Medical education reform on WIHI

Today's edition of WIHI (2pm-3pm EDT) promises to be timely and informative. The topic is "The Next Wave of Reform for Medical Education." The guests are Donald M. Berwick, MD, President and CEO, Institute for Healthcare Improvement; Lucian L. Leape, MD, Chair, Lucian Leape Institute at NPSF, and Adjunct Professor of Health Policy, Harvard School of Public Health; Dennis S. O’Leary, MD, President Emeritus, The Joint Commission; and Diane C. Pinakiewicz, President, Lucian Leape Institute at NPSF.

We've covered this topic a bit on this blog, but there is more to be said. Get more information and instructions as to how to participate here. You can join in from anywhere in the world!

My friend Katherine . . .

. . . today learned that she had been accepted by the college of her choice. That she was headed to college before today was already clear, in that she had been admitted by others, but she was anxiously awaiting the news from this particular school.

I'm just a family friend, so when I called to congratulate her, I asked, "Am I allowed to be proud of you?" Her reply, "Oh, yes you can!"

I was really happy to get that response. I had nothing to do with her success. But I reserve the right to be proud. She worked hard for this -- academics, athletics, volunteer service -- and she did it her way. Notwithstanding a college application system that sometimes felt like a random process, she deserved to get in.

But, I am not just proud of her. I am proud of the dozens of kids I know and the many more I don't know who made a multi-year commitment to personal and academic excellence in high school and who are now set for the intellectual and social growth they will experience in college.

But what of that random process, the one that left equally hard working and talented kids disappointed? For many years, the late Boston Globe columnist David Nyhan published a column at this time of year entitled, "The college rejection letter." It has probably helped thousands of kids deal with the disappointment of not being accepted at their hoped-for college. The final paragraph says it nicely, in the somewhat rough language David would sometimes employ:

And the admissions department that said no? Screw them. You've got a life to lead.

Berwick --> CMS

The New York Times reports that President Obama will name Don Berwick, CEO of the Institute for Healthcare Improvement, to be head of the Medicare agency, CMS. Don is an extraordinary leader in the quality and safety movement, and his appointment would send a strong signal as to the direction of US health care policy.

The Real Life Body Book

There is a new book coming out this week. It is called The Real Life Body Book, and is written by Dr. Hope Ricciotti (from BIDMC's Ob/Gyn Department) and Monique Doyle Spencer. You can read an excerpt and pre-order it now.

In the words of one reviewer*:

"I predict this will be the current generation's Our Bodies, Ourselves. The awesome talents of Ricciotti and Spencer are brought to bear on the hardest question of the day: how to provide young women with accurate and helpful health and wellness advice that is interesting and engaging enough to want to read. They have nailed it."

The publisher says,

"When you have questions about your health, you want answers from a trustworthy source. In The Real Life Body Book, a Harvard ob-gyn has joined forces with a humor writer to explain the full range of health issues facing young women today. This comprehensive and authoritative guide focuses on whole body wellness and prevention.... If you’re between the ages of twenty-one and thirty-five and you want the latest facts about your health in a language you can understand, The Real Life Body Book is the go-to resource for keeping your body healthy today and for the rest of your life."

---
* er, me!

The future of publishing

Worth watching.

What standards would you apply?

There were several comments on my blog post and also on the Boston.com story about the sale of Caritas Christi to Cerberus Capital Management that expressed skepticism about the wisdom of the sale and the transformation of this non-profit hospital system to a for-profit one.

Some legal background. The transaction is governed by Mass. General Laws Chapter 180, Section 8A. That section provides, in relevant part:

Prior to a sale, notice is required to be given to the Attorney General, not less than 90 days prior to a sale or other disposition of the assets or operations to a for-profit entity;

The AG is required to investigate the transaction, and consider any relevant factors, including whether:
-- Due care was followed in the process;
-- Conflict of interest was avoided;
-- Fair value is being received; and
-- The proposed transaction is in the public interest;

There will be at least one public hearing, preceded by public notice. Prior to the hearing, copies of all the transaction documents will be made available upon request;

Any charitable fund resulting from the transaction shall be subject to AG and Court approval. A public hearing in connection with the AG review of the governance of the charitable fund is also required; and

Following the transaction, a monitor will be in place to monitor community health access and the levels of free care provided by the entity for three years.

Pretend you are testifying as a citizen in the public hearings. What standard would you want to be applied to these issues? Assume for the moment that the first three tests have been met (due care, conflict of interest, and fair value), what theory or facts do you want to be used to determine if the transaction is in the public interest? And, if a charitable fund results from the transaction, how large should it be; for what purposes would you want it to be used; and how would you want it to be governed?

And before you answer, read Steve Syre's column in today's Boston Globe.

A chance to invest in quality and safety

Big news today in Boston. Rob Weisman at the Boston Globe reports that the Caritas Christi hospital system will be acquired by New York private equity firm Cerberus Capital Management in a $830 million deal. A formal state approval process is needed for the transaction to be consummated.

This would be the largest switch of hospital assets from non-profit to for-profit status that the state has seen. Where will the CEO show up on Jim Conway's chart below under the new arrangement? With the new financial resources being provided by Cerberus, Caritas has the potential to make investments in quality and safety that could help propel it to a leadership role in process improvement. That's the kind of competition that Massachusetts needs.

The article notes:

In such cases, the state Supreme Judicial Court reviews findings from the attorney general’s office, which considers such criteria as whether the transaction is in the public interest, whether the nonprofit has received “fair value’’ for its assets, and whether the nonprofit avoided conflict of interest during its decision-making. As part of a conversion to for-profit status, companies are generally required set aside money for the public’s benefit, such as by setting up a foundation.

A thought about this. If a foundation is set up, why not have its proceeds support quality and safety improvement training in medical schools and at hospitals generally in the state, perhaps stewarded by the Massachusetts-based Institute for Healthcare Improvement?

Still missing the boat

Many of my readers know of and admire Jim Conway, former COO of the Dana Farber Cancer Institute, and more recently a senior associate at the Institute for Healthcare Improvement and a faculty member at the Harvard School of Public Health. A regular feature of Jim's speeches and lectures is a presentation of this slide, an indication of the relative priority given by hospital CEOs to various current issues. He uses it to demonstrate that safety and quality are well down the list for most CEOs.

You might expect that ranking of quality and safety would have risen over the past several years. But there was a major disappointment in 2009, as its place was lowered substantially.

But we can't blame just the CEOs for missing the boat on elevating safety and quality. It is the governing bodies of the hospitals, behind and above the CEOs, who should hold them accountable on this front.

Award to WBUR for End of Life series

Congratulations to WBUR's Rachel Gotbaum and her colleagues for winning the first place radio award from the Association of Health Care Journalists for her series, Quality of Death - End of Life Care: Inside Out.

