregory

In the past, I’ve written about our infatuation with the sheer volume of care we deliver – the excesses, waste and harm that occurs from the healthcare black hole that swallows up nearly 20% of our GDP. I’ve referenced a number of reasoned physician thinkers about this problem – people like Drs. Bob Kramer, Richard Young and Vikas Saini. They all adhere to the belief that we do way too much because doing way too much in a fee-for-service setting has conditioned a broad cross-section of the healthcare environment to seize upon the business model-driven revenue opportunities.

Where have we gone wrong?

A recent British Medical Journal article recounts a brief history of evidence-based medicine, and asks whether 20 years in, the movement is “in crisis.” While the focus on quality evidence has had remarkable successes, the authors suggest that the trappings of the movement have been seized upon by pharmaceutical manufacturers and other vested interests that don’t prioritize good science and patients’ needs.

Evidence-based medicine is an intellectual community committed to making clinical practice more scientific and empirically grounded and thereby achieving safer, more consistent, and more cost effective care. Responding to the BMJ paper, Bill Gardner of The Incidental Economist writes that it is the clinical algorithms that reduce patients to “a relatively small number of critical factors” that can make evidence-based medicine appear to be management-driven rather than patient-centered. These algorithms often don’t apply well to patients with multiple chronic illnesses  and such complex patients are a common and important challenge in modern medicine. Dr Young has written extensively about that very problem of multiple health issues from the perspective of a family physician/educator. That complexity means it is important for doctors to learn not just the algorithms, but also how to apply them. Seeing patients as more than a single diagnosis to be treated is a critical step toward improving outcomes.

I’ve used this example before, borrowed from Dr. Abraham Varghese (Professor and Vice Chair for the Theory and Practice of Medicine) at Stanford. Tongue in cheek, he wrote that the algorithm approach will see a patient arrive in the ER with a traumatically amputated limb, but it won’t be confirmed until an MRI and orthopedic consult confirms the limb is missing.

To restore the soul of evidence-based medicine, the BMJ authors suggest that it’s important to return the patient to the center of practice: evidence is essential, but it’s only useful when it helps patients make good decisions, and produces better outcomes for patients. Their list of “What is real evidence-based medicine, and how do we achieve it” is a roadmap to bring us much closer to the right care.

What is real evidence based medicine and how do we achieve it?

Real evidence based medicine:

  • Makes the ethical care of the patient its top priority
  • Demands individualized evidence in a format that clinicians and patients can understand
  • Is characterized by expert judgment rather than mechanical rule following
  • Shares decisions with patients through meaningful conversations
  • Builds on a strong clinician-patient relationship and the human aspects of care
  • Applies these principles at community level for evidence based public health

Actions to deliver real evidence based medicine

  • Patients must demand better evidence, better presented, better explained, and applied in a more personalized way
  • Clinical training must go beyond searching and critical appraisal to hone expert judgment and shared decision making skills
  • Producers of evidence summaries, clinical guidelines, and decision support tools must take account of who will use them, for what purposes, and under what constraints
  • Publishers must demand that studies meet usability standards as well as methodological ones
  • Policy makers must resist the instrumental generation and use of “evidence” by vested interests
  • Independent funders must increasingly shape the production, synthesis, and dissemination of high quality clinical and public health evidence
  • The research agenda must become broader and more interdisciplinary, embracing the experience of illness, the psychology of evidence interpretation, the negotiation and sharing of evidence by clinicians and patients, and how to prevent harm from overdiagnosis.

Dr Kramer has said it simply this way for years when it comes to delivering medical care: “do the right thing, for the right patient, for the right reason, in the right place, at the right time and at the right cost.

 

THE NEXT DIFFICULT STEPS

Monday, June 30th, 2014 1:18 PM by Christopher Gregory

We continue to face an ongoing, glaring problem with our health care system. We do too much early diagnosis, treatment, prescribing and we do too many procedures. Vast amounts of unnecessary care we deliver remains highly profitable to the entire spectrum of providers and suppliers, but excessive, wasteful and damaging to both our physical and financial health.

According to a PwC Health Research Institute analysis, it is predicted that 2014 and 2015 healthcare spending will be significantly higher primarily because the health sector appears to be reverting to historical patterns of rebounding following an extended economic slump. Whether spending more freely occurs because of the improved economy or because more people have insurance provided through the Affordable Care Act, consumers have already powered a noticeable increase in spending during the first quarter of 2014. That is expected to continue through next year.

Some factors may help moderate that growth. More demands will be made for the $2.8 trillion health industry to become more efficient. Note that a big drag on meaningful efficiency will continue to be the woefully inadequate progress on effective information exchange. Doctors and hospitals are (grudgingly) adopting standardized processes that offer the prospect of better value for our health dollar. “At-risk” payment models (aka ACOs) that hold healthcare providers financially accountable for patient outcomes are touting a positive effect. Since these models are typically collaborations between insurers and health systems seeking to consolidate markets, they and their claims should be regarded cautiously.

