To Break the Bank or Not to Break the Bank With Health Care Reform?--The Wrong Question

The new debate in Washington these days seems to be over whether we can or cannot afford to do health care reform given the financial crisis and the huge budget deficits.

Some argue that with the rising unemployment rate, certain increases in the number of those uninsured to follow, and the need to inject money into the system, this is the right time.

Others say that in the face of daunting national debt it is not the time to dramatically increase our entitlement obligations even further.

In my mind this is a false debate.

Both sides seem to presume that solving the access problem, and not the cost of care in America, is the real problem.

I come from the perspective that the onerous cost of health care in America is the problem that needs to be solved. Solving it is exactly the right thing to do in the face of an already dramatic increase in the national debt.

The number of those uninsured--or on the edge of becoming uninsured--is a symptom just as the looming insolvency of Medicare is a symptom of the health care cost problem.

If you want to really reform America's health care system and pay for more people to be a part of it you have to solve its long-term cost problems.

What better time to do that then when we are faced with enormous budget deficits that, even before the financial meltdown, were always being driven to a great extent by health care costs?

But here's the rub. Dealing with costs is the problematic part of health care reform. In a way, agreeing that we should pay to cover everyone is the easy part. Kind of like buying that new Porsche is the easy part--who wouldn't want one? The hard part is paying for it.

The CBO's December report on the cost of health care broken down by 115 options tells the story of real health care reform.

It can be done. We can do it in a way that eventually reduces the budget deficit and our long-term national debt. That would be real health care reform and there is no better time to do it than now.

But it would have to be done the hard way.

The hard way will involve some really politically tough choices having to do with how much we pay--how much we pay providers and how much we pay for those who receive benefits. Cost containment is a straightforward if not problematic challenge--to contain costs you have to contain costs.

That is really the discussion we should be having.

Right now the debate seems to be about whether or not we want to break the bank with health care reform.

Why would we want to do that? More importantly, why do we need to?

CBO's December Report on Health care Reform Choices: CBO to Health Care Reformers: Naive Policy Makers Need Not Apply

"Consumer-Driven Health Care: Promise and Performance"

I am always struck by the difference between the salesmanship of health plans offering consumer-driven health products and the reality of the data.

James Robinson and Paul Ginsburg have an article in the January 27th edition of Health Affairs with an objective review of the consumer-driven movement of recent years.

Here is the central point of the article:

The performance of consumer-driven health care has fallen short of both the aspirations of its proponents and the fears of its critics. Growth of the favored organizational forms, including HDHPs and individually purchased insurance, has been anemic. The forms of insurance and sponsorship originally embodied in the consumer-driven vision have mutated into forms far from those originally envisaged. This process is not unique to consumerism, but one well known to managed care, where the original group-/staff-model HMO was diluted into the loosely structured independent practice association (IPA)-model plan and the sponsorship framework of managed competition into the "total replacement" purchasing format of self-insured employers.

They also point out that:

• Enrollment in HDHP/HSA plans grew from 400,000 in September 2004 to 6.1 million in January 2008--"a large absolute increase but still small in relation to overall enrollment in private insurance." By comparison, HMOs continue to hold 20 percent of the employer market and POS plans 12 percent.
• "The consumer-driven health care movement has been obliged to dilute its principles in light of the overuse of inappropriate services and underuse of appropriate services in the real world. HDHPs now incorporate elements of disease management for enrollees with chronic conditions; case management for enrollees with complex or comorbid conditions; and utilization management for patients using particularly costly drugs, devices, or procedures. Most of these medical management programs are obtained from the same diversified insurers that offer HMO and PPO products. Indeed, the potential for integration with claims databases is leading insurers to acquire many formerly independent medical management vendors."
• "The blind spot in the consumer-driven analysis of market performance concerns the importance of coordination in insurance, delivery, and sponsorship. The obdurate insistence on á la carte choice and retail purchasing pushed the theorists of consumerism into positing organizational and market dynamics that have not been observed in the real world."
  

Consumer-driven principles have clearly impacted the design of mainstream health insurance plans for the better.

But consumer-driven principles have not changed the fundamental dynamics of our health insurance system nor have they turned out to be a silver bullet solution. In my mind, the fundamental fault with the logic that they would was the belief the consumer could do what insurance companies, employer benefit managers, and even providers at risk before them, could not.

June 27 Post: Wall Street Journal Sends Shockwaves Through the Health Insurance Markets With the Headline "Health Savings Plans Start to Falter"

Five "Shovel-Ready" Health Care Reforms

Five "Shovel-Ready" Health Care Reforms
By Brian Klepper & David C. Kibbe

Microsoft Health Vault's leader Peter Neupert has a wonderful blog post that makes two important points really well. One message is that health care reform is about the outcomes, not the technology. We should think expansively about which technologies to invest in, based on the results we want to get.

The other message is the economic stimulus package is different than the reform effort. It is moving at hyper-speed through Congress, and it may be difficult for staffers and other advisers to sort through and incorporate what may seem like opposing Health IT views against a backdrop of traditional ideology and extremely forceful special interest lobbying.

Even so, there's consistency among the health care professionals who worry about these issues all the time. Peter unexpectedly discovered that the messages of his fellow panelists from the Health Leadership Council, the National Quality Forum, the Permanente Federation and the General Accounting Office were remarkably in sync with his own testimony to the Senate Health, Education, Labor and Pensions Committee.

