Medical Practice Softwarefaculty.arts.ubc.ca/revans/384hcblg.pdf · plenty in THCB if you want more). Today in Health Affairs (or you can read the potted version in Forbes), Dartmouth

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March 08, 2006

POLICY/HOSPITALS/PHYSICIANS: Wennberg found wearing

concrete boots at bottom of Lake Michigan

No, not really. But Wennberg’s disciples at Dartmouth are coming out withso many uncomfortable facts for the medical-industrial complex that it’shard to keep count. Starting by introducing the notion of practice variation30 years ago, the group is now turbo-charging its research production,and basically all of it is bad news for anyone pretending that “Americanhealth care is the best in the world”. To paraphrase Uwe Reinhardt, howcan the American healthcare not be as good as American health care?

In just the last couple of years not only has the Dartmouth crowd foundthat care delivered in areas with fewer doctors, and using less advancedtechnology, leads to better outcomes at lower costs, but they’ve alsofound that academic medical centers vary threefold in their efficiency ofinputs (and costs) to get the same outputs, and most recently thathospital system and location is a better indicator of resource use thanpopulation acuity.

And, for the medical establishment, the news gets worse. For the last fiveor so years, those of us who think that we’ve already got plenty of doctorsper head, as we doubled the number in medical school in the 1970s and1980s and are still waiting for the smaller generations trained in the 1960sto retire, have been drowned out by hysteria from the medicalestablishment about an impending “physician shortage”. That is of coursecode for the taxpayer (via Medicare which funds most medical education)to support the creation of new physician residency slots, creating morespecialists, who’ll then start applying more medical technology to all of us,which will contribute to more flat of the curve medicine. But I won’t giveyou a potted Fuchs/Enthoven class here (although you can search aroundplenty in THCB if you want more).

Today in Health Affairs (or you can read the potted version in Forbes),Dartmouth researcher David Goodman and his team (including Wennberg)cry bullshit on the “we need more doctors” meme. While the big academiccenters which get the money from training them would love to have moreresidents, by examining one type of intensive medical process — caring forpatients at the end of life in ICUs — Goodman et al shows pretty logicallythat many major academic centers use far too many physician resources.In other words we could provide equally good (or probably better) carewhile using many many fewer physician “inputs”. Hence overall we needfewer physicians, more efficiently used.

Of course any English surgeon, whose workloads and consequentlysurgical speed massively exceed those of their American counterparts,could have told you that. And my father frequently did every time he cameback from a “fact-finding” trip over here. And when Goodman et al invokethe most famous name in American medicine, it’s pretty hard to arguewith their conclusions:

"We have benchmarks. We have academic medical centers whichare highly successful in terms of the care they provide, and we needto start looking to those places as our examples," Goodman said."We need to study them and understand them and emulate them.The Mayo Clinic has been studied very extensively and is fairly well-

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The Mayo Clinic has been studied very extensively and is fairly well-understood," he continued. "We should be at a point where we canemulate some of those systems."

Mayo of course has fantastic outcomes at relatively low cost. In this studyit used 8.9 physician full-time equivalents per 1,000 patients in the sixmonths before death, while at the other end of the spectrum New YorkUniversity Medical Center had 28.3. Of course the system-wideimplications of all of the Dartmouth research are too awful for the medicalestablishment to contemplate, because they in the end mean 20 of the28.3 doctors at NYU going away – and there are enough cab drivers inNew York City as it is. And it’s not just New York city doctors that sufferwhen you extrapolate:

Applying the Rochester standard to the nation’s elderly, the UnitedStates has an excess of physician input; it needs 30,163 fewer FTEinputs than were allocated in 2000. Indeed, the current rate ofsupply growth along with excess capacity is sufficient toaccommodate the 56 percent increase (in the number of elderly-MHadd) predicted for 2020, with 49,917 physicians to spare.

All this research of course reminds organized medicine, and the industriesthat feed off its members prescribing more and more technology withoutcaring about the cost, of something Lenin said back in 1923 about “Betterfewer but better”. And you know how the American medical establishmenthates them commies. On the other hand, it also invites memories similarto what Maggie Thatcher did to the British steel-workers in 1980 — shebasically fired 70% of the workforce, but the amount of steel producedstayed the same. Are they going to call Maggie a commie? I think not, butyou may have noticed lots of major industries taking the same approach.

So this research will stay ignored. We spend too much on high-techmedicine, we have too many specialists doing too many heroicprocedures, and everyone’s very happy about that. Until that is that wenotice that we have a health care system that does a shitty job of basicprimary care, doesn’t cover 45 million people and costs way too much.

But if word somehow sneaks out that the two sides of that equation mightper chance be related, then the pillars of the medical establishment mightchoose to move to other tactics. And perhaps the Dartmouth crowd mightfind themselves wearing concrete boots and hanging with Jimmy Hoffainstead.

CODA: And in a quick reminder that doctors are doctors whatever theirpassport cover says, this article explains how spending more on healthcare in Canada has not shortened waiting times

In the five years up to 2002-03, the number of angioplasties (toopen arteries) and bypass surgeries increased 51 per cent, thenumber of joint replacements rose 30 per cent, and cataractsurgeries 32 per cent. But demand for care seems to haveincreased just as much, and it's not just because the population isaging. "We've got way more activity beyond what the demographicswould dictate," said CIHI Chairman Graham Scott:

More research is needed to understand the phenomenon, he saidbut new technology is probably a factor. If there are new toolsavailable, such as MRIs, doctors are likely to use them. Iftechniques for a certain kind of surgery improve, the procedure willbecome more popular.

Duh! They don’t need more research. When the NHS was introduced inthe UK in 1948, the politicians thought that demand would fall after theinitial rush from those who hadn’t had coverage before wound down. But itdidn’t. 50 years of data tells us that in health care supply creates its owndemand, and the way to deal with that is to restrict supply.

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Comments

Let's be clear, Matthew; the Dartmouth researchers limit their study to theUS system alone.

Thus it's not right to say their conclusions directly prove US-system-inferiority vis a vis other countries'.

The very real fact could be that the US system is terribly flawed - becauseof the free market distortions of public and private third party payment,heavy government regulation, and the 'command and control' approach tohealthcare characteristic of the professional medical establishment - but itis still the best in the world in many ways. Sad, isn't it?

