Health Insurance Reform - It's Not a Bumper to Bumper Warranty

We have some Healthcare reform in the US but we are still challenged with a system that is failing to deliver results. This piece recently: America Ranks No. 1 for Over-Priced, Inefficient Health Care featured the chart from the Commonwealth fund

That ranks the US last in a group of 11 industrialized countries.

As he puts it:

There is one way America is clearly exceptional:  we have a healthcare system that is dramatically more expensive than the rest of the industrialized world, but it doesn’t manage to make us any healthier.While  the Affordable Care Act attempts to address access it does little to address the cost of the system and the inefficiencies. This does not require a reduction in premiums it needs to address the costs built in to the system that we are all paying for in on form or another

Dr Hans Duvefelt wrote this piece on the healthcare blog: A Swedish Country Doctor’s Proposal for Health Insurance Reform that draws on his personal experience in "socialized medicine, student health, cash-only practices and government-sponsored rural health clinic working for an underserved, underinsured rural population."

His focus is as a primary care physician but most would agree this is one of the most challenging areas for reform with the shortage in clinicians and low reimbursement rates that is driving doctors out and certainly no encouraging our new generating of clinicians to dive into this essential area.

His main proposals center on basic services that are covered by a flat rate for populations

• Have the insurance company provide a flat rate in the $500/year range to patients’ freely chosen Primary Care Provider, similar to membership fees in Direct Care Medical Practices.
• Provide a prepaid card for basic healthcare, free from billing expenses and administration.

but importantly changing the responsibility and feedback on the cost from a central purchasing authority (the government for example) to the user themselves.

• Unused balances can be rolled over to the following years, letting patients “save” money to cover copays for future elective procedures.

And offers a pathway to specialty care with some appropriate oversight and appriroate levels of reimbursement.

• Keep prior authorizations for big-ticket items, both testing and procedures, if necessary for the health of the system.
• Keep specialty care fee-for-service.

 These are clever suggestions and would do much to encourage the patient engagement that will be, as Leonard Kish stated

Patient Engagement is the  Blockbuster drug of the century

He rightly points out that the current health “insurance” products are often poorly named - given that insurance that pays and copiers to identify diseases with screening but then stops short of paying to treat conditions and diseases when they are found through that screening. But most of all Insurance should be user driven and priorities and decision left in the hands of the individual and their clinician and not relegated to others who sit in offices emoted from clinical practice and focused on fiscal drivers not on care and quality fo life

Health insurance is not like anything else we call insurance; all other insurance products cover the unexpected and not the expected. Most people never collect on their homeowners’ insurance, and most people never total their car. Health insurance, on the other hand, is expected by many to be like a bumper-to-bumper warranty that insulates us from every misfortune or inconvenience by covering everything from the smallest and most mundane to the most catastrophic or esoteric.

His point about setting of priorities is important - no matter how you cut it there is no unlimited pot of money o resources to treat everything and everybody. These are difficult conversation and ripe for abuse by those with their own agenda’s through fear mongering and use of emotive terms like “Death Panels”.

None of this aspect of reform is simple but it needs to be addressed and included.

The United Kingdom’s National Health Service (NHS) may not be perfect but they have started this process of addressing the challenge of allocating resources in an open manner. They developed the the quality-adjusted life years measurement (QALY) out of the National Institute for Health and Care Excellence (NICE). There has been criticism and push back as there will always be but the concept and methodology use is not limited to the UK. While imperfect as Laozi (c 604 bc - c 531 bc) stated:
A journey of a thousand miles begins with a single step

There is lots of detail in this piece and I would encourage you to go over and read it

Are you "Under Observation"

This is not news for many in the healthcare profession as they face the challenges of billing rules and regulations and the sometimes obscure idiosyncrasy - but as you can see form this piece on NBC for many patients this is a surprise and a costly one at that

Visit NBCNews.com for breaking news, world news, and news about the economy

Hospitals are told that they "have to" use this status (Under Observation) if the patient doesn't meet a host of criteria for "Admission" all being driven by a series of guidelines that are publicly available although not well known and much of it in response to the RAC audits
All this is set to get worse with the “Two Midnight” rule (you can see some guidance here and some of the issues on this here)

The law of Unintended Consequences - The "Cobra effect" on Patients

For many decades, newspapers were big; printed on the so-called broadsheet format. However, it was not cheaper to print on such large sheets of paper — that was not the reason for their exorbitant size — in fact, it was more expensive, in comparison to the so-called tabloid size. So why did newspaper companies insist on printing the news on such impractical, large sheets of paper? Why not print it on smaller paper? Newspaper companies, en masse, assumed that "customers would not want it;" "quality newspapers are broadsheet."

