Outsourcing Prevention Part II

A quick follow up to previous post. A recent NPR Shots Post summarized the new role prevention may play in the restructuring of health care. A particular line concerned me. "Insurers will have to cover preventive services ... that are recommended by the US Preventive Services Task Force." First of all, the words "have to" rarely say to me efficiency or efficacy but rather a search for loopholes to recover lost profits. At the same time, the writer questions whether we will see any real savings from these requirements, citing the cost of many cancer screenings compared to their yield.

However, cancer screenings are a clear outlier on the list of services from the USPSTF. The prime motivation for colonoscopies and other screenings is not to save money but to potentially save the patient and so they are encouraged. The rest of the list deals with issues of diet, blood pressure, weight, smoking, and even vaccines, all of which, when dealt with appropriately, can greatly alleviate financial burden in the future.

Outsourcing Prevention

Several weeks ago, the members of the Costs of Care team attended the Massachusetts Health Data Conference. The dozen or so speakers differed in the methods they proposed to cure an ailing healthcare system but not so much in what needs to be changed. Common themes appeared again and again: change the fee for service payment system, expand coverage to as many individuals as possible, and find a way to fiscally motivate prevention in place of treatment. While many alternatives to fee for service were proposed, a program that somehow motivates prevention seems to be a piñata no one has the strength to break open.

I am not writing this to present some revolutionary plan, but rather to point out a growing possibility that may act as a stepping stone to pro-prevention systems: paying people to stay healthy. In a modern hospital somehow encouraging patients to take a proactive attitude towards improving their health before they get sick is near impossible in the financial sense, as well as in chronology (they’re already in the hospital!) so perhaps the best method is to remove the responsibility of prevention from the hospital entirely. Instead, it should manifest in other organizations.

Japanese health reform that began several years ago comes to mind in this context. As part of a nearly decade long plan, measuring waistlines of people between 40 and 74 became a mandatory part of annual checkups. In the end, financial penalties will be placed on companies and local governments that fail to meet certain quota. In this method, the burden of motivating lifestyle changes falls not on the hospitals but rather on employers who are also often responsible for medical coverage for their employees in the Japanese system. The architects of the waistline limit hope to show payers that they have the most to gain by motivating improved general health in the people.

This lesson is already something that many American companies have latched on to, without the nudge in the right direction from the government. Many employers offer plans with monetary benefits if employees quit smoking or lose weight. In the context of the employer/provider prevention is simple to motivate financially as they save the most money. However, can this ever emerge in healthcare? Possible plans for patient incentives in the UK show that in a nationalized healthcare system, prevention becomes crucial to long term success. With an effectively limitless need for care and an entirely different paradigm of what a patient is, the UK does not suffer from the fear of ‘loss of profit’ that comes with successful prevention in the US.

One day the US may create a system like Great Britain’s but until then it seems that hospital care may be focused to dealing with the sick, while motivating lifestyle changes and preventive medicine should be left to employers and insurers who have the most to gain from the noticeable savings. An ounce of prevention is worth a pound of cure.

“Don’t get sick in July”

"Don't get sick in July" - It's an old adage in the medical community, most pronounced in academic medical centers, when the annual turnover of interns and residents occurs each summer. Each June and July, newly minted MDs, only weeks out of medical school, become interns. Popularized as the "July effect" or "July phenomenon," is when care at teaching hospitals is, according to myth, chaotic and disorganized as the cohorts of incoming interns fill the ranks of first-year residents.

    A recent study at UCLA set out to prove the July theory. Researchers analyzed 244,000 death certificates from between 1979 and 2006 at a medical center, and noticed a significant 'July spike' in fatal medication related errors. Another study conducted at a trauma center noticed a similar spike in non-fatal preventable medical complications.

    July effect or not – the truth is that hospitals are always at the brink of change – implementing changes to policies, rolling out new IT tools and systems, new equipment and so on. And there will always be the newbie's who didn't know better. Earlier this year, an article reported on a series of radiotherapy accidents across hospitals, resulting from radiation overdose from new linear accelerators. In a recent NYTimes interview with Dr. Peter Provonost, the man who spearheaded checklists in surgical ICU's at Hopkins, was quoted as saying that "in every hospital in America, patients die because of dysfunctional teamwork and hierarchy" and it has to do with the culture of hospitals and the way doctors are trained.