Trapier K. Michaelwww.marketplace.md

Posted by: Trapier K. Michael | Mar 8, 2006 8:18:08 AM

Trap, yabutt -- America isn't America. Minesotta or Georgia are not LosAngeles or New York

Posted by: Matthew Holt | Mar 8, 2006 8:55:42 AM

I may be being simplistic here, but (a) if more of those physicians wentinto primary care, and (b) if PCPs were paid to spend more time with theirpatients (e.g., as per the American College of Physicians recentlyintroduced “Advanced Medical Home” model), then wouldn't it put to gooduse the "surplus of physician inputs," while promoting better, more cost-effective care?

Stevehttp://stevebeller.blogspot.com/

Posted by: Steve Beller, Ph.D. | Mar 8, 2006 8:57:47 AM

I don't know that we have too many doctors. Don't the French have moreof them?

Can you break this down by region and specialty? I think that outside ofurban areas like Boston and New York, there's a real shortage ofpsychiatrists, and I think that the problem may be about to get worse.I've heard that the average age of a psychiatrist is 55; they're all about tostart retiring.

Posted by: Abby | Mar 8, 2006 9:17:58 AM

Abbythe dartmouth guys have the info you want. Google Dartmouth Atlas

Posted by: Matthew Holt | Mar 8, 2006 12:59:11 PM

Matthew - it's always exciting when you get excited.

Trap - let's not obfuscate here. the sad truth is there is way too muchhealth care provided, that supply drives demand, and that it is anincredible indictment of the system (?) for the nation that spends themost as a percentage of GDP as well as in real dollars to have 15% of thepopulation uninsured. And there is a lot more government involved inevery other health care system that tend to produce much betteroutcomes with much lower costs.

I don't get your logic.

Posted by: joe Paduda | Mar 8, 2006 2:49:08 PM

Matthew,

The health care system has been awash with money since the initiation ofMedicare and it has become commercialized along with the rest ofAmerican Society. No going back or changing that in any meaningful way,

Use of Implanted Patient-Data Chips Stirs Debate onMedicine vs. PrivacyQUICK STUDY : A weeklydigest of new research onmajor health topicsRejection SlipFat or Fiction?Seeking FermentInteractionsSurvey Refutes Criticism ofMedicare Drug PlanDrug Clears CloggedArteriesDeadly Bird Flu Expands inAfrica, Europe

American Society. No going back or changing that in any meaningful way,so reform will have to look in other directions. Perhaps the time has cometo effectively push prevention and retool primary care to lead that charge.

The National Governors Association launched Healthy America at theirwinter meeting in February. I was invited to participate by GovernorSanford of South Carolina. There are reports about the meeting over athttp://www.fixinghealth.blogspot.com/. Come on over, I could use thehelp.

Thanks,Marcus

Posted by: marcus newberry | Mar 8, 2006 5:40:07 PM

> I may be being simplistic here

Yep.

Physicians avoid primary care because the hours are lousy and the pay iswell below what specialists make with decent hours. It seems to me (andothers) that the government's target for PCP salary is about $110K --down quite a way from the income target of about $150K that the PCPsapparently have.

A friend of mine takes care mostly of older people. He figures he can do adecent job with them if he sees three or four an hour. Some quick back-of-the-envelope calculations tell me that he needs to see 4 patients/hourat $55 each for 1,700 hours/year to make something resembling a $110K"salary".

At Medicare's current reimbursement rates, it is hard enough to make aliving, and a fair number of his patients are on Medicaid because he's oneof the few who will accept $12 for 20 minutes' work because he can'tstand to see somebody go without.

So, if what you mean by "PCPs were paid" could mean some combinationof:

- reimbursements to consultants fall to narrow the income gap with PCPs- PCPs become happy at around $110K- payer expectations fall to around 4 visits/hour- more docs want to be PCPs, abandoning fancy toys- reimbursements average $55 15-minute visit- people actually take advantage of preventive advice- savings from falling reimbursements to consultantsflow to PCPs, not to other congressional priorities

then "Preventive Medicine" has a chance. But I think all of the above arenecessary conditions. I understand in London I can get odds on just aboutanything. What do you suppose I'd get shown on this scenario?

t

Posted by: Tom Leith | Mar 8, 2006 6:37:39 PM

So, Tom, if PCPs could have an income more commensurate withconsultants/specialists and would not be diminished by P4P, if maintainingthat income requires they see about 4 patients per hour, and if their focuson prevention motivated patients to take better care of themselves, THENmore physicians would become PCPs, patients would get better care, andit would help drive down overall healthcare costs … Right?

If so, it sounds like a most worthy goal. What changes to our healthcaresystem would have to occur to achieve that goal?

One thing you mention is our government’s priorities. Another is patientcompliance. A third is payer expectations. The other is providers’fascination with their toys. Any others?

So, how do we get governmental priorities to change in a positivedirection? Well, it seems to me that there’s a recent groundswell ofdiscontent by the public in our political system. This may point to the needfor grass-root pressure. In addition, purchasers are fed up the healthcarecosts. And providers would, I bet, would be supportive of the kind ofchanges we’re discussing here. As such, consumers, purchasers andproviders would both benefit from a shift in our country’s politicalpriorities in the direction we’re discussing. Seems like a very powerfulforce if focused on wise systemic change!

What would make patient compliance improve? Well, there are convincingstudies of the benefit of consumer education, i.e., any combination oflearning experiences that influence behavior changes needed to maintainand improve health through changes in knowledge, attitudes and skills. Itrequires more than simply giving patients written instructions, a pamphletto read, lists of resources, or a video to watch, however; effective patienteducation includes discussion, demonstration, and active participation.

Benefits of patient education include:• Improvements in patient satisfaction• Better health maintenance and healthcare outcomes• Better self-care and adherence to the health care plan and follow-upcare• More empowered patient decision making• Fewer complications• Reduced healthcare costs• Decrease patient demands on the healthcare system• Earlier detection of problems and timelier outpatient intervention• Decreasing hospitalizations• Reduced absenteeism from school and work• Better coping skills.

And if payers were convinced that they would actually save money via thePCP + prevention strategy we’re discussing, then wouldn’t they alsosupport it?

Stevehttp://stevebeller.blogspot.com


> … Right?

