Health Reform’s 7 Lively Concerns (Not the 7 Deadly Sins)

At a recent meeting about implementing the Accountable Affordable Care Act, Don Berwick, (the recent CMS Administrator, and the Founder and former CEO of the IHI), listed 7 areas that worry him about continuing with successful health reform and the implementation of the ACA. (Note – I’ve rephrased some of these into question form and added some summary comments.)

  1. Will Care Change? (After payments change to incentive value rather than volume.)
  2. Will Costs Actually Be Reduced? (It is too early for much data, but can we get to a sustainable level of GDP spending on healthcare, e.g. 15%?)
  3. Will the Mechanics of Coverage Be Successful?

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Healthcare Reform in One Slide – Bridge to the Future

At a recent panel on health and education reform Toby Cosgrove, the Cleveland Clinic’s CEO, stated that two of the most important things for improving the US healthcare system are: 1. transparency about quality, and 2. transparency about costs. This reminded me of a March 2009 Grand Rounds presentation I gave at a Boston Hospital titled “Health Reform 2009 and Beyond.” My core message was that Accountability and Transparency are the forces driving health reform because the stakeholders paying for healthcare services and products are focusing on the value-centric question, ”What are we getting for what we’re paying?”

Below is a slide from my presentation that highlights some of the key transparency and accountability factors for practicing physicians.…

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Why Healthcare Spending is Slowing – A New Normal?

The growth in healthcare spending has slowed in recent years.  Many experts and pundits have sought to explain why – while also worrying, (or predicting), that this slowing is only temporary, i.e. past performance will predict the future.

Healthcare Delivery and Financing are Dynamically Evolving

The future will be significantly different than the past because our healthcare system, society, and economy are evolving into what might be called a “New Normal” state.  Assuming current priorities and pressures continue, public and private sector organizations at all levels will increasingly emphasize value¹ in their decisions about spending and preferences for healthcare services – including choices about substituting one treatment option for another. …

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Predicting the Future is Easy

Predicting the future is easy.  Predicting the future accurately, is hard.

Public policy deliberations about initiatives for improving healthcare delivery and financing are often handcuffed by an over-reliance on the accuracy of projections.  This happens because estimates of costs, disease prevalence, utilization rates, etc. are embraced as descriptions of inevitable futures, rather than as well-executed analytical projections with inherent probability ranges.  This metamorphosis from estimation to “factation” occurred though a predictable sequence:

  • Quantitative analyses yield estimates;
  • Estimates are published or presented;
  • Summaries of estimates are extracted from tables and slides;
  • These summaries – or “bottom lines” – are rhetorically converted by the media and others from “projections” and “estimates,” to what “will happen,” as in, “healthcare spending will be….”

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Health Insurance Security Creates Jobs

People feeling secure that their health insurance will continue (or be easy to get) creates an often overlooked societal benefit, i.e., it promotes job creation – particularly for entrepreneurs. Because this value is hard to quantify, it is seldom seen in policy or political rhetoric. (It is also overshadowed by the general “job lock” phenomenon of employment-based health insurance.)

This week’s National Journal has a great article on this topic (“The Other Jobs Bill”) that examines Massachusetts’ experience with their insurance reforms and coverage requirements: The expert consensus is that these reforms have boosted Massachusetts’ economy and job growth compared to other states.…

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Healthcare Turkey Talk

Thanksgiving is a great occasion for learning what people think about the future of the US healthcare system.*  This year, I’m going to find out what people are thinking about some of the coming health delivery system changes – particularly Accountable Care Organizations (ACOs) and Patient-Centered Medical Homes (PCMH).

