Accountability in Healthcare – What People Think of the Coming Changes

Posted on December 16, 2011 by Michael D. Miller MD

Following up on my pre-Thanksgiving post, I’m reporting back on what friends and relatives think about some of the terms for new healthcare delivery entities, e.g., Accountable Care Organizations (ACOs) and Patient-Centered Medical Homes (PCMH).

What I heard is consistent with my previous conversations: People think that ACOs are like HMOs, and Medical Homes might be nursing homes, home health, or hospice, etc. One great insight came from my cousin who is a teacher. She told me that teachers react negatively to the word “accountability” because of the No Child Left Behind (except those who don’t measure up) law – which according to a RAND analysis from the summer of 2010 is “encouraging teachers to focus on some students at the expense of others, and discouraging the development of higher-thinking and problem-solving skills.” (Yikes! That doesn’t sound good for long-term innovation, economic growth, and international competitiveness.)

Solutions for Engaging the Public with Healthcare Transformation

I’ve been talking to a variety of people involved with health transformation at the national and local level about this information/perception gap, and am looking for ideas for raising the public’s understanding about why more team-based and coordinated care will improve quality and efficiency for them as individual patients. If you have any thoughts on this, please feel free to comment. In addition, I’ll be talking to more friends and families during the remainder of the holiday season about their impressions of the new terms, (such as ACOs and PCMHs), as well as the benefits of the healthcare delivery changes that are on the horizon, e.g., why the iconic one-on-one relationship with a solo Dr. Welby-like primary care physician may not be the way to get the highest quality care.

Era of Accountable Care

Posted on October 24, 2011 by Michael D. Miller MD

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. This document listed “options for healthcare providers of all sizes, types, all across the country” to work together to coordinate patient care, improve quality and lower costs. Besides the Medicare Shared Savings Program for Accountable Care Organizations (ACOs), these options include:

Partnership for Patients ($1B over 3 years)
Bundled Payments for Care Improvements (4 models proposed and 4 more planned)
Comprehensive Primary Care Initiative (Medicare partnering with Medicaid and private payers in 5-7 local markets to support primary care improvement)
FQHC Advanced Primary Care Practice Demonstration (with HRSA)
Advanced Payment Accountable Care Organization Model (pre-funding for physician groups wanting to form ACOs for the Shared Savings Program)
Pioneer Accountable Care Organization Model (demonstration program for advanced ACOs)
Financial Models to Support State Efforts to Integrate Care for Medicare-Medicaid Enrollees

The Menu document clearly indicates a coherent strategy for doing what the Medicare Payment Advisory Commission recently recommended: “Medicare payments should strongly encourage providers to move towards [ACOs, bundled payments, capitated models, shared savings programs] and make FFS less attractive.”

HSS’ Menu document is an initial description of the map HHS is drawing for providers about these more attractive options. In contrast, in all the debate about health reform and Medicare there has been very little discussion about the future of Fee-for-Service payments or how to make FFS more sustainable - except for the $300B budgetary hole and pending 30% fee reduction in Medicare’s physician payment system’s Sustainable Growth Rate formula. However, making “FFS less attractive” is certainly one of the transformational “sticks” Medicare has been wielding based upon provisions in the Accountable Care Act* and through other Medicare initiatives such as Value Based Purchasing, not paying for Never Events, and using Competitive Bidding for certain products and services. And the future will see more and expanded use of these types of initiatives to “make FFS less attractive.”

CMS Has Already Been Transformed

Another significant distinction between HHS’ current actions and what they have traditionally done is that HHS is not moving forward alone by modifying Medicare and Medicaid. Instead they are actively seeking to work in alignment – if not outright partnership – with private payers. This is clearly stated in the CPCI and the Multi-payer Advanced Primary Care Initiative, which has already started in 8 states.

I have previously written about Accountable Care, (and how it is fundamental for successful health reform), and with the unveiling of the menu from HHS I am encouraged that we are on the way to an Era of Accountable Care – because that is what people really want and society needs, i.e. Accountability for Clinical Outcomes and Accountability for Economic Results. It is only through those two avenues of accountability that we will achieve my version of the 3-Part Aim:

Saving Lives
Cutting Costs
Creating Jobs

Health Reform is Essential for Creating Jobs

“Creating Jobs” doesn’t usually appear in lists about the goals for health reform, but it is really a fundamental reason for fixing our fractured healthcare system: By reducing the financial bite healthcare is putting on families and companies – as well as creating security for access to health insurance for individuals – health reform will pour capital and confidence into the economy leading to the creation of jobs. That will be an era of healthcare that we can all count on.