No, Steve. "more docs want to be PCPs" is a necessary condition forshifting to a prevention orientation from a restore/rescue orientation, nota consequence of it. At least that was the argument I was making,evidently poorly.

On a straightforward microeconomic analysis we might THINK thatnarrowing the compensation gap between PCPs and consultants and givingPCPs a working environment more like the consultant enjoys would resultin more interest in primary care. But there is always more to it. (How'sthat for an academic answer?)

And keep in mind we are talking about narrowing the gap between PCPand consultant primarily by reducing the compensation to the consultantfaster than we diminish compensation to the PCP. PCP compensation isdiminishing already, and the best way to think about it (in my viewanyway) is that poor-performing PCPs will see their incomes diminishfurther than well-performing PCPs. But all of them will diminish. This isapparently by design. So providers will NOT be supportive of the kind ofchanges we’re discussing here.

> Any others?

A boatload, I am sure. One thing I can think of has to do with thedefinition of "Practice Medicine" and who is allowed to do it. Matthew says1,000 really smart people read this here blog. I bet half of them knowmore about this than I do. Maybe someone will chime in.

more about this than I do. Maybe someone will chime in.

> And if payers were convinced that they would> actually save money via the PCP + prevention> strategy we’re discussing, then wouldn’t they also> support it?

Some were convinced and tried to do more than support it: they tried toimplement it. They were called Health Maintenance Organizations. Therewas a groundswell of discontent by the public. Following good small-ddemocratic principles, they are essentially illegal now.

The only thing I really hear coming from the general public goessomething like:

- I want to get whatever I want from whomever I want.- I don't want to pay for it.- I don't even want to think about it, but- I want to sue somebody when I am dissatisfied with it.- I want Congress to make it happen, but- I don't want Socialized Medicine, whatever it means.- I am therefore discontented with the current state... and with anything else I have heard about so far.

Do you think this about covers it?

> effective patient education includes discussion, > demonstration, and active participation.

I like the "active participation" part. Someone else can start paying mypersonal trainer, and now I want a Physical Therapist licensed to PracticeMedicine, not a merely Certified Fitness Trainer who I just know will kill mesome day. The Physical Therapists told me so.

t


Matthew,

On the question of "America isn't America" I'm completely with you. Ipainfully refer to healthcare (US or otherwise) as a 'system'. It isn't one.It is a wonderul, undefineable flow of marketplace interactions that are,for the sake of discussion, often denoted by localities, regions, andnations.

Joe,

My logic was simple. Matthew (nor you) should be able to use theDartmouth research as a stab against the 'US Healthcare System' vis a visother nations' which, as you note, involved more government. For one,Matthew points out the silliness of using the nation as a commondenominator for comparing health care economies. For the other, theDartmouth research is limited to intra-American health economies andcan't be used to compare health economies internationally.

Cheers to both...

Trapier K. Michaelwww.marketplace.md

Posted by: Trapier K. Michael | Mar 9, 2006 5:33:30 PM

It's wonderful to be engaged in this dialogue with you, Tom. And I, too,would love to hear what others think.

> more docs want to be PCPs is a necessary condition for shifting to aprevention orientation

You were clear, Tom. My assumption is that if the status and income ofPCPs were more commensurate with consultants/specialists, and if theirwork conditions improved, then more medical students would WANT to be

work conditions improved, then more medical students would WANT to bePCPs. I realize that these discussions are hypothetical and impractical inthe context of our current crazy healthcare system, but change -- orshould I say, paradigm shift -- isn’t possible unless disruptive/innovativeideas (and technologies) emerge and are recognized.

Anyway, diminishing compensation to all providers as part of the design ofhealthcare in the future is simply unacceptable! How much more doproviders have to be squeezed? Our country’s focus and priorities arescrewed up. I’d rather focus on answer the question: What can be done togive providers an opportunity to earn more by delivering ever-better careand preventative services, along with better working conditions, withoutincreasing the overall cost of healthcare?

Your portrayal of the general public mindset seems to boil down to: “Giveme whatever I want when I want it without any effort, expense, orinconvenience on my part … or I’ll cry!”

I can understand why you would say this, but it need not be so. If thegeneral public was aware of what’s really happening in healthcare today interms they can understand and had an open forum in which to askquestions and learn, the childish attitude you described would be short-lived.

I suggest such a forum could start out as a blog (or other virtual medium),preferably with financial support from consumer groups with integrity whopromote it. It would lay out all the important issues affecting healthcaretoday in a clear and understandable way – including all proposedsolutions/models, their affect on different stakeholder groups (who are thewinners and losers), the drivers and impediments to implementing thesolutions, etc. – and it would encourage deep dialogue, open-critical-honest debate, sharing a diversity of opinions, appreciation of minoritypoints of view, creative abrasion (friction caused when a heterogeneousgroup works together to develop creative ideas), continuous learning, etc.

By enabling people to gain the knowledge they need to understand thecomplex healthcare system through active or passive participation, wewould have educated consumers who could collaborate to pushfundamental change. After all, isn’t Democracy (I mean, true Democracy)supposed to that way?



Steve Beller writes:

> diminishing compensation to all providers> as part of the design of healthcare in the> future is simply unacceptable! How much> more do providers have to be squeezed?

Unacceptable to whom? I think the direction is to squeeze providers tothe point that they tend to earn on a par with their western Europeancounterparts. Then we can afford more of them. But they will still be in thetop 5% of income earners in the USA. I stress that this is how it SEEMS tome, based on what I see coming from the government. The calculationseems to be something like this: we already spend more than anyone elseand get less for it. We have a demographic problem and two politicalproblems: access must improve and taxes can't increase (much). Poorlymanaged hospitals will close (or get new management), and the solophysician practice will probably disappear because minimum efficient scaleis certainly bigger than one, and might be bigger than ten. (Any ideas onthis?) Surviving insurance companies will all be ASO processors.

It is probably true that some very talented people who go into medicinetoday will choose something else under this scenario. But Charles Murrayat least thinks this isn't all bad. A new set of expectations will percolate

through the industry, a new crop of students will enroll in medical school,retirements will happen, and a new sort of equilibrium will form. But in themeantime, things will be very painful.