Congress is about to make some big moves in health care that will require immense resource expenditures but, depending on what we pay for, may or may not bear the fruits we hope for. They should move carefully. Not all health care reform has to be labyrinthine. Not all ideas must require huge cost or take years to come to fruition and gain market traction. There are relatively simple actions that are available now, and that the Obama Health Team could tackle to effect tremendously positive, immediate impacts on the system.

Of course, right now the Health IT industry is focused on the promise of a huge stimulus windfall that would be dedicated to their products. But the opportunities we describe below follow principles that have broad support among students of the health care crisis. Two would change the way we pay for health care services, tying payments to documented results. Three are based on how we pull together and make use of the data that can drive clinical and financial decisions, and they overlap, though not perfectly, in their potential. Still, if any system adjustments can be passed through policy initiatives that focus on what's best for the common rather than the special interests, these should be among the most straightforward.

Payment
Re-Empower Primary Care
There is general agreement that primary care is in crisis, the result of years of abuse and neglect by the medical establishment and by CMS. In simple terms, the primary care/specialist ratio in the US is 30/70. In all other developed nations, its about 70/30. And our costs are roughly double theirs.

We should allow primary care physicians to do the jobs they were trained for, changing their roles from "gatekeepers" to "patient advocates and guides." We should immediately start financially rewarding them for collaborating with specialists to manage patients throughout the full continuum of care. Keep in mind that, as the Dartmouth Atlas and other studies have made clear, most health care waste is concentrated in the sub-specialties and in inpatient settings, incentivized by a fee-for-service reimbursement system that rewards more procedures, independent of their utility. One very thoughtful approach to invigorating primary care has been advanced by Norbert Goldfield MD and colleagues.

Of course, truly re-empowering primary care will require more than just paying primary care physicians more. Higher reimbursements will help them afford to spend more time with each patient, yes, but PCPs also need help acquiring tools that can help them better manage those patients. And they need the authority to work collaboratively with specialists. Challenging, but certainly doable and important!

Changing America's current imbalance between primary and specialty care should drive significant downstream waste from the system, dramatically improving quality and reducing cost.

Increase the Incentives For Programs That Tie Payment To Outcomes
Projects like the CMS/Premier Hospital Quality Incentive Demonstration (HQID), in which 250 participating hospitals got 1-2 percent bonuses for achieving quality improvements, have clearly demonstrated that incentives work. The hospitals that pursued the incentives made greater strides in quality improvements than their peers who did not work toward the incentives.

But we need to make the financial incentives large enough to drive real paradigmatic change. Too many programs offer incentives that are trivial in the minds of providers. Does it make sense for physicians in small, busy practices to rework their office flows to try to meet the challenges associated with hitting targets in exchange for a 1 or 2 percent financial bump, tied to a fraction of their patient population?

Now that there's no question that incentives work, we could easily give these programs teeth by raising the incentive antes to 15 or 20 percent, while also demanding commensurate levels of savings. And we should go in, understanding that the goal is to drive out unnecessary care, and create expectations that, by managing better upfront, the total spend will be lower.

Data
Establish a National All-Payers Database
Data sets, including those comprised of health care claims, must be large to generate credibly useful information.

But health care is financed through many different payer streams and by many players within each stream. Nearly all treat their data as proprietary, and information remains fragmented. So, for example, physicians rarely receive useful information on their complete pool of diabetic patients: instead, they get small slices of data from each payer, each analyzed using a different proprietary methodology. Or, we fail to accumulate adequate sample sizes to identify which treatments, interventions, drugs, devices, health plans, physicians or facility services provide the best value.

But merging those data across payers and making the aggregated set freely available would create the basis to identify true evidence-based best clinical and administrative results. Based on hundreds of millions or billions of records, we might be able to credibly identify which professionals, services or approaches most consistently produce the best results within value parameters. The data set would always be building, providing an always slightly-new base for answering our most difficult questions. Together with the analytical tools that are also becoming stronger and more refined, the potential is vast.

Of course, health plans, always politically formidable, might fight tooth and nail to maintain the competitive advantage they believe is inherent in their data. But health care is a special enterprise, with objectives that are ultimately rooted in the common interest, so they have no real excuse to refuse this. And health plans, like the rest of us, would gain access to much larger data sets that can be mined to advantage.
There also are precedents here. Several states have already begun to establish all-payer databases. At a June 2008 meeting, a presentation on Maine's experience highlighted 3 fundamental, telling principles that are challenges to any effort.

1. Nobody wants to pay to develop and manage the database.
2. Nobody wants to contribute their data to the database.
3. Everyone wants the aggregated data that develops in the database.

The solution: make it a national effort, paid for by CMS, and with mandatory participation, user fees, and open access to the data.

Create Uniform Nationally Accessible Disease Registries
Many physicians have come to appreciate the value of disease registries. Registries allow clinicians to count all active patients with distinct conditions, e.g. hypertension or diabetes. They can track characteristics within a patient subset, e.g. diabetic patients on a particular medicine. They can monitor and stratify patient status and progress within each group, and generate reminders and alerts to assure guideline level care. And they can identify trends in performance and, with relative ease, get a sense of what works and what doesn't.

