Having their cake and eating it: Perverse incentives

A friend made an excellent point the other day, upon reading my post about Consumers Union's advocacy for warranties on orthopaedic devices.

"The thing about CU and the warranty struck me hard as a revelation. We in the health care field are brainwashed into thinking these normal business practices shouldn't apply to medicine, while embracing the idea that the money-making business ideas (like ROI) should apply. But basically it adds up to doctors, administrators, and equipment suppliers having their cake and eating it, too: Getting to apply the positives from business, while avoiding the negatives which apply in all other industries, like guarantees of your work."

The big costly examples are obvious:  An alliance among the three groups (doctors, administrators, and equipment suppliers) to install a surgical robot or a proton beam machine to gain market share, but take no responsibility for determining clinical efficacy or adverse impacts or overall inflation of medical costs.

But as my friend points out, the small, ongoing ones are equally obvious.  Orthopaedic devices that regularly fail after installation in human bodies, with no recourse to the suppliers, and no adverse consequences for the hospitals or doctors that have used them without insisting on warranties.  Ditto for minimally invasive surgical equipment, which is notorious for failing after normal cleaning and sterilization processes.

You would think that the payers--Medicare, Medicaid, and private insurers--would step in, but they are complicit or oblivious.  You would think that the group purchasing organizations would step in, but they, too, are complicit or oblivious.  Maybe they are motivated by the implicit or explicit kick-backs they get by favoring certain suppliers.

On the road with WIHI

The next WIHI broadcast — On the (Virtual) Road with Mobile Clinics and Population Health — will take place on Thursday, September 12, from 2 to 3 PM ET.

Our guests will include:

• Nancy Oriol, MD, Dean of Students, Harvard Medical School; Co-Principal Investigator, Mobile Health Map; Co-Founder, Family Van, Boston, MA
• Leonel Lacayo, MD, Gastroenterologist, Glenwood Hospital; Co-Founder, Health Hut, Ruston, LA
• Anthony Vavasis, MD, Director of Medicine, Callen-Lorde Community Health Center, New York City, NY; Co-Principal Investigator, Mobile Health Map
• Jennifer Bennet, BA, Executive Director, Family Van and Mobile Health Map
• Niñon Lewis, MS, Director, Triple Aim Initiatives, Institute for Healthcare Improvement, Cambridge, MA

What’s the first thing that comes to mind when you spot a mobile health clinic? Good people, probably volunteering their time, traveling to underserved neighborhoods to offer screenings, health education, and some helpful, friendly guidance on where to go for anything more serious or chronic that should be checked out? If this is your impression, it’s fairly accurate. Except for one thing. Nowadays, more and more mobile health vans are an integral part of the health care system… especially in cities and communities where traditional bricks-and-mortar health care services are linking up with innovative community outreach programs that, together, can better manage population health. 

With that as a backdrop, we’re going to hit the (virtual) road on the September 12 WIHI with some of the leading innovators and researchers who are injecting new fuel and purpose into more than 2,000 mobile health clinics across the US. They’re doing this by mapping what’s taking place at a range of health clinics mounted on wheels, and also by carefully investigating health issues that can be impacted and maybe even better addressed by a mobile health van.

If we’re serious about improving population health, it’s critical to look hard at what’s already “out there” that’s working or helping, and then determine how to strengthen its role. Mobile health clinics are increasingly one such trusted and effective resource in many communities. WIHI host Madge Kaplan and IHI’s Niñon Lewis invite you to find out the latest on mobile clinics from an expert panel of clinicians and researchers on the forefront of the issue.

You can enroll for the broadcast here.

The winner's curse

As we look across the US and see large academic medical centers acquire community hospitals, we have to wonder whether they will someday regret their deals as they experience what's called "the winner's curse."  Here's the definition from Wikipedia:

The winner's curse is a phenomenon that may occur in common value auctions with incomplete information. In short, the winner's curse says that in such an auction, the winner will tend to overpay. The winner may overpay or be "cursed" in one of two ways: 1) the winning bid exceeds the value of the auctioned asset such that the winner is worse off in absolute terms; or 2) the value of the asset is less than the bidder anticipated, so the bidder may still have a net gain but will be worse off than anticipated.

