Navigating Healthcare – Patient Safety and Personal Healthcare Management

Healthcare – Its Personal

The Great Healthcare Debate

Healthcare is personal and front and center in our minds not just because we all intersect with it in some way but it employs 1 in 9 people in the United States. With the current state of our media and political system with polarized debates, he said she said talking heads on the media, the echo chamber of social media and the 24/7/365 barrage of news and fake news it can be hard to see a pathway out of the quagmire we find ourselves in. But we all want to see that path. I just don’t believe that people get up in the morning wondering how they can decimate the healthcare services and the lives of their fellow human beings. We don’t get up out of bed every day wondering how best to punish people who may have made bad choices in their lives or who find themselves in unfortunate positions though geography (the zip code effect) or genetics. I know I don’t and I don’t think you do either.

Yet the stream of coverage and what we read, see and hear online and sometimes even in person suggests that this is the case. I can’t answer the reasons why but I’ve read a string of articles and reporting that variably suggests its always been like this to this is the fault – and then insert the name of your favorite whipping horse. Ultimately it does not matter – unless you believe that people wake up with malintent every morning it’s better to start with an understanding of the problem and then thinking about possible solutions and how we can apply them quickly and effectively

So Let’s Start with some of the fundamental problems in our healthcare system – to be clear we are not alone in the world. I have seen and heard from many others in different countries who are all struggling to varying degrees and with different focus and priorities the same issues. If I had to boil it down to one issue I would say

Limited Resources and the Prioritization of the Allocation of those resources

It’s a familiar equation to anyone trying to balance their budget or allocate their time. If you are like me you may find there are just not enough hours in the day for the task list you created in the morning and wishing either to stretch time (time dilation) or perhaps be able to turn time back with the Wizarding world’s  Time Turner. There are two basic options available – reduce the inputs or reduce the outputs. In the vernacular of budgeting – either spend less or make more money. Both may be viable and depend on personal circumstance but undoubtedly there will be easier and harder solutions. Ultimately we all have to make our own personal decisions – so one solution or size does not fit all.

Photo from

It would be foolish to suggest that this covers all the complexity of the healthcare system as we all know healthcare is incredibly complex and always reminds me of the game Jenga.


This does not cover everything and there are many other elements in play but it is certainly a start and one that individuals and organizations can focus on to start to make incremental improvements.

As one Chinese proverb states:

Every journey starts with a single step

And turning that step into a habit is one of the best ways of setting a path to improvement.

Demand Side of Healthcare

This is the access and use of the system and the burden does not just fall on the individual. But it does start there as it is out personal choices to access and use available services that creates demand. Historically in the United States, the cost and payment of this access have been disassociated from the individual. When you visit the doctor or pharmacy you don’t pay the actual cost of the service – your insurance carrier does. Ultimately we do all pay for this through our insurance premiums and for many the contributions made on our behalf by our employer that is part of the compensation we receive for working for them but at the point of care, we are disconnected from the price and cost of a service.

Patient Accessing Care

To a varying degree individuals have some form of co-pay – a personal cost that is defined by the insurance coverage and is shifting increasingly to the individual under the new insurance plans called High Deductible Health Plans (HDHP). One of the intentions of this policy is to make the individual responsible for this cost in an attempt to influence behavior and decrease unnecessary access. But this comes with the inevitable unintended consequences with cost avoidance strategies by individuals who knowing they will be held responsible for the full cost of a visit, drug or test may elect to decline to have or use the service.


I’d count myself in that crowd having been on a HDHP plan for several years. I can point to several decision where I have declined tests, treatment and access to care because of the nature of my personal responsibility – I have an associated health savings account (HSA) which should cover the capped amount of cost for the year. But the crippling nature of potential costs associated with a catastrophic medical problem – a serious accident, cancer, heart attack are all so terrifying that I see the HSA as a buffer against the potential of medical insolvency that might result especially when you consider the impact on a family with one source of income that would be impacted by any medical disability.


Insurers Paying for Care

Insurers want to reduce their costs – and even the non-profits have to make money so are focused on the bottom line if they want to continue to serve their customers and population. So they look to find ways to reduce the unnecessary access to care imposing barriers and limits. There was a gate keeper concept that requires a referral letter from a primary care physician before you can access s specialist – that service by the way costing you additional fees to see the primary care provider. There are formulary requirements that exclude certain drugs from coverage and attempts to limit access to specific doctors and networks to strengthen the buying and negotiation power of the payor with the providers in the system.