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* The given name for the health reform legislation is the “Patient Protection and Affordable Care Act,” and it is often referred to as the Affordable Care Act or the ACA. However, I believe the transformational components of the ACA are its features that will create accountability for the clinical and economic outcomes our healthcare system produces, and thus I call it the Accountable Care Act. In the context where others are referring to this law as Obamacare, or as a government take-over of the US healthcare system, or portrayed voluntary counseling as death panels, then I am very comfortable nick-naming the ACA the Accountable Care Act.

Selling Healthcare Changes – Loss Aversion & Adoption of Innovations

Posted on September 26, 2011 by Michael D. Miller MD

Healthcare issues ranging from national health reform to stem cell research have become a major force in political rhetoric – often overwhelming substantive information. This creates challenges for individuals and organizations seeking to achieve positive changes as their communications are swamped by election-driven messaging.

Creating and implementing successful communications programs in this turbulent environment is easier when the principles of “loss aversion” and the factors affecting the adoption of innovations are used constructively.

Loss Aversion & Campaign Messages: Swinging Votes Not Actions
Campaign communications – particularly negative messages – are very effective because they use loss aversion principles to leverage people’s reluctance to embrace change.

I have repeatedly heard that people need to believe they will receive a gain that is twice as large as their potential loss before seeking to make a change. However, that 2:1 ratio is derived from some specific social psychology experiments, while loss aversion research demonstrates that the ratio varies depending upon the magnitudes of the risks and rewards for the individual. For example, many people would willingly wager 10 cents on a coin flip if they could win 11 cents by guessing correctly – if nothing else just for the “fun” of playing, and because losing 10 cents isn’t a big deal. However, very few people would wager $1,000,000 on the same coin flip for the chance to win $1,100,000 – even though the odds and the loss-gain ratio are the same, (and in the player’s favor), because the significance of the risk is much greater.

Source: Kahneman et. al. 1991

While these principles are not unique to healthcare, their power for influencing people’s perceptions and actions is greater for healthcare issues because of healthcare’s very personal nature and most people’s impression that they have some healthcare expertise acquired through first-hand experience. [Reader Participation: Insert your story here about a friend or relative who has "educated" or "advised" you with a personal healthcare story, or how someone - perhaps a stranger - has offered healthcare advice based upon something that happened to them, or someone they knew, or they just heard about from someone else.]

The principles of loss aversion make it very, very difficult for potential short-term and individual gains to be the foundation for effective communications campaigns about healthcare improvements for the following reasons:

Loss aversion means that most people are going to want to see a potential gain that is a multiple of the potential loss – and those most affected by a proposed change will see the potential loss as much more significant, and thus require an even larger potential gain in order for them to not oppose it. (And those most affected will also be the most active and vocal in their opposition.)
For most people, healthcare changes have significant levels of perceived personal risk – whether it’s changing their health insurance benefits, choice of physicians or hospitals, how they can obtain access to new or experimental treatments, or even very specific changes such as stem cell research, abortions, end-of-life counseling, genetic or autism screening, etc.
While potential losses are well understood by most people – since they know what they currently have and realize that change will be “something different” – potential gains are usually much harder to visualize and believe in. (This is why the current Administration has said that under the new health reform law people can keep their current health insurance plans if they like them.)
People’s trust in government and large organizations, (e.g. corporations), has plummeted in recent years, greatly reducing people’s confidence that changes advocated by these sources will actually produce the promised gains. Specifically, in “calculating” potential losses and gains most people will greatly discount potential gains from government or corporate initiatives. For example, suppose a proposed government healthcare change is described as having a gain of 10 and a potential risk of 3. [These numbers are obviously only arbitrary representations of the magnitude of how potential changes might be valued.] This change might be seen as having a gain-risk ratio of 10:3, but a general distrust of government actions could discount the potential gain to 25%, (which is about where Congress’ approval rating is right now), resulting in a perceived gain-risk ratio of only 2.5:3 – and this assumes that people don’t inflate the potential losses because of their low opinion of government, which could make the perceived ratio 2.5:6 or 2.5:9. Clearly this is not a situation where people would eagerly support a change in something as important as their health.

