Thursday, March 19th, 2015 1:45 PM by Christopher Gregory

The Employee Retirement Income Security Act (ERISA) is federal law that has formulated rules and minimum standards meant to protect retirement and health plan participants.

An important part of ERISA describes the fiduciary duties assigned to select individuals at companies that offer health insurance benefits to their employees. Typically, these are employers that provide health insurance through plans that are self-funded.

Recently, I spoke with ERISA attorney Adam Russo of the PHIA Group in Boston to discuss how his firm supports health plan sponsors, with an emphasis in the area of fiduciary conduct.

In a recent paper he authored: Fiduciary, Fiduciary… Who’s Got the Fiduciary?, the following paragraph caught my attention.

“In these cases, and others like them, fiduciaries are recognizing their obligation to protect their plan participants, prudently manage plan assets, and forgo the easy path in exchange for the difficult, but rewarding, avenue of fiduciary responsibility.  The problem is that there are hundreds of thousands of plan fiduciaries that are not doing these things. 

I have written about previous lengthy efforts that were aimed at encouraging large employers in the Dallas Fort Worth area to consider steps that would lead the way to more economically effective bargaining with the DFW area health industry. Recapping those steps were: 

  • Commitment to a data collaborative, i.e., warehousing employer claims data;
  • Analyses of real time claims information to identify how and where dollars were being spent on health care among collaborating employers; and
  • Following data analyses, designate and target those top-performing area health care providers (hospitals and physicians initially) with whom negotiations would take place aimed at the formation of a narrow, high-performing network.

Representatives from prominent DFW employers have met and listened to compelling information about collaborative results in a large, highly successful employer coalition in Wisconsin. They’ve heard from a leading health data analytics firm about how data could be mined to identify information needed to bargain with select providers identified as deliverers of high quality and cost-effective health care. In sum, meetings and presentations were intended to convey the message that working together, prominent DFW employers could form an effective economic counterweight to the influence and control of the local health care industry.

No collaborative action was ever taken by these companies. Instead, followup efforts with these employers signaled their intentions to keep working independently in their efforts to control health care costs. The question most frequently asked was … why, when so much more leverage could be exerted by employers who collaborate?

Around the country, colleagues and experts in health care reform efforts have told our DFW activist group that the main weakness in our efforts was the attempt to convince employer HR and benefits representatives to take the actions described. Candidly, we are told that HR/benefits personnel are historically poorly inclined or motivated to pursue innovations viewed as outside-the-box. Furthermore, they are heavily dependent on and easily dissuaded from taking such actions by their insurance companies and consulting firms, because (to insurers and consultants) such initiatives would threaten those firms’ business with employer clients. (We have been told by data experts that even when compelling data is at hand, major corporations have done little with it.)

Subsequent efforts to regroup and take the same message to area CFOs (who many believe should have been the target group in the first place) met with little success. CFOs told us “they have people on it”. Unfortunately, the people “on it” are the HR and benefits personnel from these employers.

That said, a burning question emerges. What are legitimate employer excuses for not taking a hard road described above to solve the dilemma of high cost? If the consultant discourages the employer because the consultant feels threatened, does the consultant bear part of the blame? What about the insurance company that resists data cooperation for self-serving reasons?

Who are the fiduciaries, and where does the buck stop?







Monday, March 2nd, 2015 6:55 PM by Christopher Gregory

We live in a healthcare maze. At every turn, we face another direction that is supposed to lead us to the prize that has been so elusive: quality, affordable healthcare.

The prize is health care delivered for the right reasons, at the right times, in the right places, by the right doctors at the right costs (Kramer’s Rule). .

I recently received an email from a software company (Software Advice) that speaks to the heart of a most vexing problem in health care. It referenced a report they developed (Impact of Shared Decision-Making on Doctor-Patient Relationship) in collaboration with the Mayo Clinic’s KER (Knowledge and Evaluation Research) Unit to explore how shared decision-making (SDM) improves engagement and quality of care by utilizing the greatest untapped resource in healthcare — the patient. Think about it. At every turn in a given patient’s healthcare maze there is a constant – the patient. What prevents a patient from wandering aimlessly in a maze?

Dr Richard Young tells me that shared decision making is at the heart and soul of the way family physicians provide comprehensive care to complex patients and most family doctors don’t need any special programs or education on the subject. He goes on that the private practice doctors he has observed would do this with the first problem or two in a clinic visit with a patient. But for a patient with multiple issues (e.g., older patients), everything after that was Band-Aid medicine — quick fixes without much thinking.