They could have each other, but don't

Susannah Fox at Pew Internet, a project of the Pew Research Center, has just released a very interesting report entitled "Chronic Disease and the Internet." She says to me:

I love all the reports I've written over the last 10 years, but I am especially proud of this report since it combines the best of what can be done with RDD (random digit dial) survey data (nailing down once and for all that chronic disease has a significant, independent effect on online behavior) and with qualitative data (i.e., the stories patients tell about what they do, how they thrive or bravely slog on). The increase of chronic disease worldwide is one of the great challenges of our time.

Here are some excerpts from the press release:

WASHINGTON, DC - MARCH 24, 2010 - Only 62% of adults living with chronic disease go online, compared with 81% of adults who report no chronic diseases.

"We can now add chronic disease to the list of attributes which have an independent, negative effect on someone's likelihood to have internet access, along with age, education, and income level," says Kristen Purcell, an associate director of the Pew Internet Project and a co-author of the report.

The internet access gap creates an online health information gap. More than any other group, people living with chronic disease remain strongly connected to offline sources of medical assistance and advice such as health professionals, friends, family, and books. However, once they have internet access, people living with chronic disease report significant benefits from the health resources found online.

The report, "Chronic Disease and the Internet," is based on a national telephone survey which included 2,253 adults, 36% of whom are living with chronic disease (heart conditions, lung conditions, high blood pressure, diabetes, cancer). Illustrative quotes from patients were gathered through online surveys conducted by PatientsLikeMe.com and HealthCentral.com.

Looking at the population as a whole, 51% of American adults living with chronic disease have looked online for any of the health topics included in the survey, such as information about a specific disease, a certain medical procedure, or health insurance. By comparison, 66% of adults who report no chronic conditions use the internet to gather health information.

Lack of internet access, not lack of interest in the topic, is the primary reason for the gaps. In fact, when demographic factors are controlled, internet users living with chronic disease are slightly more likely than other internet users to access health information online.

"The deck is stacked against people living with chronic disease. They are disproportionately offline. They often have complicated health issues, not easily solved by the addition of even the best, most reliable, medical advice," says Susannah Fox, an associate director of the Pew Internet Project and a co-author of the report. "But those who are online have a trump card. They have each other. Those who have access use the internet like a secret weapon, unearthing and sharing nuggets of information found online."

Not making a splash

A note this week from Dr. Michael Howell to the doctors, nurses, and respiratory therapists in the ICUs.

All –

(For those I haven’t met, I’m the Director of Critical Care Quality and one of the ICU docs.)

Yesterday marked 150 days without a single reported splash exposure in any of the nine adult ICUs. Previously, that would have been absolutely unbelievable.

Most of you will have noticed the box in the upper right corner of the Portal that lists the number of days since an employee injury. You’ve probably noticed that it’s always zero, meaning that one of our colleagues is hurt every day. Many of us were fairly agitated by that, and for almost the past year, we’ve been working on improving the safety not just of our patients, but of our staff and providers.

As our first target for improvement, we sought the elimination of exposure to blood borne pathogens by splashes. If you or a friend has ever gotten blood in your eye, you know it’s unpleasant, shocking, and scary. Some of our colleagues have, in fact, even been exposed to HIV and hepatitis this way. We know that nearly all exposures from splashes should be preventable by using personal protective equipment. And yet, before we started our work, someone got splashed with blood or body fluids about every week or two in our ICUs.

Because you reported splashes and were open and honest in talking about them, we learned a lot about things that we weren’t that cognizant of before, and we’ve been able to really reduce splashes’ occurrence. A few examples:
· ABGs and accessing arterial lines are especially risky procedures. In January 2009 alone we had *five* splashes from this mechanism.
· Glasses don’t offer adequate protection. Many people have gotten blood in their eyes (or mouth) while wearing their own eyeglasses.
· Splashes happen at unexpected times: disconnecting a Foley, flushing a PICC line, suctioning an ET tube, and being in the room while someone else was doing as ABG – people have been splashed in all of these ways.

Now, though, it’s been five months since a splash occurred. That’s amazing: If we’d done things like we used to, we would have expected ten of our colleagues to have gotten blood splashed in their eyes during this time period. Instead, no one did. For those of you who like rates, during the last six months we’ve seen a seasonally-adjusted splash rate that has fallen by more than 75%. (Yes, splashes seem to vary by season, though we’re not yet sure why.)

Finally, when I last wrote about this, in July, I made a particular appeal:
I want to make a special request of those of you who are more senior, with lots of ICU experience: please watch out for your junior colleagues, and if they are forgetting to wear a mask with visor, please remind them. Remember also that you set an extraordinarily powerful example with your own practice. By not wearing a mask, you may unconsciously be training your more junior colleagues to put themselves at risk.

Now, I want to say “thanks.” I’ve seen you not just wearing masks and visors as part of daily work, but also coaching more junior staff and coming up with ideas on how to further reduce splashes. Many of you have sought me out to talk about this issue, and at least one of you handed me a mask when I walked into a particularly and unexpectedly “active” room (as we euphemistically say in critical care) and forgot to put on eye protection. (Thanks in particular for that – I later found blood spatters on the visor …. yikes.)

Keep up the good work,
Michael

P.S. Now, as we get ready to enter our second year of this work on ICU staff safety, it’s time to start thinking about what’s next. We will continue to focus on splashes, but my sense is that we’re ready to begin other work in this arena, as well. I’d love to hear thoughts, advice, and suggestions.

Silverman Institute Poster Session

After grand rounds, the next item of business for the Silverman Institute symposium was a poster session displaying areas of quality and safety and general process improvement, and enhancement in the patient care environment. The short video below offers some of the posters and their presenters. It gives you a sense of the variety of issues facing an academic medical center, some seemingly simple, some complex.

But here's the thing that puts this in context. When I returned back from my visit to the poster session, the following email awaited me from Susan Megerman, Continuing Medical Education Course Administrator and Program Coordinator, Community Cancer Services:

Dear Paul,

The past several days have been one of ups and downs, but mostly ups. On Sunday, I had the privilege to say goodbye to a dear friend who was on Feldberg 7. I went as a visitor, but sat and watched the staff at work and became a fellow employee filled with the pride of being able to say I work at BIDMC.

M was fully unconscious by the time I arrived, yet every single member of the medical staff spoke to him as if he were fully awake, letting him know exactly what they would be doing: taking his blood pressure, taking blood, giving him an injection. I look back at that brief vignette of hospital care and know that this is what must be happening everywhere in the hospital and if it isn't exactly to that standard, that individuals and groups are working to make it so.

Sadly, M expired yesterday morning after a courageous battle in which his and the combined determination of the medical staff worked to keep him going for as long as possible.