How does this relate to the health care world? Well, let's say you are a community hospital in a locality that is strategically important for two or more competing academic medical centers who are doing their best to assemble properties to create Accountable Care Organizations. (Recall that the ACOs want scale to create a larger risk pool to deal with the introduction of risk-based payment regimes from insurers and government payers.  They also want to own medical facilities to treat patients across the spectrum of care. Finally, of course, they want a bigger guaranteed referral base to feed the beast, the academic medical center itself.)

If you are the normal community hospital, your earnings for many years have been substandard, and you have slowly been decapitalizing your plant and facilities.  You just can't earn enough of a margin to cover depreciation based on original cost, much less renew and replace capital equipment at its current price.  You also have trouble recruiting and retaining the best doctors to serve your patients because you cannot offer salaries that compete with those paid in the big city, just a few miles away.. You are, in short, looking for a sugar daddy to acquire you and be a source of capital and also cover your risk in those new risk-based contracts.

You let it be know that you are up for adoption, and the bidding war begins among the region's academic medical centers.  Since these are all non-profit organizations, there is not a "price" that gets paid from one party to another, but there are commitments that must be made to win the auction.  The mother ship must promise to invest a certain number of dollars in renewal and replacement of buildings and equipment; it becomes the guarantor of your outstanding debt and takes on the obligations of your retirement system; it promises to help with recruitment and retention of local primary care and specialty doctors; and it must permit you to have representation on the governing board of the ACO.  Your community hospital board of trustees sits in the catbird seat as the big players around town come a-courting.  The big hospitals may even bid against themselves to make a stronger case, fearful that the other guys are doing the same.

The acquisition is made. A lot of time and effort is devoted to clinical integration, business systems integration, and governance integration.  So much so that the administration of the academic medical center neglects the kind of process improvements that are necessary to increase quality, safety, and efficiency in the mother ship.

After a while the folks in the city come to realize that their acquisition is not a profit center.  It is a cost center.  Since this takes a few years, by then the CEO who negotiated the deal is off to another job, but the board of trustees remains, wondering how their new CEO is going to solve the problem of a steadily growing erosion of earnings.

Warranties for hip and knee implants?

A press release notes:

Consumers Union, the policy arm of Consumer Reports, is calling on the top manufacturers of hip and knee implants to provide warranties that would entitle patients to have defective devices replaced at no cost.

Consumers Union is pushing device makers to equip patients with warranties so they will have a better understanding of how long an implant is expected to last and a clear process to follow in the event that it fails prematurely.  Ultimately, warranties will encourage companies to make their devices safer and more durable, according to Consumers Union.

“Patients have a right to know how long medical device manufacturers are willing to stand by their products,” said Lisa McGiffert, director of Consumers Union’s Safe Patient Project (www.safepatientproject.org).  “While patients may be told by their surgeon how long a device can be expected to last, they rarely get a guarantee in writing since most hip and knee implants do not come with a warranty.”

A Consumers Union review of hip and knee implant recalls found that all major manufacturers have recalled a product or line of products for defects over the past decade.   These recalls underscore how devices can fail prematurely and harm patients.

In letters sent to Biomet, Inc., DePuy Synthes, Smith & Nephew, Stryker Corporation, Wright Medical Technology, Inc, and Zimmer Holdings Inc., earlier this summer, Consumers Union urged the companies to provide a 20 year warranty and outlined the terms of a model warranty. 

What a great idea.  Thus far, I have heard of  no overwhelming response from manufacturers.

What if we "helped" them along.  What if the American Academy of Orthopaedic Surgeons adopted a policy statement saying that its members would not insert any such implants unless the manufacturer provided such warranties?  What if the major orthopaedic hospitals announced that they would not purchase or insert any such implants unless the manufacturer provided such warranties?  What if CMS announced that it would not pay for any such implants for Medicare patients unless the manufacturer provided such warranties?

You judge. What's the right call?

Here's a video of a soccer game in which a Brazilian physiotherapist steps on the field and saves a goal from being scored--and then hightails it for a quick escape.

A question for you aficionados:  What's the correct call for the referee? Who gets the red card?

Answer from my colleague John: "The referee on the pitch got it right. Not much can be done when an outside agent interferes."

In our games, though, the outside agent is usually a dog running across the field.

Oh good. More expensive AND no benefit.

