Lola Butcher

I interviewed George C. Halvorson, chairman and CEO of Kaiser Foundation Health Plan, Inc. and Kaiser Foundation Hospitals, last week. Kaiser Permanente is the nation’s largest integrated health plan, serving more than 8.4 million members in nine states and the District of Columbia, so I am interested in what he considers the perfect health care system.

Are you ready?

“A perfect system basically says that we should have all of the information about all of the patients, all of the time, and that information should be available in real time. It should be available to the caregivers and to the patients; and the information should include information about each patient and about their conditions, and about optimal treatments for the conditions. And all of that connectivity is possible. It’s all doable. Pieces exist, but we have chosen not to put those pieces in place in a way that we should put them in place.

What I’m going to be arguing and suggesting is that we need to e-connectivity, e-visits, e-scheduling, e-linkages, that the patient should be able to get e-consults, and that the computer and connectivity should become possibly the single most important tool available to healthcare. That the computer should go from being something that just stores data and is rarely used to improve care, to being maybe the single most important tool in care–a  little bit like Bones in Star Trek, when he pulled out that little device and scanned the patient, and quickly get a sense of all of the information about the patient, and all of the information about the disease. I think that’s actually a model for where healthcare ought to go, is they ought to be creating that kind of functionality. Probably not hand-held at this point, but actually, hand-held not that far down the road.

We need computer models of the human body, we need computer models of the patient, but we also need information about each patient, and that information needs to be real time, and it needs to be focused on best care. So, I’m (advocating) about the need to move this country and our healthcare infrastructure toward the perfect system and the perfect set of connectivity, and basically say that doing anything less than that would be a huge mistake, and almost criminal relative to our patient care.”

I had the chance to interview Dr. Paul Ginsburg, president of the Center for Studying Health System Change, as a preview to his presentation at the World Congress on Consumer Healthcare and Wellness in mid-September.

Dr. Ginsburg is an economist, nationally recognized for his work in health economics and health policy, especially healthcare market changes and cost trends. He will participate in a panel that addresses something everyone in health care is wondering about:  Will Consumers Be Effective Catalysts to Reform the U.S. Health System?

Butcher: You just released a study that says 56 percent of American adults - that’s more than 122 million people - sought information about a personal health concern from a source other than their doctor during 2007. Does this suggest that Americans are becoming more active participants in their healthcare decision making?

Ginsburg: Oh, yes, they certainly are. American’s interest in their health has increased a great deal, say, over the past decade. We just know how much more space newspapers and television is devoting to personal healthcare issues, and of course we have a lot of development on the internet as far as sites that people can go to seek this information.

Butcher:  Many health plans have developed consumer support tools - speaking of the internet - such as online information about hospital and physician quality, and calculators that help plan members estimate the cost of care. Are consumers using these tools, and if so, how are they using them?

Ginsburg: Well, I’ve spoken to the plans, and the plans are all eagerly developing these tools. So when you ask them, Are consumers using them? They don’t know.

My sense is that this is clearly the direction long-term where plans will play an increasingly valuable role as an information intermediary. But I think we’re at the very early stages of it, and I doubt that there’s a lot of use. I doubt that consumers are depending on it.

One of the chicken-and-the-egg problems is that I don’t think consumers are going to be very receptive to using price information until they have more confidence in understanding the quality of different providers… Consumers can actually act perversely in the sense of not having confidence in the quality information, and equating higher price with higher quality, and thus shifting to higher priced providers, even if they actually reduce their quality of care in the process.

Butcher:  Is America’s healthcare system organized in a way that allows consumers to be effective shoppers for healthcare services? And does the healthcare marketplace respond to consumer behavior in the same way that the retail marketplace works?

Ginsburg: No, the healthcare system is very far from accommodating consumer desires, to the degree they have them, of being effective shoppers. For most cases,  medical care isn’t standardized enough that you can just call up places and, knowing what you need,  find out what the price is and the indicators of quality. Because so much of health care involves diagnosis, checking into what something is going to cost (and learning about) a provider (requires the patient) to invest a lot of time and money to make that call.

If you go to the dentist, if you need an inlay put in, a dentist won’t give you that over the phone because they’re going to say it all depends on the details of your condition. So, you’re going to have to invest the time and money of visiting a dentist to get an estimate.

So, I don’t think the healthcare consumer will ever be able to be as good a shopper as in other areas.

I was lucky to interview Donald W. Fisher,  president and CEO of the American Medical Group Association (AMGA), a trade association that represents medical groups, including some of the nation’s largest, most influential integrated health care delivery systems.  

AMGA’s membership includes medical groups that deliver health care to more than 50 million Americans in 42 states.

Butcher: What have we learned from the many pay for performance programs that are already in place?