Then, this morning, I'm walking through the lobby of Shapiro and I see the wonderful poster presentations for the Silverman Conference and again, I am deeply moved.

Having now worked at BIDMC for a little more than a year, I remain as grateful for being employed here as I was the first day I began and even more appreciative of the culture of the institution, its devotion to patients and employees. As I look toward my 65th birthday next week, I cannot think of a more wonderful place to complete my work career than at BIDMC.

Thank you.
Susan

All of the posters are available for viewing here.

If you can't see the video, click here.

Geisinger delivers care

We just concluded this morning's grand rounds, the next stage of the Silverman Institute annual symposium. Glen Steele presented, with responding comments from Paul Guzzi, CEO of the Greater Boston Chamber of Commerce; Roberta Herman, COO and CMO of Harvard Pilgrim Health Care; and Gene Lindsey, CEO of Atrius Health.

Glen expanded on last night's themes, one of which was reducing variation in the clinical setting within a health care system. He presented the following chart about Geisinger's experience after reducing variation in cardiac surgery. Results that were already quite good improved dramatically.

The business case improved, too: Net revenue increased 3.8%; Direct costs decreased 5.1%; Contribution margin increased 11.3%; Total inpatient profit per case improved $2560. The insurance companies saw a reduction of 4.8% in cost per case of cardiac bypass surgery, amounting to a cost 28% to 36% less than that of other providers.

Geisinger has also focused on integrating care upstream to people in the primary care practices and beyond, into their homes. Glenn called this "concierge care for the sick, not the rich." Again, the results were impressive, in terms of reduced hospital admissions for people with congestive heart failure and other serious chronic conditions.

The program elements are: Partnership between primary care physicians and GHP that provides 360-degree, 24/7 continuum of care; “Embedded” nurses; Assured easy phone access; Follow-up calls post-discharge and post-ED visit; Telephonic monitoring/case management; Group visits/educational services; and personalized tools (e.g., chronic disease report cards.)

Paul and Roberta and Gene all offered thoughtful observations about the nature of the Massachusetts market and the concerns and hopes of the business community. I can't give them all here because I need to rush off to the poster session, but the universal point that struck home to me was Gene's:

The big opportunity that we have is our waste. We need to unlock the vault and tap into that resource.

Steele arrives in Boston

This week, we celebrate the third annual symposium of BIDMC's Silverman Institute for Health Care Quality and Safety. The Institute was created by a generous donation from our former Board Chair Lois Silverman and her late husband Norman, and it is the focal point for our quality and safety programs, as well as academic programs in that field. The event also contains a lecture, entitled the Michael F. Epstein, MD Lectureship on Clinical Quality and Patient Safety, generously funded by numerous donors in honor of the hospital's previous chief operating officer.

Tonight's speaker was Glenn Steele, CEO of the Geisinger Health System (seen here with Lois) with a lecture entitled, "The art of the possible in American health care today."

Noting that the national health care legislation will solve an important access problem by providing insurance to millions of people, Glenn stated that other changes will be required by the increased demand this access will add to the system. "If we meet that increased demand with our least economic service line (Emergency Room service), the actual cost will be well above that predicted. The present system of care delivery is unsustainable."

"The time for fundamental redesign is now," notes Glenn. What should be changed to get there?

First, unjustified variation should be eliminated. Here, he was not talking about the kind of national variation presented in various papers, but the kind of variation that exists withing a given hospital or practice. "In any other context, we know that this kind of variation leads to lesser quality and increased cost, " and it is certainly true in medical care.

Second, reduce the fragmentation of care-giving. Focus on integrating the continuum of care from primary care doctors through specialists through surgeons within existing institutional relationships.

Third, move from a units-of-work reimbursement system to one based on outcomes, whether shared savings or capitation. Providers should take on more risk over time.

Fourth, move from a concept of patients as passive recipients of care to create a system of making patients and families feel they are partnering with us. (My comment: Read this great piece by by Kevin Clauson, hosted by Pew's Susannah Fox, entitled, "Why is participatory medicine such a hard sell?" to explore some current issues.)

How do we get there without chaos?

-- Clinical leaders need to lead the process.
-- Primary care doctors need to be paid in tandem with hospital specialists.
-- Physicians and hospitals need to work together within a single functional, if not corporate, structure.
-- Insurers and hospitals need to reframe the conversation to produce an appropriate payment relationship.
-- Tap the professional pride of purpose to provide a powerful impetus for change. Don't forget that "people get into the field because they want to help human beings."

In previous years we heard from Brent James and Steve Spear, and Glenn's talk tonight and another more extensive presentation and panel discussion tomorrow will serve to round out the themes we have heard in those previous talks..

Our own March madness

This is a stressful time of year for both medical students and hospitals, as the "match" process does its magic, and graduating medical students learn where they will be going for their graduate medical education (internship and residency). This follows months of applications and interviews. It is an intense review and selection process - in both directions.

Here's a picture of the incoming class for our Department of Medicine. There are others who will join other departments, too. We are excited to have them in our hospital and look forward to their arrival!

High School Quiz Show tonight in Boston

The High School Quiz Show premiers tonight on WGBH Channel 2 in Boston at 7:30! Lincoln-Sudbury Regional High School (Sudbury) vs. University Park Campus School (Worcester). Details here.

One is greater than three or four

Here is a recent video about single-incision laparoscopic colectomy, featuring colorectal surgeon Deborah Nagle. The new procedure involves a single small incision made at the navel. A round port allows access for the instruments needed to remove parts or all of the intestine or colon. Traditional laparoscopic colectomy involves three to four small incisions. Fewer incisions can mean fewer scars and less pain after the operation and possibly less chance of infection. Deb answers frequently asked questions about this surgery here.

I am told that BIDMC was among the first hospitals in the country to use this technique. People in other hospitals, too, are likewise experimenting with other approaches to make abdominal surgery less invasive. With the dual emphasis on patient centeredness and "bending the health care cost curve," these kinds of procedures can help head in the right direction.

Return of the soccer cleat exchange

The return of our community cleat exchange signals the beginning of the youth soccer season here. My friend Ed and I have doing this for 15 years. About 200 families found a free pair of shoes during the three-hour session. As I have noted before, Ed and I get to meet the new generation of soccer stars, and there is a warm and communal feeling to the whole thing.

"I really like that chart . . ."

. . . because it says it all," noted Ellen Zane, CEO of Tufts Medical Center, in a semi-joking, semi-serious manner. Ellen and I were called back as witnesses at the end of today's hearings on health care and insurance cost trends.

Tufts Medical Center is a competitor of BIDMC, but Ellen and I share views on several topics. This is one. Even though the light orange BIDMC "bubble" appears slightly better off than the Tuft's blue "bubble" in the chart above, the larger societal issue needs to be addressed. It is hard to imagine that the Legislature and Governor really intend the citizens to be served by a health care system that rewards certain providers for their market dominance, especially with no evidence that they offer higher quality.

