Cutting health care costs through better care delivery

[Greenbeard]

There was a very interesting paper in Health Affairs a few days ago, "How Intermountain Trimmed Health Care Costs Through Robust Quality Improvement Efforts," in which two delivery system experts at Intermountain Healthcare explain how Intermountain has been improving care and working to contain costs for the past 25 years.

In numerous threads I've emphasized the need for health reform of any kind to be conceptualized as a quest for better value (health outcomes achieved per dollar spent) in our system; reform that doesn't seek to improve value will invariably be woefully inadequate. Intermountain offers an example--though only one example--of what pursuing value looks like.

Intermountain is an integrated delivery system in Utah and Idaho consisting of 23 hospitals and 160 clinics. They consistently rank among the best integrated health care systems in the country (they've been number one in the Modern Healthcare ranking five times in the past decade or so), based on factors like efficiency and quality of care. The paper, as the title suggests, outlines how they've climbed to the top, trimming costs by improving care quality (i.e. increasing value). Some of the key points:

• Processes of care. Honing in on certain common treatments at Intermountain by breaking each treatment down into the elements it was composed of revealed that no doctors were consistently very good or very bad across all the elements of the treatment: "the findings forced Intermountain to focus on the processes of care delivery that underlie particular treatments, rather than on the clinicians who executed those processes."
• Evidence-base care.The development of evidence-based clinical practice guidelines for providing various treatments (built into clinical workflows so doctors didn't have to remember to implement them, e.g. these elements were present during care delivery in things like checklists), paid big dividends:
  
  "In the subcategory of patients who were most seriously ill with acute respiratory distress syndrome, applying this method reduced the rate of guideline variances from 59 percent to 6 percent within four months. Patient survival increased from 9.5 percent to 44 percent; physicians’ time commitments fell by about half; and the total cost of care decreased by 25 percent."​
• Data, data, data. (i.e. quality measurement and informed clinical decision-making)
  • Generate/acquire data. Intermountain pursued a "measurement for improvement" strategy by implementing new clinical management information systems. This strategy "focuses on the processes of care delivery rather than the providers who execute them, and it generates data for front-line process management and improvement."
  • Use data to improve care. Using data to identify and measure quality isn't enough. Intermountain reorganized the delivery of care to improve clinical care, in part by using physician-leader/nurse administrator pairs ("clinical leadership dyads") to help clinicians improve their practices using the available data. "They use the clinical management information system to review data on clinical, cost, and service outcomes for each care delivery group. More important, the clinical leadership dyads from across the entire Intermountain system meet monthly as a group to identify and address improvement opportunities. They test possible solutions and disseminate successful results. "

It's worth noting that the authors emphasized the need for payment reform, lamenting the current volume-based incentives that have hurt Intermountain as it saved money and improved care by reducing unnecessary service volume:

As Intermountain teams implemented clinical management, clinical outcomes improved and costs fell. However, our payments also fell—often even further than our operating costs. For example, although improvement in Intermountain’s appropriate elective induction rates saved the citizens of Utah more than $50 million per year through reduced payments, Intermountain’s costs fell by only about $41 million. Intermountain thus lost more than $9 million per year in operating margins. Implementing better care required us to invest in education, work-flow redesign, and new data systems. As we improved, the resources to drive further change disappeared.

And, of course, the paper ends with reflections on the current period of health reform:

From 1993 through 2000, total health care delivery costs for the United States remained at a relatively stable 13.7 percent of gross domestic product. This is the only period when the United States “bent the cost curve” for health care.

Although part of the reason for this success was the rapid growth of the US economy, the main contributor was the health maintenance organization movement, which included a payment system that put care providers at financial risk for their decisions to use health care resources. The movement eventually failed because of perceptions that it gave health care providers incentives to withhold necessary care, thus damaging quality. Even though empirical evaluations showed no worse, and sometimes slightly better, clinical outcomes, health maintenance organizations were not able to overcome these perceptions. Questions about limiting patients’ choice of providers also contributed to the movement’s demise.

The Affordable Care Act of 2010 aims to extend health insurance coverage substantially, and the Congressional Budget Office has estimated the number of people who will become newly insured at thirty-two million US citizens. Achieving that goal requires that growth in health care costs be brought under control.

All of the act’s major initiatives to reform the care system—such as accountable care organizations and patient-centered medical homes—are intended to “bend the cost curve.” They reflect sophisticated forms of provider cost sharing, an approach that differs from the health maintenance organization in three major ways.

First, in the past twenty years we have seen great improvement in the science of clinical risk adjustment and quality measurement. Well-organized care delivery groups can apply that science to generate and use robust measures that lead to effective care management. Second, the groups charged with managing the care are clinical teams at the bedside, not distant health insurance companies. The third difference between the new organizational structures proposed in the Affordable Care Act and health maintenance organizations is a major advantage for the former: When a care delivery group reduces health care costs by improving clinical outcomes, some of those savings will flow back to the clinical teams that delivered better care. This aligns financial incentives with efforts to improve clinical quality.