Dr Young says he is flummoxed at how much experts say and write about the time required for real conversations. They acknowledge that family doctors are pressed for time, but offer nothing in their proposed solutions that says family physicians should be paid for the time to comprehensively listen to and negotiate the care they deliver to patients.

There have been numerous solutions proposed for our broken system, e.g., ACOs, PCMHs, population management, CDHPs, wellness, clinical integration, ObamaCare, etc. Sometimes, it seems we’re drilling in wrong places. In our searches for cost-effective, quality healthcare, we’ve been coming up with dry holes for a long time. As a result, patients have wandered around in their own mazes while the system keeps spinning off acronyms for the newest turns.

Imagine doctors and patients having sufficient time to deal with all of a patient’s health issues. Will a specialist be the right one to deal with complexities outside of his/her specialty? 

Primary care – family physicians are the doctors who should have comprehensive knowledge of their patients – book, chapter and verse. And yet, with all of the complexities that may be present, the family doctor is financially forced to limit the time and attention that can be given to patients’ myriad health issues.

Imagine how much better our health and financial resources would fare if patients came out of their doctors’ offices well-informed and confident that they had reached comprehensive and mutually agreed upon goals for treatment. Maybe then we might not see studies which report that 48% of Americans think that more expensive health care means better health care.

Better informed patients should be able to reach better decisions. They should also be better able to save themselves and the system a lot of money en route to better care. Would an employee covered under a high deductible health plan have any interest in saving a great deal of money on a knee replacement? Would the employee consider having a knee replacement done at a top quality facility in Oklahoma City that ends up costing $19,000 for the entire surgical package (at greatly reduced employee cost) compared with the average $46,000 cost of a knee replacement in Dallas subject to deductibles and copays?

We must populate our system with physicians who comprehensively know their patients and can take the time to guide them through the mazes. We can have more patients who have a better feeling about their decisions because of shared decision making. The solution is to pay family physicians better for the time required to effectively address all health issues, instead of leaving some matters to the maze.

Next, patients can make smart, informed decisions and reduce their costs and their employers’ cost by learning where they can go for quality treatments at fully transparent prices that are far less costly.

The point to all of this is that the patient must be seen as a critical working piece of the decision making process, and not a passive entrant into the maze.




Wednesday, February 4th, 2015 9:20 PM by Christopher Gregory

Two weeks ago, Dr Bob Kramer and I visited one of Dallas’ iconic companies to meet with their Chief Financial Officer, Chief Human Resources Office and Benefits Officer. Our purpose was to continue a mission that was started in February of 2013, when learned colleagues from around the country came to Southern Methodist University to address several prominent employers about the facts, myths and challenges that are costing businesses and consumers vast sums while delivering substantial amounts of questionable value care.

That SMU audience was comprised of Human Resource and benefit representatives. Among our  panel of speakers was Brian Klepper, PhD, who is the CEO of the National Business Health Coalition. Brian summed up the central theme of our symposium, i.e., DFW employers must work cooperatively and collaboratively to overcome the immense influence of and costs levied by the area healthcare industry. Closing comments previewed steps that could be taken.

Several months later, a followup meeting was held to discuss steps that could lead to a collective employer-sponsored health care system. An employer coalition executive traveled here from southeastern Wisconsin to explain in detail how prominent employers there had tamed their ballooning costs through collaboration. Next, presenters from a leading health data firm told attendees that data analytic tools required to identify best in class providers and empower coalition bargaining were readily available if employers would agree to contribute their health care claims data to a data warehouse and fund the analytics study necessary to identify and bargain with hospitals and providers who have been shown to provide the most cost-effective, quality care.

The message was clear: it had been done, it can be done and the tools to accomplish it in DFW are available.

In the ensuing months, it became clear that there was no interest in the opportunity to form a collaborative employer counterweight to the grip of the DFW healthcare industry. Company representatives exhibited satisfaction with their status quo, i.e., each employer working independently to fix its own cost and quality problems. They had chosen to rely on provider systems hyperbole, insurance company promises and a handful of benefit consultants opposed to working in a collaborative project. 