Fisher: I think probably what we’ve learned from the get-go is that pay for performance just in and of itself does not go far enough, that if you build onto a current perverse reimbursement system incentives to kind of pay for assumed outcomes, you’re just going to get some small incremental improvements, but you’re never going to really get us to where we need to be with a new reimbursement system that really rewards quality and efficiency. Our current system which is built on volume and through-put simply will never get us there, so we need a whole new reimbursement system. I think that’s probably what we’ve learned the most is that it’s a great first step. It’s got us thinking about a new culture of payment that we need to change what we’re currently doing, but it’s not the final destination. It’s just a stop along our journey.

Butcher:  How soon do you see real payment reform coming, and do you foresee this as something that will happen gradually or are we getting ready for a rapid shift in the way care is paid for?

Fisher: I would like nothing more than to see a rapid shift to move completely away from the fee for service through-put model into something new. There’s a whole lot of proposals on the table that will get us there. I say that simply because we continue to pay for…the poorest quality gets paid the most in this country, and the less efficient providers get rewarded the same as the efficient providers. In fact, the efficient providers often get penalized for providing care efficiently and high quality. I’d prefer a rapid shift. My gut, though, says that it probably won’t happen that way. It will be incremental. There will be a lot of pilots. There will be testing of different payment mechanisms that will go on over the next three to five years, but we’ve got to have something by 2015 to 2018, because that’s when the babyboomers will be enrolled in Medicare in 2011, growing in significant numbers each year. They’re going to start to hit some chronic care conditions that are going to really drive our costs through the ceiling by 2015 to 2020.  I think it will be incremental. I’d love to see it be a rapid shift.

Butcher: Who do you think will initiate payment reform? Will this come from Medicare – I’m familiar with the MedPAC proposal – or private payers or perhaps providers themselves?

Fisher: When I look at this, I think that probably the drivers are going to be the employers and the providers themselves. I really don’t see Congress being the lead in creating health care reform. You kind of have a chicken/egg. You’ve got this large Medicare program which consumes most of the dollars in health care in this country, but yet you’ve got them governed by a Congress that has a very politicized way of looking at things. So it’s very difficult to get through the politics to do what’s really right for Medicare beneficiaries, and it’s really difficult to make changes in the system. My guess is it probably won’t come from Congress at the initial site. You’ll see a lot of things going on in the commercial side, a lot of experimentation pushed by providers as well as the employer community.

The Medicare Payment Advisory Commission, which guides the nation’s largest health care payer, is suggesting major changes to the way health care is delivered in America. 

Physicians who do not like pay-for-performance programs may rue the day they started complaining about them.

P4P programs, which generally keep patients out of the mix, are easy to accept in comparison to public rating systems that reward patients, via lower copayments, for learning which physicians offer the highest quality care at the lowest cost and taking their symptoms to those doctors.

Physicians are understandly nervous about ratings, which can be misleading or downright wrong. But payers–frustrated that the P4P movement is going nowhere fast–are looking for new ways to reward physicians who will get in line with payers’ cost-effectiveness goals, and physician ratings is one of them.

In Massachusetts, the state medical society sued Group Insurance Commission, which buys insurance for more than 300,000 current and retired state employers, claiming that its physician rating system “fraudulently misleads patients and unfairly affects the reputation of physicians.”

No quaking in Massachusetts. Other payers are undaunted. As reported in the Boston Globe, two of that state’s biggest health plans are moving ahead with physician rating systems instead of waiting for the lawsuit to play out.

The New York state Medicaid program is the latest to announce it’s going to stop paying for some of the so-called health care that hospitals provide that, in fact, hurts more than it helps. Wrong-site surgery, anyone? Foreign object left in during surgery?

FierceHealthcare reports on the latest payer to make the seemingly common-sense move to stop paying for preventable medical errors:

New York’s Medicaid program has decided to stop reimbursing for avoidable hospital complications and medical errors it considers to be “never events.” Starting in October, it won’t pay for care related to 14 conditions, including wrong-site surgery; foreign objects left in the body; medication errors; blood incompatibility; contaminated drugs and patient disability from electric shock. Hospitals that want to receive Medicaid payments will have to prove that such conditions were present on admission to get paid for treating them. Meanwhile, the state expects to keep expanding this list.

This trend, which now includes Centers for Medicare &  Medicaid Services, CIGNA, WellPoint, and lots of others, makes so much sense…and yet why does this feel like a raft of unintended consequences getting ready to be revealed?

It is regrettable that hospital administrators do not recognize, let alone deal with, the unacceptability of preventable medical errors until payers start refusing to send the checks. There’s no doubt that the financial consequences of poor practices that result in infections and other serious medical harm will get hospitals to change their ways. But at what cost? The bureaucracy that is being built up to make the “no pay” trend work will be substantial, adding to the high cost of care. And the high cost of care translates into reduced access for some patients.

Term limits for legislators seemed like a good idea until they were passed–and now they look like big problems. I wonder if we’ll say the same thing about the ‘never event’ trend some day.