One tangible sign of shrinkage: growth in healthcare system administrative and clinical employment has declined since 2011.

And major purchasers—namely the federal government and large employers – have attempted to tamp down the spending growth rate analyzed in this report, in part by demanding greater value and in part by shifting financial responsibility to consumers.

BUSINESS IMPACT

For healthcare organizations, a stronger economy and millions of newly insured Americans pave the way for an uptick in spending growth. That may be a welcome respite from recent years of budgetary pressure. But the fact that health spending continues to outpace GDP underscores the need for a renewed focus on productivity, efficiency, and, ultimately, delivering better value for purchasers.

As employers continue to shift financial responsibilities to their employees, it is hoped the cost-conscious consumer will exert greater influence in the new health economy. Savings that come from standardization can help position health businesses for the value-driven future. But real success and profitability will go to the insurers, drug makers, and healthcare providers that deliver highly personalized customer experiences at a competitive price.

In conversations with employers, there is a persistent and perhaps misleading notion that pricing transparency offers a silver bullet. That notion is being heavily marketed by entrepreneurial firms. They reason that by shifting the burden of more health care costs onto a population of better informed and more cost-conscious employees, employers will succeed in bending their spending curve downward.

The recent paper by the WestHealth Policy Center, “Healthcare Price Transparency: Policy Approaches and Estimated Impacts on Spending” predicted that consumers are likely to save only $18 billion over the next 10 years from price discovery and subsequent changes in behavior, while employers and providers are likely to achieve another $82 billion or so. That is $100 billion in savings over a ten-year period when we are projected to spend $40 trillion on healthcare. Such relatively small progress is not nearly enough when the central question remains, i.e., are many treatments or procedures even necessary?

This May, The Health Care Cost Institute (HCCI) announced that it will work with three of the nation’s largest health insurance companies, Aetna, Humana and UnitedHealthcare, to develop and provide consumers free access to an online tool that will offer consumers the most comprehensive information about the price and quality of health care services.

The independent, not for profit HCCI will create and administer this information portal, which is expected to be available in early 2015. The health benefit companies will provide information on health care costs to HCCI, which will maintain and manage access to the information in a highly secure, protected environment. Other major carriers have expressed interest and HCCI expects additional carriers to participate in the near future and be part of the initial release in early 2015. Participating insurers will continue to offer their own cost transparency tools and solutions as well. The cost data will be supplemented with quality and other information to provide consumers a transparent and comprehensive destination to make more informed decisions about health care.

Health care costs have been rising more than three times as fast as wages. Official estimates project that U.S. health spending will reach $4.7 trillion by the end of the decade – an 80 percent increase from $2.6 trillion in 2010 – underlining the need to better understand the prices of health care services to help make decisions and choices about purchasing care.

Hard Answer

The hard answer and a necessary solution to healthcare spending is that we must reduce the volume of unnecessary, questionable care. It is not just the price of care, but the number of care units being delivered: if the amount of excessive care isn’t curtailed, we will maintain a course to increased spending. It is critical to emphasize that discussion about engaging employees is common with benefits leaders who struggle to reach those who are most likely to be big consumers of healthcare services. In order to achieve real and lasting results, employees should now be required to follow specific protocols before undergoing certain procedures that have been shown to be overdone.

BridgeHealth Medical will soon offer employers a targeted approach for back problems and other musculoskeltal conditions which too often end up in expensive procedures that produce little if any beneficial outcomes. BridgeHealth will provide an additional module to its surgery benefit management program that makes it possible for employers to require that employees follow a specific triage protocol in order to qualify for the highest level of benefits available under an employer’s health plan. Once the protocol has been completed, the employee may proceed with a recommended surgery, but it has been demonstrated that many unnecessary, costly and potentially debilitating procedures will be avoided while the employee quickly returns to work enjoying recovery from pain.

In the near future, protocols like the one above will likely extend to other areas of care where treatments and procedures are overdone, such as invasive cardiac treatments and joint replacements

Steering to quality outcomes by means of mandated steps is a somewhat daunting proposition for employers. Because other steps to “engage” employees have met with minimal success, the time for more stringent required steps is at hand.     

THE OPPRESSION OF INFLUENCE

Wednesday, June 11th, 2014 5:02 PM by Christopher Gregory

crushed under the weight

Health care has incredible value to us when it serves the nobler purpose which, considering all of the advances that have been made by medical science, is caring for and healing in the best possible ways we can. As my friend Dr Bob Kramer has said so many times in his Kramer’s rule – “doing the right thing, for the right patient, at the right time, in the right place, for the right reason(s) at the right cost”.