A story from Robert Langreth at Bloomburg, based on a scientific study. Excerpts:

Surgery to remove the uterus using a $1.5 million robot from Intuitive Surgical Inc. (ISRG) doesn’t reduce complications and may raise pneumonia risk compared with conventional less-invasive techniques, according to a second extensive study to find no added benefit from the devices. 

Researchers examined data from about 16,000 women who had hysterectomies for benign conditions in 2009 and 2010. The robot operations cost hospitals $2,489 more per procedure with a similar complication rate as the standard practice of removing the uterus with minimally invasive equipment, according to the study released in the journal Obstetrics & Gynecology. 

The results released yesterday are from the second large-scale research published this year to find higher costs with no added benefit for robotic hysterectomy.

In February, a study in the Journal of the American Medical Association found that robotic hysterectomies for benign conditions cost hospitals $2,189 more per procedure than the same surgery without the robot. That research, which looked at data from 441 hospitals from 2007 to 2010, showed complication rates were 5.5 percent for the robot surgery and 5.3 percent for a less invasive hysterectomy. 

The response from Intuitive.  Regular readers will recognize it as a variant on, "Our patients are sicker."

Intuitive Surgical, in an e-mail, said patients in the study getting robotic surgery tended to be older, heavier and had a higher rate of chronic conditions. 

Unimaginable: Lose their kidney and then seek to recover court costs

Doug Wojcieszak over at Sorry Works! retells the sad story of a hospital, University of Toledo Medical Center, that mistakenly disposed of a kidney being donated from one sibling to another.  He draws excellent conclusions about the nature of disclosure and apology.  The article is worth reading for Doug's insights alone.

But the article also contains an amazing tidbit.  Here goes:

According to the [Toledo] Blade article and a story by Good Morning America, the hospital was initially very open with the family and accommodating, including the assistance finding another kidney.  But, things broke down when the Ohio Attorney General's Office, which is representing this university hospital, thought the family's additional requests for assistance were unreasonable.  Now the AG's office is trying to dismiss a suit by the family by claiming the hospital was not negligent and seeking to recover costs.

The Blade article actually says something a bit different about the medical negligence portion of the case:

The medical center on Tuesday filed an answer to the Fudacz family lawsuit, in which it acknowledged the organ was discarded but denies some of the Fudacz claims. The document ends with a request to dismiss the Fudacz complaint in its entirety at the plaintiffs' cost. UTMC also on Tuesday filed a motion to dismiss the Fudacz complaint – specially two parts of the lawsuit that claim: “parental loss of consortium” and “sibling loss of consortium.” The motion to dismiss did not ask the court to dismiss the first count of the lawsuit, which claims medical negligence.

The UTMC motion to dismiss states the Fudacz family has “no right to compensation for parental loss of consortium of an adult." The medical center also said, “there is no right to compensation for sibling loss of consortium in a nondeath case.”

AG Mike DeWine

I'm not qualified to comment on the legal niceties of what kind of complaints are justified in this kind of case, but would you really want to be an elected Attorney General who seeks to recover court costs from a family that has gone through this kind of ordeal?  What possible negotiating advantage could be achieved in that regard, especially if you desire--as you clearly should--to settle the negligence portion of the case?

How not to conduct a rulemaking

A well done article in Modern Healthcare raises more questions about CMS' analysis and motivations than it answers with regard to the agency's proposal to change facility fees for outpatient services. 

Quick summary:

CMS has proposed tighter controls over facility fees as part of a plan to redirect billions of dollars Medicare spends annually on outpatient care. Its proposal, though preliminary, is already drawing fire.

I make no judgment about the appropriateness of the rule change, but I have to raise questions about the manner in which the proposal was made.  Specifically, there seems to be an aversion to transparency on the part of the agency as to the reasons for the change and the likely impacts.  Here are more excerpts from the article:

The CMS didn't estimate the financial impact of the coding change and declined a written request for any data indicating upcoding by hospitals. The agency also declined to provide any comment on the rationale for the draft rule.

In proposing the facility fees change, the CMS appears to be searching for a simple way to prevent hospitals from picking service codes at a higher level than they really deserve, an illegal practice known as upcoding. Hospitals deny they engage in upcoding.