When finally, in 2004, the United Kingdom's Independent switched to the denounced tabloid size, it saw its circulation surge. Other newspapers in the UK and other countries followed suit, boosting their circulation too. Customers did want it; the newspaper companies had been wrong in their assumptions.

When I looked into where the practice had come from — to print newspapers on impractically large sheets of paper — it appeared its roots lay in England. In 1712, the English government started taxing newspapers based on the number of pages that they printed. In response, companies made their newspapers big, so that they could print them on fewer pages. Although this tax was abolished in 1855, companies everywhere continued to print on the impractical large sheets of paper. They had grown so accustomed to the size of their product that they thought it could not be done any other way. But they were wrong. In fact, the practice had been holding their business back for many years.

Everybody does it

Most companies follow "best practices." Often, these are practices that most firms in their line of business have been following for many years, leading people in the industry to assume that it is simply the best way of doing things. Or, as one senior executive declared to me when I queried one of his company's practices: "everybody in our business does it this way, and everybody has always been doing it this way. If it wasn't the best way of doing things, I am sure it would have disappeared by now".
But, no matter how intuitively appealing this may sound, the assumption is wrong. Of course, well-intended managers think they are implementing best practices but, in fact, unknowingly, sometimes the practice does more harm than good.

One reason why a practice's inefficiency may be difficult to spot is because when it came into existence, it was beneficial — like broadsheet newspapers once made sense. But when circumstances have changed and it has become inefficient, nobody remembers, and because everybody is now doing it, it is difficult to spot that doing it differently would in fact be better.

The short-term trap

Some "best practices" may in fact start out as bad practices, but practices whose harmful effects only materialize years after their implementation. Yet with short-term consequences that are quite positive, firms go ahead and implement them — and never connect the problems of today with the practice launched years ago.

For example, in a project with Mihaela Stan from University College London, we examined the success rate of fertility clinics in the UK. A number of years ago, various clinics began to test, select, and only admit patients for their IVF treatment who were "easy cases"; young patients with a relatively uncomplicated medical background. Indeed, treating only easy patients boosted the clinics' success rates — in terms of the number of pregnancies resulting from treatment — which is why more and more firms started doing it. It improved their rankings over the short term. However, our research on the long-term consequences of this practice clearly showed that selecting only easy patients made them all but unable to learn and improve their treatment and success rate further. Clinics that continued to take on a fair proportion of difficult cases learnt so much from them that after a number of years their success rates became much higher — in spite of treating a lot of difficult patients — than the clinics following the selection practice. Unknown to the clinics' management, the seemingly clever practice put them on the back foot in the long run.

Clearly, the long-term negative consequences of a seemingly "best practice" can greatly outweigh its short-term benefits. But when managers don't see that practice as the root cause of their eroding competitive position, the practice persists — and may even spread further to other organizations in the same line of business.

Self-perpetuating myths

When seeming best practices become self-fulfilling prophecies, they're even more difficult to expose. Take the film industry. Film distributors have preconceived ideas about which films will be successful. For example, it is generally expected that films with a larger number of stars in them, actors with ample prior successes, and an experienced production team will do better at the box office.

Sure enough, usually those films have higher attendance numbers. However, because of their belief that those films will succeed, film distributors assign a much bigger proportion of their marketing budget and other resources to those films, as professors Olav Sorenson from Yale and David Waguespack from the University of Maryland have shown (PDF). Once they factored this spending bias into their statistical models, it became evident that those films, by themselves, did not do any better at all. The distributors' beliefs were a complete myth, which they subsequently made come true through their own actions. The film distributors would have been better off had they assigned their limited resources differently.

