Tuesday, January 27, 2009

My Chronic Condition

I don’t know why, but I can’t stop reading about, thinking about, and writing about Chronic Illness Care. The latest edition of Health Affairs focuses on the topic with a number of great essays. I won’t cite them individually, but there are a number worth reading.

I’m also a sucker for a great opening. Health Affairs' Editor-In-Chief kicks it all off with this doozy, “As in many things in health care and health spending, American “exceptionalism” is the rule. The United States is doing an especially rotten job of delivering chronic care, at spectacular cost.” How can you not read on?

She cites a November 2008 Commonwealth Fund survey of 7,500 chronically ill patients in eight countries, including the US, UK and Germany that found “US patients are far more likely than those in the other countries to report high out-of-pocket costs; to forgo care due to the expense; and to experience high rates of medical errors.” The study also found that the care systems in these countries were likely to fall short in delivering chronic care, with care coordination lacking everywhere.

In one essay, Paez, et. al. report, “In 2005, 43.8 percent of the US civilian noninstitutionalized population had one or more conditions that we classified as chronic. One in five reported living with one chronic condition while 10.7 percent of respondents reported two conditions, and 13.3 percent had three or more conditions.” Further, “An overall shift occurred from people reporting zero or only one chronic condition to people reporting multiple chronic conditions, particularly among people in midlife [45-64] and older.” Especially interesting to me was that socioeconomic status was not as correlated to increases in chronic conditions as you’d intuitively expect. From 1999 to 2005 the percentage of people with three or more chronic conditions grew 5.6% among the Poor, 5.5% among those categorized as Middle Income, and 6.7% among High Income individuals.

Beyond the incidence data, the question of prevention and treatment looms. Paez and her partners reported, “Higher drug copayments and three-tier pharmacy plans have been found to reduce adherence to drugs for management of such chronic conditions as diabetes, hypercholesterolemia, hypertension and schizophrenia. Reduced drug adherence includes delaying prescription fills, failing to fill prescriptions, cutting dosages and reducing the frequency of administration.”

So what to do? The suggestions that come from the issue’s authors seem to coalesce around a three-pronged approach: 1. Insurance initiatives, 2. Delivery system initiatives, and 3. Social initiatives.

Insurance Initiatives: Paez and her co-authors conclude by suggesting, “Insurers should consider value-based insurance designs that subsidize high-value chronic care while increasing cost sharing for elective services without proven benefit.” Bodenheimer et. al. assert, “Payment reform should move toward risk-adjusted per patient payment for incentives for quality, services provided by nonclinician team members [more in that in a bit] and population oriented panel management.”

Delivery System Initiatives: Ron Goetzel from Emory University tees up the notion that some big gains, and major innovation, in prevention could be, and is being realized in nonclinical settings, such as the workplace. Gabel, et. al. study the success of attacking obesity in the workplace and suggest, while they have made gains, questions about the right way to fund the programs (paid benefit, reduced premium from carriers, employee responsibility, etc.) persist.

On this topic I was most interested in Bodenheimer, et. al. and their paper on “Confronting the Growing Burden of Chronic Disease: Can the U.S. Health Care Workforce Do the Job?” They present research that on average, “family physicians manage 3.05 problems per [patient] visit; the number of problems grows to 3.88 for people over age sixty-five and 4.6 for patients with diabetes.” This leads to two conclusions. 1. Under current reimbursement pressures, physicians simply don’t have enough time to spend with complicated patients, and 2. Specialists are inefficient tools for tackling these complicated patients because of the multiple systems and comorbidities that interact with one another (and their medications).

They find, “Specialists are better than PCPs at treating some specific diagnoses and can provided procedural interventions that PCPs are not trained to do. Yet PCPs, compared with specialists, provide equal quality of care at lower cost for patients with diabetes, hypertension and lower back pain.”

However, there are problems with the PCP model too. They report patients who are seen for multiple chronic conditions by PCPs report low understanding of their care and only 9 percent of the time do they participate in clinical decisions.