The consensus opinion among our colleagues and other coalition leaders around the country was that efforts to engage and challenge HR and benefit individuals to pursue such proposed collective action had been and would likely continue to be unproductive. The employer personnel that might be catalysts for the collaborative actions we proposed were not inclined to move ahead on the initiatives we presented.

We subsequently attempted to restart our efforts by reaching out to prominent employer CFOs. An effort to convene a meeting of CFOs was not successful. Instead, CFOs deferred  to the very group of individuals who had previously demonstrated little interest in initiatives and innovation. There was no apparent C-Suite appetite for thinking outside the box.

As Dr Kramer and I visited with the senior executives of this well-known company in search of a CFO bell cow, it was apparent they had little interest in what could be accomplished. Instead, their CFO chose to critique our “sales” presentation. He and the other executives did not hear the message and they were unable to grasp the possibilities.

That is what we and others face with the majority of employers in this country. Brian Klepper has told us this happens around the country. Tom Emerick (who ran the WalMart health plan for years) tells us the same thing. Physician colleagues who are  committed to making employer-bargained cost and quality a reality shake their heads in disbelief.

Are efforts like these fated to fail due to a lack of sales polish? Is it possible that passionate and committed advocates for cost-effective, quality health care in places like DFW can succeeed without a high powered marketing gimmick? With a $3 trillion dollar price tag, health care is the most economically pervasive industry in this country. Something better than SOP approaches needs to occur.

Leave polished sales pitches to the insurance companies, consultants and wellness purveyors. We’ll continue with our efforts to  seek out and engage with innovative minds when and where we can find them.         



Tuesday, January 13th, 2015 2:46 PM by Christopher Gregory

In Julius Caesar, Cassius tells his friend Brutus “the fault dear Brutus is not in our stars, but in ourselves, that we are underlings”.

Here, an argument was made that in the best interest of the public, Julius Caesar must be stopped from becoming monarch of Rome.

Who is today’s Brutus who must be convinced that profit-driven healthcare run by obscenely paid business moguls in this country’s current system must be stopped if we are to prevent our economy from being driven off the cliff?

Consider logistics. The American healthcare system collectively – hospitals, physicians, drug companies, insurance companies, medical device manufacturers, they all constitute this giant financial matrix that has ensnared our economy in a spider web that is spun on threads of excessive, unnecessary and overpriced care. The stealth and tensile strength of this highly efficient financial web largely stems from its hidden transparency. The lack of transparency makes the web difficult to see and understand – for many until it is too late.

The public is, for the most part, the poorly informed and unwitting prey that flies into this web of confusion. For individuals covered by healthcare plans (employer and individual plans, now including ObamaCare), the ease with which this takes place is facilitated by the comforting notion that they don’t have to worry about making informed choices, i.e., choosing doctors and facilities wisely and well and taking steps that allow them to effectively participate in the cost and quality outcomes that should govern decisions.    

Nero fiddled while Rome burned. Who in a position to do something about healthcare is fiddling today?

After numerous discussions and initiatives with expert colleagues around the country, the collective opinion arrow points at American business communities which simply can’t be bothered by efforts required to change their status quo mentalities. In this instance, the effort should be simply powered by a strength in numbers mentality. If the leading employers in any major metropolitan area were to band together in a common cause to create an efficiently administered bargaining unit powered by information, population and prestige, they could carve out a high-performing narrow network of providers (facilities and physicians) with whom they could bargain for packages of services that are 100% transparently priced and priced well below the joke that is today’s norm for charges for services.

What prevents this from happening? Why all the fiddling?

Corporate hubris and easy acceptance of the status quo is the answer, as well as steering wheels in the hands of the wrong business decision makers. Who puts the blinders on is an easy question: it is all those who profit from the lack of clear vision on the part of deep pocket companies with health care benefit plans. It is employers who still foot the lion’s share of health costs and who feel the crunch of healthcare costs on their bottom lines. Employers are mollified and hindered by insurance companies, hospital systems and consultants who dread the notion of a united front under a single flag to conquer local costs. For them, dealing with a well-oiled collaborative effort powered by an awesome data analytical engine would threaten the loss of business revenues. For them, as long as the herd is scattered, there are opportunities for revenues from nonsense like wellness programs and empty rhetoric “groundbreaking ACOs” , and the feeble corporate bottom line fixes to be gained from consulting studies that favor pushing more costs onto employees under the guise of a “skin in the game” cost control mentality.

As far as the out of control health care economy, the fault dear Brutus is everyone who is fiddling.