Providers Delivering Care

On the provider side the clinal professionals delivering the care all arrived at this point having selected the expensive assault course of education to train and qualify to be able to deliver care. For doctors, it’s persistence and endurance that win out. The barriers to entry are high and tied to economics. They all have the same desire to help patients – but economics and the burden of the educational system can overwhelm just about anyone and they have bills to pay both for their education but also the infrastructure they must use to be able to both deliver care but also bill and be paid for delivering. They want to reduce their overhead and spend as much of their time and resources on the delivery of care but to survive in the system must allocate significant amounts of money to non-clinal systems and activities. Estimates of these costs suggest that at least 30% of the healthcare costs we as a society pay in the United States are tied to administrative and billing functions. The data’s still lagging but projections for 2016 put the total healthcare bill at $3.207 Trillion (thats $3,207,000,000,000 or more than $10,000 per person in the USA)

Healthcare Administrative Cost: $962 Billion Dollars



Reconciling the Differences

Credit Imgur

The difference of opinion often centers on what is unnecessary – in the eyes of the patient they need and want the care they think is appropriate to them. Some of this is fed by a constant stream of information that even for an well informed clinically experienced specialist can be difficult to comprehend and make informed decision. We want wants best for our personal health and the health of our family and loved ones. But sometimes what the patient may think is best may not be – a great example is the steady stream of requests for antibiotics for treatments of minor infections. Not every sore throat or cough demands the use of antibiotics and in fact, in many cases, their use is damaging as we face a future where this line of defense is increasingly being overrun with smartly adaptive bacteria who develop resistance with terrifying speed.


Payors Perspectives

The same is true of payor and insurers – they face a rising tide of costs associated with care that is increasingly complicated and expensive and struggle to balance their budget.Faced with one patient who’s costs for treatment might be hundreds of thousands of dollars or more so they limit or decline this in favor of treating multiple other patients where their cost of treatment is thousands of dollars or less? The utopian answer is treat everyone but we they like each of us do not have unlimited budget or resources and have to make hard decisions. And the problem with healthcare fundedfor the population but access individually.


Healthcare is funded for the population but access individually


Clinicians Perspectives

Clinicians also have a view on what’s appropriate – and the vast majority act with total integrity (I would like to say all of them but sadly there are occasional stories of clinicians and healthcare professionals who game the system – sometimes with simple prescription based fraud or other times over treatment of stenting in cardiac cases). Sadly for a profession that is so dependent on trust the rare cases of fraud and abuse unfairly tar everyone with the same brush. As I said above – I believe everyone gets up in the morning with the best intentions and this is true of the clinal professionals who each and every day battle a system to deliver the care and compassion they set out to deliver when they took the path into healthcare. They want to say no to unnecessary treatment but the personal pressures applied and the underlying compassion and the innate drive that was the foundation of why they entered the profession can influence them to order and prescribe because they are unable to explain the lack of value and offering this option makes their patient happier and comfortable.

So how do we reconcile these differing opinions


Economics and Making Choices

Which path is best

There’s a sad fact in the US healthcare system – we do not talk about cost effectiveness. Its not just a taboo subject but also a forbidden topic, As Aaron Carroll (The Incidental Economist) noted in his piece Forbidden Topic in Health Policy Debate: Cost Effectiveness we avoid talking about cost-effectiveness in the United States.

Some think that discussing cost effectiveness puts us on the slippery slope to rationing, or even “death panels.”

As he points out – if there was a pill available that could extend your life by one day but costs a billion dollars, most would accept this as an unacceptable trade off and decline it. But that’ extreme – as you decrease the cost where does that line become blurred?

what’s to stop us from deciding that spending a couple hundred thousand dollars to extend grandma’s life for a year isn’t worth it either?

More troubling is the shackles that have been placed on the Patient Centered Outcomes Research Institute – who were founded but explicitly prohibited it from funding any cost-effectiveness research at all! How can an outcomes institute assess healthcare if cost effectiveness is not part of the equation?

“We don’t consider cost effectiveness to be an outcome of direct importance to patients.”

In fact, we in the United States are so averse to the idea of cost effectiveness that when the Patient Centered Outcomes Research Institute, the body specifically set up to do comparative effectiveness research, was founded, the law explicitly prohibited it from funding any cost-effectiveness research at all. As it says on its website,

PCORI was established to fund research that can help patients and those who care for them make better-informed decisions about the healthcare choices they face every day, guided by those who will use that information.