Taken together, these policy changes are crucial. Truly “managed care” means “organized care”—care whose hallmarks include rich clinical and financial data that inform the decisions of clinical teams at the bedside; and clinical teams that employ patient-centered care processes leading to improved population health. Researchers must partner with practitioners to evaluate and demonstrate innovative financial alignment models. A central challenge for policy makers now is to align financial incentives and drive the transition to organized care systems that can provide “the best clinical result at the lowest necessary cost.”

This, what Intermountain has done and what the ACA is attempting to incentivize and stimulate, is what health care reform looks like: building a high-value health system by improving the way we pay for and deliver care.

 

[Oddball]

Boring bullshit text wall unread.

The problem with medical costs it too much third-party interference between the customer and the provider, not "reformed" methods of it.

 

[Mad Scientist]

This, what Intermountain has done and what the ACA is attempting to incentivize and stimulate, is what health care reform looks like: building a high-value health system by improving the way we pay for and deliver care.

The only thing Gov't can do right is bomb foreign countries. Gov't should leave everything else alone.

 

[Oddball]

Suppose President Obama declared he would tackle rising food prices by forcing everyone to eat at government-supervised restaurant chains. Small restaurants would be nudged to merge with national ones. Bureaucrats would monitor menu items and prices. Restaurants would record orders in a central database to ensure meals adhered to federal nutrition guidelines.


Most Americans would be outraged at such infringements of their basic freedoms. Yet this is precisely the approach the Obama administration is taking by pushing doctors and hospitals into government-supervised Accountable Care Organizations (ACOs).

<snip>

The fundamental flaw with ACOs is the "Big Brother" approach of controlling costs by dictating how physicians may practice. Not only does this corrupt the doctor-patient relationship, it is unnecessary. Other care models have successfully controlled costs without compromising a physician's ethical obligation to practice in his patients' best interest.

Here comes Obamacare's Big Brother: Accountable Care Organizations - CSMonitor.com

 

[Greenbeard]

Intermountain, of course, is just one example of using delivery system innovations to improve the value of health services. Other integrated health systems around the country that are known for providing high quality care at lower-than-average costs offer even more perspective on what works.

The Cleveland Clinic has organized into a continuum of care delivery model: it has a tiered system in which a regional network of providers works in concert to provide a level of care appropriate to the patient's needs. But how is care coordinated and how are transitions between clinics/hospitals/etc made seamless?

Our electronic medical record system and Critical Care Transport services tie all of these tiers together. Whether the patient is being treated at Main Campus or a suburban hospital, doctors and nurses have immediate access to the individual’s complete medical record, including but not limited to medications, x-rays, test results, and prior physi- cians’ notes. This EMR system not only reduces duplication of effort, it also ensures that the treating physician has a comprehensive view of the patient’s medical history. Currently, more than six million patients use our EMR system. Our Internet site (www.my.clevelandclinic.org) is the most-visited hospital website in America, allowing patients to make appointments and even view relevant portions of their medical records online—virtually aligning all of our locations and providing immediate access to patient records.

Or look at some of the payment innovations that have come out of Geisinger in Pennsylvania:

What if medical care came with a 90-day warranty?

That is what a hospital group in central Pennsylvania is trying to learn in an experiment that some experts say is a radically new way to encourage hospitals and doctors to provide high-quality care that can avoid costly mistakes.

The group, Geisinger Health System, has overhauled its approach to surgery. And taking a cue from the makers of television sets, washing machines and consumer products, Geisinger essentially guarantees its workmanship, charging a flat fee that includes 90 days of follow-up treatment.

Even if a patient suffers complications or has to come back to the hospital, Geisinger promises not to send the insurer another bill.

Geisinger is by no means the only hospital system currently rethinking ways to better deliver care that might also reduce costs. But Geisinger’s effort is noteworthy as a distinct departure from the typical medical reimbursement system in this country, under which doctors and hospitals are paid mainly for delivering more care — not necessarily better care.

Since Geisinger began its experiment in February 2006, focusing on elective heart bypass surgery, it says patients have been less likely to return to intensive care, have spent fewer days in the hospital and are more likely to return directly to their own homes instead of a nursing home.

A bit more on the Geisinger model which, similar to Intermountain and the Cleveland clinic, is based on access to and use of data/information (e.g. using electronic medical records or using quality measurement to gauge performance), adherence to evidence-based processes (see the "ProvenCare" protocols), patient-centeredness, and payment that transfers some risk (and accountability) to the provider:

The Geisinger system, serving an area of Pennsylvania whose economy depends on coal mines and a nearby jail, has shaken up traditional healthcare practices with innovations considered radical in this antiquated medical system.

For one, all records are electronic, meaning that doctors can immediately see what tests have been done, reducing double-ups and delays. The hospital’s website allows customers to book their own appointments, leading to 95 per cent attendance, compared with a 60 per cent show-up rate if receptionists book a time for the patient.

“Telenurses” answer calls 24 hours a day, advising patients when they should come in and when they should take some painkillers and stay at home, and they monitor people who have been discharged, reducing readmission rates.

Most ground-breaking of all, the financial paradigm of American healthcare has been turned on its head. The 650-plus doctors at Geisinger are salaried, with 20 per cent of their packages in bonuses awarded for quality, rather than the number of patients they treat. This is a stark change from the practices at most hospitals, where doctors are paid a fee for each treatment, making it worth their while to do more tests and procedures.