Wednesday, October 29th, 2014 2:32 PM by Christopher Gregory

Someone recently accused me of being blindly pro-physician because I didn’t jump into a chorus of condemnations that were being aimed at doctors. Frankly, it didn’t shock me. In the 40 years I’ve worked with physicians, the respect and admiration for members of the medical profession have deteriorated badly.

Admittedly, many physicians are not immune from the siren song of big money, so the public’s anger over a notion of money-driven doctors is understandable. Witness the streams of newly-minted physicians electing to pursue high dollar specialties over primary care. We have maintained a free-for-all payment environment that makes it easy for physicians to generate big bills full of myriad services. Bills today are longer, less transparent and contain bits and pieces of goods and services previously not itemized and charged.

There are well-publicized, troubling stories about doctors who expose patients to unimaginable harms in the pursuit of profits. These are audacious acts of greedy individuals lacking a moral compass. It is unfortunate that these predators exist and give the profession a black eye.

Untold stories garner less attention –  stories about doctors supremely frustrated by impediments to good doctoring. Many of these doctors champion health care that would dial down the hyped obsessions with premature, unnecessary and wasteful care. I work with some of them.

If costs and confusion in our healthcare system are targets, a spotlight should be focused on businesspeople who have seized control of major hospital/health systems and run them like manufacturing companies. Theirs is a domain of maximized profits, efficiencies and peak productivities. In the process, physicians have become cogs in the business machinery. One satirical commentary recently reported about a physician who happened to read a hospital executive business manual focused on “controlling” doctors. Maybe satire? Maybe more truth than satire?

What resonates throughout the healthcare system is a feeling that doctor-patient relationships have been marginalized. Who hasn’t felt that their doctor entered the exam room with a stopwatch? Patients don’t like it – especially older patients who might have a list of ailments to address. Worse, there are doctors with whom patients have never had the briefest of interactions, yet who bill patients vast sums for services delivered while the patient was unconscious. Yes, it happens and there are companies out there that teach doctors how to do just that.

Good doctors want more time for their patients. They don’t want more paperwork (hello ICD-10), efficiency experts running their days or hospital employers leaning on them with production quotas.

Good independent doctors want a fair shake when it comes to insurance reimbursements, not meager amounts compared to large practices with plum contracts. And so important, we need to find ways to allow intuitive primary care physicians to be thorough, comprehensive and paid fairly when treating patients who come to their doctor’s office with a list of medical needs.

Then do we wrest control of our healthcare industry from the profiteering executives who execute business models that penetrate and saturate our neighborhoods and lives leading to cost proliferation? To whom should control be given?

Having advised physicians for a number of years on matters financial/organizational, my first thought would be to avoid turning the wheel over to them to run major systems. Medicine is their forte, not running business empires. Put doctors in charge of patients time and quality care and reimburse them fairly. Most doctors afforded sufficient time with their patients, less bombarded with paperwork and paid rightly for the time and the years of work it took to get there – those will be happy doctors.

Who then? Perhaps somewhere in the fictitious middle lies an evidence-based system that is cost-effectively administered, allows quality doctor patient interactions and pays well.

Maybe that’s what Physicians for a National Health Plan are talking about.




Friday, October 24th, 2014 2:46 PM by Christopher Gregory

With permission, I am re-posting an open letter written by Dr Vikas Saini. Dr Saini and our colleague Shannon Brownlee at the Lown Institute have launched the RightCare Alliance, which is an action call to members of the medical profession. Physician members of the Alliance have committed to reducing overuse and underuse in our healthcare system while preserving the vital relationship between physician and patient. The funding appeal at the close is an appeal from the Lown Institute, to underwrite the costs incurred for physician engagement meetings around the country. I encourage your support of this worthy cause and the call to our nation’s doctors. 

lown 2

Dear Friend,

Today we are facing an arms race in medicine. It is a race for technology, market power from hospital consolidation and the mass industrialization of patient care. The medical profession, once revered for its marriage between compassion and science, is now encouraged to manage the business of sickness.  

The health care system is on the cusp of a major transformation. New delivery and payment models are being offered up in the hope that they will reduce wasteful spending, improve coordination and remove incentives for delivering unnecessary services. These shifts are necessary but will not lead to better care or better health without attending to the art of healing. 

Instead, pressure on clinicians to improve efficiency will limit time for care, further eroding the doctor patient relationship and robbing health professionals of what they love most, and patients of what they want beyond efficiently delivered medical technology.