You have more faith in the general public than I have. True Democracy asyou call it requires also true Virtue or Excellence in the ancient Greeksense at least. Plato didn't think it could happen, did he? But if attitudesare going to be changed, the educational resource you propose should betargeted at television news reporters. I wonder whether it already exists.Hard to imagine it doesn't, and Matthew's blog has some of this flavoralready...

t

Posted by: Tom Leith | Mar 10, 2006 7:36:11 AM

I don’t know enough about it to comment on the validity of CharlesMurray’s POV, but I don’t see why such a drastic approach is necessary …why providers must be squeezed dry, small/solo practices will have to bedemolished, and why payers will be reduced to an administrative servicesonly role. I’m not saying it can’t happen, but I am saying that betteralternatives are possible.

My basic premise is this: The economical delivery of high-quality (safe,effective, efficient, affordable, timely, and available) care, preventativeservices, and biosurveillance to all people can be accomplished without(noticeable) tax increase and with benefits to all stakeholders, if wecollaborated in:• Revamping portions of our healthcare system (e.g., redirectingcompetition, offering rational incentives for QI, increasing fidelity, etc.)• Building and using evolving health science knowledgebases and a nextgeneration of HIT tools.

I’ve started publishing portions of a blueprint of this model on my blog andwill offer a comprehensive description in a white paper and wiki bymonth’s end.

Targeting resources for consumer education at television news reporterscertainly make sense. But our convoluted healthcare system is just toocomplex to understand with sound bites and 2 minute segments. A seriesof in-depth reports would help.

Matt’s blog is a great source of information and ideas, and I even thoughtabout it when constructing my previous post. But what we would need foreducating the general public, imo, is more like an online encyclopedia, withan evolving index linking to each main and sub topic, and evergreencontent continually being built within the topics, along with threadeddiscussions. A wiki would probably be a more effective vehicle I’mthinking. I’m saying this because while writing the white paper, I had aheck of time delimitating and organizing all the factors into many dozensof inter-related topics (like a healthcare industry taxonomy).

In terms of consumer-focused groups that have grass-roots ties, I’vecompiled this list so far: Healthcare-NOW, Center for Medical Consumers,USPRIG, Center for Science in the Public Interest, and Informed HealthOnline. If anyone know of others, please let me know.



The problem as I see it is the disconnect between the person who bills theinsurance company, the person who pays for the insurance coverage, andthe person who uses the coverage. This unholy triangle, with theinsurance company bulging out of the middle of it, is the whole problem.

To get paid $50 for 15 minutes or work, I (as a solo-practice, primary carephysician who is about to be squeezed out of the whole game) have to billan insurance company who has no incentive to deal with me in a fair way,

an insurance company who has no incentive to deal with me in a fair way,since I only cost them money and do not pay them money. If they deny acharge (and it is amazing how often this happens), I instruct my patient tocall them. But this doesn't work because now the company can simplysay, "I'm sorry, but this is the coverage you have." (The bill payingemployer wants nothing to do with it!) At this point, either I eat thecharge, or the patient pays the bill. And the piddly amount is another dropin the river of the corporation's profits (and the CEO's pocket(http://www.everybodyinnobodyout.org/FAQ/datCEOs.htm).

What needs to happen--and what I think will happen once every primarycare physician faces the decision to either give up their practice or give upthe notion of insurance reimbursement--is for us to, en masse, stop billinginsurance and expect payment at the time of service.

The very idea of this freaks the general public out, because they've goneto see their doctor for something like a kidney infection, and subsequentlyseen the insurance paperwork showing a bill from the lab for $180 for theurine culture that was ordered, and from the hospital for $885 for therenal ultrasound that was ordered. But what they fail to see is the doctor'sbill for only $72, of which only $54 was approved.

But, really, this makes perfect sense. Seems to me that this is whatinsurance coverage was meant for. Let it cover the $800 x-ray; let itcover the $3,000 breast biopsy for the abnormal mammogram; let it coverthe $212,000 bill for the 4-week premature baby. But do we really needinsurance to cover the $55 office visit? I don't expect my car insurance tocover the $25 oil change! If I did, I guarantee you that it would not take 6months until all oil changes were $75!

Primary care physicians would be happy with their $150K (especially ifthere is the prospect of it actually increasing with cost of living likeeveryone else's pay does) if they did not have to work an extra 1-2 hoursa day (without pay) in order to deal with the red tape and paperwork thatinsurance companies cause.

I'm fine with the idea of P4P and feel that the quality of care that isprovided does need to be improved and better standardized, but P4Pmight just be the proverbial straw that breaks the back of the wholesystem if the process causes me and my colleagues to have to waste evenmore time on a day-to-day basis dealing with the health insurance redtape!

Posted by: G. Hinson, MD | Mar 10, 2006 12:07:50 PM

I am not saying it must happen -- I am saying it is happening, that CMSis pushing it (I have to think by design), and that any single-payerscheme will quickly universalize it. Just like in Europe. Matthew and a fewothers have said it too. There will be no reduction in red tape; in fact anincrease, except now there will be only one source of red tape. It isprobably a wash on that front, but no improvement. What kills me is thatnobody in charge quite wants to admit any of this in plain language.

I the reason it is happening this way has to do with with leadership, orrather lack thereof, in what I call The Guild. A recent example: the blogarticle about oncology reimburesements. Who permits this to occur?Primarily other oncologists, and they help each other do it. What wouldhappen if an evil insurance company tried to stop it? What did you call it?Oh yes: there would be "a groundswell of discontent by the public." Eggedon, of course, by the oncologists. But what would happen if oncologiststried to stop it?

One of my PCP buddies told me about a book you can buy at Amazon thatlists every test and procedure a primary care doc can get away with doingwhen a patient presents with some complaint. No, it isn't a book of EBMstyle treatment plans. It is meant to maximize billing and income. Themere existence of this book is an indictment of The Guild.

All this said, there is plenty of blame to go around, not excluding patients(apologies, Theora). I do not mean to beat up on doctors I don't know.But there are these recurring patterns...

With respect to Dr. Hinson's remark: one thing the HSA scheme could dois somewhat reduce friction in the system for the small expenses. Butgenerally the red tape/documentation requirements will still be there for abunch of reasons, including UR & P4P. he just won't have to wait for hismoney for the visit itself. I feel for Dr. Hinson and my PCP friends on apersonal level, but I hope all this motivates them to more activity on aprofessional level -- as leaders in The Guild.

