Please, I'm not blaming the victim here. I've covered the business of healthcare for more than seven years, and while that doesn't qualify me as an expert, spare me the lesson about how the overregulation of healthcare accounts for this waste. The financial services industry, while no poster child for responsible activity lately, is highly regulated as well, but at least it's efficient.
I've heard this argument for years, and while I understand, it doesn't mean we shouldn't strive for something better. Arguing that reducing waste is beyond your control is a cop-out, and many of the most progressive CFOs and CEOs I talk to in this business would agree with me. In any case, for your reading pleasure, here are a few reader responses to my recent columns. Oh, and a few readers who took the time to write actually agreed with me. So there.
My column on March 17 got at least one reader hopping mad.
Why shouldn't healthcare be treated like a widget producer? First, we are not paid the way widget makers are paid--by consumers. Just for that the widget parallel is pretty insulting. Second, people are not widgets and they are truly tired of the products being offered. You would be best served by dropping the whole "medicine is like any other business" argument.
Andrew Ross MD
I'm not sure what you're arguing here, Dr. Ross, but you're twisting my comments. If you read my column again, you'll see that I never said that people were widgets and I never claimed healthcare was like any other business. Neither is shipping like retail. I made an analogy between other industries and pay for performance in healthcare, arguing against the notion that some physicians seem to feel that because of their degree, experience, and godlike status, nothing they do for a patient--no matter the cost--should be questioned by anyone other than themselves. At one time, that argument may have held some water. No more. I agree you are not paid by consumers. I never said otherwise. Some are trying to change that. Thanks for writing.
Another, more positive, note:
I too attended the conference, and I agree that much was said to support the P4P programs in theory. As an internist and CMO of a management company, I was surprised to see how many organizations have teamed up to get a resolution on measurement. I actually heard some interesting suggestions that for the first time align with the concept. One specifically made an impression.
I actually heard someone say that just because something is difficult to do does not mean we should not do it. This is exactly what needs to be considered to validate measurement of quality, or as I have come to realize, risk management. We implemented a P4P program five years ago and have used chart audits as a way to measure risk management. Avoiding discussion of bad quality linked to a specific case helped us convince the primary care physician that better risk management is what is needed. Poor processes lead to bad outcomes and we pay for implementing processes that reduce those bad outcomes. We avoid the barrier that the patient is sicker or the patient is difficult and focus on replicating management that improves continuous transitional comprehensive care.
Surprisingly, we found that what we were creating was a system similar to the Patient Centered Medical Home. As you may know, this concept supports the PCP and empowers him to be responsible for the patient's care. Of course you would pay a provider more if he practices this way, and now we have NCQA to certify its existence.
Our program has shown results. Those practices that embrace the concept have significantly less admits per thousand and better outcomes. The Medicare Risk adjustment scores are also higher, bringing more premium and thus increasing overall profit. The average reimbursement for the market is 130% of Medicare allowable, and physician satisfaction is at an all-time high.
Metropolitan Health Networks Inc.
And one more.
The healthcare system spends far more than necessary, so it's impractical to come up with a "reward" program that will cost the system even more money.
Ideas like not paying for never events in hospitals will lead to better quality, fewer mistakes and decreased costs for the hospitals. Building on this concept is a much better idea. For physicians, paying for an episode of care or treatment of a condition limits the exposure of the payer while putting some accountability back on the doctors and the patients.
Lion & Carillo LLP
This note came from a reader in response to some commentary I fired off about the move in some states to tax some well-performing hospitals in order to attract more federal funding so that they can distribute it to hospitals that are struggling financially.
It's called Upper Payment Limit. If you are going to edit a healthcare finance newsletter, you might want to become familiar with it. A federal rule states that states must pay for Medicaid at least at the level that Medicare would have paid. If they don't, there is a UPL gap. For public hospitals, no tax is required--it is handled through an Intergovernmental Transfer or IGT. For private hospitals, a tax is required and must be approved by CMS. It's the only way these hospitals will have access to those monies--federal and state.
Idaho Hospital Association
Ms. Terry, thanks for the lesson. I understand how it works in the same way that it is possible, with much instruction and research, to understand how any Rube Goldberg machine works. What I don't understand is why it was built this way. Please educate me as to why one government program spending more should be required in order for another government program to spend more. Seems diabolical to me, but I'm just a simple healthcare writer--and taxpayer.
My March 24 column, If It's Broke, Fix It , brought these remarks:
Something that seems to be missing from the equation that we are trying to solve regarding the high cost of healthcare is what I call the big three: cost of pharmaceuticals, cost of medical devices (implants etc.), and cost of private health insurance. It seems that the manufacturers and insurers are able to deflect the criticism over the relatively high cost of the big three in the U.S. compared with identical items in other countries.
Wadley Health System
Indeed they have, Mike. These big three have some powerful friends in Congress. At least with medical devices, some members of Congress are trying to crack down on the gifts these companies give to doctors in return for using their products. Let's not pretend that practice is anything else. And some senators have introduced a bill to boost transparency in medical device pricing. I see no reason to argue against this bill.
Phil, I appreciate your optimism concerning consumer-directed healthcare, and as a long-running, prosperous free market society, we have every reason to have confidence in ourselves as consumers. The dilemma with healthcare is that the attempts to engage the consumer (patient) only address the demand side of the healthcare economic equation. The supply side is still regulated and controlled by everyone from Congress to CMS to state certificate-of-need boards to professional associations to accreditation groups along with other constraints to creating the type of market competition that would free the supply side of the equation. Until local physicians, hospitals, and other providers organize into competitive units that can create real differentiation in the quality and costs of their "care product," we won't have a healthcare market in which knowledgeable and empowered consumers can make a difference with their choices. As it is now, I, as a "consumer," can only be "directed" to "contracted" hospitals and physicians that all look pretty much the same and with which prices are negotiated and set by government, insurers and other third parties outside of my control. Just what is it that Consumer Directed Healthcare expects me to do?
Physicians Healthcare Management Group Inc.
A well-thought-out response to the difficulties involved in helping consumers differentiate between providers based on cost and quality information, Robert. I don't have the answer, but many of the people I've talked to argue that comprehensive payment reform is a great start. Whether that will happen depends on how desperate we get as a society. Of course, we could always try nationalized or single-payer healthcare.
Thanks for writing, everyone. And keep those comments coming--especially the ones that don't agree with me. Those are the most fun.
Philip Betbeze is finance editor with HealthLeaders magazine. He can be reached at email@example.com.
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