There is still time to change the course of medicine. The Lown Institute promises to be the moral compass during this dynamic period of change. We are assembling a national network of impassioned medical students, residents, senior clinicians, patients and community groups who have joined us in building the RightCare Alliance, a movement dedicated to ensuring that human presence is central to scientific ministrations. Members of the RightCare Alliance are creating programs for transforming medicine, by addressing issues of overuse and underuse of our existing healthcare system and working to ensure that the heart of medicine is preserved over the business of healthcare.

We invite you, too, to be part of this growing movement. Together we can create a just, effective and caring healthcare system, sustainable for many decades to come. But we need your support.

Now more than ever, your donation will have impact. A gift of $50, or any amount you are comfortable giving, will help us continue to organize across the country. Please visit our donation page here to contribute.

Thank you for your help in the past, and for your commitment to the Institute’s work in the future. I deeply appreciate your support.  



Vikas Saini, MD


Lown Institute







Friday, October 10th, 2014 10:42 AM by Christopher Gregory

My previous commentary followed last Sunday’s 60 Minutes interview of two oncologists who spoke out against the pricing of cancer drugs. What these two doctors exposed was the blatant profiteering companies like Sanofi and Novartis are getting away with. Now comes this……

In response to recent reports that the cost of some generic drugs has been unexpectedly rising at a rapid clip, two members of Congress have launched an investigation and asked 14 generic drug makers to provide data about what the lawmakers called the “escalating prices they have been charging” for generic medicines.

A recent analysis, for instance, found that half of all generics sold through retailers became more expensive over the past 12 months. And prices paid by pharmacies more than doubled for one out of 11 generics. In some cases, price hikes exceeded 1,000% and even topped 17,000%.

The reports add to growing concern about the increasing cost of prescription drugs, which has largely been confined to brand-name drugs – such as expensive new treatments for cancer, hepatitis C and certain rare diseases. Outrage erupted earlier this year, for instance, over the Sovaldi treatment for hepatitis C that is sold by Gilead Sciences at a costof $1,000 per pill, or $84,000 for a 12-week regimen.

I asked Dr Bob Kramer, pediatrician and child lung specialist for many years about Albuterol Sulfate, which is used to treat asthma and other lung conditions. The average cost for a bottle of 100 pills was $11 last October, but rose to $434 by this past April. He was shocked. And the antibiotic doxycycline hyclate cost $20 last October for a bottle of 500 tablets, but by April of this year, the price was $1,849, according to their pricing chart. Another example is the per-unit price for a 500 mg capsule of tetracycline, a common antibiotic. It increased from $0.05 cents to $8.59, a more than 17,000 % increase

“It is unacceptable that Americans pay, by far, the highest prices in the world for prescription drugs,” says U.S. Sen. Bernard Sanders (I-Vt.) in a statement. “Generic drugs were meant to help make medications affordable for the millions of Americans who rely on prescriptions to manage their health needs. We’ve got to get to the bottom of these enormous price increases.”

At the bottom of this is a Congress which has prevented the government from negotiating Medicare drug prices. In essence, the current law says that Medicare must pay whatever a drug manufacturer charges, plus a percent cushion. Which of course ripples throughout the pharmaceutical supply chain (i.e., private insurance).

And U.S. Rep. Elijah Cummings, (D-Md.) says “in some cases, these outrageous price hikes are preventing patients from getting the drugs they need.” He cited a report by IMS Institute for Health Informatics showing generics account for 29% of prescription drug spending and 86% of drugs dispensed in the U.S.

Consider the ripple effect of massive price hikes for generic drugs. Faced with the rising costs of generic prescription drugs, health insurers increasingly are turning to tiers and preferred lists on their formularies to keep costs down. Those strategies previously were used only for brand-name and specialty drugs. Experts say those approaches will increase out-of-pocket costs for patients and could make them less likely to adhere to drug regimens. If  generic medications become unaffordable, what might be an expected outcome if a patient stops taking or reduces the recommended dosage of a prescribed medication? Could a patient denied albuterol because of cost end up in the ER due to an asthmatic crisis? 

Can there be any doubt that the financial carnage being imposed on this country by the various health care sectors has reached insane proportions? Lives are subject to the whims of profiteers in all segments.




