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My wife: Why is Obama making people buy insurance policies that cost 8% of their take home and pay for “not much”

Me: Don’t blame me, I voted for “single payer”

My wife is involved in the enrollment process for the Affordable Care Act. Last year she enrolled many folks who were grateful for their newly found access to health care. This year she is finding a that many folks didn’t pay for health insurance previously because a) they are reasonably healthy and b) they realize that they are paying for, to coin an expression, crap.

What her clients, and everyone else in America, is painfully aware of is the following (complements of Dissent Magazine):

In America we spend a lot of money and get worse outcomes than folks who live in other countries. Some of our excess mortality is due to car accidents and gun violence but there is general agreement that even once that is accounted for, we don’t get our money’s worth. Why?

As a rule, we pay more than our peers for the same health care goods and services (especially drugs). Much “health spending” is wasted on administrative overhead, on marketing, and on the important business of figuring out who is insured and who isn’t. And that spending is starkly uneven, lavishing services on those with good insurance coverage and bypassing those without.

Here in Mobile, we finished celebrating Mardi Gras today. This is, in the words of my son, a very weird celebration. For 3 weeks, people eat, drink, and dance to excess. The streets are filled with vendors that sell such delicacies as fried Oreo cookies. The parades themselves feature folks throwing moon-pies by the thousands to the crowds. Today, tens of thousands of folks were out today cooking lots of meat over open flames and drinking lots of adult beverages.

Today was Mardi Gras day. It features a parade, the Knights of Revelry, with the lead float featuring Folly who, using pig bladders, calls attention to our excesses.

Mardi Gras 2010 096Then, at the end of the day, Folly reappears being chased by Death.


Legend has it that, at the end of the parade, Folly wins out. However midnight invariably comes and Folly is put away for another forty some-odd weeks.

As my wife has discovered, we have been throwing the equivalent of a “carnival” diet for healthcare. We throw a lot of care at the wrong people and not enough at the people who need it. As a consequence, we are now requiring folks to spend up to 8% of their income or risk a penalty.

Here is Mobile, after today, moonpies will no longer fall from the sky. One has to fry ones own Oreo cookies if he or she has a hankering. The parade barricades go away. Perhaps people will demand more disciplined health care spending as well.


Remember the song, “We’re # 37“? It came out in 2009, the beginning of the debate about the ineffectiveness of the American healthcare system and the need for change. The video went viral, more because of the catchy tune and cute visuals, I’m afraid, than for the message. Here we are 6 years later and even with the Obamazation of health care our system is still last in the industrialized world. We still do not offer access to all of our citizens (witness the 24 states that deny access to the working poor), Our system remains very inefficient with 30% of spending wasted on inefficiency and unnecessary care. We deny people access to measure proven to extend lives and do so in a manner that punishes those of color disproportionately. Worse, we do it in a manner that costs twice as much as other industrialized countries, with most of that money coming from taxpayers.  .

As a part of a class I am taking, I have been reading a lot about change management. This weekend, I read John Kotter’s book Leading Change. In this book he identifies 8 components necessary to change an entrenched system in the business world:

  1. Establishing a Sense of Urgency (people need to sense that the platform is on fire before they jump into the ocean)
  2. Forming a Powerful Guiding Coalition
  3. Creating a Vision
  4. Communicating the Vision
  5. Empowering Others to Act on the Vision
  6. Planning for and Creating Short Term Wins
  7. Consolidating Improvements and Producing Still More Change
  8. Institutionalizing New Approaches

Why are we still last? It appears that we skipped the first step. Most people never use healthcare at all. thus they are unaware that the platform is burning. Or, even if they do, it is for an urgent problem (my throat hurts, I have a cough) and our system is really good at getting folks in and out for self limited problems in a very expensive manner ($111 to tell you “It’s a cold, live with it“). For the 20% who need our system a lot, the system has moved most of the costs to the taxpayer, so the true costs are hidden. Of course, this is after the family has bankrupted themselves but the expression “blood from a turnip” comes to mind.

Turns out that part one of the Obamazation was “getting all people access” and that wasn’t even in Kotter’s book. Part two, “transform the system”, started last week. Sylvia Burwell, secretary of Health and Human Services, announced last week a series of sweeping Medicare payment changes.  In effect, the platform has been set on fire. The changes moving 50% of the money from fee-for-service to quality by 2018 with an interim goal of 30% by 2016. What does this mean?

