Not So Fast (Part I)

While it might not be the “Harry and Louise” full-frontal assault that battered the Clinton administration efforts on system reform, smart, measured resistance to the Obama Principles of Reform are bubbling up all around. To his credit, the President has prescribed an open process, with very public dialog; one suspects the goal is both to avoid the aura of secrecy that clouded the Clinton effort and actually hear from the industry’s best and brightest to leverage their thinking.

A third goal, I suspect, was to amass public support from the same best and brightest as a way of selling the Administration’s vision for the future of the American health system. Seems a funny thing happened on the way to the group hug…people are presenting reasoned, polite dissent. The Administration isn’t getting the, “you’ve got it right” stamp of approval it might have hoped for from the field.

Two instances this week were particularly interesting. First, on Tuesday research appeared on Health Affairs’ website posting the question, “Will Americans Support the Individual Mandate?” This study aimed to assess if an individual mandate, on its own, similar to the Massachusetts plan, could have wide public support, or if something more faceted would be politically necessary.

Respondents to the study’s survey were asked their opinions on two different approaches, the “stand-alone mandate” and a “shared-responsibility plan” each described as follows:

Stand-Alone Mandate: "This proposal would require all Americans to have insurance. Most people would still get insurance through their work. People who don't get insurance from work would have to buy it themselves, or pay a fine if they don't. People with lower incomes would get help from the government paying the cost of health insurance."

Shared-Responsibility Plan: "This proposal would place requirements on individuals, employers, the government, and insurance companies so that everyone shares in the responsibility. Individuals who don't already have insurance would be required to buy it or pay a fine, with financial help from the government for people with lower incomes. Employers would be required to cover their workers, or pay money into a pool that helps people buy insurance. Government health insurance programs would be expanded. Insurance plans would be required to take anyone who applies, even if they have a prior illness."

The stand-alone plan is an easier platform on which to campaign; it doesn’t take a lengthy explanation to get across and the principle is simple. While the President didn’t/hasn’t come down firmly in this camp (he supported a mandate for children, while Hillary Clinton went for the full mandate), he has expressed an openness to it.

The noise out of DC and the trial balloons being floated from Congresses work groups suggest the task forces are leaning more toward a “shared-responsibility” model [and what a great name! Who could be against a concept like shared responsibility?]. This study seems to think this is a politically viable course of action.

Essentially, “48 percent of the public supported the stand-alone individual mandate. It was not as popular as some incremental approaches to partially covering the uninsured population (assessed in another recent Kaiser Family Foundation survey), such as expanding state government programs for low-income people (72 percent) and offering businesses incentives to insure their employees (79 percent). It was slightly more popular than a single-payer government plan financed through taxes (44 percent).”

“A shared-responsibility plan was more popular than the stand-alone mandate in 2008. Fifty-nine percent of the public supported it, compared to the 48 percent who supported the stand-alone mandate. All groups, regardless of political affiliation, income, race, age, and education, were more supportive of the shared-responsibility plan than the stand-alone mandate, except the Hispanic/other race subgroup, which appeared to be indifferent about which of the two options was better.”

This all sounds encouraging, until you hit this sentence: “’shared-responsibility’ enjoyed majority support among every measured subgroup except Republicans (44 percent), respondents over age sixty-five (50 percent), and college-educated people (50 percent).” Huh? That sent my radar buzzing. One of our two major political parties, one of our largest voting blocks (and the largest healthcare consuming demographic, and the “elite” class the President is supposed to represent. Support really drops off when you talk to wage earners garnering between $80,000 - $100,000.

If support for even the better approach is wanting among these significant groups, does that suggest that neither idea is very well-liked? The reasons given for not supporting any form of mandate are predictable and reveal fundamental disagreements on the government’s right role in healthcare; the belief that either approach “would lead to government-run health care or higher taxes, or both. The Democrats who opposed the plans were significantly more likely than the Republicans to say that these reform options were the wrong approach because a single government health plan was needed. Republicans and Democrats also disagreed on the issue of the individual mandate itself. A higher percentage of Republican opponents than Democratic opponents disagreed with the principle of government requiring people to buy insurance. More Democrats than Republicans opposed mandates because they thought that people might not be able to afford the insurance they were being required to purchase.”

Jeff Goldsmith posed the question, especially in this economy, where is the money to fund any of this going to come from? Even if you favor the “shared-responsibility” approach, Mr. Goldsmith points out, “mandating that employers offer health insurance to their workers if they do not already do so is, in effect, taxing them. Those that do not play would be asked explicitly to pay an equivalent amount (6-8% of payroll?) to a fund that would help finance those not covered by employer plans.”