Monday, October 6th, 2014 12:26 PM by Christopher Gregory

This commentary will address a problem so pernicious, and in so many ways lacking in humanity, that we are being literally dragged into an economic black hole consumed with only one goal – profits all around for a healthcare system that is not close to being a good deal. In order to become more informed, there are news outlets like 60 Minutes, and reporters like the New York Times Elisabeth Rosenthal (Paying Till It Hurts) that should be seen and read by everyone because healthcare touches everyone.

Anyone watching 60 Minutes on Sunday, October 5th, saw jarring revelations from two cancer specialists. Drs Len Saltz at New York Sloan Kettering and Hagop Kantarjian at Houston MD Anderson spoke out about financial carnage when drug manufacturers get away with exorbitant pricing on cancer drugs. These are drugs desperately sought by cancer patients who are, in some instances, being financially destroyed in order to live a little while longer. And remember that the extension of life for a precious little while says nothing about the other glaring price that is often charged – quality of life. The ugliest scenario one could imagine is being financially devastated in order to endure in misery one’s final days.

WHY …. does the 2003 law mandate that Medicare must pay whatever a drug manufacturer decides to charge? As shown on 60 Minutes, the drug Zaltrap’s pricing was pure fiction, limited only by the extent of Sanofi’s audacious belief that they could get away with it. And so individuals pay, employers pay and we the people (government) pay whatever freight corporate greed decides it can get away with.  

This commentary could go on for a mile, documenting the outrages, excesses and wastefulness of our health care system. Anyone who doubts the seriousness or the extent of that – contact me and you will be given directions to reading materials that will wake you up and keep you up.

Here is the problem. As a nation of employer and consumer users and payers for healthcare, we have become devoid of the intestinal fortitude needed to take on the massive “business” of healthcare. Good doctors and good systems dedicated to providing ethical care when needed in the most appropriate ways at costs that will not destroy peoples’ lives have faded into memories. Today, physicians are pawns on the commercial chessboard of a system that will financially destroy our economy if left unchecked. Everywhere you look, our consciousness is saturated by health concerns, lack of informed choices, drug ads and medical vanities that haven’t distinguished this nation in terms of quality metrics.

There is a complete lackadaisical attitude about taking on the beast. Nowhere is this more in evidence than in attitudes among those who could lead. The biggest potential force that exists with sufficient mass to move in opposition against the healthcare bleeding we are experiencing rests with the single largest source of money being spent on healthcare. That is a commitment and a collaborative cause to bring healthcare costs under the control of the people who hold the purse strings – American businesses and the employees that are covered by health care plans.

The buck is being passed. We have asked employers simple questions, e.g., “what was the last innovative thing you did to put a lid on escalating costs?”. Too often, the plans of our employers have been enveloped in a miasma of mediocrity. Too often, health plans have simply pushed more costs onto employees. Too often, employers have succumbed to the entreaties of purveyors of schemes like wellness and prevention plans that promise big payoffs – and spectacularly fail to deliver. (Wellness culture good, wellness plans bad.)

There is a lack of control by the people who should be going catatonic over the costs of health care – the financial people in our nation’s businesses. The bleeding is seen there, and the tourniquets should be applied there. This means getting tough with employee-consumers of healthcare. The mindset that consumers can have it all, have it now and have it where they want it should be finished. Best providers – hospitals, doctors and others should be (and can be) identified. Employees should be given options to use the best identified, or pay a stiff price for being indifferent and spoiled. We need to wrench away the misconception held by 50% of our populace – that more expensive healthcare is better healthcare.

A force like none seen previously needs to emerge. That force needs to be possessed of a single-minded vision to defeat politicians’ agendas, sham government agencies, bad law legacies, obsessed profiteers and spoiled, hypnotized consumers.

Think Canada. Think the UK. Think countries with better healthcare at fractional costs to ours. Think common sense and think no frills, quality healthcare.


Friday, October 3rd, 2014 1:30 PM by Christopher Gregory

For our colleagues committed to meaningful changes in our healthcare system, a nagging question persists. When senior corporate management can measure and understand the financial toll that health care costs are taking on their companies, why haven’t there been more vigorous, concerted efforts to push back in areas where genuine, meaningful changes can produce outcomes that are good for employers and their employees?

Each year, when CFOs must account for health care expenses in corporate annual reports,  discussions are held with department(s) responsible for managing employers’ health plans. For a long time, when the numbers have been added up, those conversations should have focused on hard realities, i.e., health care costs too much. To which should be added another contemporary question, “how much more of the cost pie can be passed on to employees before we try to make real changes?”