Particularly troubling to good health care is the pervasive and resource devouring business juggernaut that we call the health care system – that inundates, confuses  and overwhelms target audiences, fueled by profits. Its target audience is everyone and anyone who readily pays for the vast expanse of healthcare services we offer – patients, employers and we the people (aka the government).

No nation on earth spends more on health care than the United States. Yet we are not getting anywhere near a good return if you consider studies which show that more than half of our annual health care spend – equal to 9% of GDP or our 2012 budget deficit – provides zero value.

What then explains this thriving, expanding economic engine that makes massive amounts of money by delivering such an inefficient yield on our investment?

I titled this commentary The Oppression of Influence because of what I believe is a dominant villain that fuels this black hole we call health care – the all encompassing, pervasive influence that the business of health care has in all facets of our lives and our economy.

Consider hospitals and hospital systems. They are everywhere and more keep sprouting up. In Dallas Fort Worth, it seems like only a short time interval between announcements by some hospital system that it is opening a new facility somewhere. It often feels like turf wars for patients. Will each new suburb or neighborhood end up with its own hospital? The hospitals are doing a pretty enticing  job of portraying themselves as your friendly neighbors, and in some affluent areas are marketing themselves like a Ritz Carlton hotel, i.e., “you won’t want to leave our hospital”. C’mon – really?

We put doctors in charge because they always have been and because we are supposed to trust them. The doctor- patient relationship has increasingly been diluted by suspicion about financial motives, which is a shame. If a patient is told by a doctor that he needs a heart procedure, or a spinal fusion, or a new titanium knee or an obscenely expensive cancer drug treatment – what does the average patient know other than what he hears? Some doctors influence us for monetary gains – there are well publicized examples about doctors who have succumbed to greed and some of them are now in prison for their crimes. Then there are physicians who may lack the full requisite expertise to knowledgeably justify their recommendations for doing something, but doing something is still OK for them. And where are these doctors now? Current hospital system models put many in the hospitals and/or employed by hospitals. Because that drives hospital revenues many physician decisions can be influenced by those relationships.

Consider the drug companies and their television marketing blitzes – direct to consumer marketing. They worry us ominously about diseases or defective body parts, tout their cures and tell us to lobby our doctors. Then they scare the heck out of us with all of their legalese caveats about things that can go wrong. And yet, patients gladly take pills or get injections or do whatever else delivers the drugs.

In government, health care has a wickedly effective way to drive decisions and exert influence. In 2009, as the Affordable Care Act was formulated, health care organizations fielded eight lobbyists for every Congressional representative, providing an unprecedented $1.2 billion in campaign contributions to Congress in exchange for influence over the shape of the law. These activities go on continuously behind the scenes and ensure that nearly every health care law and rule is structured to the industry’s advantage and at the expense of the common interest. Congress is a happy hunting ground for influence peddling.  

So here it is. Hospitals grow everywhere and increase profits through growth and acquisition of physician feeders. Doctors make more money because they can tell patients what they want them to know and patients believe them. Drug companies saturate us in the media and convince us our lives will be better with their drugs. Device manufacturers tell us how much a new knee will improve our lives and insurance companies soothe us with stories about how much they care.

Employers are by and large the largest source of fuel for these healthcare engines.  They offer insurance, so too often the patient mantra is – “don’t worry, insurance pays for it”. Employers then get reamed for massive amounts, and they pay it. When it gets bad enough, they have passed on some more of the pain to employees. They’ve tried incentives – positive and negative, to no avail. Unfortunately, many employers have largely missed golden opportunities to sieze control in their heavily populated areas where the major health systems have market presence and influence. It is not an easy task to engage in real collaboration to be sure, to work with other employers and use their combined purchasing muscle to counterweight the influence of providers. But what else has worked to stem the continued rising costs of care?

And lastly, patients remain mostly uninformed and vulnerable because the numbers tell us they are not aggressive about becoming better prepared to make decisions and choices. They are comforted when they have insurance to cover costs, and bankrupted when they don’t.

We could do better. Do we want to?

 

 

 

 

 

 

 

THE MAGNITUDE OF THE OVERDONE

Tuesday, June 3rd, 2014 12:27 PM by Christopher Gregory

After a while off, I’m going to reflect a bit. I’ve chewed on the subject of healthcare for a very long time – going on 40 years and I’ve had an opportunity to develop a lot of my own perspectives.

Medicine is a money game (really?)