“If my patients have fewer complications, I get paid more,” says Kimberly Skelding, the cardiac surgeon checking Mr Schankweiler’s arteries. “Most doctors are given incentives to do more, but we’re sort of working to put ourselves out of business.”

Geisinger has developed “ProvenCare” protocols that lay out the tests and examinations a patient should go through to be treated. For Mr Schankweiler, that meant Dr Skelding had to take 40 steps before she opened the vein in his wrist.

“A lot of the steps are not things that most other doctors would do because they might not have an impact today,” Dr Skelding says, saying she checked his lipid levels and haemoglobins as part of the 40-step process.

Heart failure is the number one cause of hospital admission in the US.

Geisinger’s procedures have produced tangible results. For example, a coronary artery bypass graft operation requires an average hospital stay of 5.3 days at Geisinger and costs $88,000, compared with a Pennsylvania average of 5.8 days and $112,000.

The Mayo Clinic actually has its own Center for Innovation aimed at exploring new delivery models and "using a patient-centered focus to transform the experience and delivery of health care for patients everywhere." One of the initiatives they helped to launch recently was a variant of the patient-centered medical home model in one of Mayo's medical centers:

Begun in 2009 and 2010, the continuing project involves a broad spectrum of Austin’s citizens including the Austin Medical Center and local businesses, schools, the faith community, the Mower County Public Health department, United Way and other social services, to develop a “patient-centered medical home” model for Austin that could potentially be replicated around the United States.

The “patient-centered medical home” (PCMH) or “medical home” is a health care model promoted by some health care advocates that stresses forming long-term relationships between primary care physicians, patients and sometimes their families, as well as integration of care across all the potentially health-supporting services available in a community. Those might include elder care programs at churches, temples and mosques, exercise classes at the Y, health education classes in schools, corporate wellness programs, and so on.

A medical home pilot project at the Austin Medical Center was certified last year by the Minnesota Department of Health. The project is designed to test new ways to meet an especially thorny health care challenge: coordinating care for patients with complex chronic conditions. Forty patients and a half-dozen primary care physicians are enrolled in the project, one of 47 state-certified medical home initiatives in Minnesota. Certification allows institutions to bill for Medicaid reimbursements although in Austin’s case, not anywhere near the cost of service.

To anyone familiar with the health care reforms being implemented now, these concepts won't be new; however, they do offer clues as to what a high-performing, high-value health system would look like and thus what reform should encourage if we want to contain costs without compromising quality.

 

[Mad Scientist]

To anyone familiar with the health care reforms being implemented now, these concepts won't be new; however, they do offer clues as to what a high-performing, high-value health system would look like and thus what reform should encourage if we want to contain costs without compromising quality.

All these things you talk about are just fine when it relates to the private health sector. But the problem is that you and others like you want the gov't to take it over and turn it into a money wasting, bloated, bureaucratic monstrosity.

Why do you want to destroy health care in this country?

 

[Greenbeard]

All these things you talk about are just fine when it relates to the private health sector. But the problem is that you and others like you want the gov't to take it over and turn it into a money wasting, bloated, bureaucratic monstrosity.

Take over what? What you'll notice is that these high-value examples are not simply Hospital X in Podunk, USA, they're specific structures (integrated health systems). Virtually all of them have an insurance plan associated with them, though they generally take patients from external commercial payers, as well. That insulates them a bit from the forces driving the rest of the nation's providers, though it doesn't completely protect them.

The reason the rest of the country--providers who aren't in the Mayo system, or the Cleveland Clinic network, or Geisinger--often can't do what they do is that the incentives are misaligned, structural barriers stand in the way. What did the Intermountain guys say about some of the broader reforms in the ACA? "They reflect sophisticated forms of provider cost sharing...". You're not going to get that (outside of the integrated delivery systems) without policy changes and even the integrated systems could benefit from payment reforms so that they're actually rewarded instead of penalized for lowering costs, as the Intermountain folks noted.

None of that just happens. If I were to get treatment in the Cleveland Clinic network and then for some reason later seek treatment at a Geisinger facility, the fact that both have sophisticated EMR systems may not lead to coordinated care and information at the point-of-care when the physician needs it. That's because electronic medical records generally don't cross organizational boundaries; they're excellent if you're staying within the Cleveland Clinic's system or within Geisinger's system but if we want broader interoperability (signified by a slight terminology shift: electronic health records) we need more. Ohio and Pennsylvania will both need to have infrastructure for health information exchange between any providers in their respective states and those two state infrastructures will need to be able to talk to each other using national standards. All of that is being built now but it doesn't just happen by accident, any more than the interstate highway system built itself by accident.

Your ideology is blinding you into thinking there's a "government takover" of something (it's unclear what) when in fact we need policy changes to spread the innovations that are working in the industry leaders (even the industry leaders themselves recognize this and are asking for those policy changes). In other words, the private sector is still going to be doing these things under reform, not the government. The point of reform is to remove the structural barriers that prevent them from doing this.

 

[boedicca]

What's really amusing is that Intermountain Healthcare is focused on these efficiencies all on their own without being ordered to and micromanaged by the HHS. Any properly run health care organization is always seeking productivity improvements (which makes the cost saving assumptions in ObamaCare even more bogus).

