Bundling: Is What's Good for the Consumer Good for You?

I write about a variety of subjects that I think are, or ought to be, important to those of you running finance at healthcare organizations. You're quick to let me know when I'm off target, and quick to praise when I'm on. I appreciate that. It keeps me from getting the "big head," as we say here in the South.

When I wrote about the "bundling" aspect of President Obama's budget a couple of weeks ago, a man I greatly respect took the time to respond. Francois de Brantes, chief executive officer of Bridges to Excellence, who has dedicated his career to improving the efficiency of healthcare, thinks the Obama budget proposal "needs some important refinements," but "it is on the right track."

In the column, I took the opportunity to warn about unintended consequences that may stem from the proposal, but I also think the president is on the right track. A hospital's or physician's responsibility to the patient shouldn't stop when they stop getting paid for the "stuff" they do. The bundling idea is an important attempt to change that equation. Before docs and hospitals get your dander up about not needing financial incentives to provide quality care, consider the story I told about my aunt, and de Brantes' response to it.

"If you think about it, your aunt got crappy care and it cost a lot of money. So the question is how could the hospital and the rehab facility have worked better together to avoid the pneumonia to begin with? Well, that's a completely avoidable complication that's caused by the proliferation of a controllable virus. Today, almost no one really cares about it because there's no financial risk associated to eliminating the care defect. Until providers are held accountable for those defects, nothing will change and patients will continue to suffer."

I agree, and so does the Institute of Medicine and a host of other groups that are working to improve quality. My aunt has recovered from her pneumonia, but Francois shared a story about a friend that illustrates how the outcome from shoddy care can be worse. Much worse.

"I also have a joint replacement story, but somewhat more tragic. A friend went in for a knee replacement three months ago and he's now paralyzed from the neck down and his condition will likely never improve. And he didn't get paralyzed by slipping on the floor of his house, he got it as a result of medical error."

Another response to that column came from a registered nurse who sees the fraud and abuse in Medicare and Medicaid as the key fixes to tackle before any other big-picture reforms are enacted, like the bundling idea.

"I agree our healthcare needs reform," says Leta Hanks, RN, who is quality/compliance manager at OSE Holy Family Medical Center in Monmouth, IL. "The same needs to be done with Medicaid. Until we rid the system of waste, fraud, and abuse, we really don't know what needs to be reformed. Instead of pouring more money into an already corrupt system, let's fix it right. Let's make everyone accountable for the services they receive. Medicare and Medicaid are not a right. They are a privilege to be earned."

It's always fun to get an "attaboy" from media peers who think you've done a good job. I remember watching the "Nightly Business Report" with Paul Kangas with my dad when we were sharing the same roof, so it was a thrill to hear from one of NBR's top reporters regarding our stimulus and Obama budget coverage. Said Jeff Yastine, who often anchors the show for Kangas when he's out:

"Phil: I enjoyed reading your column and its insights into the Obama stimulus plan. For a reporter like myself, a few minutes reading HealthLeaders Media and its various components cuts through a lot of the healthcare rigamarole. It's like reading an intelligence report on the latest battlefront in healthcare. Anyway, nice work."

I just had to put that in there. Thanks for indulging me. I wrote a short piece about the Maryland charity care bill last month, a bill that aims to rein in abusive practices by hospitals in their attempts to collect patient bills. Andrew Mercer, finance director at MedStar Health's Good Samaritan Hospital in Baltimore, took me to task a little bit for telling hospital leaders they should have regulated themselves on these practices to avoid having a legislative solution forced upon them.

"Your intro to the article on the Maryland charity care bill was way off the mark," says Mercer. "Legislation to protect our patients is not necessarily a bad thing, especially in Maryland, where hospitals have been regulated since the '70s. I'm sure you agree that the basis for the recent publicity over hospital collection practices was increased readership. I'm sure you also agree that standards in healthcare are a good thing. As for the industry addressing this issue itself, we've done that. You won't like the answer, but it's through regulation! Maryland has the most effective method of allocating funds for uncompensated care; a method developed in collaboration with state, hospital, and payor representatives."

I think we're talking past each other a little bit, Andrew. Don't know if I agree that the recent publicity about hospital collection practices was about increased readership. That's kind of like saying the recession is only a big deal because news outlets won't shut up about it. I think it's the other way around, but call me biased if you want.

However, I will admit, Andrew, that perhaps I misunderstood the situation there, which is always possible when commenting on news that you didn't actually cover yourself. My impression was that the new legislation was deemed necessary because some hospitals were behaving badly in this regard. Call me crazy, but I always think that if an industry is able to police itself (admittedly, this happens rarely), regulators won't need to impose a solution on them.