Even so, many registries are still in silos, meaning that the sample sizes remain small and that the parameters that define the registries' characteristics often vary between implementations.
What we need are freely available, Web-based registries with easy data entry and easy querying capabilities. The impact on our management of patients with chronic illness, who consume 70 percent of our health resources, would almost certainly be powerfully positive.

Release Medicare's Physician Data
Nearly a year and a half ago, the consumer advocacy organization Consumer Checkbook sued the US. Department of Health and Human Services (HHS) for the Medicare physician data in four states and DC. HHS argued that physicians have a right to privacy, even though, in the case of Medicare and Medicaid, they are vendors taking public dollars, and even though hospitals do not enjoy the same protection from scrutiny. In August 2007, the court held with Checkbook, and on the AMA's "advice," HHS promptly appealed, locking up the data for the duration of the Bush Administration.

The large commercial health plans have traditionally considered their claims data proprietary and so have not made their data sets publicly available. Self-funded health plans, administered by Third Party Administrators (TPAs), develop sizable data sets but have resisted collaborating, and have also not expressed an interest in making their data available.

So for those outside the health plan community, there are few, if any, data sources with sample sizes large enough to accurately evaluate and profile physician performance. This is significant, since studies have shown that there can be profound differences, 6x-8x, in resource consumption (i.e., cost) between the least and most expensive physician (within a specialty and market) to obtain the identical outcome.

In other words, not all doctors perform equally. While more patients are paying out-of-pocket for a larger portion of care, there is still virtually no credible information to guide their physician choices.

The American people could quickly learn which physicians within a specialty and a market consistently get the best outcomes at the lowest costs if Medicare physician data were made publicly available. Releasing these data would also put pressure on physicians everywhere to understand their own numbers, and to improve if their performance values are lacking. We see this as beneficial to the great majority of physicians who seek excellence in their work.

Smoothing the Way
American health care is a vast enterprise in which millions of professionals and hundreds of thousands of organizations vie for an ever larger portion of what has historically been an always growing resource pool. The chaos and dysfunction that has developed in health care is largely due to two system characteristics. One is the fee-for-service reimbursement system that has rewarded more rather than the right care. The other is a lack of transparency that prevents us from knowing and understanding performance, even when that performance is dangerous: what works and what does not, which approaches are high and low value, who does a good job and who does not.

The five action steps outlined above would allow us to better identify the problems and opportunities in our health system, as well as the strongest solutions to drive decision-making. Then they would leverage that information to create strong incentives for the right care, organically changing the dynamics of care and reimbursement and, to the degree possible, smoothing the transition required to heal the way we supply, deliver and finance care in America.

Brian Klepper PhD is a health care market analyst and a Founding Principal of Health 2.0 Advisors, Inc. David C Kibbe MD MBA is a Family Physician and Senior Adviser to the American Academy of Family Physicians who consults on health care professional and consumer technologies

SCHIP Bill Not a Good Sign for Major Health Care Reform

The extension and expansion of the State Children's Health Insurance Program (SCHIP) has now passed the full House and the Senate Finance Committee and is on its way to the full Senate.

After minor differences between the House and Senate are reconciled it will become law.

However, the way it is being done does not give me a good feeling.

In the Senate Finance Committee the Democrats were only able to get the support of one Republican--Maine's Olympia Snowe--on the way to a 12-7 approval.

They did not have the support of the ranking Republican, Chuck Grassley of Iowa.

Senate Finance Democrats lost the support of the Republicans when they insisted on departing from last year's bipartisan agreement to leave existing policy on covering the children of legal immigrants as is. As it now stands, a legal immigrant agrees not to apply for Medicaid and SCHIP benefits for the first five years they are in the country. Under the new rules states would have the option of covering legal immigrants. The new bill also left out provisions from the earlier bipartisan comprise to limit benefits for higher income families.

Without judging on the merits whether these two new provisions should have been in the bill, what the Democrats have done is moved away from earlier bipartisan agreements and in doing so lost moderate Republicans like Grassley who showed good faith in reaching an earlier bipartisan compromise.

As I have repeatedly said on this blog, major health care reform is not possible unless it is bipartisan.

My simple definition of bipartisan reform is getting Chuck Grassley onside.

Ditching Grassley over SCHIP was a mistake and it does not bode well for bipartisan health care reform. This is the kind of dumb stuff the Clintons did in their failed 1993 unilateral health care reform effort.

To put it as simply as I can, no major reform of America's health care system will pass without Chuck Grassley voting for it.

What It Will Take for President-Elect Obama to Accomplish Health Care Reform

President-elect Obama has listed entitlement reform as a major goal for his incoming administration.

Just this week he said, “The big problem is Medicare, which is unsustainable. We can’t solve Medicare in isolation from the broader problems of the health care system.”

I doubt anyone would disagree with the President-elect on that score.

Fixing the entire U.S. health care system cannot be done in isolation from the Medicare challenge.

At the core of the Medicare challenge, and the challenge for the rest of our health care system for that matter, are what services we pay for and how much we pay for them. Medicare policy commonly drives private payment policy. Private fee schedules, for example, are often a factor of the Medicare system’s payments.

The President-elect’s incoming budget director, Peter Orszag, recently released a very important report while at his old job—head of the Congressional Budget Office. It itemized the fiscal options for health care reform. I am pretty sure the President-elect had this report in mind when he commented about the unsustainability of Medicare and the linkage between Medicare and the private health care system.