Quality-Adjusted Life Years

As he points out there is actually a fairly robust strategy and measure that can offer insights into the value of measuring health outcomes – QALY’s (Quality-Adjusted Life Years) which the National Health Service has been using fro some time in the National Institute for Health and Care Excellence (NICE) that provides guidance, advice, quality standards and information services for health, public health and social care. Also contains resources to help maximise use of evidence and guidance. There is no doubt they are imperfect but very little in life is perfect and perfection should not be a barrier to progress. The use of this is not a sole determinant – but offers some measure of science and data to making what are incredibly difficult tdecisions

So in the current debate of what health system we need to put in place I would advocate the inclusion of cost effectiveness as one of the factors that must be considered and the QALY and perhaps even the Incremental cost-effectiveness ratio (ICER) as part of this difficult discussion.

I’m all about incremental changes and while including a cost effectiveness as a measure may seem a bigger stretch I feel it is a smaller step in the right direction. Can we achieve this? Is there a better incremental step we can take to resolve the challenges of our healthcare system? Leave your thoughts below.

Healthcare – Its Personal was originally published on Dr Nick – The Incrementalist


Wise Up to Hidden Healthcare Fees

It’s perverse but the healthcare system in the United States is making you sick. Don’t believe me – then maybe you have a high-end plan with no deductible and full access and no ceiling. But there are not many of those and for the rest of us, I imagine your interaction with the system is as frustrating and stressful as mine – probably on a spectrum depending on your plan (High deductible plan or the more traditional Preferred Provider Organization (PPO) and co-payments.


Fee for Service Healthcare

The cynical view might be this is deliberate since our system remains firmly stuck in a fee for service model – healthcare providers are paid to do something…anything. From its original development, this made sense – our capacity to treat conditions was limited and the cost of these treatments in line with our ability to pay for them. But along this journey science and in particular the incredible progress of medical research got involved and we have been on a veritable tear of progress and innovation, or as the Exponential Medicine group would say Exponential progress.

Original from Foundation Teaching Economics

There is a continued push towards a more robust and accountable model – Accountable Care Organizations have been set up and these models of total care and coverage and responsibility tested for effectiveness and economic effect. There is lots of disagreement on the success or failure of ACO’s and it is fair to say that the jury is still out. But intuitively we know that taking care of the complete picture and being responsible for the total care of patients health is better for the patient and for outcomes. I have seen it time and again where individual mandates or focus induce unwanted/unexpected/unintended consequences elsewhere in the whole system.

Discharging Patients Early – Unintended Consequences

Discharging patients from the hospital early typically results in better outcomes. Early programs that incentivized this behavior and rewarded programs that got patients out of the hospital early were deemed successful but failed to take account of the downstream impact of readmissions resulting from too early a discharge and subsequent complications for that patient that could have been avoided.

Fixing a Broken System

The recent book “American Sickness” by Dr Elisabeth Rosenthal “An American Sickness” takes on the existing system and is filled with strategies for patients faced with mounting medical bills, an intractable and aggressive healthcare system that is unflinching in seeking payment and by many estimates the leading cause of personal financial crisis and insolvency. While the figures remain under debate my own personal reality living with a High Deductible Plan that has found me

  • Self-treating Fractures
  • Becoming my own compounding pharmacy and
  • Spending months and many hours fighting multiple bills


In the case of one screening procedure, that under the current regulations are fully covered but thanks to either mistaken coding or perhaps even deliberate coding, remains outstanding and in two of the three cases, the billing organizations despite my attempts at regular communications, response and protests were handed over to debt collection agencies.

So I am with Dr. Rosenthal and “breaking down the monolithic business”.

The situation is far worse than we think, and it has become like that much more recently than we realize. Hospitals, which are managed by business executives, behave like predatory lenders, hounding patients and seizing their homes. Research charities are in bed with big pharmaceutical companies, which surreptitiously profit from the donations made by working people. Americans are dying from routine medical conditions when affordable and straightforward solutions exist.

Employer Sponsored Insurance

Central to the challenges is the arcane concept that you access to healthcare and health insurance should be linked to your employment. As one friend of mine commented, “There are some who believe this is a deliberate policy on the part of employers to lock in employees to jobs they may not want but have to take because they need the health insurance and can’t afford the challenge or cost of changing (health insurance”. I don’t quite go down that rabbit hole and think Dan Munro’s explanation in his great book “Casino Healthcare

that detailed the history linked to the war effort and the need to find other incentives after they introduced: “An Act to further the national defense and security by checking speculative and excessive price rises, price dislocations, and inflationary tendencies, and for other purposes.” (EPCA) in 1942 – wages were frozen to stop inflation but as is so often the case left the door open for unintended consequences that found employers looking for ways to compete for a shortage of labor. And as they say what follows is history – Employer Sponsored Insurance (ESI) was born.