This means that even for a proposed change where the best projections indicate significant benefits to many, many people, any individual or organization who opposes the change, (for political or other reasons), has a very easy time crafting messages and images that are very effective in undermining support for the proposed change. (For example, the combination of the following phrases has been effective in undermining support for the new health reform law: “Government Takeover,” “Death Panels,” “Unconstitutional,” and “You Lie.”)

Overcoming Loss Aversion and Negative/Counter Messaging
The solution to overcoming such undermining messages that play on people’s concerns about losing what they have (and know) – as well as their mistrust of governments and other large organizations – is to present proposed changes in ways that expand people’s confidence in and understanding of the potential gains, while also minimizing the perceived loss potential. One way to do this effectively in a communications strategy is to address the 5 factors influencing the adoption of innovations that Rodgers first described in the 1960s:

Relative Advantage
Compatibility
Simplicity
Observability
Trialability
[These are derived from Rogers 2003 book and it's earlier editions, and described by Dealy and Thomas in their 2006 book.]

Selling Health Reform as Positive Innovation
Shifting to a “selling” campaign that incorporates these factors – while minimizing the potential affects of loss aversion – moves the communications dynamic away from the slippery losing slope of loss aversion’s context to one that is more favorable to thinking about the longer-term and more tangible benefits of the proposed changes. For example, the broad communications campaign for the bipartisanlly supported Medicare prescription drug benefit, (Part D - enacted in late 2003, benefits started in 2006), emphasized how much individuals would save, rather than the long-term value and security of having insurance – which is what Part D plans are, they are insurance, not a discounted purchasing scheme. (A USA Today article stated that an average person who enrolled in a Medicare Part D plan would save $1,100 in 2006.)

The Result: While people who did purchase Part D plans were generally happy with their plans, about 10% of Medicare beneficiaries (~4.5 million people) didn’t have prescription drug coverage in 2007 despite some plans costing less than $10 per month. The large number of people who decided to not purchase this very low cost insurance is even more striking because individuals’ premiums increase by a “penalty” of 1% per month for every month between their initial period of eligibility and their enrollment date. (This penalty is to reduce adverse selection, which occurs when people wait until they are ill before getting insurance.) Unfortunately, the number of Medicare beneficiaries without drug coverage doesn’t appear to be declining – in 2010 it was still about 10% of beneficiaries, and this compares very poorly to the very low percentage of people who declined Medicare Part B coverage.

The significant number of Medicare beneficiaries who decided not to purchase a Part D plan could be due to their aversion to a perceived loss being stronger than the positive messages used to sell the benefits of the plans. This imbalance results from the gains being presented as short-term financial savings, (rather than the long-term benefits of having insurance), and thus didn’t utilize the factors for improving the adoption of innovations, i.e., Part D insurance plans is comparable to other insurance they have, it is not complicated (except for the initial large number of choices), they can observe it, the plans can be tried, and the insurance provides a significant relative long-term advantage.

Bottom Line – Sell the Value & Spirit, Not the Calculation
The bottom line is that selling the value of healthcare changes – whether it’s national reform or narrow innovations – needs to encompass broader, longer-term, and tangible values, rather than short-term calculations that may be both uncertain and not believed, while also deflecting and undermining opposing arguments, i.e. capitalize on the factors that ease the adoption of innovations while minimizing people’s inherent aversion to potential losses.

And in closing, (at least for this posting), how these principles were used in a negative way to sell a non-healthcare change might be a useful illustration:

Buying a house with an unaffordable mortgage was seen as OK before 2008 because the potential for loss was believed to be very small – since prices were rising and foreclosures were rare so there was very little to trigger an aversion. And owning a home is compatible with most people’s desires and daily lives, home ownership is observable, renting is akin to a trial of ownership, brokers and agents made it all very simple, and home ownership has potentially great financial and social advantages. However, in retrospect it’s clear that purchasing a home was vastly wrong for many people – and potentially involved outright fraudulent communications – because they had been led to believe in illusory loss-gain (a.k.a. risk-benefit) calculations.

Fixing or Fracturing Medicare?

Posted on July 14, 2011 by Michael D. Miller MD

Reducing Medicare spending has been one of the focal points in the debt ceiling negotiations, and it was reported that the President is considering throwing the idea of raising the eligibility age for Medicare into the pot as part of a stone soup recipe that might get enough Congressional Ds and Rs to swallow the end product.