That CBO report made it clear that the relatively easy lifting in Medicare, or broader health care, reform—things like better health information technology, wellness, prevention, outcomes research, and the like—will have only a modest and insufficient impact on health care costs to really get the job done.

The real heavy lifting will be in actually changing provider behaviors by finally eliminating wasteful procedures and technology, addressing payment reform head-on, and finally cracking the high administrative costs we carry in the U.S. health care system.

The new President talked this week about the importance of at last facing up to the real health care problems, “This by the way, is where there are going to be very difficult choices and issues of sacrifice and responsibility and duty.”

President-elect Obama could not be more right.

In my mind the only way he can accomplish health care reform is if he and his administration spend the time to bring the American people up to speed on just what those sacrifices look like in order to build the enormous bipartisan political capital needed to force the stakeholders out of their “me” mode and ready to accept the “difficult choices and issues of sacrifice and responsibility and duty.”

What drives me crazy are all the stories I read about how health care reform will be different this time because the big stakeholders are ready and there is consensus for what reform will look like.

Baloney.

I get the sense our new President understands just how hard this will be.

Today, President-elect Obama has nowhere near the political capital he will need to get this gargantuan health care policy problem across the line.

I hope he takes the time to build the political capital that he can only have after he has brought the American people onside. To do that he will have to bring health care reform to the forefront of the public discourse over a period of many, many, months.

When the “difficult choices and issues of sacrifice” that have to be made look to us all as inevitable, then, and only then, will he will finally have the political capital he will need to make his health care move.

I believe we have a leader who is bringing good will to his health care reform efforts. I hope he is successful.

Cuomo Shows the Health Insurance Indusry Who's Boss!!

New York Attorney General Andrew Cuomo today announced a "victory" in his battle with the insurance industry over how out-of-network physician claims are paid. Cuomo had argued that the industry's use of its out-of-network "customary and reasonable" database "defrauded" consumers and he sued the database's manager, United Health's Ingenix, over the controversy.

In a February 2008 post I said, "In a few months, we will hear that Ingenix paid a big fine and agreed to fix something (that no one will understand) and Cuomo will have another notch in his belt."

Well, today it was announced that Ingenix will pay $50 million to set up an independent not-for-profit to operate the customary and reasonable database. The industry gets to continue determining what customary and reasonable physician charges are through this non-profit and just exactly how they do it will continue to be done by systems gurus the way systems gurus do things--pretty much in a "black box." While an undetermined university will operate the system, the industry, who will finance it, will presumably have a great deal of input into it. The industry's use of the database will be more defensible since one of its own is no longer arguably directly controlling the entity.

$50 million is peanuts compared to the out-of-network customary and reasonable savings any one of the big health plans achieves every year and this settlement makes the ability of state medical societies and trial lawyers to attack the system much harder.

What will be better is that consumers, presuming they know about the new "transparency" website, will be able to go on-line to see what their allowable charges will be in advance. So, if Joe MiddleAmerica is on vacation in Orlando and needs to go out-of-network to the emergency room, prior to rushing off for treatment they can go find a computer, find the website, and shop around for emergency rooms that have the lowest out-of-network payments. Gosh, Andy, thanks!!!

The big losers here are the docs. The result is going to be about the same and their medical societies will now have less reason to challenge the customary and reasonable system than they did before.

"In a few months, we will hear that Ingenix paid a big fine and agreed to fix something (that no one will understand) and Cuomo will have another notch in his belt."

Why poor Andy is being passed over for the Senate I just don't know!

Earlier posts:
Give Cuomo and the Physicians What They Say They Want--Show the Patient Just What the Doc Is Accepting From Everyone Else

The Usual and Customary Controversy--Who's Cheating Whom?

No One Ever Did Understand "Customary and Reasonable"

Health Care Reform––Are the Adults Taking Over?

In past posts I have pointed to what I called the “irrational exuberance” over health care reform––that the excitement over the new administration and its ability to accomplish all the big things was getting out of hand.

There was even talk that Democrats would use the Senate budget reconciliation process and bypass the 60-vote rule enabling them to use their big new majorities to ram their idea of health care reform through.

I warned that health care was too big and too complex an issue for partisanship and any overconfidence or unilateral behavior would simply backfire.

That’s why I was encouraged to hear incoming HHS Secretary Tom Daschle say at his confirmation hearings that the administration would not use the simple majority budget rules to pass health care reform. That would also be in keeping with President-elect Obama’s pledge to generally be more bipartisan.

In my mind, bipartisanship is the only way health care reform can occur.

The President-elect, facing the financial crisis, has also been unwilling to say in recent interviews that raising taxes for those making over $250,000 is still on the table as a way to pay for health care reform. Obama also said this weekend, "I want to be realistic here––not everything that we talked about during the campaign are we going to be able to do on the pace that we had hoped"

The House will also take up a SCHIP reauthorization and extension this week. It is clear that the Democratic Congressional leadership does not want to risk getting a bipartisan SCHIP agreement bogged down in any long and uncertain national health care debate––a wise move.

In recent posts I have pointed to the importance of the recent CBO work itemizing the cost and savings potentials for health care reform. That report is a daunting outline for just how difficult health care reform can be. I have also written about the lack of consensus on the really core issues in health care reform—starting with provider payment reform.