History of the NHS

It is interesting to note that the NHS model was also a product of the war that found the wounded servicemen and women in need of healthcare. A need that was serviced by the “Emergency Hospital Service” (aka Emergency Medical Service) that provided a model and experience to the country that became the model for what is now the NHS established in 1946.

But whatever the history, reasons, and background – this remains a millstone around American’s. It can add to job reductions and General Motors have stated that their employee healthcare costs add $1,500 – 2,000 to the price of every car they produce. It makes us less competitive internationally and crippling many with overheads that add to the cost of goods sold. It also puts employers at the table on healthcare decision making for their employers that present potential conflicts of interest given their need to service their share holders and remain profitable.

Finding a pathway to resolving this big intractable healthcare mess is going to take some major re-thinking and compromise on all sides. In the meantime, I suggest focusing on individual incremental approaches locally.


Incremental Steps to Coping With Healthcare

The list of 6 Questions to ask your doctor before your appointment and 5 questions to ask before you stay in a hospital are excellent resources from Dr. Elisabeth Rosenthal, that are featured in the book and on the website. So in the spirit of the incremental approach, I offer up two credit card size templates containing the

  • 5 Questions to Ask During Your Hospital Stay
  • 6 Questions to Ask Before Every Doctor’s Appointment


Formatted in a handy Avery 5371 White Business Card Template that can be printed – double sided and put in your wallet: Questions When Using Healthcare Avery Template 5371

Do you have any tips or suggestions in dealing with the healthcare system? Disagree with any of this – feel free to leave your comments or reach out.

Wise Up to Hidden Healthcare Fees was originally published on Dr Nick – The Incrementalist

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

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Are you “Under Observation”

Posted in Healthcare Insurance by drnic on January 23, 2014

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 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)

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

Posted in #hcr, Healthcare Insurance, Pharma by drnic on February 19, 2013

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.

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

A shift in how healthcare is paid for

Posted in #hcsm, Health Care Costs, Healthcare Insurance, HealthIT, HITsm, Meaningful Use by drnic on December 17, 2012

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.”

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.


Healthcare Costs and Deductibles

Posted in Healthcare Insurance by drnic on July 27, 2010

Despite all the changes from the HITECH act and the healthcare reform there remains a continuing problem of healthcare costs and the deductible. This was brought home to me listening to NPR on health and the podcast: Sleep My Little Couch Potato – Sleep“.
You can listen here at around minute 13:00).

The title hides a segment on the to the “Fancy Diagnosis of House

Where All Things Considered dissected the cost of procedures ordered up on “House” that is featured in a book by Andrew Holtz (The Medical Science of House MD). What was shocking was the numbers featured in the example.

  • Liver biopsy: $ 8,000 – 11,000
  • MRI: $ 200 – 1,000
  • Splenectomy: $ 140,000 (8 days in hospital)

As Andrew said anytime you get into understanding healthcare costs

“we just don’t know (how much things cost), it depends on what variety of the procedure, in which institution (!!!), if the moon is in retrograde…it seems as with anything else in healthcare trying to nail down what seems like a simple question turns into an episode of bizzaroland”

This is  continuing problem and compounded by co pays and deductibles that are rising for many people as companies try to reduce the impact of rising health care costs. In fact most polices, even ones that people would consider “good” insurance includes shared costs that might read “you pay 30%, plan pays 70%”. There are some caps on this but even for relatively simple treatments you can rapidly find yourself with big unexpected bills even with “full” medical insurance. And many of these plans have lifetime limits that may seem large (1 – 2 million dollars) but treatment of any significant condition (cardiac, cancer these being the top two killers) and you can see that maximum reached very quickly

The latest changes are trying to move the system in the right direction but the problem of medical of medical bankruptcy is likely to explode in the coming years as the population ages, coverage decreases and gets more expensive and healthcare costs continue to rise unabated.

I suggest you read the fine print now on your policy and start planning for these costs since we can typically expect to be accessing and needing more and more healthcare as we age.