 

[Quantum Windbag]

There was a very interesting paper in Health Affairs a few days ago, "How Intermountain Trimmed Health Care Costs Through Robust Quality Improvement Efforts," in which two delivery system experts at Intermountain Healthcare explain how Intermountain has been improving care and working to contain costs for the past 25 years.

In numerous threads I've emphasized the need for health reform of any kind to be conceptualized as a quest for better value (health outcomes achieved per dollar spent) in our system; reform that doesn't seek to improve value will invariably be woefully inadequate. Intermountain offers an example--though only one example--of what pursuing value looks like.

Intermountain is an integrated delivery system in Utah and Idaho consisting of 23 hospitals and 160 clinics. They consistently rank among the best integrated health care systems in the country (they've been number one in the Modern Healthcare ranking five times in the past decade or so), based on factors like efficiency and quality of care. The paper, as the title suggests, outlines how they've climbed to the top, trimming costs by improving care quality (i.e. increasing value). Some of the key points:

• Processes of care. Honing in on certain common treatments at Intermountain by breaking each treatment down into the elements it was composed of revealed that no doctors were consistently very good or very bad across all the elements of the treatment: "the findings forced Intermountain to focus on the processes of care delivery that underlie particular treatments, rather than on the clinicians who executed those processes."
• Evidence-base care.The development of evidence-based clinical practice guidelines for providing various treatments (built into clinical workflows so doctors didn't have to remember to implement them, e.g. these elements were present during care delivery in things like checklists), paid big dividends:
  "In the subcategory of patients who were most seriously ill with acute respiratory distress syndrome, applying this method reduced the rate of guideline variances from 59 percent to 6 percent within four months. Patient survival increased from 9.5 percent to 44 percent; physicians’ time commitments fell by about half; and the total cost of care decreased by 25 percent."​
• Data, data, data. (i.e. quality measurement and informed clinical decision-making)
  • Generate/acquire data. Intermountain pursued a "measurement for improvement" strategy by implementing new clinical management information systems. This strategy "focuses on the processes of care delivery rather than the providers who execute them, and it generates data for front-line process management and improvement."
  • Use data to improve care. Using data to identify and measure quality isn't enough. Intermountain reorganized the delivery of care to improve clinical care, in part by using physician-leader/nurse administrator pairs ("clinical leadership dyads") to help clinicians improve their practices using the available data. "They use the clinical management information system to review data on clinical, cost, and service outcomes for each care delivery group. More important, the clinical leadership dyads from across the entire Intermountain system meet monthly as a group to identify and address improvement opportunities. They test possible solutions and disseminate successful results. "

It's worth noting that the authors emphasized the need for payment reform, lamenting the current volume-based incentives that have hurt Intermountain as it saved money and improved care by reducing unnecessary service volume:

As Intermountain teams implemented clinical management, clinical outcomes improved and costs fell. However, our payments also fell—often even further than our operating costs. For example, although improvement in Intermountain’s appropriate elective induction rates saved the citizens of Utah more than $50 million per year through reduced payments, Intermountain’s costs fell by only about $41 million. Intermountain thus lost more than $9 million per year in operating margins. Implementing better care required us to invest in education, work-flow redesign, and new data systems. As we improved, the resources to drive further change disappeared.

And, of course, the paper ends with reflections on the current period of health reform:

From 1993 through 2000, total health care delivery costs for the United States remained at a relatively stable 13.7 percent of gross domestic product. This is the only period when the United States “bent the cost curve” for health care.

Although part of the reason for this success was the rapid growth of the US economy, the main contributor was the health maintenance organization movement, which included a payment system that put care providers at financial risk for their decisions to use health care resources. The movement eventually failed because of perceptions that it gave health care providers incentives to withhold necessary care, thus damaging quality. Even though empirical evaluations showed no worse, and sometimes slightly better, clinical outcomes, health maintenance organizations were not able to overcome these perceptions. Questions about limiting patients’ choice of providers also contributed to the movement’s demise.

The Affordable Care Act of 2010 aims to extend health insurance coverage substantially, and the Congressional Budget Office has estimated the number of people who will become newly insured at thirty-two million US citizens. Achieving that goal requires that growth in health care costs be brought under control.

All of the act’s major initiatives to reform the care system—such as accountable care organizations and patient-centered medical homes—are intended to “bend the cost curve.” They reflect sophisticated forms of provider cost sharing, an approach that differs from the health maintenance organization in three major ways.

First, in the past twenty years we have seen great improvement in the science of clinical risk adjustment and quality measurement. Well-organized care delivery groups can apply that science to generate and use robust measures that lead to effective care management. Second, the groups charged with managing the care are clinical teams at the bedside, not distant health insurance companies. The third difference between the new organizational structures proposed in the Affordable Care Act and health maintenance organizations is a major advantage for the former: When a care delivery group reduces health care costs by improving clinical outcomes, some of those savings will flow back to the clinical teams that delivered better care. This aligns financial incentives with efforts to improve clinical quality.

Taken together, these policy changes are crucial. Truly “managed care” means “organized care”—care whose hallmarks include rich clinical and financial data that inform the decisions of clinical teams at the bedside; and clinical teams that employ patient-centered care processes leading to improved population health. Researchers must partner with practitioners to evaluate and demonstrate innovative financial alignment models. A central challenge for policy makers now is to align financial incentives and drive the transition to organized care systems that can provide “the best clinical result at the lowest necessary cost.”