Steve, I appreciate you want to educate people. So do I, but I think itcould be you have a perspective problem. I explain: For more than tenyears the great majority of my time was spent at Washington University inSt. Louis -- either as a student or a staff member. I got quite used tobeing in a "society" where my gifts in any area were noticably aboveaverage only very rarely. I started thinking things like "Well, even I canfigure thaaat out!" Then I left this wonderful world and returned to theReal World®. Not to put too fine a point on it, but at the company Iiummediately joined, there was one other guy there who was about asbright as I am, but nowhere near as well educated. Just one out of about35. Maybe you are in the same boat I was in. It warps you until you getjolted out of it.

If you don't already, go hang out at a neighborhood bar in a working classneighborhood. Regularly. Or join a car club, or the Knights of Columbus orsome kind of organization that the general public joins. The general publicthat never dreams of college. This is a real education for any aspiringpolicy wonk: these are the people for whom the policies are made. Theirneeds, abilities and predjudices must be accounted for.

Having done all of the above, I have come to think you need television foreducating the general public -- the two-minute snippet on the local news.Medical dramas. But this kind of thing: not Discovery Channel material.The only people willing to be educated by reading websites or watchingThe Discovery Channel aren't the general public. They're wonks at somelevel.

t


Getting the government and red tape out of medicine will be the onlyanswer to drive down costs. I agree with Dr Hinson. A free market is theonly way to go. There is a disconnect because of the insurance/medicaremiddle man. Doctors are moving slowly to cash payments when servicesare rendered like any other profession. This is the only way out of this bigmess. There is something different b/w the "eutopia" of European andCanadian healthcare and the USA and that is the US Constitution.Canadian socialized medicine can't happen here because of the USConstituion and the right to contract. But that is a mute point sinceCanadian healthcare is falling apart and "illegal" fee for service hospitalsare opening there due to overwhelming demand from the patients.

As a surgical specialist I am seeing older surgeons leaving/retiringeveryday. Soon the breaking point will be reached and I will start chargingcash/VISA/Mastercard for my services like any other highly trainedprofessional in this country. Unlike the many self elevating middlemen nowsucking the blood out of the US healthcare system my services are thebottom line, don't come cheap and are not reproduced easily. By the wayI do have a "fascination with toys" and believe it or not my patients do too(and they are willing to pay for it)!!!

Posted by: pgbMD | Mar 10, 2006 7:37:58 PM

Gee, old surgeons retiring -- who woulda thought?

It is well-established that there are many opportunities besides red tape(so-called) to reduce healthcare expense.

When you are willing to accept a global fee to cover everything whenservices are rendered like any other profession, then I might start tobelieve you are committed to a Free Market. I sincerely doubt that yourpatients pay for much of anything, and so their willingness to pay forfacinating toys has not been measured. This is the fundamentaldisconnect that makes a classical Free Market in helathcare impossible.But there are others.

While Canadian style socialized medicine can't happen here (i.e. privatepay is illegal), other models could, and doctors (and nurses, andsterilization techs, and housekeepers, and...) would face a single buyer oftheir services. Even if this is not strictly true, everyone will bargain upfrom the rates paid by CMS, not down from a fee-schedule.

Speaking of, I got this in my inbox this morning:

============New Cardiology Opportunities

Northern Georgia Cardiology Opportunity8 Cardiologists1st year negotiable 2 years to partnership near Atlanta partners making 550K plus============

These days are surely coming to a close. We can observe the trend withPCPs, and I cannot imagine it will not spread. I think these guys wouldstill practice for $250K, and if there is one who will not it probably isn't agreat loss to the system. This is the calculation being made: The Guildcannot control supply nearly so well as CMS can control prices. But it willbe a Clash of Titans.

t


We already are accepting global fees from CMS and most insurancecompanies for surgical procedures last time I checked.

Certainly laywers (and most other top tier professionals) don't acceptglobal fees. Last time I needed a laywer I kept getting $500/hr bills. Myfather-in-law is a partner at KPMG (large accounting firm) and all partnersmake in excess of $850k/yr. Maybe we should go to a single payer systemfor accounting. Maybe P4P for accounting is in order. Oh I forgot, theirprofession wasn't dumb enough to start acceptinginsurance/HMOs/medicare in the first place so they don't have thatproblem.

Many of my patients are already paying out of pocket for many of myservices. I could reduce my office staff by 50% by cutting out acceptinginsurance and medicare and going to all cash right now, but I feel thatthat portion of my practice is my payback to society. Medicare andMedicade is the safety net everyone is clamoring about. We already haveit.

HSAs are the begininning of the end of the HMO style of reimbursementthat has sucked the life out of our healthcare system over the last15years. Great way to save in a tax free acoount and also brings thepatient back into the fray interms of paying for routine office services. Theonly people that may get hurt by HSAs are the PCPs when patients thinktwice about going in for a routine cold.

The shortage in cardiologists and many other specialty fields that treatolder patients is just the tip of the iceberg. I forsee this problemmultiplying as the Baby Boomers begin to hit 65yo. This problem is further

multiplying as the Baby Boomers begin to hit 65yo. This problem is furthermultipled by the fact that now >50% of med school grads are women. Themajority of female doctors don't want to go into surgical specialties anddon't like the long hours. I have witnessed this personally since I have 2female partners and they both work only part-time. The cold hard factsare daunting.

If you are so jealous of those cardiologists then why don't you go to medschool for 4years and then do 7years (for interventional) of cards training!There certainly will be a huge need for good cardiologists in 11years.

By the way, I recently got an ad in the mail asking me to bat for the NYYand they offered $10mil starting. They must have sent it to the wrongaddress ;)

Posted by: pgbMD | Mar 11, 2006 10:15:56 AM

A surgeon should make more than an accountant. A cardiologist ought tomake more than a plumber. Oh, and an elementary school teacher oughtto make more than someone who plays baseball for a living. Our societyhas a funny way of placing value on services rendered.

Medicine is unique in that there is a need for the government to interveneand make sure that adequate care is available for those who cannot affordit. If society would rather reimburse Oprah for her TV show than thepeople teaching our children, than government does indeed need to stepin and try to make sure that our schools are adequate. Same could besaid about healthcare.