It is critically important that health care reform be achieved. But it will never be achieved with another naive suicide charge led by people who don’t understand just how much real work has yet to be done to bring the key stakeholders onside.

This week there are some indications the “irrational exuberance” of December may be waning and the adults may be taking charge. That would be good.

Recent post: CBO to Health Care Reformers: Naive Policy Makers Need Not Apply

Sanjay Gupta Could Be a Great Pick for Surgeon General

I have been surprised at some of the political criticism President-elect Obama has taken for considering CNN correspondent Sanjay Gupta for Surgeon General.

That some in the Public Health Service would be concerned career officers are being passed over is legitimate. And Gupta does not have managerial experience overseeing thousands of career health officers.

But the most successful Surgeon General in our history, C. Everett Koop, brought something to the post that I think Gupta can also bring--the ability to use it effectively as a bully pulpit toward improving our people's health. And, Dr. Koop was not a manager of thousands of people either when he came to Washington from his pediatric surgery practice in Philadelphia.

Dr. Koop had two things going for him:

1. He was, and still is, incredibly well grounded. His moral compass is as sharp as anyone's and he is fearless about following it.
2. He is an incredible communicator.

My sense is that the President-elect knows that what we need most in public health these days is a communicator who can lead the charge in the fight to reverse the decline in healthy behavior in our country. Put obesity and the issues related to our diets at the top of that list.

Improving America's health care will take a multi-prong attack. A reform bill dealing with our health care financing system will not be enough.

We will also need to reform our behaviors that are not helping our health.

Sanjay Gupta might just be the person to grab the Surgeon General's bully pulpit once again.

If he is, I hope he is willing to take the high moral ground just like Dr. Koop did--in Dr. Koop's case on tobacco and AIDS. Both were high risk issues to tackle in the early 1980s and Dr. Koop didn't make a lot of friends inside the Reagan administration in those days. But he sure earned the confidence of the American people!

Because if Gupta isn't willing to use the bully pulpit, and take some risks, he'll just be another pretty media face!

Let's Reboot America's HIT Conversation--Part 2: HIT Beyond EHRs

Let's Reboot America's HIT Conversation
Part 2: HIT Beyond EHRs

by DAVID C. KIBBE AND BRIAN KLEPPER

Yesterday we tried to put EHRs into perspective. They're important, and we can't effectively move health care forward without them. But they're one of many very important HIT functions, and EHRs and HIT alone won't fix health care. So developing a comprehensive but effective national HIT plan is a huge undertaking that requires broad, non-ideological thinking.

The danger we face now in developing health care solutions, as we've learned so painfully elsewhere in the economy, is throwing good money after bad. We don't need merely a readjustment of how health IT dollars are spent. We need to reboot the entire conversation about how health IT relates to health, health care, and health care reform in this country. To get there, we need to take a deep breath and start from well-established and agreed-upon principles.

Most of us want a health system that bases care on knowledge of what does and doesn't work - i.e., evidence - whenever possible. We want care that is coordinated, not fragmented, across the continuum of settings, visits and events. And we want care that is personal, affordable and increasingly convenient. Most of us agree that, so far, we have not achieved these ideals. In fact, health care continues to become costlier, quality is spotty, and the gap between the health care we believe possible and the current system is widening.

We believe that most health care professionals are acutely aware that HIT alone cannot resolve these problems. Despite billions of dollars in HIT investments by health care professionals and organizations, the gap persists and is widening. Many physician practices have expanded their HIT functions, moving beyond billing systems - a necessary asset to be paid by Medicare - towards EMRs and from paper to software systems. About a quarter of US physicians use EHRs from commercial vendors. Hospitals and health plans - larger, corporate organizations with more dedicated capital resources - have implemented HIT more quickly. Even so, the tools implemented have typically been focused on recordkeeping and transactional processing, not decision-support. Health care clinical and administrative decisions have not yet become more rational, less tolerant of waste and duplication, or more congruent with evidence. We don't just need more HIT; we need an array of specific functions that can facilitate better care at lower cost in a complex, wasteful system that currently adheres to few evidence-based rules.

What would those better HIT products look like, and what would they do?

Focus on Decision Support
Most important, new HIT would help clinicians, managers, purchasers and patients make the best possible clinical and administrative decisions. This includes identifying risks and following the best path to lowering them whenever possible. In other words, HIT should help people stay healthy and avoid illness through active clinical decision support, and make sure that the system recognizes value. Which patients, according to past data, have chronic or acute conditions that need care? Which, do the data show, are the most effective (or high value) doctor, hospital service, treatment, intervention - so that the market can work to drive efficiency. Given a particular set of signs or symptoms, what is the best next step in care?

Technology and information engineering is readily available to do this. Car technologies now help drivers understand when a problem is occurring, or is likely to occur, monitoring fluid levels, tire pressure, maintenance appointments, and location in case of emergency. Banking technologies can flag suspicious credit card purchases and can instantly invalidate charge cards. Recently, Google trended flu searches to help estimate regional flu activity; their estimates have been consistent with the CDC's weekly provider surveillance network reports.

By comparison, most HIT is relatively unsophisticated. In general, the prevailing frontline tools do not yet help clinicians identify individual- or population-level health risks. They don't yet provide guidance with evidence-based approaches that can best mitigate those risks, or help monitor adherence to care plans, even though the data are now clear that most Americans die and we pay the most money due to easily preventable and managed conditions.