Increasing Medicare’s Eligibility Age is Bad Policy and Worse Politics
While increasing Medicare’s eligibility age to reduce spending makes simple arithmetic sense using the formula Spending = Number of People x Spending per Person, like almost everything in healthcare, what is simple is often 30 degrees wrong. And raising Medicare’s eligibility age is no exception because it has significant fiscal and political problems.

First, that simple arithmetic formula ($=#($/#)) doesn’t account for the reality that older Medicare enrollees are more expensive than younger ones, so the savings from eliminating people who are at 65 and a few years older only saves a fraction of the average per person Medicare spending.

Second, raising the age of eligibility won’t eliminate all those people under the new enrollment age since some of them will still qualify because they are disabled or have end-stage renal disease – and these enrollees are more expensive than average too.

Third, eliminating the youngest (and least expensive) enrollees from Medicare will cause the Part B premium to increase because by law it has to account for a fixed percentage of all Medicare Part B spending.

Fourth, those individuals age 65+ who would be ineligible for Medicare would have to buy private insurance – or continue to be covered by their employers’ retiree health plans or state Medicaid programs. And just as they are generally less expensive than older Medicare beneficiaries, they are also more costly to insure than the average person under the age of 65. Which means that they (or their former employers or Medicaid – which the Federal government also partially pays for) would be paying more per/person for their insurance. AND, including these individuals in the now forming insurance exchanges would raise premiums for everyone else in the exchanges. (In a report released in March, the Kaiser Family Foundation found that raising Medicare’s eligibility to 67 in 2014 would “result in an estimated net increase of $5.6 billion in out-of-pocket costs for 65- and 66-year-olds, and $4.5 billion in employer retiree health-care costs,” as well as $0.7 billion more spending by states for their Medicaid plans in 2014.)

So the final score is bad fiscal outcomes, (Medicare is saving less money than might be quickly conceived), along with a bunch of bad political outcomes: People aged 65+ without Medicare would pay the highest private sector premiums – either directly or via their former employers or Medicaid – and middle income people on Medicare would see a Part B premium increase. Of course those effects could be mitigated by subsidizing the Part B premiums and the private sector insurance (and Medicaid) costs to lessen these impacts – and the political fallout. But then what happens to those Medicare “savings?” If that’s the “deal” that is struck, it would be a direct hit to begin fracturing the fundamental social contract that has defined Medicare since it’s founding – and subsequent whacks would likely be to incrementally increase enrollment age and otherwise cut eligibility criteria.

A Better Idea
A better solution is to actually improve Medicare – and (spoiler alert) much of what is needed to do that was contained in the ACA and the fiscal stabilization legislation. Specifically, changing incentives for providers from volume to quality and creating support for the adoption of healthcare IT systems. Neither of these will occur rapidly, but just as real medicine doesn’t cure people like Dr. McCoy did on Star Trek or Dr. House does on TV today, really changing a system as complex as the one that delivers the services that Medicare pays for won’t occur quickly. The first stones on that path have been laid (e.g. ACO concepts, advanced primary care that coordinates care, similar pilots/demos, and penalties for delivering low value care, a.k.a.”value based purchasing”), and veering off that path because it’s “hard” or not as speedy a trip as some would want, is like jumping into a turbulent river to get downstream faster without any idea where the rapids or waterfalls might be, or what carnivores (or nasty microbes) are waiting for a tasty snack.

Patient-Centered Care? Or Not?

Posted on July 11, 2011 by Michael D. Miller MD

The term “patient-centered care” has increasingly been used to describe healthcare structures that deliver better quality care – as well as often doing so with lower costs. And today there was a news story about how some medical schools are assessing applicants’ interpersonal skills, something that is fundamental for being a patient-centric clinician.

While there are have been numerous articles demonstrating the value of patient-centered care and concluding that it is better and should be promoted – including those looking at the ill named “Patient-Centered Medical Homes” – I’ve found myself pondering the following questions:

“What type of care have clinicians been providing if it hasn’t been patient-centered? Has it been clinician/physician centered? Or revenue centered? Or just intentionally confusing and impersonal care designed to stymie the adoption of evidence based standards of care?”

“And along those lines, is the widespread delivery of non-patient-centered care the reason why the IOM concluded that it takes about 17 years for valuable healthcare information to be adopted into clinical practice? Or why Atul Gawande found that hospitals in other countries have widely adopted surgical checklists to reduce medical errors and adverse outcomes, while only 25% of US hospitals are using these checklists?”