Ellen explained that, consistent with the findings of the Massachusetts Attorney General, "The funneling of dollars disproportionately among hospital and provider groups serves to warp the overall system balance." She mentioned that one result of this is to allow better paid systems to recruit away doctors to their networks, a result documented by the AG in the chart below.


Ellen pointed out that this result is exactly counter to sound public policy, which should rather encourage the lower cost systems to expand. She agrees with Blue Cross Blue Shield and others that a movement away from fee-for-service payments to capitated contracts will prompt greater efficiency, but she set forth a warning (one my readers have seen before):

"Global payments in and of themselves will not stop the warping behavior," she said. "Unless we deal with distortions in the market, that kind of pricing will do nothing to alleviate the system's problems."

What more do you need to know?

The State House News Service, writing about yesterday's hearings on health care and insurance cost trends, offers the following summary of one witness' comments:

Asked whether he agreed with Attorney General Martha Coakley's conclusion that costs charged by certain hospitals for the services they provide aren't linked to the quality and outcomes for patients, Partners HealthCare Chief Operating Officer Thomas Glynn said, “No.” Glynn, speaking at a state hearing on health care costs Thursday, said the most recent contracts signed between Partners and Blue Cross Blue Shield only provided for cost increases that matched medical inflation. Glynn said, “It's a little bit of a mystery to our physicians how our contract is driving up these increases.” Glynn suggested that the higher rates Partners hospitals charge to health insurers are driven, in part, by inadequate payments from the government for Medicare and Medicaid services.

It has been known for a long time that there are disparities in reimbursement rates in Masachusetts that are correlated mainly with market power. It has also been quite clear that these disparities are not related to differences in quality. Yet, the Attorney General's recent report and the testimony submitted by the state insurers under oath quantify this in manner not seen before. The kind of denial contained in the remarks reported above has no substantive support. For example, if we were to assume that all the BCBS contracts signed in the last three years had the same rate of inflation contained in the Partners' contract, the disparity between PHS and other providers would have grown simply because the base upon which that increase is applied at Partners started at a higher level. (To the extent other providers were not offered those same rates of inflation, the disparities grew even more.)

The State House News Service also said:

Andrew Dreyfus, executive vice president of health care service for Blue Cross Blue Shield of Massachusetts – the state's largest insurer – said he doesn't believe his company has the market power to eliminate disparities in the way doctors and hospitals are paid for their services.

As I note below, the Attorney General has rightly found that these disparities -- which exist in both the fee-for-service and capitated reimbursement worlds in Massachusetts -- have led to and will lead to greater market concentration by those dominant providers. As it has in the past several years and will in the future, this causes a continuing impetus for higher rates of medical cost inflation.

Several months ago, a senior executive at Blue Cross told me that the rapidly expanding utilization of services for patients in the Partners system, compounded by the higher rates being paid to that system, was "murdering" Blue Cross' bottom line. This person actually asked me what could be done about that problem. My answer was that a transparent presentation of the differential in rates was the only way I could see to create a sufficient moral imperative in the political and business environment to force a change in this pattern of behavior.

The Attorney General and the Division of Health Care Finance and Policy have now provided that moral framework. But those in the hearing yesterday made clear that a change in business practices is dependent on actions by the state government. As Andrew put it, even the dominant insurer (which has more subscribers than all other insurers combined), does not believe it has has the market power to eliminate disparities.

Thus far, though, there has not been proposed legislation or regulatory activity that addresses this problem. Who will step up in the body politic to propose and demand such change?

At the Cost Trend Hearings

I just returned from testifying at the Health Care Cost Trend Hearings. (Prepared statements are posted here.) Commissioner David Morales of the Division of Health Care Finance and Policy presided. In addition, Attorney General Martha Coakley attended, seen here with Thomas O'Brien, Assistant Attorney General of her Health Care Division.

The day started with an excellent presentation by Stephen Schoenbaum, EVP for Programs at the Commonwealth Fund. It covered a lot of topics, as you can see if you flip through his charts.

A pertinent one for the topic we have been discussing here was that a likely downside of creating Accountable Care Organizations would be an increase in market leverage of such organizations in negotiating payment levels. This will require, he suggests, some level of state action (a point I have made earlier.) "At a minimum," there would be a need for transparency of prices. Beyond that, we will "probably need" a system of all-payer prices and maybe a move to rate-setting (perhaps akin to that employed in Maryland or West Virginia.) "I don't think private payers on their own can do this," he noted, arguing for government supervision of some sort.

This theme came up later during our panel discussion when people were talking about the potential advantages of moving from a fee-for-service to a capitated reimbursement system. Jim Roosevelt, CEO of Tufts Health Plan, wisely noted, "Before going to global budgets, we need to deal with the variation in unit prices" that exists in the Massachusetts market. (See the chart above.) As noted earlier, I agree.

Health Care Cost Trend Hearings

They don't get much media coverage, but the Health Care Cost Trend Hearings being held by the state government right now offer a variety of opinions about the current health care situation in Massachusetts. The prepared statements of the witnesses are available here.

If you only have time to read one thing, look at this statement from the Attorney General. It is as thoughtful and comprehensive a view of the Massachusetts market as can be imagined. Excerpts:

Price variations are correlated to market leverage as measured by the relative market position of the hospital or provider group compared with other hospitals or provider groups within a geographic region or within a group of academic medical centers.

Variations in providers’ per member per month expenses are not correlated to the methodology used to pay for health care, with expenses sometimes higher for globally paid providers than for providers paid on a fee-for-service basis....

These findings have powerful implications for ongoing policy discussions about ways to contain health care costs, reform payment methodologies, and control health insurance premiums while maintaining or improving quality and access. The report raises concerns that existing systemic disparities in prices may, over time, create a provider marketplace dominated by very expensive “haves” as the lower and more moderately priced “have nots” are forced to close or consolidate with higher paid systems.

Who is a wise man? He who learns from everyone.

In these days of cynicism about our elected representatives, I more often find reason to believe the opposite about them. One example is Congressman Michael Capuano, a Democrat representing a portion of the Boston metropolitan area. I have known Mike since his days as Mayor of Somerville, and his commitment to doing the public good has been admirable and consistent.

So, Mike now faces a tough vote on the national health care bill. I was not surprised to see an email from him to a broad group of constituents seeking their input on the matter. He asked specific and detailed questions about various provisions in the bill, and yesterday reported back to all of us.

Here are some excerpts from his note, leaving out several sections about the details of the bill. Although he gave me permission to include the whole, I wanted to focus here on his major themes.

I am so impressed with how Michael is handling this issue. Whichever way he votes, I know he will have the country's and the state's interests at heart.