I’ve conducted this two-question informal survey with handfuls of people and found their level of knowledge and positive reactions equivalent to Congress’s approval rating, i.e. 9%.  This is worrisome, since if transforming the US healthcare system to increase value and quality will be partially based on ACOs’ and PCMHs’ superior care coordinating abilities, it will be hard to improve cost, quality, and access at the local level if the average person/patient doesn’t know what these organization are, there is inherent aversion to their names, or there is resistant to unexplained “changes.”…

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Era of Accountable Care

For many months I’ve been talking about the array of health transformation initiatives the Department of Health and Human Services has been deploying as both demonstrations and programmatic changes.  I’ve been characterizing this strategy to create more accountability as an evolving menu, buffet, or map – sort of like those magical Harry Potter maps where the lines keep appearing on the parchment to create a recognizable image.

As part of releasing the final rules for the Medicare Shared Savings Program, HHS also put forth a document subtitled “Menu of Options for Improving Care,” which is a list of some of the landmarks in the future map of an Era of Accountable Care.…

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Health Reform’s Challenges – Some Things Don’t Change

A few years ago I was asked to write a Forward for a book about the transformation of healthcare in the US.  I recently came across what I’d written about the rapidly changing US healthcare system and the challenges of controlling the growth in spending.  I’m sharing it below (in the original Courier font) because what I’d written still is applicable for today’s situation, and particularly the summary sentence: “If today’s leaders — both health professionals and politicians — make wise decisions to support and foster integration of the delivery system and administrative standardization, while guaranteeing universal coverage, we will have a strong health system to support a strong nation.”…

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Health Law Is Reforming System Via Market Forces

All the controversial rhetoric about the new health reform law is missing a huge reality:  The law is driving dramatic changes in the real world.  Almost every major health delivery system is preparing to reorganize how they provide care to hundreds of millions of Americans by becoming Accountable Care Organizations (ACOs).

Health Systems are Voting With Their Wallets
The magnitude and level of financial interest in ACOs – and proof that it is not just cautious planning – were dramatically illuminated by recent actions and a Washington Post article:

  • On Thursday, HHS released the long anticipated proposed rule for ACOs and Medicare “Shared Savings.”

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Accountable Care Now

If all arrows in Washington pointed to the same spot for solving the healthcare and Federal spending problems could the politicians, pundits and policy people agree?  Or would it take some new and powerful force to shine a spotlight and focus the collective vision on this solution, and what would that force be?

These are the two questions I’ve been asking myself as the battle over Federal spending has become near white-hot, and as it has become increasingly clearer that long-term Federal solvency and deficit reduction will require addressing the growth in healthcare spending – particularly Medicare.

Federal Outlays and Spending - Medicare - 2010 Pie Chart[Source: Kaiser Family Foundation “Medicare Spending and Financing,” February 2011]

To summarize the highlights of this situation:

  • Cutting non-defense discretionary Federal spending can’t produce the reductions needed to significantly impact the deficit – contrary to the general misunderstanding about how the Federal budget is spent.

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Fundamentals of Health Reform and Transformation

Trying to follow what’s being written about implementing health reform has been like trying to drink a waterfall. Having followed these issues for many years I’ve gleaned some fundamental aspects about many of the ideas and recommendations that simplifies how to approach this flood – including how to evaluate ideas and proposals like Patient-Centered Medical Homes (PCMH), Accountable Care Organizations (ACO), Shared Savings, Health Information Exchanges (HIE), Pay-4-Performance (P4P), etc…

Structure v. Reimbursement Systems/Arrangements
First, discussions and descriptions that don’t  affirmatively recognize the distinction between Structures and Reimbursement Systems can create significant confusion. For example, the requirements for a PCMH to be recognized by the National Commission for Quality Assurance are structural, but how they are reimbursed will strongly influence how successful such practices are for improving quality of care and controlling costs.…

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US Healthcare Spending – 2009

With all the focus on US health spending I thought it would be useful to update the pie chart I’d posted previously that showed 2007 and 2006 National Health Expenditures.  So below is the chart showing US health spending for 2009.


US Health Spending 2009

What can be seen by comparing this chart with the previous ones is that the percentages haven’t changed very much.  Which means that the foci for cost containment still needs to be on hospitals and physician services and how they influence other types of spending.  For example, avoiding hospital admissions, and utilizing clinical services provided by non-physician professionals, etc…. More on this to come in future posts.…

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