Legal Reform is Essential

Posted in Health Insurance, Healthcare Insurance, Healthcare Policy by drnic on March 1, 2010

Philip Howards Talk over at TED Talks is not focused on healthcare but the legal systems impact on society in general: Four Ways to Fix the Broken Legal System. It is 20 minutes long but worth watching in its entirety:

There’s a phenomenon that General Counsel is becoming CEO’s of companies because they need so much legal counsel

It applies to all areas of society. Law suits are out of control.

Healthcare system has been transformed into defensive medicine
Reliable estimates wasting $60 – $200 Billion wasted per year

Lawyers say the fear of law suits provides for better care – research says it does not. Doctors fear speaking up and talking to each other and fail to communicate. It spans environmental review that prevents any progress.

You can read the article on Tort Reform in the US here.

Take a stand, insist on change to the legal system and a full-scale reform of US law to free society.

Healthcare Insurance – Its CostCo membership for Health

Posted in Healthcare Information, Healthcare Insurance, Preventative Healthcare by drnic on February 23, 2010

It is now being referred to the as the third rail in healthcareNo one wants to touch it for fear of electrocuting themselves but it remains one of the greatest challenges facing healthcare and rising costs. The fact that healthcare insurance companies stock prices have reacted positively to the news of the loss of the 60 seat majority in the senate. The insurers have bitterly fought any notion of a public insurance plan because this would cut into their profits.

Taking a look at some recent profits: Wellpoint owner of Anthem Blue Cross – $ 2,700,000,000 which was followed by an announcement they would be raising premiums by as much as 39%……..! That’s even more than the university and education sectors astounding rate increases.  Kathleen Sebelius the Health and Human Services Secretary weighed in asking them to “justify” this. Seriously – “justify”!

All this was discussed in the “GetBetterHealth” Blog by DrStanleyFeld in a piece titled: “Are Health Insurers Killing the Goose that Laid the Golden Egg“. Pointing out the usual techniques in play to deflect criticism in an attempt to justify this behavior

using a well worn public relations technique by pointing a finger at the other stakeholders. All its administrative costs, additional reserves, and investment costs are included in the “85 cents out of every premium dollar figure.”

In fact you have to wonder which group of middlemen the Health Insurance industry falls into

You don’t need to be an economist to understand that any middleman interposed between seller and buyer raises the price of a given service or product. Some intermediaries justify this by providing benefits, such as salesmanship, advertising or transport. Others offer physical facilities, such as warehouses. A third group, organized crime, utilizes fear and intimidation to muscle its way into the provider-consumer chain, raking in hefty profits and bloating cost, without providing any benefit at all.”

and this characterization

“The health insurance model is closest to the parasitic relationship imposed by the Mafia. Insurance companies provide nothing other than an ambiguous, shifty notion of “protection.“

So what do individual personal experiences tell us about dealing with the insurance industry. Recent experince suggests that the insurance industry is misnamed. Insurance is designed to pay out for legitimate claims. Health Insurance does no such thing and is much closer to buying membership to CostCo but not as good. The CostCo model has customers paying a membership for exclusive access to lower priced of goods. If you are not a member you have to pay the higher rate.

Examination of a recent claim form showed that membership to the Healthcare Insurance club provided a discount to the billable amount of 87%. But unlike CostCo if any of the items you selected or used the insurer deems to be uncovered then you get to pay 100%. So this would be like showing up at the CostCo check out and being told that in your case the meat you purchased is not part of you membership perhaps because they think you are a vegetarian and therefor instead of paying $5 per pound you must pay $9.35 per pound

In the healthcare example a legitimate set of routine laboratory tests on blood and urine as part of an annual physical.  It is impossible for me to imagine a reason to deny basic routing screening but the system is geared to do precisely that every time a claim is submitted. SO where is all the money going… aside from posting profits and investor returns there is a big chunk in the case of Wellpoint allocated to $1.8 to $8.4 Million dollars per year for its CEO and Divisional Presidents. And UnitedHealthcare was even worse:

In a March 2007 post I stated that “ UnitedHealthcare claims that costs are out of control. Why? Who paid their CEO $1.8 billion dollars over 8 years? The amount equals $300 million dollars a year or $821,917 a day in salary and benefits to one person. What are the other top executives at UnitedHealthcare receiving in salary and benefits? Do you think these salaries affect the cost of insurance?”

I agree with the notion that we the consumer need to take greater control and management of our healthcare dollars and remove these excess additive costs. Will someone have the courage to take this on….?

What have your experiences been with insurance. Do you think you get value for money and that health insurance is part of your health solution as opposed to being part of your health problem?