Then there’s the issue of time. “It has been estimated that it would take a PCP 10.6 hours per working day to provide high-quality chronic care to a typical patient panel.”

This leads the authors and other essayists to advance the multidisciplinary team scenario. Simply put, there is evidence a coordinated team approach, often lead by medical assistants or Nurse Practitioners as care quarterbacks are delivering better results at a better price. My question is, who will own this solution? All the evidence comes from controlled situations like the Group Health Cooperative of Puget Sound or Kaiser Permanente. In the fantasyland of the 1990’s, integrated delivery systems, receiving global capitation would be incentivized to force this kind of structural change. Without such a payment and delivery structure, this might become disintermediated to retail clinics…not necessarily more organized, just cheaper per encounter transactions.

Social Initiatives: Until chronic ill health, obesity, and “un-fitness” attain the stigma of drunk driving and smoking in public places, can we reasonably expect social forces to impact behavior? Borrowing from a colleague’s note, “Steven Gortmaker, professor of society, human development, and health at the [Harvard]School of Public Health, observes that the convenience-food culture is so ubiquitous that even conscientious parents have trouble steering their children away from junk food. "You let your kids go on a ‘play date,’" says
the father of two, "and they come home and say, ‘We went to Burger King for
lunch.’" (He notes that on any given day, 30 percent of American children
aged four to 19 eat fast food, and older and wealthier ones eat even more.
Overall, 7 percent of the U.S. population visits McDonald’s each day, and 20
to 25 percent eat in some kind of fast-food restaurant.)

Bodenheimer et. al. summarize it nicely when they conclude, “If payment restricted to face-to-face clinician visits continues as the dominant payment mode, high-quality chronic care will remain an unfulfilled dream…Without a multidisciplinary team, consistently good chronic care is impossible. Without payment reform, multidisciplinary teams are impossible.

And without societal disgust at a ballooning federal budget deficit, increased taxes and other hard choices regarding desired government programs, we’ll stay [seated of course] on this merry-go-round.

Friday, January 16, 2009

You're Fired.

A friend recently asserted that 1-in-5 hospital CEO’s turnover every year. Truth is, it’s consistently been about 15% or 1-in-6.7, according to ACHE. My bold prediction for the new decade: That number jumps closer to my friend’s 20% figure, perhaps even higher. Why? Failure to anticipate the meteor.

I’m talking about the dinosaurs. They couldn’t have seen it coming, but man, when it hit, they were done. Like hospital CEO’s, even if TRex saw the meteor days, weeks, heck months before it hit, they were ill-equipped (short arms being what they are) to change their fate.

I’ve gotten back to IBM’s “Healthcare 2015: Win-win or lose-lose?” and the opening pages of “A portrait and a path to successful transformation” are sobering. IBM identifies three channels of transformation; 1. Transforming Value, 2. Transforming Consumer Responsibility, and 3. Transforming Care Delivery.

There are a myriad of ways to go from that jumping-off point, but a few consistent threads kept bringing me back to the structural centerpiece of the current US health system, the acute care, general hospital. Through this lense I perceive so much opportunity for failure that the demise of the hospital CEO appears nearly assured.

Inability to Transform Value. The cornerstone of this argument is that, by 2015, consumers will “assume much greater financial oversight and responsibility for their healthcare, which, in turn, will drive the demand for value data that is readily accessible, reliable and understandable. Payers will take a more holistic view of value…and [societies] will demand that payment for and quality of healthcare services be aligned to the value those services return both to the individual and to the country or region as a whole.”

My same friend correctly points out that hospitals are the last great bulwarks of information hoarding. Interoperability is something to which we award gold stars because it largely can’t be done. Hospitals have resisted all pressures for transparency that is “readily accessible, reliable and understandable.” They’ve even paid others to obfuscate the issue, such as HealthGrades, US News and World Report, Thompson-Reuters and Healthcare Compare. Once you’ve ceded ground it’s hard to get it back.