According to the recent Bank of America poll, CFOs rate health care their #1 concern for the third year running. Yet, when asked to take control of efforts to reduce these costs, they tell us things like – “we have people on it”, or “the timing is not right”.

Tom Emerick managed the WalMart health care plan for 15 years, and has been recognized for genuine innovation and thought leadership in health benefits design, healthcare economics, evidence-based medicine and process improvements. When asked about what should happen to move employers in the right direction, his response was prompt:

 “Health costs are a huge risk to be managed and should no longer be viewed as an HR construct. To truly begin the process of controlling health costs, the following four steps have proven effective:

  1. Transfer benefit design to the finance department;
  2. Inter-company data collaborations and direct contracting with providers have proven useful in some markets;
  3. Use claims data and other resources to determine the highest quality and most cost-effective providers and direct employees to use them; and
  4. Curtail wasteful spending on demonstrably ineffective programs, a step few HR departments can do well”;

Regarding collaboration, Brian Klepper, PhD, CEO of the National Business Coalition says “absolutely right”

In fairness to HR and benefits departments that have a lot on their plates, one sales pitch after another has been made to employers from vendor services promising  remarkable things to reduce health care expenses. It gets wearisome. Take wellness, for example. Wellness in and of itself is a good thing and something which should be the responsibility of individuals (losing weight, quitting smoking, reducing cholesterol and exercising). It’s a culture of wellness that should be pursued. But many wellness plan purveyors promise much, while delivering little by way of savings that can be quantified. Many wellness vendors proclaiming attractive ROIs make a great deal of  money while delivering little. Ample evidence has been presented to demonstrate overblown claims, e.g., the Safeway story, the State of Nebraska and the Rand report to name a few. A big problem with things that don’t work is they can create more expenses and are accorded too much center stage attention by employers, to the exclusion of other steps that can and should be meaningful in reducing costs.

Another challenge for employers is the consulting industry. Too often, as many of my colleagues agree, consultants hold an almost unlimited influence on employer decisions. Really innovative thinking, e.g., collaborative innovation, is not something consultants want to be drawn into.

Claude Lagalante, Senior Director at Truven Health Analytics tells me that data methods available today can definitively and conclusively identify the facts that should be targeted by employers in metropolitan areas like Dallas Fort Worth. If employers commit to working collaboratively, data will identify best hospitals and best doctors in critical areas as the requisite information needed to form narrow, high-performing networks that employers can motivate employees to use. That will save employers and employees money, save employees from receiving excessive, unnecessary and wasteful care, and even save lives.

Yet when these incontrovertible facts are presented to forums of executive leaders (e.g., CFOs), the response from areas around the country (and not just DFW) is, “the timing is not right”, “we can look at this next year” or “we have people on it”.

Dr Bob Kramer is a physician with many years of hindsight and insight into medicine and healthcare as both a physician and a CMO. As a passionate observer of the wrong direction we are taking in our delivery of healthcare, he makes an analogy. He says that attitudes displayed by many senior management executives today is akin to “calling the fire department to report a house fire, and hearing them say they won’t come out for two weeks”.

Hospital systems are building everywhere, freestanding emergency rooms and CareNows are sprouting like mushrooms, hospital system physician influence is now being connected to in-store clinics at CVS, WalMart, Walgreens and most recently Target stores:  retail medicine -so long real doctor-patient relationships. Hardly any independent primary care doctors can be found anywhere (resulting in far greater costs for office calls). Hospital chargemasters are confounding messes, lack of medical cost transparency is contributing to 60% of personal bankruptcies, and physicians are rigging the game and committing heinous acts in pursuit of millions in revenues because they can. Pharmaceutical and device manufacturer conflicts of interest for physicians are everywhere (hello “Sunshine Act”). Government panels have rigged the game for specialists at the expense of primary care medicine which is drying up.

The term “black hole” surely applies to healthcare.

As Brian Klepper says at every opportunity, “the only possible counterweight to the healthcare system today is non-healthcare employers banding together”.

And yet, we hear yawning in the room.