Dear Friends,

Health Care reform is as important an issue as I have dealt with in my life and it is of great interest to many people.

In my last communication I shared a detailed letter expressing some concerns and seeking input. Since that time, I have received many calls, emails and letters. Most calls merely express support or opposition to the proposal. Others have more detailed points to make. I value this input and I thank you. I am still weighing my vote.

I decided long ago that this is one of the few issues I will decide without regard for political impact - it is too important. I will cast my vote on the basis of what I think is in the best interest of our country, state and district; if there is a political price to pay for that vote, so be it.

So, as of this writing, here is the status of the issues I raised:

1. Pundit views to the contrary - I have NOT decided how to vote. I want to vote YES, but I am still not certain that this SPECIFIC bill deserves my support.

2. One reason for this hesitancy is that we still do NOT have a final draft of the reconciliation bill. No one can or should make a final decision before they read, consider and discuss the final product. We are so far beyond generalities and rhetoric that decisions made before the actual language of the bill is available are irresponsible.

...

8. Process - Some opponents of the underlying proposal are focusing on the process for passage. While I don't like the convoluted process we will be following, it will not deter me from a thorough analysis of the proposal. I would ask if anyone remembers the process that was used for Medicare, Civil Rights or any other important legislation. Furthermore, I can assure you that convoluted processes have been used many times by Republicans and Democrats. In fact, process is only a means to an end - the real issue is the product. If the product is good, I will vote yes - if it is bad, I will vote no. Following the process may be an interesting sidelight, but the important factors are decided in the substance of the bill.

Like others, I wait anxiously for the text of the reconciliation bill. When it is public, I will ask again for comment from informed observers.

I realize that many people are tired of this debate - so am I. But it is important and complicated. It took years to enact Medicare, Medicaid and Social Security - and I argue that it was worth the time and trouble.

I realize that some just want us to vote yes or no based on a few talking points. I will not succumb to that suggestion. Health care is a serious and complicated matter. I do not believe that the vast majority of people really want me to vote on the basis of rhetoric.

I also realize that some see this as a political tug-of-war between the right and the left or between Democrats and Republicans. I do not see it that way at all. I see it as the implementation of basic values:
First - Do you believe that every American should have health care coverage? I do.
Second - If you do not, the answer is easy, vote no. But then you should also think we should repeal Medicare and Medicaid.
Third - If you agree with me that the goal is to expand coverage, the next questions are whether THIS actual proposal gets us closer to that goal, does it do it in a fiscally responsible manner, and does it harm the programs we already have in place? The answers are never as clean and neat as the first two questions and this is what I am trying to decide now.

For those who have contacted me, I appreciate your input. For those who wish to do so, we are happy to hear from you.

Congressman Mike Capuano
8th District, Massachusetts

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P.S. The title for this blog comes from the Pirkei Avot, or Chapters of the Fathers, a group of Talmudic commentaries on the Old Testament, dealing with moral and ethical principles.

Price controls do not work

If there is anything about economics that has been proven over and over, it is that price controls do not work. The unintended consequences are usually worse than the problem that led to the solution in the first place.

Massachusetts legislators, feeling the frustration of higher insurance premiums, are now considering a bill to limit doctor and hospital reimbursement payments to 110% of Medicare rates, or perhaps some other percentage of Medicare rates. The problem with this is that Medicare rates are not fully compensatory to doctors and hospitals and have contributed to the increase in private insurance company rates. This was one of the conclusions reached by the Attorney General in her extensive investigation of these matters.

An unreported fact in Massachusetts is that Tufts Health Plan, at the request of the Group Insurance Commission (the agency that manages the state employees' health plan), recently sent out a request for proposals for a new insurance contract for the tens of thousands government employees covered by the GIC. The main provision was that the doctors and hospitals would have to agree to rates set at 110% of Medicare.

The result: It was a bust. Hospitals and doctors did not express interest in the contract because they knew that they could not cover their costs with it -- even though they could have been included in a limited network and have an effective monopoly to serve this large group of customers.

If today legislators adopt price controls over hospital and doctors' rates, tomorrow they will have to deal with layoffs and closures in the Commonwealth's strongest economic sector. These organizations are not for-profit enterprises with shareholders who can absorb losses.

It is interesting to me that a state in which many people decry the idea of rate-setting would consider the idea of picking a certain price target by fiat for the medical sector. If we are going to move towards government supervision of reimbursement levels, please instead set up a regulatory body to determine the appropriate level of rates based on best medical practices and true underlying costs of hospitals. An evidentiary hearing in which all those factors are considered by qualified administrative law judges would do more to provide a sound basis for determining rates than the price control approaches being raised.

A Day in the Life of a Poison Center

Blogging buddy Tony Chen (formerly of Hospital Impact) sent me this link and the following note:

I just wanted to send along a cool/important link that you might be interested in. The Illinois Poison Center did a unique "behind the scenes" look into the type of calls they get on a daily basis, culminating in this post "A Day in the Life of a Poison Center." There are lots of crazy/interesting/important/funny things in here (what DOES one do when a 2yo accidentally takes his grandfather's viagra?!)

Anyway, just thought I'd pass it along. So many of the calls these guys get (about half of their 100,000 calls per year, actually) are from clinicians working in hospitals leaning on their expertise. It's amazing to think about how many ER visits are avoided because of the poison hotline.

Status-Quo Anxiety

Marybeth, a Women's Health Nurse Practitioner here, sent me this link to a James Surowiecki New Yorker article from August. I think it is really well done.

Would you buy anything from this company?

Another in a series of unsolicited email solicitations, many with undue informality. A marketing company, at that.

Is grammar dead? Punctuation? Correct capitalization?

Subject: Re:Thank you for your time on the call - Paul (Of course, there was no call, and this was not a return of an email.)

Hi Paul,

This is Jessica from an Online Marketing Solutions Company called Futuristic Inc.,

We are a Global database company providing customized & complete marketing solutions based on your needs across the globe. Business Expansion, Lead Generation, & Brand awareness are what we are best at. We partner you in increasing your clientele and reach globally.

Our Expertise includes List Acquisition, Email Appending and Email Marketing across all industries, worldwide. There is always an advantage in keeping an updated database of your target market as it helps you to retain your clients and also enables you to get new business opportunities.

To know more on how we can help you in your marketing initiatives, kindly let me know a convenient time when we can have a quick call to discuss or respond to this email with your Target audience and Industry and I would revert accordingly.

Looking forward to your response.

Regards,

Jessica [last name removed]

Marketing Manager

Futuristic inc.,

"But our patients are sicker"

Liz Kowalczyk at the Boston Globe provides a story and the detailed analysis of the rates paid by Harvard Pilgrim Health Care to hospitals and physicians in Massachusetts. Similar charts have now also been filed by Blue Cross Blue Shield and Tufts Health Plan. All this demonstrates again that the health care reimbursement system is broken.