Primary care physicians are an essential part of the equation. You cannotsee doctors for your kidney, for your heart, for your skin, for yourabdomen, and expect that all of the treatments and therapies will worktogether perfectly. Also, there isn't a specialist to talk to when you thinkyou have heartburn and it turns out that you're really just suffering fromexcessive stress.

I think I make an important impact on the lives of those I take care of.And, for it, I make $30/hr (80 hrs/wk, 50 wks/yr).

There is another stress, however. To make that $30/hr, I am forced to seemore and more people per day, and provide less care for those I do see. Iam not able to spend enough time with each patient I see, and knowingthat I should be doing even more for everyone, that I should better stayon top of my practice's chronic medical problems, that I should moreactively help manage the bad diseases...this is an even greater stress forme.

I need a system that will pay me more for doing a better job than I amcurrently doing, taking into account that to do this, I need to work lessand spend more time with each patient. Someone pinch me please.

I've come to think that the only way I can accomplish this is to switch mypractice to a free market driven, cash-based practice. Effectively firing ahuge percentage of my patients-- i.e., those that leave me when I makethe switch--and recouping the overhead spent on getting insurancecompanies to pay me, is the only way I can see pulling something like thisoff.

Oh, and don't talk to me about a Cardiologist, someone who will likely addyears to your life, later in your life, making $550K! Would I like some ofthat as a primary care physician? Sure. But I do not begrudge specialistswho make that kind of money. Talk to me instead about what you read onthis link--http://www.forbes.com/static/pvp2005/LIRRI3M.html. How cananyone not see that, even prior to a push towards a single payer system,significant health insurance reform is needed. The silent middleman,pumping money into the pockets of our politicians, is the evil underlyingour system. Slowing milking it of every last penny and every last bit ofhumane care.

United Healthcare recently threatened to cancel the contract of a colleagueof mine in Colorado who was billing too many level 4 visits. This doctortakes care of an elderly population and sees 15-18 seniors a day forlonger visits, instead of 25-30 people of a mixed population for lesscomplex reasons. As such, he bills more per visit.

And yet William McGuire, the CEO of UHC, had a salary of $125,000,000.


Here’s my attempt to summarize the main points we’re making and pose afew questions:

1. We all seem to agree that our healthcare system fosters insane fiscalrelationships between providers, payers, purchasers and patients, whichleads to waste, red tape, and discontent.

2. Drs. Hinson and pgb make a strong case about how our country’spriorities are screwed up -- One’s income is unrelated (and oftennegatively correlated) to the degree of good one does for society.

3. A single-payer system is no silver bullet.

4. Our political system is based on a foundation of corruption, so don’texpect any virtuous solutions from Washington.

5. Two groups of stakeholders who can drive meaningful systemic changebut lack leadership are Consumers and Providers (“The Guild”). Activatingconsumers to take a stand requires some serious education. As Dr. RobLamberts said, “People don't know what good healthcare is because theydon't know how bad healthcare is. People don't know how bad healthcareis because they don't realize how good it could be.” Tom’s suggestion todo it through popular forms of media (e.g., TV, movies) in order to reachthe general public makes sense to me. Any thoughts about MichaelMoore’s next movie? What is necessary to activate providers to demandrational change in the system in a way that doesn’t put unreasonableeconomic burden on the consumer? Can there ever be a “clash of theTitans” (Guild vs. CMS) and what would be the likely outcome if therewas?

BTW, I wouldn't leave out purchasers (employers) as a potential driver forchange.

6. The Oncology reimbursement study confirms my contention that aknowledge void is a big part of our healthcare crisis. If we all knew themost cost-effective interventions (and preventions) for each patient, andhad a healthcare system that enabled them to delivered effectively andefficiently, then we wouldn’t have these kinds of problems and we’d bewell on our way to solving the healthcare crisis! We should be focusing onmuch more on the dissemination and implementation of useful scientificknowledge, or we will continue to have serious quality problems andescalating costs due to ignorance, mistakes, and inefficiencies.


Posted by: Steve Beller, Ph.D. | Mar 11, 2006 1:16:38 PM

What everyone needs to recognize is that that you can not legislate ordictate change via governmental intervention. The government is grosslyinefficient and wasteful. I saw it first hand while in the military workingwith TRICARE. What a scam that was. You sould have seen the rush forthe door at 3:00pm by every civil servant working in the hospital. What adisgrace.

The reason healthcare is in the mess it is in right now is because of toomuch government red tape/involvement and the third party payer system.HSAs are a good start to solving the problem. Just like the Libs areagainst school vouchers, they were/are against HSAs. It is amazing howsmart the consumer is when given a choice and when they are spending

smart the consumer is when given a choice and when they are spendingtheir own money!! You P4P people need to give the American public somerespect and credit and stop being so condescending. They are smarterthan you think! :)

Posted by: pgbMD | Mar 11, 2006 2:01:59 PM

I left a word out of "global fee" -- I mean a "real global fee", one thatincludes the hospital expenses. This will serve to align everyone'sinterests.

Dr. Hinson, who says a surgeon should make more than a PCP or that aschool teacher ought to make more than a baseball player? On whatprinciple of equity or freedom? I have tried to argue that PCPs ought toaverage about 4 patients/hour at about $55 (realized) per each. If theycontrol their practice expense, they will net $100 -- $150K per yearworking reasonable hours.

I do not begrudge anyone anything except maybe economic rents flowingfrom licensure laws: I am only thinking about what I see going on. And asI have said before, if The Guild won't fix it then someone else will, and itwon't be pretty. It looks to me like Michael Moore will have his way, andthe someone else will be the government. I am enough the libertarian thatthis is very far from what I consider ideal, but unless something drastichappens soon, I do not see how it can be stopped.

t


While HSA and P4P have some potential, they are far from perfect (seeHSA Debate and P4P Debate).

And as to Dr. pgbMD’s comment “…give the American public some respectand credit and stop being so condescending. They are smarter than youthink” – While I agree, I think the issue is less about the intellect of thepublic and more about informing the public. To make wise decisions aboutwhere and when to seek help for a health-related problem, and aboutwhat treatments are best for a particular person – judgments that arefundamental to HSA and P4P – people have to be well informed.Unfortunately, valid and reliable information for making suchdeterminations simply don’t exist and it will take major systemic reform toemerge and disseminate this knowledge in useful form, which issomething, I say, we should be focusing on doing.