Prediction: Hospitals will wrestle this back, with the help of, perhaps, organizations like the Joint Commission (frankly, their biggest potential ally in the quest, because they have more useful information than anyone else), but I suspect the current leadership of hospitals won’t be the ones with the fortitude to do it.

Inability to Transform Consumer Responsibility. Well, this won’t really be the hospital CEO’s fault, but it will happen on the current batch’s watch. Personally, I think this will be the last thing to piece of the puzzle to fall into place, unless the financing mechanism becomes amazingly punitive for preventable, chronic conditions. How it gets hospital CEO’s is this: 1. Financing structures finally change to the point that bad behavior becomes really expensive for Joe Sixpack to maintain. 2. The financial pressure on patients changes their healthcare shopping habits – bearing more of the financial burden, they look to new (retail and other) delivery sites to get their act together. 3. Hospitals realize they are losing connections to customers and those formerly loyal patients begin heeding the advice of new mid-level providers (with no loyalty to the general hospital) in these new care settings. Desperate, they try to close the proverbial barn door after the horse is out. 4. Hospitals begin a scramble to re-engage with people with whom they should have never lost touch. 5. The turnover of hospital marketing directors begins, not because of this failure, but their likely inability to do anything about it. The tide of continued failure drags hospital CEO’s along.

Inability to Transform Care Delivery. Here’s the big one; the “fundamental shift in the nature, mode and means of care delivery.” I’ve gone on in the past about the issue of chronic care, and the current edition of Health Affairs redoubles the call for meaningful change in the US approach to 75%+ of the $2 trillion spent annually on chronic diseases. “Today, preventative care…is a concept without a champion…consumers ignore it, payers do not incentivize it, and providers do not profit from it.”

They go on, “by 2015, we believe chronic patients will be empowered to take control of their diseases through IT-enabled disease management programs that improve outcomes and lower costs. Their treatment will center on their location, thanks to home monitoring devices, which will automatically evaluate data and when needed generate alerts and action recommendations to patients and providers. Patients and their families, assisted by health infomediaries, will replace doctors as the leaders in chronic care management, a shift that will eliminate a major contributor to its cost and, because of doctor time constraints, its brevity.” Only a small, confident slice of visionary hospital leaders will involve themselves here.

This suggests a further decentralization of medical decision-making and authority, away from acute care hospitals. Economy and effectiveness will be described in terms that have less and less to do with general hospitals. IBM proposes this is an opportunity, “encourag[ing] the transformation of today’s massive, general purpose hospitals into centers of excellence devoted to specific conditions and combination triage centers.”

We can debate the pace and likelihood of such a massive transformation, but where I become most skeptical is the defensive mentality of most acute care organizations. “If I can just continue to steal enough heart surgeries from my competitor, I don’t have to do this integration, decentralization thing.” That sounds to me like Big Detroit Auto Thinking, and I believe those three bosses should be shown the door.

I think about the many ways hospital CEO’s will have to transform if the hospital is to remain a key player in the process (which their unique cash and debt position gives them power and influence), and question their track record. Regardless of the pace or ultimate magnitude of the shift, it surely seems hospitals will need to become:

  • More physically decentralized
  • More specialized
  • More integrated with physicians and a new class of mid-level providers
  • More non-acute focused and successful
  • More data integrated
  • More data transparent

And that seems like an unreasonably tall order. Necessary, but beyond many CEO’s grasps.

Oh, and you can follow me on Twitter. I’m dmiers!