While the debate is still far from consensus, whether electronic health records will lower or raise costs, no amount of technological innovation can ever replace culture – the culture of transparency, teamwork, accountability and not shoving mistakes under the carpet. Just as medical students are afraid to talk back to their professors or raise safety issues, nurses are afraid to stand up to surgeons who won't take a mandatory "time out" to do safety checks before they commence surgery – these cultures ultimately cost patients their lives. Moreover, the logic is undeniable that safety and efficiency go together. Safer hospitals will achieve lower costs – by working inside out – first with the right culture and then with the technology.

How are innovative hospital's dealing with the culture issue – by being transparent about errors and near misses. AHRQ Innovations Exchange reports on how the University of Michigan Health System adopted a process of full disclosure of medical errors that involved multiple components including an online incident reporting system, open and honest communication with patients and families, with an apology offered when warranted; and quality improvement initiatives guided by reported errors. The program increased error reporting, significantly reduced malpractice claims and costs per claim, hastened the claims resolution process, and reduced insurance reserve requirements.

An Exciting Summer

A preview of exciting things to come this summer:

1. Early stage development of the Costs of Care mobile application (if you squint at the iPhone you'll see our icon, courtesy of Zegarra Designs)

2. Preparation for the inaugural Costs of Care essay contest with large cash prizes for the top anecdote demonstrating the importance of cost-awareness in medical decision-making. Judges will include former U.S. Presidential Candidate and Massachusetts Governor Michael Dukakis, current Harvard Medical School Dean Jeffrey Flier, and others to be announced soon.

3. A major expansion of the Costs of Care blog.

Stay tuned for details!

Pictures of the Inaugural Event on FB

Thanks to everyone who participated in our inaugural event last month, "Doctors, Policy, and Change We Can Implement" hosted on the Harvard University main campus. It was a great success with standing-room-only attendance, lively unscripted debate among our panelists, and outstanding questions from the audience. Thanks in particular to the Malcolm Weiner Center for Social Policy who generously sponsored the networking reception and to the Harvard Business Review for providing free copies of their latest issue on health care costs to everyone who attended.

Check out our Facebook page for pictures and other media. Based on the feedback we received, we will host our Fall event in a larger venue and plan to provide streaming video for those who cannot be on site. Stay tuned!

Debating price transparency

Ever wonder how prices are set for healthcare services? If you've ever received a medical bill and wondered why it can't be simpler to understand, then you're asking the right question.

While there are many reasons why healthcare costs are spiraling, one of them is that nobody really knows what anything costs. Providers get paid through a multiplicity of insurance-company contracts and billing schedules that change from patient to patient, depending on the type of health plan. Recently a New York Times article covered the issue of 'balance billing'. A situation where doctors and other health care providers receiving discounted payments from the insurance company — an amount less than the fee they want to be paid — bill the patient for the 'balance'.

How are consumers expected to make well informed decisions if they have no idea what to expect with treatment costs? More importantly, what kind of treatment decisions should consumers be making themselves? The overall consensus however is that with consumers being asked to pay larger proportions of their medical costs, they should know what they are paying for.

That is precisely what the Congress is debating over: How much transparency in prices do we want in healthcare? The Health Subcommittee of the House Energy and Commerce Committee held hearings last week on three different bills—all designed to make prices in healthcare markets more transparent. A Wall Street Journal blog does a great job of summarizing the hearings highlighting leading points in the long-running debate over price transparency. Another article by Julian Pecquet of The Hill adds useful details on the democratic vs. the republican bills.

There are strong arguments for and against price transparency. An article in the American clearly summarizes the polarized arguments. On the one hand we have economists who believe that in the healthcare market, price transparency could result in higher, not lower prices, with providers charging as much as their competitors, thus defeating the purpose of transparency. On the other hand, we have proponents of consumerism, who believe that once American's, currently insulated by insurance, are made aware of the healthcare tag price – they will consume less.

In conclusion, while the price transparency legislation is off to a slow start, there are several unanswered questions. How will price transparency affect costs? Does transparency really affect consumer-consciousness in the healthcare market?

 

Transforming the Delivery System

On June 4, 2010, Costs of Care will be a featured exhibitor at Transforming the Delivery System, a Massachusetts Health Data Consortium sponsored conference focused on payment reform.

We'll be reviewing our progress to date, future plans, and discussing ways information technologies can be leveraged to help health care providers lower the costs of care.

Register here