Read just about any publication that critically evaluates health care and you’ll read that the U.S. is not the best at delivering care to our people, all the while (over)spending massive amounts while proving just that point. The list of abuses tied to the almighty dollar are profuse and obscene. Too many providers of services easily overdo tests, over-diagnose, intervene too early and do too many procedures. We even insist on care when care is no longer effective and worthwhile. Too many senior citizens are dying in hospitals hooked up to machines that do no good and only prolong suffering.

We have vastly overpopulated the ranks of specialty medicine with doctors aspiring for big(ger) incomes, and have largely routed many consumers to the specialist doctors who charge many times more (and do much more) than qualified and capable family doctors. We have created a society consumed with body parts medicine. Got a headache? Go see a neurologist. Got a rash? Go see a dermatologist. Low back pain? Go see a spine specialist. Why not – insurance pays for it.

Are you overweight? You don’t have to diet and exercise – just See Dr Jones for bariatric lap banding or a bypass. Or take these pills and you don’t have to exert yourself to magically lose those pounds. Drug manufacturers are having a field day pushing all their cures at us straight out of our televisions (and scaring the hell out of us at the same time). Depressed? Here’s a cute little cartoon commercial about a drug that will make your current depression drug work better.

Over and over, guys like Tom Emerick, Terry White and Drs Kramer, Young and Saini focus much needed attention on avoiding avoidable and wasteful spending.

The real elephant for change is in the room    

Brian Klepper, PhD is the new CEO of the National Business Coalition on Health. Nonstop, he has advocated for employer intervention in this chaos we call healthcare. His message has been clear: the only force big enough to counterweight the influence and the penetrating fiscal impact of the healthcare environment is all of the businesses that pay for healthcare – in a united effort.

Jim Landers of the Dallas Morning News has done exceptional writing about healthcare for a long time – he probes areas that need probing. Just recently, he did a commentary about this obsession (my slant) we’ve developed for transparency. Transparency is something the providers (e.g. hospital systems) are trotting around in all of their ballyhoo about ACOs, and many other entrepreneurs are crowing about transparency as the magic bullet. This is all market-cornering hyperbole. In his last column, Jim referenced a recent report that says the cost transparency fervor will generate about 100 billion of savings over the next decade. Problem is, we’ll spend about 40 trillion during that same period. Yes, there are transparency devices out there, and a lot of purveyors are making some serious bank selling that to employers. Problem is, as ABC News disclosed last week, less than 5% of consumers even access those resources.

The elephant is distracted  

We (as a national group of thinkers) have tried to instigate change – to fire up a group of employers in the Dallas Fort Worth metropolitan area to unite and to start calling some of their own shots about the cost and quality of healthcare. We had to try this with the human resources and employer benefit community from DFW employers. There was one strong voice for leadership – one VPHR and Benefits Manager who invited colleagues and called for unity. I don’t know if outright failure is the best way to describe the results, but it wasn’t for lack of vision and trying by one corporate bell cow who believed this could happen.

So do we blame HR and benefits people? At first, I though they were a dismal flop (save one). But maybe we should lighten up on them because healthcare isn’t the only headache these individuals have to endure. Maybe no one gets more hail on their roofs than the HR and benefits areas and I know they are racing around the country putting out all kinds of fires. As much as they might like to make fixing the problems of corporate fiscal hemorrhaging on healthcare their sole job, that isn’t possible. Unfortunately, the safety net these folks have to rely on is the corps of health care consultants out there. Not my opinion alone here, but a shared opinion among some high quality thinkers is that these consultants are often clueless, and often peddle limited or ineffective ideas (like wellness). Lot of good money to be made doing it that way.

And so, we’ll just thank those employers who took time and who listened. We understand. At the same time, where to from here as the health care cost bleeding keeps on?

Milwaukee and southeastern Wisconsin taught us a lesson. So did Savannah. CEOs got the job done in their neighborhood, because CEOs spearheaded the effort to get it done. As a result, health cost trends for employer members in the Wisconsin Business Health Care Group have remained incredibly low for years. Sadly, in DFW, not one CEO was probably even aware that this effort was being incubated (perhaps save one).

At the last meeting of DFW employers, attendees heard a presentation about a workable claims warehousing-analytic strategy to drive the identification of a high-performing hospital/physician network. It never happened. Afterwards, the director of the respected data analytics firm that we invited to present the strategy told me that what derailed this opportunity to reshape DFW healthcare was the difficulty for attendees to reconcile themselves to the tough decisions that would need to take place. It was never going to be easy. This was also confirmed in a conversation with the VPHR of one of the firms attending the presentation. CEOs might have made the difference.

So here we are. Intelligent, well-informed thinkers and voices around the country telling us that the financial tar pit we call health care is a result of the chaos, confusion and lack of purpose that allows the health care environment to maintain its open season on our national and individual pocketbooks.

 Where to from here?

 

 


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