Hospitals argue that they shouldn't be taken to task for any confusion over how to bill these charges properly. During the past decade, the industry repeatedly urged the CMS to set standards for billing emergency department facility fees. But in 2007, CMS officials wrote that the effort “was proving more challenging than we initially thought.” The proposed new rule states that national guidelines are “not feasible,” hence the decision to give up on them and adopt a flat-rate payment.

Jugna Shah, a hospital outpatient billing expert who is president of Washington-based Nimitt Consulting, said CMS officials in recent years haven't given any hint that they believe some hospitals game Medicare. “It caught me off guard,” she said of the proposed rule. The CMS could be searching for a “quick fix” to the controversy over alleged upcoding, she added.

Along the same lines, the American College of Emergency Physicians advised its members that the CMS “might be reacting to the media attention and speculation” about upcoding, noting the “harsh reprimand” from Holder and Sebelius.

If the CMS wants to be more persuasive that the direction of its proposal is sound, the agency should be more forthright about the thought process behind the proposed change. Otherwise, this just looks like a knee-jerk reaction at the behest of the Attorney General and the Secretary of Human Services.

The importance of being earnest and NICE

UK's National Institute for Health and Care Excellence is widely admired both in the country and abroad for the rigorous manner with which it develops guidance on the use of new and existing medicines, treatments and procedures within the NHS.  (We have no such body in the US.)

It is hard to imagine (not!) that some of its deliberations are controversial.  How wonderful then to see this language used in describing the qualifications desired for an analyst position the Institute is seeking to fill:

“Excellent oral and written communication skills, including the ability to communicate highly complex ideas to a range of audiences where there are significant barriers to acceptance which need to be overcome in a hostile, antagonistic or highly emotive atmosphere.”

(Thanks to Marco D. Huesch, MBBS, Ph.D., assistant professor at the USC Sol Price School of Public Policy, for this lead.)

Tom still reminds us of a Reason to Ride

One of my great pleasures when I was CEO of a hospital was to engage in philanthropic efforts by grateful patients who wanted to support the research or clinical activities of the doctor who had served them.  I would offer my personal involvement, and I would also make sure our development office provided planning and on-site support to the events. In my mind, these kinds of events were a symbol of the very human relationships between providers and patients, and I always felt them worthwhile even if they didn't bring in the kind of dollars that one might solicit from major donors.

A prime example of this was an event initiated by Tom DesFosses, a brain cancer survivor.  After finishing his treatment, Tom took a solo bike ride of several hundred miles throughout New England to celebrate.  Then he started up an annual fund-raising event--called A Reason to Ride--to raise money for Dr. Eric Wong's research program.

Back in 2009, I wrote about this ride and quoted Tom:

"For me, this ride will be very emotional, but in another way it will give me incredible joy. It will give me time to reflect on how blessed I am to be a cancer survivor, and to think of others who are not able to join me on this quest. I hope other cyclists will join me on this ride to help raise greatly needed funds for life-saving cancer research."

Each year, dozens of Tom's friends, cancer survivors, and friends of other cancer patients join the ride.  Now, Tom and his crew take total responsibility for planning and running the event.  A stalwart supporter has been Jim Boland, owner and operator of four New England-based Fuddruckers restaurants, seen above at right with Dr. Wong (left) and Tom (middle).

Today's ride was a great success.  We hope to see you next year!

There goes the random walk hypothesis!

My daughter recently mapped the path of her one-year-old son shortly after he learned to walk.  Here it is:

Wise words from my friend Boaz Tamir

On this eve of the New Jewish Year, the fog grows thicker and the horizon seems to be moving ever-further away: We face uncertainty, confusion and daily challenges to our assessments of what the morrow may bring. Once our slogan was, "Every plan serves as a basis for change;" but the in the current pace of change, we must adopt a slogan of, "Changes are the basis for never-ending planning."

The changes are multi-dimensional: technological innovations; global climate change, civil uprising and political unrest, drastic adjustments in public consciousness, consumer awareness and the political arena and the rearrangement of global and local systems are bringing about epic transformations. These are leading to a destabilization of the validity of established economic, political and managerial paradigms and their usefulness as a base for the development of economic-political polices and sustainable business strategies.

What should we wish for others and for ourselves as this New Year begins?