In short, we monitor our cars and bank accounts better than we do our health. We can change this.

Untethering Patients with Easily Accessible Personal Health Information
High value HIT would improve care by making summary personal health information available, increasingly independent of location and time. Most health records are still tied to a health care organization's data center, supporting an outdated business model in which the patient must come to a centralized, expensive location for even the most routine tasks, like history-taking or lab testing. Most current EHRs don't change this, in large part because they aren't connected to the Internet. Web-enabled patient information would untether the patient, and make increasingly standardized care more readily available anywhere. De-coupling health information from health care providers is the first step in the development of new business models that will offer team-based care services wherever one is located, saving money and increasing convenience.

Empowering Patients Through Online Linkages with Clinicians and Other Patients
HIT will link patients with clinicians, will match problems with most appropriate solutions, and will use social networking to increase access to patient- and condition-specific information, knowledge, and guidance. This class of HIT applications will be particularly useful with chronic illness, shifting more of the condition's monitoring and management to the patient and his/her family and peers, with diminished reliance on the office-based physician. Bringing advances like these to fruition will require much broader implementation and access to broadband technologies, as well as standardized health record formats.

Participatory Medicine: Bridging the Medical Home and Web-Based Care
As Kibbe and Kvedar recently wrote, much of the HIT we're describing bridges the divide between two powerful trends: Health 2.0 (or user-generated health care ), and "the medical home." It is now clear that, while most health care consumers want to be more actively engaged in their own care management - e.g., using Web-based search and joining patient communities - they also want to be connected to their physicians for questions and care when appropriate. The way forward here is participatory medicine that combines and remixes health information and knowledge - some from experts and some from the crowd - in the interest of helping us live healthier lives. Here is a very good description from a practicing pediatrician about how this will work:

...organized medicine needs to provide the day-to-day support patients need to prevent disease and to self-manage their conditions if they are ill. In the connected era that means just in time delivery of the personalized and up-to-date data and information a person needs to have the knowledge to make wise choices. It means supporting patients to easily and accurately keep track of their performance. It means providing tailored messages and experience that speak to each person based on their unique characteristics, their performance on key behaviors and their needs at that moment in time. It means helping patients link directly to family and friends for critical support, and link to their many providers to help integrate medical care with everyday life.

Data and Accountability
HIT can help make all health care professionals and organizations - physicians, hospitals, other providers, health plans, drug firms, device firms - more accountable for quality, safety, and cost results, and for the engineering required for continuous improvement. We can learn from our current supply, care delivery and finance processes in the same ways that Toyota and Wal-Mart monitor their internal business processes. The problem is not just that we lack some important data elements to carry out these analyses now. More to the point, we have not committed nationally to aggregating, analyzing, and reporting the massive amounts of health data that we already have. Similarly, due to a lack of incentives and competing interests, most professional and organizational health care players have resisted using data to improve the quality, safety and cost of American care.

Closing the Collaboration Gap
Finally, a new generation of HIT capabilities will close the "collaboration gap" that exists between the system's many sequestered players, who as a result perform so much less effectively and efficiently than they otherwise might. Clinicians, for example, diagnose disease and set up treatment plans but often are isolated from helping their patients cope, manage, or adhere to these plans. Patients, once diagnosed, are motivated to manage their illnesses but often have few tools or methods to assist them. Purchasers and payers want to see clinicians use the most efficacious resources, but typically do not have a way to inform and reward evidence-based purchasing processes. In every case, HIT can facilitate a more collaborative experience that is tailored to the user's purpose, no matter what role that user plays in vast health care space.

HIT presents enormous, unprecedented opportunities to improve the quality of care, to dramatically reduce the waste and cost inherent in our current approach, and to culturally transform patients to become more actively engaged in their own health and care. Bringing the fluidity of knowledge and data to fruition will allow us to leverage the true power of information, and that can take many forms. The real HIT challenge to the Obama health care team is to step back, take stock of the kinds of applications that are emerging in HIT, and create an expansive, open policy structure that can leap beyond the status quo and really change the way American health care, in all its facets, works.

David C. Kibbe MD MBA is a Family Physician and Senior Advisor to the American Academy of Family Physicians who consults on health care professional and consumer technologies. Brian Klepper PhD is a health care market analyst and a Founding Principal of Health 2.0 Advisors, Inc.

The Five Myths of Health Care Reform––Health Information Technology, Prevention, Outcomes Research, Pay-For-Performance, and Universal Coverage

The arguments that the widespread use of health information technology (HIT), improving health status, expanding outcomes research, implementing pay-for-performance systems, and covering everyone will make it possible for us to afford comprehensive health care reform are commonly cited by people on both sides of the political aisle.

It's all a myth.

Undoubtedly, these ideas will be at the core of any number of health care reform proposals as we begin the 2009 health care reform effort.

There is nothing wrong with any of these things and all can make a positive contribution toward improving both the cost of and especially the quality in our health care system. All should be part of a reform proposal.

The problem is that none of them would make more than a modest dent in what a reformed system would cost us and not come anywhere near close to accomplishing the objective of stabilizing our health care costs much less reducing them.

Therefore, any responsible reform effort would not count on any, or the sum, of these things by themselves to make it possible for a reformed American health care system to become sustainable.

Simply put, let’s stop kidding ourselves that these commonly cited improvements can pay for health care reform.

