One Thing…
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I had breakfast recently with the CEO of a major hospital delivery system, and he asked if I could do one thing to change the way health care gets financed and delivered in this country, what would I do? I thought about it for a minute, and then offered up the following suggestion. This country spends over $28 billion at the National Institutes of Health (NIH) on health care research - and almost all of it goes toward learning about the next new thing. In other words, we spend gobs of money on the next new treatment or the next new disease, but we spend almost nothing on how we’re doing treating the stuff we already know about. This is a mistake. The NIH needs to dedicate some percent of its research funds - say 5-10% - to how we’re doing treating the illnesses and diseases we already know something about, especially in cases that involve patients managing four or five chronic conditions. Overnight, this would do two things - first, it would create serious effort to understand how good we are at using best practices and evidence-based medicine to treat illness and disease we already know how to cure, and second, it would expose areas in which care providers are simply not doing the right things in the right way at the right time. Most clinicians will say - in private - that if this country focused more of its research money on studying how care gets delivered to treat the maladies we already know how to treat, the impact on quality, saving lives, and cost-effectiveness would far exceed the incremental benefit of one more dollar on the advancement of science.
For example, a pretty small portion of the population - about 5% - is responsible for 50% of the money that gets spent on health care. These people often have four or five serious conditions they’re dealing with, and the quality and cost of the care they receive varies tremendously. If we did a better job of studying the way these people access and receive care, and made the information about who is serving them well and who isn’t publicly available, it would identify the high performers - always a good thing - and it would force the poor performers to either get better or get out.
Thoughts/comments welcome. Remember - you can only propose ONE idea.
My one idea: robust price and quality transparency, including both Medicare rates and insurer contract rates especially for expensive hospitalizations, surgeries, and imaging. My top priority would be to make this information available to doctors (who drive almost all healthcare spending) in an easy to use and access format. I would make it available to individuals as well. The idea would be to encourage (and reward) referring doctors to steer their patients to the most cost-effective specialists, hospitals, imaging centers, labs, drugs, etc. Conversely, providers who prove to be persistent high utilizers of the system should be penalized and perhaps even removed from the network. I would also, of course, make the information available to patients / consumers.
With respect to the 5% of the people that account for 50% of the cost, they are not the same people from year to year. CBO did a study a couple of years ago that showed on a cumulative five basis, the most expensive 5% of Medicare beneficiaries accounted for only 27% of the cumulative five year cost of the program. This is because some people die along the way while others have a significant event (like a heart attack) and then recover.
I agree completely with your suggestion to focus more on how can we take what we already know and apply it better and more broadly. This is an area where we might learn a great deal from work going on in less well resourced countries, where organizations like Partners for Health and others are working with communities and achieving results and outcomes in many cases and for some diseases that are far better than those in the US.
So, what can HPHC do to try to take this idea about more focus on application and practice and make it happen? And are there areas for collaboration across health plans in Massachusetts. Can the new Quality and Cost Council offer help here?
BC - good points. And let’s face it, I’m as interested in transparency on cost and quality as anyone. Hopefully, the “movement” on this one can continue to advance this agenda - no matter who’s in power or who’s in charge. Peter S. - funny you should mention Partners for Health. I’ve actually talked to them about their focus on delivery, and believe that they have spent as much time as anyone thinking about this issue. Stay tuned. We’re kicking around a number of ideas with them, some of which we should be able to talk about before the end of the year.
With constant advances in medicine and technology, it would be reassuring for patients to know that their doctor is ordering the right diagnostic procedures, tests, treatment, etc. Transparency in quality and best practices would give the patient (or caregiver) vital information at a time which can be very stressful. Early detection and prevention of related health problems due to various conditions would certainly increase if more research is devoted to this area. The result would definitely be more value for one’s health care dollar!
Chronic diseases do drive much of the cost of a commercial population but in the bigger picture (including Medicare and Medicaid populations) I would say that costs are being driven by beginning of life and end of life care. Look at any Boston hospital inpatient census and you will see many multiple birth, premature NICU babies and a huge percentage of elderly patients born in the 1920s and 1930s (basically people in their 70s and 80s). If you were to look at any nationalized healthcare system you simply would not see things like IVF coverage and then coverage for the cost of multiple premature NICU babies. Further, you would not see people in their 70s and 80s routinely get expensive implantable defibrilators and expensive surgeries. It may be simply that the United States is unique and that we are willing to pay more for this level of healthcare services and as the baby boomers hit this demand is going to explode. I just don’t think we as a nation are ready to make the difficult (and costly) beginning and end of life choices that other nations already live by.
I recently closed my business. Providing health insurance had me teetering on the edge for a long time and the last premium increases put the nail in the coffin. My annual premiums were $55,000.00 and the business was paying approximately $35,000.00. My business simply could not support the annual increases in premiums. It was easier to let go of the stress. I operated a restaurant and employed 47 people with an annual payroll of approximately $500,000.00. Many employees were young, healthy and invincible. They were not willing to contribute any amount of money toward healthcare premiums. I have found this to be the general attitude of most of the younger generation regarding healthcare premiums. For some reason the public feels that healthcare is a birthright. This thought process does not carry over to other types of insurance or any other basic life expenses. Some of the recent health care proposals are very will thought out and work well on paper but I feel that many of these proposals are too sophisticated. I do not believe that the majority of the public will ever shop healthcare. Most of my working experience has been in the food service industry and I would like to humbly offer my thoughts. Outside of the government the food service industry is the largest employer in the United States. I am not certain but I believe that the statistics for restaurant employees would indicate a young, healthy and immigrant population, most without health insurance and with a propensity to constantly use emergency room services. I understand that taking food service employees out of the general pool would cause the premiums in others industries to rise but I would think that as emergeny room visits were reduced some of the healthcare costs would be reduced and premiums would follow. The reason I would choose the food service industry is because of the number of employees and their usage of emergency room services.I am certain there are a million reasons why this is not a good idea but these are my thoughts. Thank you.
SG - I asked about how much we spend on NICU babies, and the answer is, “a lot.” However, they’re a fairly infrequent occurance, and as a result, they really don’t represent a significant piece of health care spending (maybe a couple of percentage points). End of life care is harder to measure, primarily because it’s always hard to tell when the last six or twelve months of life might be. I’ll see what I can come up with on that and get back to folks.
Carla - Very sorry to hear about your business. Closing it must have been a very difficult thing for you to do. I think you’re right about “young invincibles” and health insurance. They don’t see the need or the point. They have auto insurance if they get in a car accident, and worker’s compensation insurance covers them if they get hurt at work. What do they need individual health insurance for? Hopefully, the new products that are being made available to young adults - which are pretty inexpensive compared to traditional health insurance - may be of interest to them.
As far as singling out food service, I think the hard part there is that there are many, many industries that have similar issues, and generally speaking, it’s small business and sole proprietors who have the hardest time buying health insurance. That’s why the reform plan in MA focused on those two groups. Let’s hope we make some progress with these groups over the next year or so.
Cost transparency can be an easy, simple thing to do.
I was in a pediatrician’s office where a poster demonstrated the first, second, third and last lines of antibiotics for various conditions, ranked by effectiveness and listing the expected price of the drug. I can count on one finger the number of times I’d seen such a chart, and I can count on one hand the number of times the doctor volunteered the estimated cost for a prescription to me.
Powerful, simple stuff. Could it be similarly expanded to the methods that doctors use to narrow down diagnoses and treatment paths? Quite likely.
But when those processes themselves are flawed, perhaps it’s time to study the entire approach (see, for example, this Boston Globe story).