How not to regulate rates

I wrote last month about a proposal by our Governor to limit insurance rate increases for the individual and small business market in Massachusetts. While he has filed legislation on this front, he also has taken administrative action through his Division of Insurance (summary of both here). New DOI emergency regulations could be used to turn down any rate increase that exceeds 4.8%.

On February 14, DOI issued "filing guidance" to the insurance companies to carry out these regulations. Here's the disapproval section, requiring the previous year's rates to stay in effect if the new rates are not approved:

Health Plans may immediately re-file if a filing is disapproved, but the filing will be subject to at least another 30 days for review. Health Plans may not increase a rate from the prior year if the filing is disapproved. For example, if a group policy is renewing on April 1st, and the March 1st filing for April rates is disapproved, the prior April's rates must stay in effect until such time, if any, that the Health Plan's filing is deemed not disapproved. Health Plans must notify the affected policyholder if a filing is disapproved by the Division.

While I have made clear my predisposition for a wholesale state review of insurance payments to providers, the Administration's rulemaking is another matter altogether. This kind of piecemeal approach to regulation is ill-advised. You simply can't just look at one set of premiums and rule on their reasonableness by administrative fiat.

To the extent the proposed rates are reflective of the demographics and actuarial characters of the group's members, any attempt to use a predetermined price index as a threshold is, on its face, arbitrary. Beyond removing the proper price signal of the underlying cost of medical care and the risk characteristics of the population, turning down a proposed rate increase on these grounds introduces a level of turmoil into the market that will be difficult to unravel.

For those from out of state, please recall that the preponderance of these policies in Massachusetts are written by non-profit insurance companies, so there are no shareholders to bear the shortfall. Instead, the insurers will have to reduce capital reserves, modify plan designs, or cross-subsidize these policies with revenues from other policies. Where reimbursement rates are currently under negotiation, the insurers might attempt to put downward pressure on providers to sell services for this customer segment below cost to make things balance. If agreed to, this would lead to further cost-shifting to other subscribers; but it might be that providers choose not to sign up with insurers that request this. That would leave consumers with policies that do not include certain doctor and hospital networks.

In my days of regulating utilities, the appellate court would have found this kind of ratemaking to be arbitrary and capricious. Requiring investor owned utilities to sell certain services below cost might also have been found to be confiscatory. I don't know what legal standard would apply here, but I am guessing we might soon find out.

Fortunately, indications are that the proposed legislation is unlikely to make progress, but this administrative regulatory approach will move forward unless it is stopped. It should be.

What does it take? (revisited)

I beg your indulgence to read this old post of mine, but more importantly, to read the comments that it stimulated from some of the world's experts in process improvement, but also from some "regular people."

All things considered, are we in the health care professions moving fast enough to transform the delivery of care? And whatever you think about today's problems and this generation of caregivers, how about trying harder for the next? An excerpt:

The Lucian Leape Institute at the National Patient Safety Foundation released today a report that finds that U.S. “medical schools are not doing an adequate job of facilitating student understanding of basic knowledge and the development of skills required for the provision of safe patient care.” The report comes approximately 10 years after the Institute of Medicine’s landmark 1999 report “To Err Is Human,” which found that 98,000 Americans die unnecessarily from preventable medical errors. “Despite concerted efforts by many conscientious health care organizations and health professionals to improve and implement safer practices, health care remains fundamentally unsafe,” said Lucian L. Leape, MD, Chair of the Institute and a widely renowned leader in patient safety. “The result is that patient safety still remains one of the nation’s most solvable public health challenges.”

A major reason why progress has been so slow is that medical schools and teaching hospitals have not trained physicians to follow safe practices, analyze bad outcomes, and work collaboratively in teams to redesign care processes to make them safer. These education and training activities, the report states, need to begin on Day 1 of medical school and continue throughout the four years of medical education and subsequent residency training.

“The medical education system is producing square pegs for the delivery system’s round holes,” said Dennis S. O’Leary, MD, President Emeritus of The Joint Commission, a member of the Institute, and leader of the initiative. “Educational strategies need to be redesigned to emphasize development of the skills, attitudes, and behaviors that are foundational to the provision of safe care.”

Questions for medical students and residents out there. Have you received training in process improvement or the science of care delivery? If so, tell us about it. If not, is it something that you would fine useful? Would it influence how attractive you found potential training programs when planning your career?

Crowd sourcing comes through again

I have written below about the incredible power of crowd sourcing, using the reach and scope of social networking on the Internet to solve a complex problem. Here's a play-by-play about a difficult question. It demonstrates how the asynchronous participation of many participants inevitably converges on the right answer in less than 24 hours. You just have to be patient and let the truth emerge.

I posted the following problem on Facebook:

Query -- what makes some Facebook status updates stay put on the top of your page until cleared, while others appear as one-time updates? (Yesterday at 12:22pm.)

Luba:

I think it's an algorithm that has to do with how often you comment on other people's posts. Facebook tries to be smart about which people you actually care about seeing. I often find it wrong and look at both top stores and most recent to get a full picture of what is going on.

Me:
No, I mean that it stays at the top of your profile page -- sometimes.

Kim:

I think if you go to your home page and write on your wall (as opposed to the "feed" page), it stays up as your status until you change it.

Me:

Nope, it only persists when I post it from the profile page, but then not always. It is inconsistent.

Beverly:
My daughter's answer to these kinds of questions was always, "That's just FB being weird." Evidently they have their quirks.

Eileen:

Do the updates have links (i.e., to other web sites)? Those show up in the news feed but won't get posted like a FB status update on your profile page. Your previous status will remain if a newer post has any kind of link attached to it.

Amy:

I think Beverley's daughter has the answer. FB is both quirky and weird.

Isabel:
Like Eileen, I thought it was links v. no links...

Cal:

There are two buttons at the top center of your News Feed page - Top News and Most Recent. Click on Most Recent and the feeds will be in chrono order.

Me:
That's not the question. Sorry if not clear. The Q is what makes a status change show up at the top of the profile page and stay there?

Beverly:

I just posted a status update with a link and it never went to the top of my profile page. I think the link people are right - link (or photo?), it doesn't go there, no link, it goes to the top and stays. Evidence-based Facebook. (:

Rob:

It has to do with how hard you strike the keys on your computer. Gentle pushes fade much quicker. (Today at 7:48am)

Phineas, we hardly knew ya

One of my favorite displays is of the actual head of Phineas Gage. If you recall, he was a railroad worker who unfortunately got in the way of a projectile -- a long, sharp iron bar that inadvertently became a missile as a result of a mistimed explosive charge.

Mr. Gage's head, and the bar that traveled through it back in 1848, and a technical explanation of the event and the aftereffects are on public display at the Countway Library at Harvard Medical School. (Contact the library at (617) 432-2170 for information.)