I’m just asking….

Regulating Insurance: States v. Federal Roles

Posted on March 18, 2010 by Michael D. Miller MD

One of the fascinating issues within the health reform debate is how to improve the insurance market by changing government regulations. While large employers who self-insure are except from state regulations, (and must only conform to limited Federal rules under ERISA), individuals, small groups, and others who actually purchase insurance have their policies regulated by individual states.

Both Democrats and Republicans agree that the current system of insurance regulation creates job lock and other socially undesirable effects, and that insurance companies should be able to sell policies across states lines. However, their solutions are quite different.

Democrats favor national regulation to create a single playing field, and Republicans prefer permitting insurance companies to sell in multiple or all states if they are licensed and regulated in any state. The insurance industry’s trade association (AHIP), doesn’t seem to take a firm position on this issue – at least from looking at their website.

However, I was surprised to see a full page ad from an individual company on the back cover of a recent issue of National Journal advocating for national rules to replace state insurance regulation. This interesting ad included the following phrases:

“Something’s wrong when…. innovation surpasses…. insurance regulation.”

“Here’s something to bristle at: the regulatory system that shapes our…. insurance policies hasn’t changed much in the last century. Yet everything …. has changed dramatically…… Chrome and steel have given way to thermoplastic and fiberglass.”

And the company’s recommendations for solutions focus on increasing national regulations:

“Today there are 50 different sets of insurance regulations in 50 states. This makes it difficult to introduce innovative new products. But with a modern system of national regulation, consumers would get to choose from the best products available nationwide.”

“National regulation would help spread risk more fairly across similar geographic areas.”

“Modern regulation is the kind of protection Americans deserve.”

However, the caveat here is that this ad is talking about regulation of car insurance and not health insurance. In fact, the specific company doesn’t even sell comprehensive health insurance – so they don’t have a dog, cat or Cadillac plan in that fight.

What is also interesting is the parallel developments and history in the State of Massachusetts with health and auto insurance. Everyone following the debate about health reform has certainly heard what Massachusetts has done with health insurance reform and mandates to achieve near universal coverage. However, in roughly the same time-frame the state also reformed its auto insurance regulations to enable national insurers to enter the market. This increased competition resulted in dramatic decreases in premiums – but the insurance plans are still regulated by the state.

How changing the regulation of selling health insurance would change costs and affect consumer protections is open to debate. Unfortunately as an “issue” it has been overshadowed in the health reform discussions by other aspects such as the so-called public option, abortion coverage, coverage of immigrants, costs to individuals, effects on the Federal deficit, and mandates for having insurance. Thus Federal v. State insurance regulation – which is really a core part of health reform – hasn’t been a big part of the national political debate, even though changing insurance company practices has been a large part of the Democrats’ messaging. Despite that, there are several interesting points to consider:

Insurance companies operate on a business model very similar to financial institutions, such as banks, in that they seek to manage risk and they make most of their money on the “float” – or interest earned – based upon having large amounts of money for a period of time between collecting premiums and having to pay for covered benefits… and deductibles also adds a delay to these payments, which creates a cushion to the float. Therefore, because their revenues are tied to their interest earnings, the lower the prevailing interest rates the lower their earnings – and thus the more they need to raise premiums… and vice versa. (I did an analysis several years ago showing that premium increases were directly correlated with interest rate fluctuations, but delayed a year or two.) This parallelism with banks raises the question about why it is OK to Federally regulate banks, but not health insurance companies? How much more important is it to protect people’s money than their health insurance coverage?
National insurance regulation would help address both job lock for individuals within companies that purchased insurance directly, and location lock for small businesses and entrepreneurs – particularly those operating service businesses where location may not be as crucial as manufacturing or retail operations.
Permitting the selling of insurance across state lines based upon licensing in one state would probably result in reduced consumer protections since some states have less oversight and requirements than others about marketing, coverage guarantees, etc.
And neither national rules from the Federal government or allowing selling across state lines would significantly affect the growth in health case costs or insurance premiums, i.e. they wouldn’t really bend the cost curve. Although allowing selling across states lines could reduce premiums in certain higher cost states, but that would be due to people being able to by insurance policies with less coverage or intrinsic protections. In some ways this would follow the old saying, “you get what you pay for.”
And since the consensus is that bending the cost curve will require changing how health care is actually delivered to patients, (which makes sense since ~80+% of health care spending goes to pay for health care goods and services), this discussion makes me wonder how differential state regulation of doctors and healthcare providers fit into this equation? While laws and legal procedures may vary among states, presumably the practice of medicine shouldn’t vary dramatically…. Although many studies have shown that it does so in ways that can’t be explained by demographic differences or regional variations in disease states such as Lyme disease. I’m not certain how changing the way clinicians are licensed would improve healthcare delivery or costs, but it is another aspect of State v. Federal regulation that is becoming an increasingly contentious issue – as was pointed out in an article in today’s New York Times.