Most experienced executives have strong beliefs about what works and what doesn't, and logically they assign more resources and put more effort into the things they are confident about, eager not to waste it on activities with less of a chance of success. As a result, they make their own beliefs come true. The good box office results of the films distributors expected to do well reaffirmed their prior — yet erroneous — beliefs. This reinforced the myth of the best practice, and stimulated it to spread and persist.

Hence, with all the best intentions, executives often implement what is considered a "best practice" in their industry. What they do not know is that some of these practices are bad habits masquerading as efficiency boosters, their real consequences lying hidden. Questioning and uncovering such practices may significantly boost your competitive advantage, to the benefit of your firm and, eventually, us all.

via blogs.hbr.org

Nice piece looking at the challenges of unintended consequences through the ages. The piece is replete with great examples of why introduction of new rules and what appears like a good idea is not always.
This is often described as the Cobra Effect named after a famous incentive introduced by the British rulers in India.

In healthcare we need to be vigilant of the same unintended consequences (as we do in medicine). The new plans with high deductibles and incentives to reduce total spend by individuals is a good case in point. If the incentives are sufficient we could end up stopping patients from seeking therapy. In a recent example related to me a high deductible plan was selected by an individual who discovered to late that his relatively minor medications for a mild skin condition went from a cost of ~$200 per year to a cost of > $4,000 per year.
Casting aside the issue of drug costs that has as yet not been adequately addressed in any of the reforms to date, the unintended consequence is patient stops treatment. This may seem minor but the long term consequences may well be significant and the mental effect alone will have impact on that individual.

It may not be possible to predict all the possible outcomes but it is important to be aware and allow for rapid course corrections as we learn more going through these big changes in our healthcare systems

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A shift in how healthcare is paid for

CHELMSFORD, Mass. — It's hard work being one of Dr. Damian Folch's diabetic patients.

If a lab test shows high cholesterol, Folch is quick to call or email. No patient can leave the office without scheduling an annual eye exam, a key preventive test. A missed exam or an appointment leads to another call.

"We are a real pain in their necks," joked Folch, a primary care physician in suburban Boston. "We track them down."

That kind of attention has always been good medicine. For Folch, 59, it's now good business. He is among thousands of physicians in Massachusetts whose pay depends on how their patients fare, not just on how many times they see them. If patients stay healthy and avoid costly medical care, he gets more money.

This simple shift in how healthcare is paid for — long seen as key to taming costs — has been occurring in pockets of the country. But nowhere is it happening more systematically than in Massachusetts, the state that blazed a trail in 2006 by guaranteeing its residents health insurance. Now Massachusetts, a model for President Obama's 2010 national healthcare law, may offer another template for national leaders looking to control health spending.

"There have been few greater periods of change in American medical history … and this is the epicenter," said Dr. Kevin Tabb, a former chief medical officer at Stanford Hospital and Clinics in Northern California who now heads Beth Israel Deaconess Medical Center, one of Boston's leading hospitals. "It is striking how different Massachusetts is from the rest of the nation."

In the last three years, commercial insurers in the state have moved nearly 1 million patients into health plans that reward doctors and hospitals that control costs while improving quality.

About 180,000 Massachusetts seniors are on track to get care from physicians paid this way by Medicare through a new initiative included in the national health law. And this summer, state lawmakers passed legislation aimed at moving 1.7 million government employees and Medicaid recipients into similar health plans.

Within a few years, close to half of the state's 6.5 million residents could be in a health plan that pays for medical care in a fundamentally different way.

Massachusetts' move to reshape how healthcare is financed is still in its infancy. And the state continues to have the nation's highest medical costs, spending nearly 50% more per person than the national average.

That has fueled skepticism from conservatives who see too much government involvement and from liberals who say the state should more aggressively set medical prices. "I don't see how we can rely on market forces," said Nancy Turnbull, associate dean of the Harvard School of Public Health.

But early research in Massachusetts suggests the approach may be slowing health spending. And medical providers, business leaders and elected officials are increasingly hopeful they are making headway.

"Whether this is sustainable remains to be seen," said James Roosevelt Jr., president of Tufts Health Plan, one of the state's largest insurers. "But there is a broad consensus that it makes more sense to pay for healthcare this way."

The building block of the Massachusetts experiment is a contract between insurers and groups of doctors known as a global payment. In such contracts, physicians receive a budget to care for a cohort of patients. If doctors can care for their patients more economically, they keep a portion of the savings. If patient care exceeds the budget, they pay a penalty.