Not Boston

I was recently in Palm Beach and had occasion to drive my rental car to one of the local restaurants. It was "valet only" parking. As I stepped out of the car, I asked the valet for the ticket, and he said, "No need. It is the only Chevy in the lot."

After dinner, a new attendant was on duty. He asked for the ticket. I said, "It's the Chevy." He said, "I'll get it right away."

I think they were happy to have it off their lot.

New blog: Health Reform Musings

There is a new blog by Bruce Bullen. It is called Health Reform Musings.

I am hard-pressed to think of anyone in this field in Massachusetts who garners the respect that Bruce does. He was admired as a true professional when in the state government and then afterward at Harvard Pilgrim Health Care. I would keep track of what he says.

In touch or out of touch?

Here is a fascinating opinion piece in the Washington Post by Pat Caddell and Douglas Schoen, pollsters to the past two Democratic presidents, Jimmy Carter and Bill Clinton. They suggest that the Democrats are not in touch with the public regarding health care reform. "Their blind persistence in the face of reality threatens to turn this political march of folly into an electoral rout in November." See my recent notes here and here that have related themes.

More excerpts:

"The battle for public opinion has been lost. Comprehensive health care has been lost."

"Yes, most Americans believe, as we do, that real health-care reform is needed. And yes, certain proposals in the plan are supported by the public. However, a solid majority of Americans opposes the massive health-reform plan."

"Health care is no longer a debate about the merits of specific initiatives. Since the spectacle of Christmas dealmaking to ensure passage of the Senate bill, the issue, in voters' minds, has become less about health care than about the government and a political majority that will neither hear nor heed the will of the people."

"For Democrats to begin turning around their political fortunes there has to be a frank acknowledgement that the comprehensive health-care initiative is a failure, regardless of whether it passes. There are enough Republican and Democratic proposals -- such as purchasing insurance across state lines, malpractice reform, incrementally increasing coverage, initiatives to hold down costs, covering preexisting conditions and ensuring portability -- that can win bipartisan support. It is not a question of starting over but of taking the best of both parties and presenting that as representative of what we need to do to achieve meaningful reform."

Moore helps get more done

I was asked to give the keynote address today at a senior leadership retreat for Sutter Health's Sacramento Sierra Region. Sutter is a community based, not for profit health system.

The Gordon and Betty Moore Foundation has teamed up with Sutter to explore means and methods to transform this multi-centered health care system to the next level of quality, safety, and patient-centeredness. Sutter has already done a lot of good work in these arenas, so the hope is to build on that and explore how to do still better and enhance the likely sustainability of the results.

Pictured here are Michael Dourgarian, a local businessperson who is Chair of the Board of this region of Sutter, and Karyn DiGiorgio, RN, MSN, Program Officer for the Moore Foundation. Not shown is Dr. John Mesic, Chief Medical Officer, who introduced me and has had a lot to do with the broader Sutter effort, and Sarah Marie Miller, who helped organize the retreat.

My job was to tell the story of BIDMC's approach to quality and safety, transparency, process improvement, and patient and family involvement. As always, this prompted lots of good questions and interaction, as people considered what might be drawn from our experience and applied to their own, and as I did so in reverse from their comments.

New blog: Gastrically Changed

There is a new blog on the scene, entitled Gastrically Changed, by Kristen, a labor and delivery nurse who decided to have gastric bypass surgery. It is poignant and thoughtful and well written. (I like the play on words: It is hard not to read it as gastrically challenged!)

After I wrote her a note praising the blog, Kristen replied:

From the beginning of this entire process, I knew I was going to be very open about it. I think if you try to be secretive, people think you are ashamed or embarrassed about what you are doing...because THEY think YOU think you are doing something wrong. That makes everyone uncomfortable. I knew that I would lose a lot of weight...fast...and people would figure it out either way. So if people would know, even if I didn't tell them, why not be open about it and remove all the uncomfortableness? This surgery was going to change my life for the better and I wanted to share that excitement with people! I was aware that, by being this open, people would ask questions and be curious. So if being open about my experience can help educate them, maybe I can do my small part to make this more accepted all around.

Please take a look and enjoy and learn from this patient's perspective.

In memoriam: Ray Tye

I just got word that Ray Tye, one of the most generous people I have ever met, has died. He was generous in the way Maimonides would have liked: He gave without fanfare and with no wish for recognition.

Every now and then, he would hear of a patient, either local or international, who needed some sort of expensive medical treatment that was unaffordable for that person. Ray and his Medical Aid Foundation would provide funds for travel, treatment, and follow-up care -- from conjoined twins to an Iraqi woman with a heart condition.

In spite of his not wanting attention, people wanted to recognize Ray. Here, for example, Catholic Charities gave him their Justice and Compassion Award, the first time Catholic Charities presented that award to a member of the Jewish community.

At the personal level, Ray was warm and thoughtful and engaging. He would call me from time to time with an idea or to offer support, and he was always polite and modest, never wanting to interfere or be an inconvenience.

He was beloved in our community and will be missed in so many ways.

Mini Mobile Billboard

Adventures in the airports continue: Upon boarding my flight, I came upon a fellow passenger with this new type of mobile billboard. It is a changing electronic message worn on the body. The person was advertising Isagenix, a kind of food supplement called nutritional cleansing.

(I am not offering an endorsement nor otherwise commenting on the efficacy of this product, so please don't submit comments about that. This post is about the medium, not the message.)

For your convenience . . . almost

A couple of years ago, I wrote admiringly about ubiquitous cell phone charging stations in Iceland, where you could automatically pay a small charging fee and securely leave your phone behind to be charged while you did something else. So you can imagine my pleasure at seeing this complimentary charging station, sponsored by CNBC, at a Florida airport (after my check-in below).

But I guess you can't always expect to get something for nothing. Many of the connector cables were out of service, rendering the charging station useless -- and not a great reflection on the sponsor.

Positive ID

Working in a hospital, I have become very sensitized to the issue of proper identification of patients. Like other places, we require affirmative redundant identification by the patient before histories are taken, procedures are undertaken, and drugs are administered. For example: "What is your name?" "What is your birthday?" Not: "Are you Mary Smith, born on April 15, 1945?"

All this has made me more alert in other venues. This morning, I approached the American Airlines counter to check a piece of luggage. It is early on a quiet day, and there are no other people waiting in line. No pressure. I hand the agent my pre-printed boarding passes and my driver's license.

"That will be $20 for the luggage," she says.
"I thought I was exempt because I am an Aadvantage Gold member," I reply (while silently noting that the sign on the counter says $25, and not $20.)
"Well, I'll just waive it," she says.

She hands me a new boarding pass, with "Steven Levy" on it and my luggage receipt, which says "ORD" instead of "SFO."