Miscommunicating the Government’s Powers for Health Reform

Posted on February 8, 2010 by Michael D. Miller MD

The Virginia state legislature recently passed a law making it illegal “to require individuals to purchase health insurance.” This action reminded me how commonly the extent of governmental powers are misperceived.

The Virginia legislature’s action follows those in other states, and are in line with the “tea party” groups’ opposition to the general direction of national health reform. But what exactly it means for a government’s actions to be “illegal” is also unclear. And as Tuesday’s Washington Post article on the Virginia bill states, “it would have little practical impact because it would be preempted by federal law.” Thus, the actions in Virginia and other states are more political than substantive, and seem to be more about the states’ laying down markers should they later want to take the Federal government to court over any individual mandates for buying or having insurance.

Powers of the Government
Hidden underneath this political discussion of the “illegality” of health insurance mandates is exactly what the government can and cannot do to force or entice people to do things. And while academic and legal scholars may take some issues with my simplified description of governmental powers, there are basically four broad options for what governments can do to try and change people’s actions:

1. Attack
Making war, (or other type of overt or covert intervention), is probably the most dramatic of the Federal government’s powers, but presumably doesn’t have a role for health reform and mandates for buying insurance, etc.

2. Incarcerate
The government does a great job of putting people in jail, but I haven’t heard anyone talking about jail time as a penalty for failing to have health insurance. However, healtcare for prisoners has been a potent political and policy issue at different times. For example, it was a key message in Harris Wofford’s victorious 1991 special Senate election in Pennsylvania when he noted that if prisoners had a right to healthcare then so should all Americans. And at a much more granular level, there have been cases where prisoners have tried to stay incarcerated so they could get care for health problems because if they were freed they would have been uninsured.

3. Money, Money, Money
Money is the lever governments uses most frequently for non-criminal activities, such as health insurance, housing, food, etc… At the most basic level governments can either give money, (e.g., tax credits, food stamps), or take it away, (e.g., higher tax rates, fines, penalties, or denial of tax deductions or credits, etc.). And the mechanisms for giving or taking money can be divided between taxes and cash – or cash equivalents like housing vouchers.

For example, in Massachusetts, the individual and employer health insurance “mandates” are enforced by financial penalties, i.e. not jail time. Similarly, fiscal incentives for individuals and states to have or provide health insurance are very common, e.g. the increase in Federal Medicaid matching rates included in the 2009 stimulus law.

Of course, there are often strings attached to the receipt of money or benefits because neither governments nor private citizens are in the habit of leaving cash in a bag for someone to pick up and do with what they please. That is why government programs have participation requirements just as private contracts have provisions for what must be done before money is exchanged.

4. Talk the Talk
The last tool governments can use to influence actions is the power of the speech, persuasion, and illustrative illumination. Elected and senior appointed officials have the advantage of having their words amplified through the press. Such officials can also identify individuals and companies who have done good things, as well as not-so-good things. This type of individual identification can be very powerful, but may also be politically dangerous if praise is directed towards those who has skeletons in their closet, (either literal of figurative), which then become public.

The last type of tool that governments can use to change the world is to use government program operations and purchasing decisions to lead by example. This type of Walk the Walk action is a combination of money and talk, and an example is the State of Massachusetts using their state employees’ health benefits program to advance quality of care by using information about individual physicians to create incentives for employees to go to physicians who are rated the highest in quality. This initiative was controversial but it survived a court challenge in the State, unlike a similar initiative in New York State.

Leading by example is often not as simple as creating targeted economic incentives, because such actions can run into government procurement rules, international treaties, union contracts and other legal limitations on government actions – which may be why this tactic is not commonly used for driving public policy changes.