This is closely related to Tom’s issue of "real global fee," which isinteresting, but paying everyone the same rate appears to ignore the issueof “value,” i.e., how to get the biggest “bang for the buck.” Knowledge ofhow to get the best care for least cost is imperative, but requiresreconstructing our current healthcare system so it focuses on bridging the”knowledge void”.

In other words, no fiscal-focused strategies can solve the healthcare crisisby themselves because the crisis is as much a knowledge problem as amoney problem, and the two are inextricably connected.

Aligning income with social benefit is unrealistic without a major shift ofhuman consciousness; and that’s unlikely to happen until things get evenworse. Bringing the incomes of PCPs, therapists, social workers, teachers,etc. more in line with lawyers, lobbyists, professional athletes,entertainers, CEOs, etc. requires a fundamental transformation in thefocus and beliefs of our society; a transformation from happiness, self-worth and life-purpose:(a) being linked to one possessions, creature comforts, economic mightand physical intimidation… to … (b) being the result of one's proactive membership in the larger “humancommunity” and doing what one can to improve the well-being of allpeople through social change emerging from self-awareness, compassion,

people through social change emerging from self-awareness, compassion,critical thinking, innovation, quest of knowledge, conservation of naturalresources, protection of the planet, acceptance of different cultures andcustoms, etc.

I’m hoping this transformation will take place before it’s too late, but wecannot sit by waiting for it to happen.

Back to the “value” concept -- I equate healthcare value with healthcarequality by defining quality as safe, effective, efficient, affordable, timely,and available care.

What is doable near term, and has the potential to transform the systemlong term, is taking steps to optimize healthcare value/quality. Considerthe following strategy:1. Giving the greatest income to providers who deliver the most cost-effective care, treat the most difficult patients, and get the best outcomes – i.e., produce the greatest value/quality2. And, at the same time, doing what’s necessary to enable all providersto deliver higher-value/quality care to all patients. Factors increasing carevalue/quality are likely to be practitioner experience, knowledge and skills;the use of effective information technologies and decision-support tools;implementation of effective quality-improvement and wellness programs;use of cost-effective evidence-based treatment protocols and medicalequipment; having enough time and resources to execute and coordinateeffective plans of care; efficient administrative operations (cutting the red-tape); bedside manner and accurate intuition; etc.

Two of the biggest challenges to implementing such a value/quality-basedsystem are:1. Establishing and using valid and reliable ways to measure and reward “value/quality” and 2. Creating a system that enables all providers to increase thevalue/quality of their services.

Dealing with these challenges requires many changes to our currenthealthcare system, and, I contend, this is where we should be focusing ourefforts and spending our money.



> This is closely related to Tom’s issue of> "real global fee," which is interesting,> but paying everyone the same rate appears> to ignore the issue of “value,” i.e., how> to get the biggest “bang for the buck.”> Knowledge of how to get the best care for> least cost is imperative, but requires> reconstructing our current healthcare> system so it focuses on bridging the> ”knowledge void”.

In the short term it sorta does ingore the issue of "value", but this servesa purpose in disseminating information and driving adoption.

They who figure out how to cure a patient at least as well, but lessexpensively benefit by receiving what you might call an "excess payment"if you have a cost-plus mentality. If you have an intrinsic value mentality,the payment isn't excess at all: the smarter docs make more profit justlike smarter automobile manufacturers do.

But just like in every other industry, this does not go on forever -- youcan't rest on your laurels. The technology spreads (and it is notnecessarily capital-embodied technology) and begins to move up the BassCurve to become the new Standard of Care, the price should come down.In an ideal market, this would happen naturally, and fast. In medicine, the

price-regulator-in-chief will have to take care of it.\

t


How about this instead? I decide what it costs me to provide a particularservice, and then I charge that to the person I am providing the serviceto? If I charge too much, or do not provide an adequate service, then noone will come to see me. If I do a good job, and their is value to theservice, then everyone is happy. Why should there be ANYTHING ELSEinvolved?


You can do that. Go all cash. No credit cards even. And never Medicare orMedicaid. There is a lot to be said for this. Where you live and work, youcould probably do it. Go for it.

t


I’m no economist, but Dr. Hinson’s proposal seems like a natural marketprocess to me. The trick would be to enable consumers to evaluate carevalue, which would require transparency in cost and outcomes. That is,patients would need access to valid, reliable data about the cost andbenefit of different services rendered to different types of patients bydifferent providers, so each patient can choose the provider most likely todeliver the greatest value to him/her.

And since providers would want to gain competitive advantage bydelivering the greatest value, there would have to be a way to enablethem to continually improve the quality of their care or risk losingpatients.

It seems to me, therefore, that such knowledge on both ends is requiredto make this system work in a way that helps fix the healthcare system;like when automobile crash tests give objective feedback to the public andmanufacturers resulting in better cars and increased sales to the makersof those cars.

Then, as an increasing number of providers deliver the same value as thebest performing providers -- through dissemination and implementation ofhigh-quality standards (e.g., evidence-based practice guidelines) --competition would be increasingly based on cost alone, which wouldrequire increased efficiency while maintaining the same level of efficacy.Am I making any sense?

And as far as Tom’s proposal – with the Bass Curve and prices falling inline with new care standard – I’d like to know more since I’m havingtrouble with the “price-regulator-in-chief” concept. What would have tohappen in the healthcare system for the relationship between the BassCurve and price points to become a natural and fast process as in otherindustries? That is, how would the system have to be transformed in orderfor providers delivering the greatest value to receive the greatest “profit”and prices to fall as those high-value services become standards, withoutthe need of a price regulator?

It’s starting to appear as though the two proposals above are not inconflict. Am I missing something?


Posted by: Steve Beller, Ph.D. | Mar 14, 2006 3:15:19 PM

Steve, you make sense under a number of impossible assumptions. Therewill never be anything resembling an ideal (competitive) market in medicalservices because it isn't snack foods or even automobiles.

services because it isn't snack foods or even automobiles.