This, what Intermountain has done and what the ACA is attempting to incentivize and stimulate, is what health care reform looks like: building a high-value health system by improving the way we pay for and deliver care.

There is actually a major difference between the two.

Intermountain conducted a long term study with the intent of increasing profits. The government intends to control cost by central committee and fiat. One works because it increases productivity and reduces costs, the other fails because central planning cannot adjust to conditions on the ground.

Not that I expect you to understand this, if memory serves you tend to run and hide when something you masters have you post turns out to prove the opposite of what they think it does. That indicates to me that whoever you work for it is not the government because they they know enough to minimize their losses.

 

[rdean]

Health Care companies operated with a "profit motive".

 

[Quantum Windbag]

Intermountain, of course, is just one example of using delivery system innovations to improve the value of health services. Other integrated health systems around the country that are known for providing high quality care at lower-than-average costs offer even more perspective on what works.

The Cleveland Clinic has organized into a continuum of care delivery model: it has a tiered system in which a regional network of providers works in concert to provide a level of care appropriate to the patient's needs. But how is care coordinated and how are transitions between clinics/hospitals/etc made seamless?

Our electronic medical record system and Critical Care Transport services tie all of these tiers together. Whether the patient is being treated at Main Campus or a suburban hospital, doctors and nurses have immediate access to the individual’s complete medical record, including but not limited to medications, x-rays, test results, and prior physi- cians’ notes. This EMR system not only reduces duplication of effort, it also ensures that the treating physician has a comprehensive view of the patient’s medical history. Currently, more than six million patients use our EMR system. Our Internet site (www.my.clevelandclinic.org) is the most-visited hospital website in America, allowing patients to make appointments and even view relevant portions of their medical records online—virtually aligning all of our locations and providing immediate access to patient records.

Or look at some of the payment innovations that have come out of Geisinger in Pennsylvania:

What if medical care came with a 90-day warranty?

That is what a hospital group in central Pennsylvania is trying to learn in an experiment that some experts say is a radically new way to encourage hospitals and doctors to provide high-quality care that can avoid costly mistakes.

The group, Geisinger Health System, has overhauled its approach to surgery. And taking a cue from the makers of television sets, washing machines and consumer products, Geisinger essentially guarantees its workmanship, charging a flat fee that includes 90 days of follow-up treatment.

Even if a patient suffers complications or has to come back to the hospital, Geisinger promises not to send the insurer another bill.

Geisinger is by no means the only hospital system currently rethinking ways to better deliver care that might also reduce costs. But Geisinger’s effort is noteworthy as a distinct departure from the typical medical reimbursement system in this country, under which doctors and hospitals are paid mainly for delivering more care — not necessarily better care.

Since Geisinger began its experiment in February 2006, focusing on elective heart bypass surgery, it says patients have been less likely to return to intensive care, have spent fewer days in the hospital and are more likely to return directly to their own homes instead of a nursing home.

A bit more on the Geisinger model which, similar to Intermountain and the Cleveland clinic, is based on access to and use of data/information (e.g. using electronic medical records or using quality measurement to gauge performance), adherence to evidence-based processes (see the "ProvenCare" protocols), patient-centeredness, and payment that transfers some risk (and accountability) to the provider:

The Geisinger system, serving an area of Pennsylvania whose economy depends on coal mines and a nearby jail, has shaken up traditional healthcare practices with innovations considered radical in this antiquated medical system.

For one, all records are electronic, meaning that doctors can immediately see what tests have been done, reducing double-ups and delays. The hospital’s website allows customers to book their own appointments, leading to 95 per cent attendance, compared with a 60 per cent show-up rate if receptionists book a time for the patient.

“Telenurses” answer calls 24 hours a day, advising patients when they should come in and when they should take some painkillers and stay at home, and they monitor people who have been discharged, reducing readmission rates.

Most ground-breaking of all, the financial paradigm of American healthcare has been turned on its head. The 650-plus doctors at Geisinger are salaried, with 20 per cent of their packages in bonuses awarded for quality, rather than the number of patients they treat. This is a stark change from the practices at most hospitals, where doctors are paid a fee for each treatment, making it worth their while to do more tests and procedures.

“If my patients have fewer complications, I get paid more,” says Kimberly Skelding, the cardiac surgeon checking Mr Schankweiler’s arteries. “Most doctors are given incentives to do more, but we’re sort of working to put ourselves out of business.”

Geisinger has developed “ProvenCare” protocols that lay out the tests and examinations a patient should go through to be treated. For Mr Schankweiler, that meant Dr Skelding had to take 40 steps before she opened the vein in his wrist.

“A lot of the steps are not things that most other doctors would do because they might not have an impact today,” Dr Skelding says, saying she checked his lipid levels and haemoglobins as part of the 40-step process.

Heart failure is the number one cause of hospital admission in the US.

Geisinger’s procedures have produced tangible results. For example, a coronary artery bypass graft operation requires an average hospital stay of 5.3 days at Geisinger and costs $88,000, compared with a Pennsylvania average of 5.8 days and $112,000.