1. That we learn to adjust to reality, even if we have no theory to explain it.
2. That we learn to view chaos as a lever for creativity, disruption as an advantage and crisis as an opportunity.
3. That we are wise enough to create systems that blur hierarchical boundaries, whose stability stems from constant movement in fluid surroundings.
4. That we replace the paralyzing anxiety brought about by uncertainty with the ability to grow in a storm.
5. That we exchange pride with modesty, answers with questions and certainty with investigation.
6. That we succeed in integrating internal and external strengths as we enlist workers and managers to cope with an environment full of contradictions and disharmony.
7. And to those who have lost their way in the fog: We hope that they will be able to return to their foundations – to interpersonal relations, the foundations of culture, and to be willing to learn from organizational frameworks and cultures that have survived for thousands of years.

Happy New Jewish Year,
Boaz Tamir, Zicheron Yaakov, September 5th, 2013

I wasn't cynical enough about the proton beam industry

I've posted a number of stories about the manner in which the medical-financial complex has pushed through the construction of very high cost proton beam machines, creating a market for a service that has limited clinical support.  It turns out I wasn't cynical enough.

Here's a report from The Advisory Board Company entitled, "Achieving financial success in proton therapy in 2013." Here's the imperative laid out in the report:

This turns the scientific method on its head. Instead of conducting research to determine if proton beam therapy is clinically more efficacious that traditional radiotherapy, we are told to conduct trials designed to substantiate the superiority of this technology. Here's the advice:

Facing heavy payer scrutiny and patient recruitment challenges for large-scale randomized controlled clinical trials, proton centers will need to augment clinical trials while refining strategies for engaging private payers. For tumor sites facing scrutiny, proper patient selection, recent data, and messaging will be very important.

In other words, pick the patient sample to support the desired conclusions.

Meanwhile, another report sets forth marketing advice. Here it is:

As proton centers enter the market in 2013, administrators will need to adapt referral strategy to a new environment.   Changing market forces, including the proliferation of centers,  an expansion in clinical eligibility, trends in physician-hospital relationships, and healthcare reform create new marketing imperatives. 

Now, centers will focus not on a largely exclusive, trans-regional marketplace, but focus much more intensely on finding patients within their own backyards, raising the need to convert exploratory self-referrals.

Let's think about the meaning of: "Convert exploratory self-referrals."  We're going to take ordinary people suffering from cancer and persuade them that this technology is the answer to their problems.  So direct-to-consumer marketing will be applied to this patient population.

Well, it's worked before, e.g., with the da Vinci surgical robot.  Who can blame these guys for taking a leaf out of that book?

Are Surgibuns™ for you?

Not all health care innovations come out of NIH R01 grants.  Here's one developed by Lisa Corcoran, an OR nurse who was tired of wearing the bouffant caps that are popular in the medical field. Her Surgibun™ hair covers are disposable and latex free and the woven and non-woven materials meet the Standard for the Flammability of Textiles CPSC 16 CFR Part 1610.

She's trying to introduce them to the marketplace.  Check them out here. In addition to the healthcare world, they would be excellent in the food and restaurants sectors and in any area in need of hair caps and protectors.

There are protons in Europe, too

Speaking of proton beams, while they populate like rabbits in the US based on a financial model that includes overpayment for prostate irradiation, there are real debates going on in Europe about their efficacy.  Here are excerpts from an article from the British Medical Journal:

Critics say the NHS should not be spending so much money on a treatment that has not been subjected to randomised controlled trials and for which there is little evidence of long term efficacy or safety. In April, an article in the BMJ questioned whether the government’s £250m investment was premature. “For most indications,” reported a review of the evidence in February, no firm conclusions could be drawn about the superiority of protons over photons and it was “sobering to observe that no phase III trials have been performed.”

The debate has been clouded in the UK by a focus on the widespread use of proton therapy in America for the treatment of prostate cancer. This is a red herring, says Adrian Crellin, a consultant clinical oncologist at St James’s University Hospital, Leeds and the Department of Health’s national lead for proton beam therapy: “We have quite specifically excluded prostate cancer as a standard indication for treatment because there’s no evidence.”