Supply is restricted by the suppliers with the help of licensure laws. Everyservice provided is a bit of a one-off, not so much as some of the doctorsclaim, but they have a point -- direct comparisons are impossible. Manyoutcomes are heavily dependent on the cooperation of the patients, whichis why most quality programs have focused on processes rather thanoutcomes. Even price and outcome transparency as complete as we canmake it will not begin to approach the level of simplicity needed by 75% ofthe "customers", maybe more. Everyone knows how a potato chip shouldtaste, but only an expert knows what to expect from a medicalintervention, and only imperfectly even so. If you don't like the car youbought, you can sell it and get another one. Medicine is not like this.Conflicts of interest, real and potential, are rampant. For anything at allserious or complex (read "expensive") magnify all the preceding by 100and add in the necessary financing mechanisms. Even if we returned toindemnity insurance, paid to the patient, he is still more or less price-insensitive at this point, and market mechanisms by definition aredefeated.

Since there can't be an efficient market, someone will have to be theregulator. You really should learn some economics -- microeconomics andprice theory would help you a lot. Then some game theory if you're stillinterested. Can't do public policy or business strategy without it.

t


As a med student, I would gladly go into primary care for 100k salary takehome.

I go to one of the best med schools in the country, and I'm about the onlyone considering primary care. The perception is that specialist pay is muchbetter, PCPs are not respected or valued, and that

Somebody suggested that US doctors salaries should be reduced to whatthe guys in europe make. If you reduced our salaries to what they get,they would come out far ahead of us because they dont spend tens ofthousands of dollars on malpractice insurance or experience the same kindof lawsuit risk we face.

You give me a salary expectation of 100k take home, and cost ofliving/inflation adjustments, for a 50 hour work week, with malpracticeinsurance covered by the federal government, and I'll be fat and happy. Idont think thats too much to ask for undergoing 4 years of college, 4years of med school, 3 years of residency, and a system in which thegovernment directly controls the salaries of an entire profession. Evenfiremen and policemen dont operate that kind of national pay scale, citiesand counties compete for their services.

If you are going to give us socialized medicine with the same salaries thateuropean doctors get, then at least give us the same malpracticeprotections that they get.

Posted by: med student | Mar 14, 2006 6:10:30 PM

Well, Tom, I said I’m not an economist … I didn’t say I’m ignorant ofeconomics. Nevertheless, no one can be authority in every area, I agreethat continual learning is a good thing, and it is our good fortune thatsubject matter experts like you and others here are participating in thisforum!

I’m also convinced that a collaborative approach to problem-solving anddecision-making is often the best way to spark the kind of innovation,creative ideas, and productive dialogue that leads to the wisest solutions …especially if the participants have a wide diversity of experiences,knowledge, and conflicting viewpoints. Blogs such as THCB, Healthvoices,and others are a great vehicle for this.

I’m also a believer in “using the mirror,” i.e., hold up a vision of the idealsituation and asks questions and examine why it isn’t a reality and whatmust happen for it to be; and if the ideal unreachable, then determine thebest path to follow to make the situation ever better, and make necessaryadjustments to the direction along the way as new knowledge emergesand events occur.

It’s obvious that healthcare is incredibly more complex than otherindustries for many reasons, some of which you point out. I’ve claimed,and to assert, that key to any valid proposal to solving the healthcarecrisis is: (a) gaining and disseminating knowledge of the most cost-effective, personalized interventions that keep people well (prevention &maintenance) and make people well (diagnosis & treatment) and (b) asystem that enables and encourages consumers and providers toimplement those interventions in an efficient and effective manner. Ifeveryone received those interventions in an optimal way, I contend, therewould be no healthcare crisis! Of course, this is idealistic. So, we shouldour focus energies on defining the path that would bring us ever closer tothis ideal, then invest heavily on moving closer to making it a reality.

Since both reducing costs and increasing efficacy (i.e., improving carequality/value) are imperative, we must focus finding ways establisheconomic/payment/funding policies that supportscientific/knowledge/quality-improvement processes. If they don’t, we’ll berepeating the mistakes of the past. And this is a complex endeavor sincethere are numerous interacting variables that impede and drive such aneffort, e.g.:

• Impediments from a human nature perspective include ignorance, fear,inertia, self-deception, greed, ego, conflicts of interest, etc.• Drivers from a human nature perspective include quest for knowledge,compassion, curiosity, innovation, collaboration, talent, awareness of thehealthcare crisis and desire to fix it, etc.

• Impediments from a healthcare systems perspective include an irrationalpayment system, lack of transparency, misdirected competition, lack ofleadership, adversarial relationships between payers and providers, theknowledge void, low use of clinical decision support systems, low fidelity,continuity of care problems, practice variations, “low status” of PCPs, etc.• Drivers from a healthcare systems perspective include wellnessprograms, quality improvement programs, evidence-based practiceguidelines, health IT systems, Advanced Medical Home model,personalized care, incentive programs, RHIOs, integrated deliverysystems, etc.

• Impediments from a health sciences perspective include lack of funding,limitations of evidence, time and expense establishing practice guidelines,information overload, uncoordinated research efforts, politicization ofresearch, etc.• Drivers from a health sciences perspective include our country’s recentfocus on healthcare quality, better IT systems, collaborative efforts(largely abroad), growing awareness that science is a vehicle for bridgingthe knowledge void, etc.

Since our whacky payment system is inextricably tied to dozens of otherfactors, I’m glad were examining it in the context of the bigger picture.

Discussing monetary issues such as acceptable income levels, a “price-regulator-in-chief,” sensible ways of competition, paying for universalcare, etc. are certainly important and I’m eager to share my thoughts, askquestions, research, and learn.

Equally important is dealing with the challenges of knowledge-building,continuous quality improvement, development of next generation healthinformation technologies, and the systemic change needed to drive them –which, I admit, are closer to my heart than debating economic theory.

I believe that finding solutions to all this takes a diverse communitycollaborating openly and honestly with open minds, critical thinking, and abroad, balanced perspective; people who develop wise policies by focusingon resolving very complex issues that often seem intractable. I just don’twant a repeat of the past, where discussions focused on monetary issuesto the exclusion of quality issues, resulting in the implementation of short-sighted, ineffective, fiscal-only strategies that made matters worse. Wehave a tendency to do this in our country.



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