Conclusions
While the Federal Government has considerable power and resources, the history and legal system of the United States limits governments’ powers so that giving and taking money is the primary tool used to enforce “mandates” and “requirements.” The result is that people, companies and even state and local governments have a choice – comply with the Federal rules and get the money, or don’t and don’t get the money, or maybe even lose some money. For example, as I noted in my last posting, the State of Arizona didn’t get any Federal matching funds for Medicaid for over 15 years because they chose to not have a Medicaid program. Similarly, the mandates in Massachusetts for having health insurance are “enforced” by tax penalties for individuals and businesses – although the number of people and companies effected has been relatively small because of the exemptions for smaller companies and affordability for individuals.

Leading by example – either in how they run their internal operations or their procurement/contracting – is an option which governments have used less often to advance specific policies. In a time of fiscal constraints, leading by example might be a good way to leverage limited Federal money and resources – particularly around the contentious issue of health reform where it could help demonstrate the positive value of better healthcare benefits and care delivery for employees, organizations and society.

What “Will” Happen With Health Reform

Posted on November 29, 2009 by Michael D. Miller MD

With the Senate scheduled to start debating (and likely amending) health reform legislation this coming week, speculation is rampant about what will happen with health reform. Since the title of this blog is “health policy and communications,” I want to focus on the use of language in discussing health issues, studies, proposals and legislation – specifically the word “will.”

The word “will” is very strong and it implies a high degree of certainty about predicting future events, such as “The Sun will come up tomorrow morning.” And while I have no problem with predicting the future – as my friends know, I have a great reputation for predicting the future, particularly about sporting events like fake punts and winning 8 straight games to win a World Series – but using the word “will” to describe the implications of scientific studies, or legislation and policy proposals, can be misleading.

Specifically, the word “will” is often used loosely as a stand in for the phrases, “is projected to be” or “is estimated to be.” For example, in a recent press release for a study about diabetes in the US it was reported that, “The diabetes population in the United States will almost double over the next 25 years…” Interestingly, the next part of that sentence states, “and annual medical spending on the disease is projected to hit $336 billion, up from $113 billion today…” So apparently future costs can only be projected, but future cases of diabetes can be predicted with much greater certainty. [emphasis added]

Assumptions v. Future Reality
The reason to be concerned about the use of this type of language is because although the methodology for any study or projection may be valid and reasonable, its conclusions are only as good as its assumptions. And as ever researcher and policy person knows, many, many, many things can occur that cause reality to differ from what is projected based upon those assumptions – particularly over the course of 25 years. Think about it, how accurate do you think the predictions about 2009 were in 1984?

Media Contributes to Impression of Inevitability with Language
The media also tends to propagate some misleading impressions. For example, the phraseology about the implications of the diabetes study was copied by multiple new sources – such as Time Magazine – and even expanded upon by the Chicago Tribune to imply that costs will also dramatically increase, “…diabetes cases will nearly double in the U.S. in the next 25 years and the cost of treating the disease will almost triple…” and CNN, “The number of Americans with diabetes will nearly double in the next 25 years, and the costs of treating them will triple…”[emphasis added]

What Will Happen With Legislation
It is also common so see the word “will” used when referring to legislation. Many politicians and pundits use it in asserting that various bills and provisions “will do” something specific, such as expanding coverage, controlling costs, etc… when actually they are referring to projections or estimates – often from the Congressional Budget Office which is generally very careful about describing their work as projections or estimates.

The reason politicians, pundits, and others use the word “will” is because it is very effective in rallying support for (or against) specific bills or proposals, since it increases the impact on the listener (or reader), makes them feel more concerned about the issue, and increases the likelihood that they will take some desired action. Thus politicians and PR people use the word “will” rather than “projected” or “estimated.” So the next time you hear a speech or news report about legislation that states the bill “will” do something in terms of changing the number of people with some benefit, or it “will” cost or save so much, substitute the phrase, “is projected to” for “will” in your mind, and see how much less impact and traction the message has – and you’ll see why the word is used.

The only drawback for politicians of making such statements, is that 5-10 years later when the actual results are different than what was projected or estimated, there can be rhetorical battles about why someone “promised” that the legislation “would” do something, yet the actual results were different. (A great example of this was the provisions in the Balanced Budget Act of 1997 that were intended to expand options for Medicare HMO plans, but it actually reduced the options for such plans.)

