Friday, July 31, 2009

Right Idea, Wrong Time

The Wall Street Journal report, “Doctors Oppose Giving Commission Power Over Medicare Payments” by Jacob Goldstein that featured President Obama’s Budget Director Orszag explaining the creation of a commission to determine fees for physicians continues to perpetuate the flawed path to health reform our president has begun to walk. Before paying for something, we usually ascertain what we are buying. In the instance of setting fees for medical care, most of us do not know what we are buying and then we constantly complain it costs too much.

It appears that shifting Medicare reimbursement out of the hands of Congress is a good thing to do because it removes one of many conflicts of interest that continue to drive up the cost of healthcare. Some highly paid medical specialists and the American Medical Association (AMA) are lobbying against this proposal because highly paid specialists are the ones who will be most financially affected by the proposed commission. Certain highly paid Specialists are the one group of physicians that can still afford to belong to the AMA. Insurers pay fees to the AMA for providing the nomenclature for the code books they use for claims administrative payments making insurers customers of the AMA.

Congressmen are reluctant to change the method of adjusted per capitation payment for medical services by region because they depend on political support especially from hospitals and doctors in regions that receive higher Medicare reimbursements.

The Dartmouth Atlas of Health Care has long confirmed variation of medical spending by regions in the United States is not due to medical care quality or to medical care need by region. Rather, this “small area variation” is due to differences in medical practice performance, i.e. the quality of care. These variations exist not only in widely disbursed geographic regions, but also among practicing physicians within the same hospital staff and by hospitals in the same community. Our current reimbursement system rewards each region based on medical spending, not on quality of care.

The idea of making all physician payments more equitable, based on performance and across specialties and populations is important. However, when the President highlights the importance of the discussion by proposing a new commission about payment mechanisms, we are distracted from the single most important focus for public discussion: What are we getting for what we are paying when it comes to health in America?

Preoccupation with reforming health through administrative change will not reform health care unless a new strategy is invoked that provides all of us regularly reported useful knowledge about what we are purchasing… before we pay for it.

The Health Gadfly

Monday, July 27, 2009

Changing the Language of Health

Pauline Chen’s July 23, 2009 New York Times article “Getting Good Value in Health Care,” Abraham Verghese’s July 24, 2009 Wall Street Journal article “Who Speaks for Medicine” and David Leonhardt’s July 25, 2009 New York Times article “Forget Who Pays, It’s Who Sets the Costs” segue into a much different discussion about how to achieve monetary relief from America’s unrelenting health cost trend. Instead of trying to reform a system with existing nomenclature that forces even the most creative thinkers to regress to what has already failed, new vocabulary is required to shape new thoughts.

To begin with, Dr. Chen’s discussion is about health care, not health. By using the words “health care” she inadvertently perpetuates the notion that we must take care of sick people better in order to gain control of health expense. This is only partially true. We often hear that unless the care of some people is limited (rationed) all of us will continue to pay unacceptable amounts for health care. This is also not true. The use of the phrase “health care” instead of “health” has created a conundrum of thought about reforming our medical system.

We will all benefit if we can shift the discussion from “health care” to “health.” This word is more optimistic and does not drag us into the quagmire of sickness as the “care” in “health care” suggests. After all, isn’t sickness what we all want to diminish or avoid altogether?

So what is health and how is it measured? Health is the status of each person’s physical and mental condition. Good health is the condition (status) in which people not only feel mentally and physically well but also are aware of personal risks that can lead to deterioration. Without immunizations to protect against infectious disease, without knowing that results of screens for cancer are negative, without following guidelines for early identification of medical problems and without complying with proven successful treatment regimens for chronic and acute conditions, our health status is diminished. This collective diminution of health status represents a large portion of the many billions of wasted dollars spent for medical care in America.

Measurements of health (health status) can be easily summarized and quantified (indexed) for individuals and collectively for populations. Quantification of health status permits comparisons and sets the stage for measuring improvement among individuals, groups of individuals and our population as a whole.