Monday, January 12, 2009

Reform Is Coming

Two particularly interesting and important things happened at the end of last week. One, as reported by the New York Times (“Daschle Lays Out a Plan to Overhaul Healthcare”), was presumptive Health Czar Tom Daschle’s visit to friendly confines of the US Senate to chitchat about reform. The article reports he appeared fluent on the topic, didn’t need to resort to notes and enjoyed a very favorable reception from his former colleagues. Granted, it seems he wasn’t thrown too many hardballs, but his message was quite clear: “as we face a harsh and deep recession, the problem of the uninsured is likely to grow.” Acknowledging criticisms of the failed 1994 attempt to address the systems shortcomings, Mr. Daschle asserted, “The[y] are good arguments for undertaking reform in a way that is aggressive, open and responsive to Americans’ concerns,” he said. “They are not good arguments for ignoring the problem.”

While many, like Jeff Goldsmith, had suggested a go-slow approach on health reform, it appears clear something more aggressive will happen. The Administration will join the growing chorus of proposals gathering for consideration and vote.

Which leads to the other item that appeared on Friday. The Commonwealth Fund Commission on a High Performance Health System issues their analysis (part I of II) of Leading Congressional Health Care Bills. It’s an interesting tome and a surprisingly fast read. Admittedly, I have spent the most time on the section dealing with mixed private-public insurance with a shared responsibility for financing advanced through proposals by President-elect, Senator Max Baucus and the “Building Blocks” plan offered by the Commonwealth Fund itself. Ego being what it is, I assume the bill that finally goes to the floors of Congress for debate, vote and conferencing will resemble the President’s view of the universe. He is the “Noun” to the verb “Change.” He gets to claim victory and credit (and, if necessary, blame).

The details of the proposal are fairly clear and widely available. Two items jumped out at me though which are worth mention.

First, Figure 3 of the report compares US Population by Primary Source of Insurance under Current Law and Proposals, 2010. Under the Obama-Baucus-Building Blocks (OBBB) model, the Employer Sponsored insurance market is projected to change very little. – covering 49% of all Americans, down from 53% currently. I personally found that small shift surprising. in the election, the Doom-And-Gloomers often said that if the Goverment was providing and "out" employers would take it. Guess not.

The Connector – the new mechanism that will be the market-maker for insuring the currently uninsured and which is also expected to pick up some people currently covered by Medicaid – will become the third largest “insurer” at an estimate 19% of the population, behind Medicaid/SCHIP (45%) and just ahead of Medicare (10%).

It is expected, in this model, that providers would receive Medicare rates for people insured under the Connector, so Medicare’s fee schedule would cover 29% of the population. An intriguing question. Can hospital operators profitably serve a third of their patient population at Medicare rates? Maybe more intriguing is the financing aspect of the OBBB plan that places a 4 percent assessment on hospital gross revenues and 2 percent on physician revenues to partially fund the expansion of access. Gross revenues, not net. This is an interesting kettle of fish; a tax dressed up in sheep’s clothing. It could certainly impact hospital pricing strategies. I foresee an abundance of multivariate analyses calculating how much prices could increase and still deliver bottom line benefit in excess of new taxes.

Beyond the fun questions of profitable business management and pricing strategies, the bigger question that bubbled up was the issue of tax-exempt status. Once you’ve started to tax, it’s hard to stop.

So if the total uninsured burden on the US economy drops to 1% of the population (4 million people) and the care for 78% of all citizens is paid at Medicare rates or better, what becomes of hospitals’ charitable missions? Losses on serving Medicaid, providing medical education, and under/unfunded research burdens can’t justify millions of dollars of foregone state and local tax receipts. Even if they were to receive credit for the assessments that help fund the Connector program, it seems hospitals will be exposed to a significant, non-defensible assault.

I won’t argue that this is a bad thing. I can imagine a provider revenue boom (not to mention savings in collections, something hosptials particularly stink at). As a marketer, in a land of taxable hospitals, I see incredible marketing opportunities – grow sales at all costs to spread fixed costs across more cases and drive marginal revenue. Relieved of the burden of the uninsured/no-pay patients, does a new “Wild West” of health care competition emerge? Puzzling questions I don’t have full ideas on yet.

But if I were a gambling man, I’d continue to put chips down on “Change.”

Changes aren’t permanent, but change is.”