[The adminstration] plans to tie 85 percent of all Medicare payments to outcomes by the end of 2016 — rising to 90 percent by 2018.

A subset of those payments — 30 percent in 2016 and 50 percent in 2018 — will have to be part of what the government calls “alternative payment models.” These are contracts where groups of doctors and hospitals and pharmacists — a big enough network, essentially, to cover a patients’ whole spectrum of health care needs — get a lump sum of money to take care of a set number of patients.

This, in addition to the 40% of commercial contracts that currently include a value component, means that over half of all dollars in health care will be contingent on quality. Is that smoke I smell?


My friend Josh Freeman offers his take on an article published in New England Journal regarding “Value-based purchasing” in health care. In this study, hospitals were paid a little more (about 2%) if they did some simple things effectively (made sure most patients got the right medications and correct instructions upon discharge). I personally don’t think the study proved much of anything. The study coincided too much with actions initiated in the same time period by the Joint Commission that required hospitals to do these things to maintain accreditation. In effect, the small “carrot” provided by the feds was overwhelmed by the larger “stick” that is the JC leading to an expensive flop of a study.

Josh makes a very good point, however, in that the “value” being purchased was not necessarily seen as valuable by patients. The hospitals were being asked to do things that lead to shorter hospital stays, not necessarily to folks feeling better. This reflects the continued disconnect between the purchasers of health care (insurance companies, governments) and the owners of the bodies, minds, and souls upon which health care is foisted (sick people).

Part of the problem with this study is that for a health care interaction to occur in America today, someone has to be sick. Over half of Americans spend under $300 annually on “health care.” I suspect that they make food choices which may lead to obesity and exacerbate diabetes. I suspect they consider reducing risky behavior such as smoking or physical inactivity as well as mitigating other genetic risks. I suspect they make decisions on how to spend leisure time, perhaps debating whether or not to focus on activities which would improve their spiritual and emotional wellbeing. Unless they walk into a pharmacy or a physician’s office, however, it doesn’t count as health care. The health care industry under the current payment structure will have to be content to wait on the sidelines until the person becomes gravely ill then spring into action, making sure that they get the right medicine at the right time in the right (expensive) place.To maintain the health care economic engine (18% of our gross domestic product), it requires a lot of decisions leading up to “Oh my God, I think I’m having a heart attack!”

This leads me to the Center for Health Quality and Payment Reform and Harold Miller. I saw Dr Miller’s presentation this weekend and was amazed. Many people think that the only way our country can extract ourselves from this mess is a single payer, Medicare for all system. While we may see this, I don’t think a country that enjoys 100 different varieties of ketchup will agree to a single flavor of health care. Dr Miller offers a blueprint for moving away from the current “volume based” strategy that rewards getting people really sick and then snatching them (VERY EFFICIENTLY) from the jaws of death, instead moving towards a place where the money follows the person and he or she can determine what values should be emphasized. Both traditional and non-traditional means could be used to in this system to encourage wellness rather than focus on illness. The vehicle, Accountable Care Organizations, exist today as a consequence of “ObamaCare” and people are starting to take notice. What will we ever do with all those empty hospital beds?

We are slowly working on redesigning the way we deliver care in our Family Medicine Center. We have focused on care of folks with chronic illness for a while but recently (with the passage of the ACA and the coming of ACOs) we are working on hitting the sweet spot.  A couple of weeks ago Dr Berwick made it easier. He published an article in the New England Journal of Medicine that identified areas of care delivery that primary care physicians will be required to focus their quality energy on in the future if they expect payment and recognition in a post-ACA world. For those, like me, who believe the future is now below are the areas where documentation of level of care (followed by improvement) in the primary care setting will be expected:

Ability of the practice to provide an enjoyable patient and caregiver experience

• Getting timely care, appointments, and information

• How well your doctors communicate

• Helpful, courteous, respectful office staff

• Patients’ ratings of doctor

• Health promotion and education

• Shared decision making

• Health status or functional status

Ability of the practice to facilitate care coordination —transitions

• Risk-standardized, all-condition readmission

• 30-Day post-discharge physician visit

• Medication reconciliation

• Care transitions measure

• Management of ambulatory-sensitive conditions: diabetes; chronic obstructive pulmonary disease (COPD); congestive heart failure (CHF); dehydration; bacterial pneumonia; urinary tract infections (UTIs)

delivery of services related to preventive health and early disease detection

• Influenza immunization

• Pneumococcal vaccination

• Mammography screening

• Colorectal cancer screening

• Cholesterol management for patients with cardiovascular conditions

• Adult weight screening and follow-up

• Blood-pressure measurement

• Tobacco-use assessment and intervention

• Depression screening

Care for members of at-risk populations —diabetes

• Composite and individual measures (glycated hemoglobin, LDL cholesterol <100 mg/dl, blood pressure

<140/90 mm Hg, tobacco nonuse, aspirin use)

• Poor glycemic control (glycated hemoglobin >9%)

• Blood pressure control in diabetes

• Screening rates for microalbuminuria

• Dilated eye exam; foot exam

Care for members of at-risk populations — heart failure

• Left ventricular function assessment

• Left ventricular function testing

• Weight measurement

• Patient education

• Heart failure prescription rates for left ventricular systolic dysfunction (LVSD)

• Angiotensin-converting–enzyme inhibitor or angiotensin-receptor blocker (ACE/ARB) rates for LVSD

• Warfarin therapy for patients with atrial fibrillation

Care for members of at-risk populations — coronary artery disease

• Coronary artery disease (CAD) composite and individual measures (oral antiplatelet therapy for patients with CAD; drug therapy for lowering LDL cholesterol; beta-blocker for patients with CAD with prior myocardial infarction; LDL cholesterol <100 mg/dl; ACE/ARB therapy for patients with CAD and diabetes, LVSD, or all of the above)

Care for members of at-risk populations —hypertension

• Blood-pressure control rates (<140/90 mm Hg)

• Hypertension plan of care

Care for members of at-risk populations— COPD

• Spirometry evaluation

• Smoking-cessation counseling

• Bronchodilator therapy based on FEV1

Care for members of at-risk populations — frail elderly

• Screening for fall risk

• Osteoporosis management in women who had a prior fracture

• Monthly INR for beneficiaries on warfarin

The New England Journal of Medicine has a very good series on the implementation of the ACA (Affordable Care Act) or imminent arrival  of socialism as ushered in by  PPACA (Affordable Care Act)  depending on your politics. In the  article this week, John Kastor details the potential impact (or lack thereof) of Accountable Care Organizations (ACO)  on the Academic Health Center (AHC). As a physician who has spent almost his entire career in academics, I have seen how change happens (slowly) and how difficult the transition is for some. As the new law is being implemented despite some controversy, it is important that we in academics prepare for the changes as best we can.

Dr Kastor points out that the concept of the ACO is completely contrary to the way medicine is practiced in the AHC. AHCs tend to be rather top heavy with sub-sub specialists. In contrast

The ACO concept is predicated on the primacy of primary care, with doctors, nurse practitioners, nurses, and other health care providers working together to supply the most efficient, successful, and economical care for their patients.

He also points out that the AHC administrative structure may not be conducive to an ACO infrastructure. The tradition is for colleges of medicine to be a part of a larger university. The university is typically composed of many colleges, each of which is headed by a Dean. While this works for arts and sciences, it can be problematic if the college is expected to generate excess revenue in some manner such as patient care:

…the dean, who is often responsible for the practice plan, reports to a senior university official, whereas the hospital’s chief executive officer (CEO) reports to an independent board of trustees, as is the case at the University of Maryland, where I work. Conflict among deans, among chairs of clinical departments, and between directors of practices and directors of hospitals, particularly over the distribution of resources, can be endemic in institutions structured in this manner.

The organization of the AHC will be challenged in another way as well. The structure of the clinical department is based on the university model developed in the 16th century. In this model faculty members who share a common knowledge are gathered in a department. This department is headed by a Chairperson. These departments are tasked with offering instruction in the unique content that the department faculty represent.

Chairs tend to be jealous of their prerogatives and are not naturally inclined to transfer the administration of their clinical services to a central authority whose aims may not coincide with their own. The effectiveness of ACOs will depend on the centralization of the administration of medical care, whereas clinical departments in medical schools operate on a decentralized model. At least currently, department chairs have few incentives to change from their traditional method of operating. Without such coordination, it will be difficult for academic medical centers to reduce the costs of practicing medicine — one of the principal aims of ACOs.