The Mayo Clinic actually has its own Center for Innovation aimed at exploring new delivery models and "using a patient-centered focus to transform the experience and delivery of health care for patients everywhere." One of the initiatives they helped to launch recently was a variant of the patient-centered medical home model in one of Mayo's medical centers:

Begun in 2009 and 2010, the continuing project involves a broad spectrum of Austin’s citizens including the Austin Medical Center and local businesses, schools, the faith community, the Mower County Public Health department, United Way and other social services, to develop a “patient-centered medical home” model for Austin that could potentially be replicated around the United States.

The “patient-centered medical home” (PCMH) or “medical home” is a health care model promoted by some health care advocates that stresses forming long-term relationships between primary care physicians, patients and sometimes their families, as well as integration of care across all the potentially health-supporting services available in a community. Those might include elder care programs at churches, temples and mosques, exercise classes at the Y, health education classes in schools, corporate wellness programs, and so on.

A medical home pilot project at the Austin Medical Center was certified last year by the Minnesota Department of Health. The project is designed to test new ways to meet an especially thorny health care challenge: coordinating care for patients with complex chronic conditions. Forty patients and a half-dozen primary care physicians are enrolled in the project, one of 47 state-certified medical home initiatives in Minnesota. Certification allows institutions to bill for Medicaid reimbursements although in Austin’s case, not anywhere near the cost of service.

To anyone familiar with the health care reforms being implemented now, these concepts won't be new; however, they do offer clues as to what a high-performing, high-value health system would look like and thus what reform should encourage if we want to contain costs without compromising quality.

Again, private enterprise increasing profits v government reducing costs. One works, the other doesn't. Remember what happened when Carter imposed price controls on gasoline? Do you remember rationing and long gas lines?

I do.

 

[Greenbeard]

What's really amusing is that Intermountain Healthcare is focused on these efficiencies all on their own without being ordered to and micromanaged by the HHS. Any properly run health care organization is always seeking productivity improvements (which makes the cost saving assumptions in ObamaCare even more bogus).

To reiterate the point I just made: the unifying theme behind these innovators is that they're integrated care systems, meaning they have a health insurance plan built into their provider network (i.e. they're both the payer and the provider, much like the VHA). There are multiple reasons that setup works well for them (e.g. less fragmentation = better care coordination), but most notably the incentives line up much better for integrated health systems.

Why? Because savings accrue to payers more than they do to providers. Electronic health records are a classic example of this: despite their potential for cost savings and quality improvement, fully functional EHRs were in use in very few hospitals or practices as recently as three years ago. The reason being that they have certain upfront and fixed costs attached to them, yet if they save money through better clinical decision-making and a lower volume of procedures, that savings goes to the payers, the insurance companies. And so there wasn't a large push for the adoption of EHRs until the payment policy made it more financially feasible for providers to start switching over (the exception, again, is in integrated systems like the VHA, Intermountain, the Cleveland Clinic, etc which already had internal EMRs because those systems already had a higher likelihood of recouping their costs). Hence the Intermountain folks' emphasis in their paper on provider risk-and-cost sharing.

Even in integrated health systems that are set up to better profit from these kinds of value improvements, there's still a loss associated with misaligned payment incentives (primarily because they deal with a mix of public and private commercial plans beyond their own associated health plan). Did you miss the quote I included in the OP about this?

As Intermountain teams implemented clinical management, clinical outcomes improved and costs fell. However, our payments also fell—often even further than our operating costs. For example, although improvement in Intermountain’s appropriate elective induction rates saved the citizens of Utah more than $50 million per year through reduced payments, Intermountain’s costs fell by only about $41 million. Intermountain thus lost more than $9 million per year in operating margins. Implementing better care required us to invest in education, work-flow redesign, and new data systems. As we improved, the resources to drive further change disappeared.

The reality is that payers have to take the lead in allowing and, yes, prodding providers into organizing care to incorporate the elements we know work. In rare instances, private payers are stepping up to do this, particularly in markets where they have some influence relative to providers (see Blue Cross Blue Shield of Massachusett's Alternative Quality Contract). But HHS can't force private payers to realign these incentives, nor can it empower them to do so in the numerous markets where they lack to clout to do it effectively even if they wanted to. All HHS can do is act in its own capacity as a payer, reforming the payment incentives in Medicaid and Medicare, to enable and promote care delivery models that have been shown to work.

It wasn't so long ago that this was a relatively bipartisan concept. For example, see Paul Ryan's 2009 health reform proposal (the Patients' Choice Act), which called for a concept that was incorporated into the ACA:

SEC. 502. MEDICARE ACCOUNTABLE CARE ORGANIZATION DEMONSTRATION PROGRAM.

(a) Establishment-

(1) IN GENERAL- In order to promote innovative care coordination and delivery that is cost-effective, the Secretary of Health and Human Services (in this section referred to as the `Secretary') shall conduct a demonstration program under the Medicare program under which--

(A) groups of providers meeting certain criteria may work together to manage and coordinate care for Medicare fee-for-service beneficiaries through an Accountable Care Organization (in this section referred to as an `ACO'); and
(B) providers in participating ACOs are eligible for bonuses based on performance.​

 

[Oddball]

Health Care companies operated with a "profit motive".