"But I am going to San Francisco, not Chicago. And this boarding pass does not have my name on it."

"What is your name?" she says with a bit of annoyance, although she still has not returned my license. I tell her.

She reissues the boarding pass and luggage receipt.

I review both very carefully. And I wait until I see the luggage tag securely fastened to my suitcase.

Passion, accuracy, and politics

I admire the President and really hope a health care bill is passed by Congress, but I wonder if his overstatement of what the bill does might ultimately cause him to fail. Here's the latest, as reported in today's New York Times:

Boiling down his proposal to a few sentences, Mr. Obama asked, “How many people would like a proposal that holds insurance companies more accountable? How many people would like to give Americans the same insurance choices that members of Congress get? And how many would like a proposal that brings down costs for everyone? That’s our proposal.”

Is that really the proposal?

As for holding insurance companies more accountable, a number of state insurance commissioners have their doubts, at least with regard to federal regulation of premium rate levels.

Will we have the same insurance choices as members of Congress? Well, maybe to the extent that they can choose from a number of plans, but that is not the full set of benefits to which they are entitled.

And, as for bringing down costs, every person in the industry knows that is just not true. David Brooks explains why in his op-ed today.

From the beginning, I pointed out that Mr. Obama was over-promising when he was offering (1) a reduction in health care costs; (2) an increase in access for people currently uninsured or under-insured; and (3) maintaining choice for people in their selection of doctors and hospitals.

Opposition to Mr. Obama's plan is often characterized as a politically motivated attack from the Republicans. Certainly, some of that is true. But some portion of the opposition also arises from this kind of overstatement, which in turn generates mistrust or at least concern among educated members of the public.

Mr. Obama is betting, though, that his energy and passion will carry the day in motivating members of Congress in his own party to muster enough votes.

Crystal clear compassion

Kevin Cullen sensitively writes this column in today's Boston Globe about Crystal Sannella and her colleagues from BIDMC who recently went on a medical mission to Haiti.

I've had the privilege of getting to know some of these folks, and I am struck by their generosity of spirit. You can see this, too, in the post-mission emails among them and to those of us in hospital administration. Here are some excerpts from three:

Now that we are all back from Haiti, I just wanted to take a minute to say again what an honor it was to work beside all of you this last week. Despite conditions that really defy description, you each worked tirelessly to provide the absolute best quality of care possible given the circumstances of the situation, and I - and the patients and families we cared for - appreciate that. Surrounded by such devastation and tragedy, it would have been easy to despair; yet each of you managed in different and unique ways to create something positive in an otherwise bleak reality, always acting professionally and with compassion.

The experiences we have had will all make us better in our own roles and appreciate the resources we do have to provide great clinical care at BIDMC. I have no doubt that there are many more people alive this week who would not have been had we not been there. There were unfortunately a lot of deaths as well, but having reviewed every case, I can honestly say that nothing more could have been done in the clinical situations you were all in. You have touched the lives of many and they were grateful for it -- evidenced by the fact they did not want us to leave.

[This trip] was shocking, tragic, exciting, challenging, inspiring, and memorable -- sometimes discouraging, but ultimately immensely gratifying. We were all frustrated and saddened by the limits of what we could do, but despite those limits I think we were able to do some very good work. I'm also especially grateful that as a very junior member of the department I was given the opportunity to help. It was a profound experience for me, and I hope very much that I can make international work a significant part of my practice in the future.

Fast followers

With thanks to somebody at Krū Research, a global think tank focused on empowered patients, I repeat the following idea:

We talk much, encourage and glorify “leaders” in any space. But the real power is in “fast followers.” It’s a business strategy concept well known to entrepreneurs and venture capitalists, but not a familiar concept to others.

Here's a video that demonstrates the concept. If you cannot see the video, click here.

What happens next in MA?

What happens next in Massachusetts with insurance reimbursement rates now that many of the facts and figures have been made public?

Here's what I see. The dominant parties in the state on whose watch the disparities in the marketplace have taken place -- Blue Cross Blue Shield and Partners Healthcare System -- face financial and political problems, respectively. The PHS rates that are so much higher than others' cause a major financial drain for BCBS. They do so in the short run just by the degree of current utilization. The effect is compounded over the long run, though, as PHS has a competitive advantage vis-à-vis other systems in recruiting community-based doctors and thereby brings more and more referrals into its hospitals. That these differentials have now been made public by the state creates a political embarrassment for PHS, which has often asserted that its creation brought about substantial economies of scale through integration of care.

I suspect that these factors will lead to a negotiated agreement between BCBS and PHS, where PHS takes a bit of a haircut in its current reimbursement contracts. Not so much that it dramatically affects the PHS bottom line, but enough so that both parties can say that they have cooperatively acted to slow down the rate of health care spending in the state. Will the new rates be anywhere near the statewide average? No way. Will they do anything to offset the competitive advantage that PHS has had or will continue to have? No.

Then, BCBS will come to the rest of us (including BIDMC and our physician group) whose rates are next in line and ask for a "comparable" rate reduction. Citing the PHS deal, we will be publicly and privately pressured to make similar concessions for the good of the Commonwealth. Of course, any such rate reduction would then serve to maintain PHS' market dominance.

Here's my proposal instead. Let us, in the presence of the state's Attorney General, so there are no concerns about antitrust violations, all agree to rate schedules equal to the current statewide average reimbursement rates for hospitals and doctors.* Let's create two major categories -- one for academic medical centers and their doctors to reflect the societally important teaching role -- and one for community hospitals and community-based physicians.**

In other words, let us recognize that the health care reimbursement system in Massachusetts is broken. It is time to get rid of the idea that rates should reflect market power. Have them instead reflect the health status of the population, with appropriate adders for medical education or other specific programs of societal value as directed by the state. Further, if the state and federal government insist on underpaying for Medicaid and Medicare patients, let us acknowledge that amount explicitly in the approved rates for the private insurers.

I know I don't fully understand the insurance business, but I cannot figure out why BCBS and the other insurers in the state would object to this approach. I can't see why it is to their advantage to conduct numerous negotiations for reimbursement rates or to have different rates in place for exactly the same services.

What about quality, you might ask? Well, it would certainly be great to adjust reimbursement rates for meaningful measurements of quality of care. But let's start first by equalizing the base rates, and then we can work on quality metrics in the next step.

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*Or if would make more sense, perhaps a different average would be employed for the Eastern and Western parts of the state, or urban versus rural areas, to reflect regional differences in the cost of living.
** While I make this point with regard to fee-for-service payments, it is certainly a prerequisite for a move towards the kind of global, or capitated payment recommended by the state's Massachusetts Special Commission on the Health Care Payment System. As I have noted in an earlier post: If a capitated rate were established for PHS providers today based on this differential, it would perpetually reward this health care system for its market dominance.