Health Information Technology and Prevention
Health information technology is important and can probably do more to improve the quality of our health care system than save us money. Prevention and wellness will also help and would certainly improve the quality and length of life for people who deal with preventable health problems.

But the research on both counts always comes up way short of what politicians argue it can do to save money. In this month’s groundbreaking Congressional Budget Office (CBO) report on health care reform options, the authors said, “…approaches—such as the wider adoption of health information technology or greater use of preventive medical care—could improve people’s health but would probably generate either modest reductions in the overall costs of health care or increases in such spending within a 10-year budgetary window.”

In his comprehensive review of the literature on health care costs in October, Paul Ginsburg found, "Obesity is a significant factor driving health spending, accounting for an estimated 12% of the growth in recent years." However, any gains from reducing obesity would be concentrated in the short and intermediate period "because some of the savings will be offset by increased longevity and the cost of disease that are most prevalent during old age."

Both come to the same conclusion—modest gains, worth doing, but nowhere near blockbuster results.

Outcomes Research
Outcomes research has been going on for decades. Let me make it clear I do buy into the Dartmouth arguments that we could improve our costs by 30% if all health care providers followed the course of the most efficient. As Ginsburg pointed out in his literature review, the inefficient use of technology is the key driver in health care spending accounting for an estimated 38% to 65% of spending growth.

The problem I have with the suggestions that more outcomes research will save us money is that more than twenty years of outstanding outcomes research, Dartmouth for example, has not kept our health care costs under control. Why would a dramatic expansion of what we already know do any more?

As Ginsburg points out, "Overall our understanding of high and rising costs is fairly solid. Our most pressing needs are not as much on the research side as on the development side, that is, all of the technical work needed to pursue many of the reforms..."

The CBO found that the net effect on the deficit between 2010 and 2019 for funding more research comparing the effectiveness of treatment options would be an increase of $860 million and “reduce total spending on health care in the United States by an estimated $8 billion over the 2010–2019 period (or by less than one-tenth of 1 percent).” CBO seems to be saying that more such information will be of small value unless underlying incentives that promote inefficient practice patterns are not changed.

As I posted recently, I have watched and admired the Dartmouth work since 1990. But it is clear that just publishing this information is not enough—far more importantly there must to be an imperative for providers to adopt it. That comes under the heading, tough cost containment, not more research.

Pay-For Performance
There isn’t anything in this health care debate that I can be more cynical about then “pay-for-performance.” As a concept I can’t disagree with it. That it sounds good is likely the most important reason it is at the top of so many reformers’ lists.

But we haven’t agreed on what quality is or how to measure it.

In my mind, “pay-for–performance” is just a means of politically rationalizing a way to avoid the upcoming Medicare physician fee cuts and paying the politically powerful providers more. To work, pay-for-performance has to be something better than a sum zero game—it has to be budget negative. The providers, as a group, have to get less than they would have. There must be losers.

The CBO doesn’t see any big savings here either. For example, the CBO estimates that allowing physicians to form bonus-eligible organizations and receive performance-based payments would reduce spending by $5.3 billion cumulatively over ten years—hardly a dent in a system that will cost $2.6 trillion in 2010 alone.

Universal Coverage
We need be certain that anyone who wants to be covered is covered because there is a moral imperative to do so. It is not acceptable for responsible citizens playing by the rules to be denied health insurance coverage for any reason—cost or underwriting standards.

Politicians on both sides of the aisle have argued for years that getting everyone covered will save us money because it will be cheaper to have them receive proper care early on rather than wait for them to be really sick and then cost us more. That logic is correct. But the savings really aren’t anywhere the size promised.

Will covering everyone save us money?

As Ginsburg found, if we insure more people our health care system will cost more not less. "The increase in the percentage of people with health insurance accounted for approximately 10% to 13% of the historical growth in spending." The uninsured has not contributed to the recent growth in health spending in the aggregate and will not be a driver in the future unless we find a way to insure more people.

We should find a way to cover everyone. But we should not presume the end result of giving more people comprehensive access to care would save us any money.

Where Are the Savings?
I will suggest that successful health care reform will deal with the real villains in our system:

• The inefficient and wasteful use of technology.
• Our prices for drugs, devices, and services that are dramatically higher than in other industrialized nations.
• Administrative overhead.

As Ginsburg’s review of the literature found, inefficient use of technology is the key driver in health care spending accounting for an estimated 38% to 65% of spending growth, drug prices are 70% higher in the U.S., physician compensation is 6.6 times per capita GDP for specialists and 4.2 times for primary care compared to 4 and 3.2 in OECD nations, the U.S spends 54% more for the top five inpatient medical devices, and the U.S. spends six times more for administration than the OECD nations.

I accept the premise that our health care prices and overall costs will not likely ever be as low as other industrialized nations because of our higher GDP. But the GDP gap explains only part of it.

Let me also reiterate that including these five things in any reformed health care system will be important—probably more from a quality perspective than a cost saving effort. But, if we want to just keep kidding ourselves we can count on the myths that these five things will give us the savings we need to reform our system. All we will accomplish is making matters even worse when costs continue to explode and the new promises we have made become unaffordable in ways that will make our current health care system look like a bargain.

If we want to get real, it will take a head-on assault on these more problematic villains. That will likely require us to deal more directly with the demand side as well as the supply side.