*GAAAAASP!*

 

[Quantum Windbag]

Take over what? What you'll notice is that these high-value examples are not simply Hospital X in Podunk, USA, they're specific structures (integrated health systems). Virtually all of them have an insurance plan associated with them, though they generally take patients from external commercial payers, as well. That insulates them a bit from the forces driving the rest of the nation's providers, though it doesn't completely protect them.

You really are completely ignorant about market dynamics. The reason this works for them is not because they are isolated, it is because they are focused on making money. Obamacare will actually force organization organized like these to change the way they do things as it forces them to spend more of their money of health care leaving less incentive for them to make profits.

By the way, how is the government getting involved directly in a market it has never been involved in before not a government takeover?

The reason the rest of the country--providers who aren't in the Mayo system, or the Cleveland Clinic network, or Geisinger--often can't do what they do is that the incentives are misaligned, structural barriers stand in the way. What did the Intermountain guys say about some of the broader reforms in the ACA? "They reflect sophisticated forms of provider cost sharing...". You're not going to get that (outside of the integrated delivery systems) without policy changes and even the integrated systems could benefit from payment reforms so that they're actually rewarded instead of penalized for lowering costs, as the Intermountain folks noted.

No it is not. There is no reason they cannot do that, they just choose not to do so. They find the profits they make and the way they keep records sufficient for them, why do we need to impose a record system that will cost them hundreds of thousands of dollars to implement, and is not designed to meet their needs, on them?

None of that just happens. If I were to get treatment in the Cleveland Clinic network and then for some reason later seek treatment at a Geisinger facility, the fact that both have sophisticated EMR systems may not lead to coordinated care and information at the point-of-care when the physician needs it. That's because electronic medical records generally don't cross organizational boundaries; they're excellent if you're staying within the Cleveland Clinic's system or within Geisinger's system but if we want broader interoperability (signified by a slight terminology shift: electronic health records) we need more. Ohio and Pennsylvania will both need to have infrastructure for health information exchange between any providers in their respective states and those two state infrastructures will need to be able to talk to each other using national standards. All of that is being built now but it doesn't just happen by accident, any more than the interstate highway system built itself by accident.

Do we want greater interoperability? Do we have major problems with the fact that Wells Fargo uses a slightly different accounting system than Bank of America? We see no need to force banks to comply with a government mandated record keeping system that makes it easier if someone changes their bank, why do we see a need to impose a government system of record keeping on health care providers?

Your ideology is blinding you into thinking there's a "government takover" of something (it's unclear what) when in fact we need policy changes to spread the innovations that are working in the industry leaders (even the industry leaders themselves recognize this and are asking for those policy changes). In other words, the private sector is still going to be doing these things under reform, not the government. The point of reform is to remove the structural barriers that prevent them from doing this.

Somebodies ideology is certainly blinding them.

If the private industry wants to implement policy changes let them do so. I see no reason for the government to get involved. My guess is that the government will spend billions on "incentives" to help private industry to implement a new system that will be outmoded before it is fully in place. They will then spend more money to revamp the system, and then will have to modernize it, and this will continue on forever.

If these systems work private industry will implement them without the government's getting involved. They will then adapt to newer technology, again without the government being involved. This will cost the companies some money, but it will ultimately be less than what it will cost if the government helps.

 

[Quantum Windbag]

Health Care companies operated with a "profit motive".

Yes, the Mayo Clinic has always operated with the idea of making a profit. This has resulted in them being recognized as the best place in the world to go if you are sick.

Do you have a problem with them being the best in the world at what they do? Do you think we should force them to just be mediocre simply because making money is evil? Do you understand that they often treat people without any cost to the patient and still make that evil profit? That profit makes it possible for them to give people care without charging them.

 

[Quantum Windbag]

What's really amusing is that Intermountain Healthcare is focused on these efficiencies all on their own without being ordered to and micromanaged by the HHS. Any properly run health care organization is always seeking productivity improvements (which makes the cost saving assumptions in ObamaCare even more bogus).

To reiterate the point I just made: the unifying theme behind these innovators is that they're integrated care systems, meaning they have a health insurance plan built into their provider network (i.e. they're both the payer and the provider, much like the VHA). There are multiple reasons that setup works well for them (e.g. less fragmentation = better care coordination), but most notably the incentives line up much better for integrated health systems.

Why? Because savings accrue to payers more than they do to providers. Electronic health records are a classic example of this: despite their potential for cost savings and quality improvement, fully functional EHRs were in use in very few hospitals or practices as recently as three years ago. The reason being that they have certain upfront and fixed costs attached to them, yet if they save money through better clinical decision-making and a lower volume of procedures, that savings goes to the payers, the insurance companies. And so there wasn't a large push for the adoption of EHRs until the payment policy made it more financially feasible for providers to start switching over (the exception, again, is in integrated systems like the VHA, Intermountain, the Cleveland Clinic, etc which already had internal EMRs because those systems already had a higher likelihood of recouping their costs). Hence the Intermountain folks' emphasis in their paper on provider risk-and-cost sharing.

Even in integrated health systems that are set up to better profit from these kinds of value improvements, there's still a loss associated with misaligned payment incentives (primarily because they deal with a mix of public and private commercial plans beyond their own associated health plan). Did you miss the quote I included in the OP about this?