“The president recently reaffirmed his support for the so-called Employee Free Choice Act, which would also increase employment costs by rapidly accelerating unionization. How you can heap these two economic burdens on employers, which are laying off 650,000 workers a month, and expect to get back to 7.9% unemployment next year or even the year after, beggars the imagination.”

This was the most sobering cry in the wilderness yet. While those who support either mandate do so most often on the basis of moral principle – it’s the right thing to do. I can’t imagine how job #1, re-energizing the economy, can take a back seat to some halcyon moral imperative.

Then, there’s the advice – FINALLY – that this whole debate is focusing on the wrong problem. But that’s a topic for next week.

Healthcare Wisdom from 'Dancing with the Stars'

Well, something’s gonna happen.

On April 9, 2009, President Obama made it official: there is a new White House Office of Health Reform. Through an executive order President Obama assigned the task of pressing his goal of expanding and improving health coverage in America.

Then, just yesterday, Dora Hughes, HHS’ counselor for public health and science, said during the 6th Annual World Health Care Congress in Washington, that the administration remains optimistic that Congress will able to produce a bipartisan healthcare reform bill by the end of August.

The hope is that Congress will make a good-faith effort to reflect the President’s eight principles for reform: protect families’ financial health; make healthcare coverage affordable; cover all Americans; provide portability of coverage; guarantee choice; invest in prevention and wellness; improve patient safety and quality care; and maintain long-term fiscal sustainability.

Monday night on 'Dancing with the Stars,' Judge Len Goodman remarked, "just because you're moving doesn't mean you'rE dancing." There might be a parallel. Just because you're fiddling with health, it doesn't mean you're fixing anything.

Sunday’s New York Times reported former Missouri congressman Dick Gephardt is suggesting the administration and Congress “Think Smaller. Seek Less. Don’t Fail.” According to the Times, “now Mr. Gephardt says universal or near-universal coverage cannot pass this year — and he is urging the White House to defer that goal until it enacts cost-saving reforms in health care delivery.”

And I have to believe Mr. Gephardt is imagining real savings beyond the phantoms of “efficiencies” to be derived from expanded health IT.

Further on in the NYT article, “Representative Ron Kind, a Wisconsin Democrat who serves on the Ways and Means Committee, insists that Congress must address cost and coverage “on parallel tracks.” Indeed, Mr. Kind sees savings from “system delivery reform,” like improved approaches to preventive care and treatment of chronic diseases, as the way to pay for expanded coverage.”

Therein lies the rub of healthcare (and not health system reform): the divergent but intertwined challenges of cost and coverage.

Re-reading the President’s eight principles, the focus is populist, clearly aimed at coverage over cost. The insiders would direct us to “invest in prevention and wellness; improve patient safety and quality of care; and maintain long-term fiscal sustainability” as proof of commitment to the “cost” side of the ledger. Sounds like shadow boxing to me.

Months ago I agreed with Jeff Goldsmith who urged, essentially, raging incrementalism. Go slow. Try things. Fix things. Go for the prize (i.e., universal coverage) with success under your belt. It would seem to me the smart pathway to reform would be strategic demonstrations, testing different health system reforms to see which work best. Transferring knowledge and best practices is working in medicine, why abandon it in system reform with an all-or-nothing bet?

The dumb guy question I often ask (and receive blank stares in response) is, “how will universal coverage reduce the burden of the Medicare program on the Federal budget?” Not to be redundant, but it is the “$34 trillion problem.” Sometime soon (e.g., in the President’s first term), Fortune Magazine reports, “Medicare Part A will go cash-flow-negative.” What it will take to stabilize Payer #1 could completely swamp the best intentions of universal coverage advocates.

Monday’s conversation of ACO’s is an interesting first step. Some contend that, beyond Geisinger, Mayo and Kaiser system reforms imagined by The Commonwealth Fund are not doable? Why? Presumably, because their integrated structure is unique and not replicable. Un-integrated entities are not organized or capable of actually profiting on lower reimbursements driven by improved efficiency and outcomes.

Again, I say bully to that. Why can’t the system be reformed before the financing system is thrown into a blender (OK, or at least at a similarly measured, insulated pace)?

Now, the Times article suggests the motivation is *gasp* political. System reforms will be glacial, certainly longer than election cycles can tolerate. Can a candidate run on the success of demonstration projects and incremental learning? No. Universal coverage can happen by matter of fiat, the single stroke of a pen. Then you can stump on accomplishing the long dreamed of ideal of many great Americans. Otherwise, will voters might just wonder, “what exactly did you do?”

How about, “we simply saved the American economy for generations to come”?

A Safety Net?