Thursday, September 25th, 2014 5:47 PM by Christopher Gregory

I would like to thank Dr. Vikas Saini and Shannon Brownlee at the Lown Institute in Boston for an exceptional Lown journal called the Right Care Weekly. Some of the best things I have read, aiming to get us doing the right things for the right reasons in healthcare, have come from Lown and the Right Care Alliance. The Alliance is a committed physician movement which I fervently hope will grow across the nation. The first important Right Care Alliance meeting on the road will take place on October 13, at the University of Colorado Medical Center in Denver.

The article which I reference in part below is one that was just published by the Institute of Medicine, in which Shannon was one of the coauthors. It talks about shared decision making (SDM).

What Is SDM?

For this paper, we consider SDM to be the process of communication, deliberation, and decision making during which:

  • One or more clinicians share with the patient information about relevant testing or treatment options, including the severity and probability of potential harms and benefits and alternatives of these options given the specific nature of the patient’s situation;
  • The patient explores and shares with the clinician(s) his or her preferences regarding these harms, benefits, and potential outcomes; and
  • Through an interactive process of reflection and discussion, the clinician(s) and patient reach a mutual decision about the subsequent treatment or testing plan.

Since research has shown that extemporaneous conversations with clinicians often do not result in the effective exchange of reliable, complete, and balanced information, a structured tool can often enhance information exchange to support the process of SDM.

When Should SDM Be Pursued?

There are a few treatment decisions, such as whether to set a broken arm, for which there is such incontrovertible evidence of benefit and so few downsides, that clinicians and patients would be almost unanimous about what to do. While some have sought to limit the application of SDM to preference-sensitive decisions, this distinction is difficult to define and challenging to apply in practice.

We propose that the default position for every medical decision for which the options or results have health, financial, or quality-of-life implications should be that patients should be informed about their options and given a chance to have their informed choices honored when decisions are made. In particular, since patients must implement (and could in the process revise) many health care decisions—to fill prescriptions, attend visits, self-monitor blood sugars—SDM should be the aim for discrete decisions (such as whether to receive a certain screening test, or which treatment option to pursue for a given diagnosis) and also for ongoing, daily management and lifestyle choices for such chronic conditions as diabetes or high blood pressure.

What Is the Role of Decision Aids?

One way to promote SDM is to provide patients and clinicians with well-designed and structured decision aids, which are tools intended to provide detailed, balanced, evidence-based information about competing treatment options.

A 2014 Cochrane review of 115 randomized trials reported that using patient decision aids can lead to patients who are better informed about their options compared with patients who receive usual care. Decision aids enhance patients’ knowledge and understanding of the harms and benefits of various options, lead to more accurate perceptions of risk, greater comfort with decisions, decisions that align better with patient goals and preferences, and patients using decision aids are less likely to remain undecided (Stacey et al., 2011, 2014). There is also evidence that patients tend to make different choices when they have access to these tools versus usual care, and they are, on balance, more likely to choose less-invasive interventions.

In sum, while patient decision aids can help patients become better informed, and being informed may help patients engage with clinicians, ensuring that patients are informed does not necessarily ensure that patients are invited to “share” in the decision making process, or that their preferences are respected. The best decision aids, therefore, provide information and also encourage patients and clinicians to get on the “same page” with regard to options, evidence, preferences, values, and plans.”

Why Have I Written This Commentary?

For years, I searched for ways by which I can advocate for patients to become better equipped to make decisions about their health care. Too often, physicians rely on their professional gravitas to basically compel patient decisions. Remember Elisabeth Rosenthal’s excellent (and troubling) New York Times article where the surgeon told a patient compromised by excruciating pain “You need surgery, you won’t walk out of the hospital”?

I searched for and found a company that does an excellent job of encouraging patients to become more conversant and better involved in decision making, and then supports patients with information to do just that. That company does not interfere in the doctor patient relationship – they improve it by making conversations and decisions better.

I have spoken with employee benefit managers at major corporations about this. I don’t believe they intend to overlook and minimize the importance of steps designed to make right decisions and better decisions. They just have a great deal of information to process and a lot of people vying for attention, and so I don’t know if the decision making process has become a high priority in agendas about bending the employer’s cost curve. I hope it will.

Studies have shown repeatedly that when quality information is sufficient, decisions about surgery are often changed in favor of medical management that involves much less risk and expense. Back problems are a glaring example of how treatments facilitated by better investigations and questions can eliminate costly and ineffective spinal procedures. At one Fortune 100 company, such an approach reduced back pain-related costs by 50%, while vastly improving patients’ quality of life.

Information is power.


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