In fact, the application of proton therapy in the UK is limited to just 15 rare cancers— three adult and 12 paediatric—that have the clearest evidence, including base of skull chordomas and chondrosarcomas and primary paraspinal tumours. Referrals to overseas treatment centres, which will continue until the NHS units are up and running in 2017, are subject to approval by a national clinical panel that takes account of a range of other factors, including the timing of radiotherapy in relation to other treatment and the stage and pathology of the cancer.

Meanwhile, we see some caution in the Netherlands:

Roelofs explained that the Netherlands takes a somewhat cautious approach when it comes to introducing new treatment regimes, as evidenced by its health insurance board, which will only reimburse proven technologies. For many years, there was concern about the lack of evidence for proton therapy, a situation that led to the instigation of ROCOCO - an ongoing international multicentric in silico trial comparing photons, protons and carbon ions. 

The idea is that before a patient is referred for proton therapy, simulated plan comparisons must reveal a significant dosimetric benefit of protons. This advantageous dose distribution then needs to be translated into clinical benefits, such as reduction of side effects, using proven complication prediction models. "This general in silico concept was picked up by the health insurance board to be enough evidence to reimburse," Roelofs said. The board has stated four model-based indications: head-and-neck, lung, prostate and breast cancer, where patients are eligible for reimbursement, as well as the standard indications: intraocular tumours, chordoma/chondrosarcoma and paediatric tumours. 

But they recognize that the jury is still out and so study is needed.

Another government requirement is that all patients treated with protons in the new centres are included in standardized clinical trials with uniform outcome measurement, requiring close collaboration between sites. "All four initiatives have been working on this proposal for years, so there's already good collaboration between them," Roelofs explained. "We're working together to set up one registry for protocols. When you have four centres treating in the same way, collecting the data in the same way, this will enable you to perform comparisons more easily. I think it will help create the evidence for proton therapy that is still needed." 

In the US, there is not a requirement that efficacy be demonstrated.  Only safety.  So the capital markets have leaped on the technology as a way to draw in the dollars.  Hospitals sign the mortgage to create a competitive advantage.  The medical arms race continues, enhanced by a national association!

September 13 deadline for HOPE Award nominations

 

Nominations for the MITSS HOPE Award are Due by Friday, September 13, 2013. 

 

Now that Labor Day has passed, it's time to get those nominations in for the 2013 HOPE Award.  Don't miss the opportunity to recognize someone who is making a difference.  Self-nominations are welcomed, and submissions from anywhere in the United States and Canada are encouraged.

Click here  or visit www.mitsshopeaward.org for eligibility criteria and submission requirements, to download a nomination form, check out past winners, and much, much more!

This prestigious award is being sponsored by RL Solutions, and the winner will receive a cash prize of $5,000 to continue their important work.

Learning from patients, made easy and effective

An article in The Guardian tells of a lovely and simple approach for really listening to patients and using their feedback, from Spiral Health's 40-bed rehab center in Blackpool (UK). Thanks to Samantha Riley, Director of Insight at NHS England, for the tip.  Excerpts:

A group of people representing all stakeholders in our hospital community – managers, healthcare assistants, therapists, nurses and patients – gather together to analyse patient feedback and decide on action points. Our staff and patients have loved being involved, and it is interesting to hear feedback on problematic issues from so many different perspectives.

Before we start, we collect patient views by conducting friendly bedside interviews. Each patient is asked to talk to us about two things that are working, two things that are not working and two things that people would like to see if they came back to the unit again. The interviews are more of a chat than a formal process and we work hard to make patients feel at ease. We also remind them that negative feedback is as important as glowing praise. Older generations sometimes don't like to make a fuss, even if something is troubling them.

As we are determined to be open and honest about the feedback we receive – negative and positive – we have a display in our reception area that highlights issues raised and what we are working on.

Some people have said we are brave to invite criticism, but we feel strongly that if we are going to be truly patient-centred we must listen hard to them and learn from them. If we were just content to ask tick-box questions of our patients, would the results really be worth the paper they were written on?

Calling the trustbusters!

The case for market concentration driving higher health care prices, which could be predicted by virtually any economist, is being proven over and over.  It happens in the UK.  It happens in the US.

A story in Modern Healthcare.com sets forth the latest study, by the Center for Studying Health System Change, documenting the phenomenon.  The lede:

Bargaining leverage, not the cost of providing complex care, is the main reason why some hospitals can demand prices twice as high as their competitors' and still get contracts to treat privately insured patients, according to a new study.