An interesting article trickled across the wires the morning courtesy of HC Pro. Subtly titled “Could ACO’s Appear on the Medicare Payment Horizon?” it tees up an interesting conversation I’ll get to in a second. First, a couple of prefaces that made this story particularly interesting.

On January 21, 2009, an article by primary care physician, Benjamin Brewer, M.D., appeared in the Wall Street Journal under the title, “How to Make Primary Care Better.” Among other prescriptions, one line particularly caught my eye: “To get real reform we're going to need to put more money into primary care. I have a few suggestions about where to start looking for it…we can revoke the tax exemptions of supposedly nonprofit hospitals that don't fulfill their mission of community service.”

I had forgotten about this piece until a front-page article appeared in the Chicago Tribune last week, “Are Hospitals Passing Off Their Low Profit Patients?” The article bluntly rapped metro-Chicago hospitals for the amount of charity care (more specifically, the small amount of charity care) they provide. A sidebar article recounted the Illinois Supreme Court’s decision last fall rejecting Provena Covenant Medical Center’s (Champaign-Urbana, IL) argument that free care should not be the sole determinant in deciding if a hospital is keeping its charitable promise. Provena Covenant had its tax-exemption repealed 5 years ago and remains in court on the issue.

Over the past few years, presumptive Illinois Gubernatorial hopeful, now-Attorney-General Lisa Madigan has made noise about hospital tax exemptions. The sharks are certainly circling.

That said, the economy is doing hospitals some favors. Uncompensated care cases are up. And, with non-operating, investment income in the toilet, it’s probably politically unpalatable to hunt wounded organizations - especially the only sector that has, up until recently, added 13,000 -17,000 jobs to the economy month to month.

This leads me back to the opening article of interest on the latest healthcare acronym…ACOs. An ACO, an Accountable Care Organization, “can include a variety of hospitals, primary care physicians, and possibly specialists. Potential ACOs could be made up of integrated delivery systems, PHOs, hospitals with multispecialty groups, or even academic centers.”

“However, ACOs would work to promote improved "care coordination and collaboration with providers," working with a defined group of Medicare patients, "the hope would be that unnecessary services would be reduced and quality would be improved."

“In turn, provider payments or bonuses would be tied to quality and resource use. Quality benchmarks, for instance, could include objectives such as lower mortality rates or hospital readmissions.”

An intriguing idea. Finally, serious talk about how to hold the hopefully-reasonably-integrated delivery system accountable for performance, and rewarding them for doing a good job. MedPAC reports there’s support for the idea in Congress as health reform motors along.

So, this is where the safety net might come in. With snipers poised like Navy Seals, holding tax-exempt status in their sights, it seems to me that hospitals are the most capable enterprises to construct/sponsor ACOs. They have the management, the cash, the business systems and the know-how to corral the disparate pieces an ACO would need to be successful. In the Integrated Healthcare movement of the 90’s, beyond a few exceptions at places like Alta Bates and San Jose, hospitals were the agents of integration. This time around though, the spin is more productive. The 90’s were all about control of covered lives. The more you had – hoarding them like rollover minutes in a popular cell phone commercial – the more power you had.

The idea is not completely new. An article appeared in Health Affairs back in December 2006, introducing the ACO as an, “Extended Hospital Medical Staff” as “essentially a hospital-associated multi-specialty group practice that is empirically defined by physicians’ direct or indirect referral patterns to a hospital.”

In February 2007, the Commonwealth Fund reported on the paper, noting, “seriously ill patients receive care from many clinicians in many care settings, proper coordination among these professionals is critical to ensuring that no significant gaps in quality occur. That is why reform efforts focused solely on holding individual providers accountable for the care within their direct control may do little in the end to improve the overall quality of care…Previous efforts in this direction have targeted traditional health maintenance organizations or multispecialty group practices. But these groups represent only a tiny share of the current market: most U.S. physicians are employed in solo or small group practices.”

“Performance measurement and public reporting at the extended hospital staff level is the logical first step to implementing such a system and could begin nationwide relatively quickly.”

While maybe not echoing the acronym, in their February 2009, publication, “The Path to a High Performance U.S. Health System” the Commonwealth Fund did “encourage greater shared accountability for a continuum of health care services. Bundling payments for care needs over a period of time—including physician, hospital, and other clinical care—provides a financial incentive for hospitals and physicians to join forces to improve quality of care and reduce avoidable complications, hospital readmissions or episodes of care.”

As a hospital strategist, I would be attracted to the possibility of the ACO as a pathway to legitimized authority within the delivery system and a defense against cash hungry taxing authorities. It’s always better to be able to show you’re part of the solution than part of the problem.