Another potential problem is the use of faculty physicians to supervise and deliver care. Faculty members in academic departments see their role, at least in part, as furthering global knowledge. The way this is traditionally assessed is  when the faculty members receive grant funding and publish papers in peer reviewed journals. For faculty who teach history, this means going to the library and researching in the stacks then perhaps going out into the field. To some medical school faculty, this means treating patients in a unique manner. Unfortunately, for ACOs to work, the care, where possible, must be standardized.

Such standardization is not characteristic of the work of many clinical faculty members, who may have their own ways of diagnosing and treating patients who have similar diseases. Furthermore, doctors must accustom themselves to working with teams of auxiliary personnel to optimize their patients’ care, particularly for chronic conditions.

The traditional mission of AHC—teaching learners the nuts and bolts of clinical medicine—doesn’t pay very well. As ACOs proliferate, the anticipated efficiencies will eliminate some of the fee-for-service excess revenue that was being used by AHCs to accomplish this mission. Unfortunately, there doesn’t seem to be any obvious replacement for this revenue at this time. Additionally, the ACO is intended to change the balance in the health care world. As opposed to other industrialized countries, America has a health care system that is specialist dominated.  Many have speculated that this is a contributor to the well documented high cost and poor quality of care. This will be a problem for AHCs.

It is the specialists, not the primary care providers, who dominate academic medical centers and order the expensive tests that increase hospital charges. Moreover, many patients are referred to academic centers for single-encounter diagnosis and treatment of one particular medical problem and not for long-term care, which is a key focus of ACOs. The requirement for robust primary care programs will present a problem for many, perhaps most, academic medical centers that propose to become ACOs. Centers that do not have large primary care programs staffed by full-time faculty or that decide not to develop such units will need to form alliances with off-campus groups of primary care providers, many of whom may be self-employed — an undertaking with which many centers will be unfamiliar.

Ultimately, AHCs may find that they have a niche that doesn’t require affiliation with an ACO to take advantage of the ACA (PPACA). Their hyperspecialization may be useful to patients on a contracted basis for care such as transplants or treatment of rare illnesses. However, if AHCs remain tasked with training physicians-to-be with learning bread and butter medicine, they had better find a way to bring learners and these types of patients together. ACOs are potentially one such way to do that but it will require the AHC to change, not the other way around.

I was reading an article in the New England Journal of Medicine about Accountable Care Organizations last night and was reminded of “path dependence” as an explanation of why healthcare is in the state it is in today. A summary of what these organizations should be able to do is found below

What’s not to like? Turns out there some barriers in moving from our current system to our new system. The first is that doctors do not work well together to deliver coordinated care. Sandbox was not our strongest subject in school. Secondly, physicians have been especially slow to embrace technology (if the stethoscope was good enough for Laennec, it should be good enough for me). You can get your money on another continent but not your health records. Lastly, hospitals have been the capital engine of the health care market and it is possible they may not relinquish control.

This last point illustrates the problem of path dependency. As discussed in the article

Established institutional relationships tend to persist because of “path dependence”: decisions about the future are constrained by decisions made in the past, even though circumstances may change. Although it is unequivocally inefficient, inequitable, and otherwise problematic to finance health care with a combination of employer-based coverage, Medicare, and Medicaid, it has proved impossible to change this structure.

Why work to change course? If you have to ask this, read this post.

Addendum: The president’s oil spill commission came out and said that most of the oil money should go to environmental restoration, to the dismay of Alabama coastal economic leaders. As I discussed previously here, part of the proposal was to strengthen primary care in the region so I should be disappointed but in truth I think they are correct. At any rate, you can still hear the croud chanting “Monorail, monorail, monorail!”

I was in a couple of meetings with a gastroenterologist colleague yesterday and while in between meetings we had a discussion regarding healthcare reform. He said that he has been telling folks he would not want to be a 40-year-old subspecialists. His reasoning is that when the “money rain” is over the ones in their 50’s will retire .  The 30 somethings will accept the relative “money drought” as the new reality.  It’s the 40 somethings who will be resentful of their wealthy and retired older colleagues because of current expenses that reflect the previous reality. I suspect it is the same for health care executives. I was sent this video that illustrates a health care administrator trying to bring back the “money rain”.