Recent posts:
The CBO report on health care reform cost options: CBO to Health Care Reformers: Naive Policy Makers Need Not Apply
The Ginsburg paper, "Demystifying U.S. Health Care Spending"
On the value of outcomes research: We Can Save 30% By Getting Rid of the Waste in the U.S. Health Care System—Sounds Like "Groundhog Day" To Me

"Let's Reboot America's HIT Conversation---Part 1: Putting EHRs in Context"

Last Month David Kibbe and Brian Klepper asked me to post an open letter to the Obama Health Team with their thoughts on how to spend the coming federal health IT money. That letter ended up as the centerpiece of a Boston Globe story with the lead line, "some specialists are warning against investing too heavily in existing electronic recordkeeping systems."

Encouraged by the response to that letter, they have asked me to post their follow-up in two parts. The first part is below and the second part will be posted tomorrow.

Let's Reboot America's HIT Conversation
Part 1: Putting EHRs in Context

by DAVID C. KIBBE AND BRIAN KLEPPER

On December 19th, we published an Open Letter to the Obama Health Team, cautioning the incoming Administration against limiting its Health Information Technology (HIT) investments to Electronic Health Records (EHRs). Instead, we recommended that the HIT plan be rethought to favor a large array of innovative applications that can be easily adopted to result in more effective, less expensive care.

The response to that post was vigorous - we received many comments and inquiries from the health care vendor, professional and policy communities - urging us to provide more clarity. One prominent commentator called to ask whether we, in fact, supported the use of EHRs. We both have been active EMR and HIT supporters for many years. Dr. Kibbe was a developer of the Continuity of Care Record standard, a de facto standard format for Electronic Medical Records (EMRs), and has assisted hundreds of medical practices to adopt EHRs. Dr. Klepper has been involved in EMR projects for the last 15 years, and the onsite clinic firm he works with provides every clinician with a range of HIT tools, including EMRs.

That said, we are realistic about the problems that exist with health information technologies as they are currently constituted. As we described in our previous post (and contrary to some recent claims), most products are NOT interoperable, meaning licensees of different commercial systems - each using different proprietary formats - often find it difficult to exchange even basic health care information.

Most EHRs are bloated with functions that often are turned off by practitioners, that are promoted politically through the current CCHIT certification process, and that drive up costs of purchase, implementation and maintenance. Despite moving toward Web-based delivery models that have MUCH lower transactional costs than old-fashioned client/server approaches, most commercial offerings are still extremely expensive, especially compared to the revenue flows of the relatively small operations they support. (John Halamka MD's recent recommendation that the Fed invest $50,000 per clinician for rapid implementation of "interoperable CCHIT certified electronic records with built in decision support, clinical data exchange, and quality reporting" provides an idea of the resource allocations that are on the table.) The very wide range of choices in the market currently raises the question of whether the implementation of a national EHR infrastructure MUST be so costly.

Many health care professionals still think of HIT as a compartmentalized function within health care organizations. But HIT has increasingly become the glue between and across all health care supply chain, care delivery and financing enterprises. In the past, it was enough for HIT to facilitate information exchange inside organizations - in which case a proprietary system would do - but we now expect information to be sent and received seamlessly, independent of platform, and including over the Internet. Most of the currently dominant EHR technologies don't even begin to get us there.

Nor, despite the rampant optimism about its potential, can a focus on HIT alone - or even more emphatically, EHRs - resolve health care's deeper problems. As the noted health care economist Alain Enthoven wrote in a December 28 New York Times editorial:

[President-elect Obama]... has suggested, for example, that electronic medical records could save Americans nearly $80 billion per year. But information technology cannot bring meaningful savings if it is used in a health care system that regularly rewards waste and punishes efficiency, as ours does.

In other words, as the recent reports from the Congressional Budget Office and the Dartmouth Atlas point out (yet again), real reforms will require an array of significant changes, many of which will face withering opposition from entrenched interests. One of those interests is the established health care information technology sector, which stands to finally win handsomely from huge Federal investment in their current products.

The good news is that this is the position held by Peter Orszag, the incoming Director of the Office of Management and Budget, the current Director of the Congressional Budget Office, an astute student of health care dynamics, and a key member of the Obama health team. In testimony before the Senate Finance Committee, July 18, 2008, he said:

The bottom line is that research does indicate that, in certain settings, health IT appears to facilitate reductions in health spending if other steps in the broader healthcare system are also taken to alter incentives to promote savings. By itself, however, the adoption of more health IT is generally not sufficient to produce significant cost savings.

In other words, it is fair to be skeptical about how we should proceed with a national HIT build-out effort. The HIT industry's current product/service offerings are analogous to the auto industry's obsession with SUVs, as much the problem as the solution. Just as the auto industry can be re-purposed to build lower-energy, less wasteful vehicles, so too should the HIT industry be encouraged to offer smarter products that serve the interests of an affordable, convenient, and evidence-based health care system.

A smorgasbord of Health Information Technologies is available to help us build a far better health system. Part 2 will describe some functions that a national HIT infrastructure renewal effort might consider.

David C. Kibbe MD MBA is a Family Physician and Senior Advisor to the American Academy of Family Physicians who consults on healthcare professional and consumer technologies. Brian Klepper PhD is a health care market analyst and a Founding Principal of Health 2.0 Advisors, Inc.