As Intermountain teams implemented clinical management, clinical outcomes improved and costs fell. However, our payments also fell—often even further than our operating costs. For example, although improvement in Intermountain’s appropriate elective induction rates saved the citizens of Utah more than $50 million per year through reduced payments, Intermountain’s costs fell by only about $41 million. Intermountain thus lost more than $9 million per year in operating margins. Implementing better care required us to invest in education, work-flow redesign, and new data systems. As we improved, the resources to drive further change disappeared.

The reality is that payers have to take the lead in allowing and, yes, prodding providers into organizing care to incorporate the elements we know work. In rare instances, private payers are stepping up to do this, particularly in markets where they have some influence relative to providers (see Blue Cross Blue Shield of Massachusett's Alternative Quality Contract). But HHS can't force private payers to realign these incentives, nor can it empower them to do so in the numerous markets where they lack to clout to do it effectively even if they wanted to. All HHS can do is act in its own capacity as a payer, reforming the payment incentives in Medicaid and Medicare, to enable and promote care delivery models that have been shown to work.

It wasn't so long ago that this was a relatively bipartisan concept. For example, see Paul Ryan's 2009 health reform proposal (the Patients' Choice Act), which called for a concept that was incorporated into the ACA:

SEC. 502. MEDICARE ACCOUNTABLE CARE ORGANIZATION DEMONSTRATION PROGRAM.

(a) Establishment-

(1) IN GENERAL- In order to promote innovative care coordination and delivery that is cost-effective, the Secretary of Health and Human Services (in this section referred to as the `Secretary') shall conduct a demonstration program under the Medicare program under which--

(A) groups of providers meeting certain criteria may work together to manage and coordinate care for Medicare fee-for-service beneficiaries through an Accountable Care Organization (in this section referred to as an `ACO'); and
(B) providers in participating ACOs are eligible for bonuses based on performance.​

The unifying them is profit. not the system they use.

 

[Oddball]

Take over what? What you'll notice is that these high-value examples are not simply Hospital X in Podunk, USA, they're specific structures (integrated health systems). Virtually all of them have an insurance plan associated with them, though they generally take patients from external commercial payers, as well. That insulates them a bit from the forces driving the rest of the nation's providers, though it doesn't completely protect them.

You really are completely ignorant about market dynamics. The reason this works for them is not because they are isolated, it is because they are focused on making money. Obamacare will actually force organization organized like these to change the way they do things as it forces them to spend more of their money of health care leaving less incentive for them to make profits.

It brings to mind the classic quotation from Friedrich Hölderlin: "What has always made the state a hell on earth has been precisely that man has tried to make it his heaven."

There are a multitude of reasons why government planning always fails. These reasons include, but are not limited to, the denial of consumer sovereignty, the ineptitude of central planners and their inability to account for the actions of millions of individuals living in different situations and responding to different incentives, and the willingness of policymakers to sacrifice honesty and prudence for expedience and power.
The Road to Serfdom provided my introduction to the Austrian School and I have since tried to immerse myself in his work as much as possible — if only our supposed "experts" would do the same. Not that this is likely to occur; it is not in the best interest of our experts to learn how free markets work and government-planned institutions fail, unless they want to put themselves out of a job.

How the Experts Are Wrecking Healthcare

 

[C_Clayton_Jones]

Boring bullshit text wall unread.

Then you have no occasion to post, and any post is meaningless.

In numerous threads I've emphasized the need for health reform of any kind to be conceptualized as a quest for better value (health outcomes achieved per dollar spent) in our system; reform that doesn't seek to improve value will invariably be woefully inadequate.

Agreed.

Thanks for the informative article.

All these things you talk about are just fine when it relates to the private health sector. But the problem is that you and others like you want the gov't to take it over and turn it into a money wasting, bloated, bureaucratic monstrosity.

Why do you want to destroy health care in this country?

What's really amusing is that Intermountain Healthcare is focused on these efficiencies all on their own without being ordered to and micromanaged by the HHS. Any properly run health care organization is always seeking productivity improvements (which makes the cost saving assumptions in ObamaCare even more bogus).

You both forgot to cite your documentation in support for the above.

 

[Greenbeard]

The unifying them is profit. not the system they use.

Read more carefully: that's the point. Their integrated structure (i.e. simultaneous status as payer and provider) allows them to profit from value improvements, something that's significantly less true of the rest of the delivery system in this country. Hence the emphasis on payment reforms that allow shared savings (shared with providers, not just payers) and accountable care.

I'd love to see providers profit from using high value (i.e. better health outcomes for less money) delivery system innovations. That means the financial incentives have to align, as they (roughly) do in the innovators I've been highlighting in this thread (and even within them there's still room for improving the incentives). Outside of integrated delivery systems, at present those incentives don't align. Hence the problem.

 

[boedicca]

Health Care companies operated with a "profit motive".

*GAAAAASP!*

Oh NOOOEEESSSSSS!!!!!!1!!!!!1!!!!!!!!!!!!!11!!!!!!!!!!!

I've come to the conclusion that "Profit Motive" is to the Lefties on USMB what Ralphie saying the F-word is in "A Christmas Story".