Using “health status” instead of “health care” in our discussions implicitly changes the paradigm for improving health from reactive to proactive. This new proactive view of health prevents ongoing misinterpretation and gross underestimation of the broad opportunity afforded by comprehensive preventive health for everyone. The simple shift of language creates new thought and discussion. Using the words “health status” instead of “health care” improves everyone’s perspective on the overwhelming value of preventive health and leads to more meaningful discussion about how to achieve value in health.

Value in health is no different than value in anything we buy. It is a measure of real and perceived quality divided by cost. Value is always measurable. The following simple equation provides an index that should be used to govern health policy decisions and to measure their success or failure. This equation provides a practical structure that supports and can provide measured credibility for Dr. Verghese’s important argument for payment reform. The equation directly deals with the issues raised in this Sunday New York Times article “Forget Who Pays Medical Bills, It’s who sets the costs” by David Leonhardt.

Value = Outcome/Cost

Outcome is measured by comparing each person’s compliance to care standards set by the CDC and academies and associations that set these standards. Another component of outcome and directly related to perceived and measured value is each person’s perception of his or her care, which is quantified by survey. In this equation, cost of care is measured as cumulative dollars spent for an individual for health over finite periods of time or over a lifetime. The same value index is a measure of the quality of care provided by physicians. The value of a physician is measured by the health status of the panel of patients he cares for. How else could a physician’s effectiveness (Value) be measured?

This equation provides a quantified explanation of the long sought after explanation of the link between value, quality and cost in health. The highest value and therefore quality of care according to this equation costs the least. The equation dispels the long time held inappropriate view of health that the best care costs the most. The best care actually is always the least expensive. Health care measured in this context looks at cost over time, not in terms of a unit of service measured by a single CPT-4 code. Doctors submit codes for each medical procedures and office visit of every kind for the purpose of making insurance company billing accurate and efficient. Thoughtful decisions about health strategy for individuals in consultation with their caregivers contributes the most to high health status (quality of life) and lowers our health expense burden.

The equation, Value = Outcome/Cost accurately predicted the failure of the past forty years of insurers trying to “manage care” because objectives for managed care were actually constants, cesarean birth rates, lengths of hospital stay, etc. (nothing to do with improved health status or quality). Applying these managed care principles to this equation quickly led to the transformation of the equation from Value = Outcome/Cost to Value = K(constant)/Cost and ultimately Value = Cost. Simply put, if insurers paid no claims, the insurer got the best value! The use of misleading nomenclature (managed care) and its adverse impact on strategy (managing to constants) has deprived us of better health for over fifty years. The equation was right; the strategy of the “managed care” era was wrong.

This broader view of preventive health requires us to measure compliance with guidelines for health provided by the Center for Disease Control, The American Cancer Society, American Heart Association, The American Lung Association, The American Diabetes Association and The American Academy of Pediatrics among others.

Individual health status is measured as the difference from 100% that individuals or a population achieve compared to their goal. Organized medicine must replace the words “preventive health care” with the phrase “proactive health” as the guiding principle to bend the trend in American health expenses. This change in language creates greater opportunity for all stakeholders, individual citizens, physicians and all care givers, insurers and government.

In conclusion, using the two words “health status” instead of “health care” in our national debate is an important first step towards reaching a satisfactory conclusion to our debate on health. Health status is inclusive because all individuals have measureable health status. Health status is present among people who feel well, are chronically ill or who are acutely ill. Understanding health status will quickly lead our national effort to shift from a narrow focus on reducing individual high outlier expense to actually decreasing the number of outliers for entire populations. Improving health status is comprehensive prospective (preventive) health care.

Bending the trend of medical expense in America requires broader interpretation of preventive health, focus on health not on health care and focus on populations, not outliers. Bending the medical expense trend is measured by actual change in expense for our whole population and can not be achieved by just squeezing out some discounts, avoiding tests or depriving sick people access to advanced medical interventions. Our health expense trend will never be lowered by a new government insurance company; and it cannot be changed by government shuffling of the financial terms of contracts with doctors, hospitals, insurers and others who are on the health care dole.

“Getting good value in health care” is achieved with improved health status as defined by the equation Value = Outcome/Cost.

The Health Gadfly