The analysis by the Center for Studying Health System Change of actual payments to hospitals and physicians by private insurers in 13 U.S. cities found that the most expensive hospitals got rates as much as 60% more than the lowest-priced competitor for inpatient care, and prices that were double the competition for outpatient care. 

And here's a familiar argument (one that our friends at Partners Healthcare habitually made about the Eastern Massachusetts market):

Expensive hospitals have long argued that providing medical education and the best equipment available drives their costs. But the study authors cast doubt on that because their research was based on how much each hospital's rates exceeded Medicare payments for the same services. Since Medicare rates are adjusted to reflect patient case-mix complexity and the cost of capital equipment, those factors shouldn't explain why some hospitals get more than others relative to Medicare's rates.

Let's recapitulate, citing a conclusion noted in a recent New York Times article:

If there is one thing that economists know, it is that market concentration drives prices up — and quality and innovation down.

 

The body politic has chosen to look the other way.  Will greater price and outcome transparency make an iota of difference when the largest provider group in a given metropolitan area dominates the landscape?  I doubt it, in our lifetimes.  The article cited above notes:

 

The entities with the most bargaining power, and thus the highest mark-ups, are the “must-have” hospitals—that boast good reputations, large numbers of services and desirable locations, the authors found. “Even in metropolitan areas with many competing hospitals and hospital systems, these must-have hospitals can command unusually high prices,” they wrote. 

Congratulations to Dr. Minter-Jordan

I missed this announcement earlier this summer but am very pleased to repeat it now.

Dr. Myechia Minter-Jordan took over as the new president and CEO of The Dimock Center on July 1. Dimock is a community health center serving the Roxbury section of Boston--the second largest health center in the city--offering a variety of important programs to people in that part of town. 

Myechia served as chief medical officer at the center since 2007.  I had the pleasure of getting to know her and working with her during my tenure as CEO of BIDMC.  She is a spectacular choice for the head of the center.  As the article in the Bay State Banner notes:

The 41-year-old Minter-Jordan is also dedicated to improving the community health-care model. And she wants to make sure The Dimock Center, already a recognized leader in community health care, will continue to lead the way.

“I relish the opportunity to talk … about issues that impact the Latino and black community,” she said. “I think it is important to me to bring the voice of community health centers to that discussion.

“We can’t stop there. We have to keep moving until it is recognized by all that community health centers are really the model … to create a place for patients and family where all their needs are met,” she added.

Still nothing from CMS, but Blue Shield of CA acts

One of the mysteries of the medical arms race is why the CMS administrators who have served in the Obama Administration (Don Berwick and Marilyn Taverner) never took action to eliminate the unjustified Medicare subsidy of high cost proton beam machines.

So, bravo to Blue Shield of California for doing just that, even in the face of inaction at the federal level.  Here's the story from the Los Angeles Times.  Excerpts:

As hospitals race to offer the latest in high-tech care, a major California health insurer is pushing back and refusing to pay for some of the more expensive and controversial cancer treatments.

Blue Shield of California is taking on this high-cost radiation treatment just as Scripps Health in San Diego prepares to open a gleaming, $230-million proton beam therapy center this fall, only the second one in California and the 12th nationwide.

This week, Blue Shield began notifying doctors statewide of its new policy for early-stage prostate cancer patients, effective in October. The San Francisco insurer says there's no scientific evidence to justify spending $30,000 more for proton beam treatment compared with the price it pays for other forms of radiation that deliver similar results.

"Proton beam is really the perfect example of all that is wrong with our healthcare system," said Cary Gross, a researcher at the Yale School of Medicine who recently compared outcomes for 30,000 Medicare patients who received proton beam or standard radiation. "The rush to adopt proton beam is far outpacing the amount of evidence to support its use."

In December, Gross and other Yale researchers published a study that analyzed 30,000 Medicare patients who received proton beam therapy or standard radiation for prostate cancer. Supporters of proton therapy say it helps those patients avoid common side effects from radiation such as incontinence and erectile dysfunction.

But the Yale researchers found that there was no difference in terms of side effects a year after treatment. Yet Medicare paid more than $32,000 for a course of proton beam treatment, compared with less than $19,000 for conventional radiation.