That is supposed to encourage physicians to keep their patients healthier and direct them to lower-cost hospitals and specialists.

If poorly designed, the arrangement can create a financial incentive to skimp on care. That perceived problem undermined earlier experiments with global payments and provoked a backlash against managed care in the 1990s.

"The most widespread attempts to do this failed," acknowledged Andrew Dreyfus, president of Blue Cross Blue Shield of Massachusetts, the state's largest health plan and a leading proponent of the new generation of global payment contracts. "There was no quality measurement.... It was really just about dollars."

In a key change, Blue Cross now links its contracts to dozens of quality metrics that track whether patients get the right screenings and exams, whether doctors and hospitals prescribe the correct drugs — even whether patients are satisfied with their care. That means a doctor who withholds care in hopes of saving money faces a penalty if patients suffer or are unhappy.

In Folch's suite outside Boston, these measurements have been transformational.

On a shelf in his tidy office are reams of spreadsheets, updated constantly, that outline how each of his patients is faring, which tests they have taken and which are due. With bonus payments from Blue Cross, he has hired new aides and installed a new computer system to better track his patients.

"We had to change the way we practiced," Folch said.

Folch also had to explain to patients why he wants them to get X-rays, eye exams and other routine care at the community hospital rather than at one of Boston's famous teaching hospitals, where an MRI that normally runs about $1,100 can cost as much as $1,650.

That wasn't easy.

"I try to explain that I'm not throwing them to the lions. I am referring them to people that I go to," Folch said. "If you have some rare form of cancer, then of course we're going to, say, get a second opinion.... But I had a lot of difficult conversations at first."

Some patients quit his practice.

Change has not come easily around the state, particularly for hospitals that depend on filling beds, not on keeping patients healthy enough to prevent hospitalizations.

"It's a dramatic reorientation," said Dr. Tom Lee, an executive with Partners HealthCare, the state's dominant hospital group.

Medical practices like Folch's are already making significant strides, however.

Between 2008 and 2011, the percentage of Folch's patients getting recommended colorectal cancer screenings increased from 61% to 82%. The share of patients with cardiovascular conditions managing their cholesterol jumped from 75% to 89%. And last year, all of Folch's diabetic patients successfully managed their cholesterol and had their yearly diabetic eye exams.

"If he sees something he doesn't like, he contacts me right away," said Bill Wooster, a 59-year-old sales representative who began seeing Folch after having a stroke four years ago. "I'm his patient, but I feel like more of a friend."

Those results are mirrored elsewhere. Statewide, the quality of care provided by physicians in a Blue Cross contract like Folch's — known as an Alternative Quality Contract — outpaced that of other medical providers, according to an analysis by Harvard Medical School researchers published in the journal Health Affairs.

Although the cost savings were modest, healthcare spending increased more slowly for the Blue Cross medical practices compared with others. Patients were hospitalized less and used fewer expensive services like advanced imaging. "These results suggest that global budgets with pay-for-performance can begin to slow underlying growth in medical spending while improving quality of care," the researchers concluded.

It's unclear whether other states, especially those where political resistance to the national health law remains fervent, will follow Massachusetts' lead on cost control. "Much of the rest of the country is still battling over the merits of covering everybody," said Alan Weil, president of the National Academy for State Health Policy.

In Massachusetts, however, the reforms remain very popular. "This has allowed me to be a better doctor," Folch said. "And it's better for my patients."

noam.levey@latimes.com

via latimes.com

A simple idea that is not news as I have pointed out on several occasions
Universal Health Care – Pay While You are Healthy and Reassessing Primary Care.
The Chinese principle of paying the local doctor while you are well may seem like an oversimplification but as Einstein said

Everything should be made as simple as possible, but not simpler

This seems like a really simple and a great strategy - it would help to capture data in sufficient detail to be able to demonstrate value and quality in the population. The capture of this data would be secondary to the actual health management and delivery of care that is keeping patients well. Unlike the current system which focuses on the documentation as verification of clinical activity and consumes much of the doctors time. I'm willing to bet most clinicians would be supportive of any system that focuses on the care and generates sufficient information to demonstrate the health improvement rather than burdening the care providers with data entry tasks.

 

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