Next Up: Implementing Health Reform – What Will Happen

Cost and Coverage c. 1989-91: Part 2 of Historical Perspectives on Health Reform

Posted on November 17, 2009 by Michael D. Miller MD

As I mentioned in my last post, in going through old files I found many memos and articles about health reform. Some of them from 1989-91 illustrate the long history of the challenge of controlling costs and providing care for more people – and eerie similarities to the current debate:

For example, below are some pieces of text from articles and commentaries published in the New England Journal of Medicine from January 1989 – October 1990:

“A Consumer-Choice Health Plan for the 1990. America’s health care economy is a paradox of excess and deprivation. We spend more than 11 percent of the gross national product on health care, yet roughly 35 million Americans have no financial protection from medical expenses. To an increasing degree, the present financing system is inflationary, unfair, and wasteful. In its place we need a strategy that addresses the whole system, offers financial protection from health care expenses to all, and promotes the development of economically financing and delivery arrangements. Such a strategy must be designed to be broadly acceptable in our society. To remedy this deprivation, we propose that everyone not covered by Medicare, Medicaid, or some other public program be enabled to buy affordable coverage, either through their employers of through a ‘public sponsor.’ … The U.S. health care economy is inflationary. It is still dominated by fee-for-service payment of doctors and hospitals by third party intermediaries with open-ended sources of finances. There is no total budget set in advance within which providers must manage the care of their patients. For the most part, there is no incentives to find and use medical practices that produce the same health outcome at less cost.” (1/5/89 - Enthoven and Kronick)
“A National Health Program for the United States: A Physicians’ Proposal. Our health care system is failing. Tens of millions of people are uninsured, costs are skyrocketing, and the bureaucracy is expanding. We propose a national health program that would (1) fully cover everyone under a single, comprehensive public insurance program; (2) pay hospitals and nursing homes a total (global) annual amount to cover all operating expenses; (3) fund capital costs through separate appropriations; (4) pay for physicians’ services and ambulatory services in any of three ways: through fee-for-service payments with a simplified fee schedule and mandatory acceptance of the national health program payment as the total payment for a service or procedure (assignment), through global budgets for hospitals and clinics employing salaried physicians, or on a per capita basis (capitation).” (1/12/89 – Himmelstein and Woolhandler)
“Sounding Board: It Is Time for Universal Access, Not Universal Insurance. … Universal health insurance is not a good idea. To control goods and services through a single agency – especially when the driving force is economic – would fly in the face of the American way of doing things. … Rather than support such unworkable, soulless programs, I propose universal access through a pluralistic funding mechanism. … So, we ought not to be talking about a universal health insurance scheme, but rather about universal access – access to needed care, on a timely basis, with controls on quality and use that have been accepted by everyone involved. The key principle of effective access and limited cost is the rationalization of care. In this age of high-technology medicine and miracle drugs, we must realize that we can no longer do everything for everybody just because it is possible. Rather, we should develop a system in which decisions about what we do, when, where, and to whom are based on reasonable expectations of the benefits involved and on sound medical principles communicated clearly to patients and their families.” (7/6/89 – James Todd, MD – American Medical Association)
“Special Report: The Pepper Commission Report on Comprehensive Health Care. A look at the outcome of the commission’s deliberations give a good indication of what, in fact, it takes to build political consensus. The commission basically face two separate tasks – reform of the nation’s existing system for insurance medical or health care, and creation of a system for insuring assistance in the task of daily living we call long-term care. The commission voted overwhelmingly (11 to 4) in favor of a major government initiative in long-term care. … By contrast, the commission’s vote on health care reforms – universal coverage for people under the age of 65 (at a cost of $24 billion) and measures to promote the efficient delivery of health care – passed by the slim margin of eight to seven. … The difference between the commission’s votes on long-term care and health care, then reflects the many and pointed political pressures that will work against consensus on health care reform, not for it. … First, and most obvious, the vast majority of commission members face reelection campaigns this fall… … Second, and related, in the wake of the traumatic repeal of Medicare catastrophic coverage, members will remain acutely sensitive to potential voter reaction to any particular reform package. Third, in health care there are entrenched political interests. … Fourth, with a complex issue such as this, consensus on the whole requires many, many concessions on individual provisions. … Finally, outright partisan politics will undermine consensus on health care reform, as the commission found in the days preceding the vote, when the White House placed intense pressure on some members to resist any consensus before the November elections. … If we do not act promptly, I believe our health care system may well implode by the end of the century. The need for action is starkly clear.” (10/4/90 – Senator John D. Rockefeller IV, Chairman of the Pepper Commission)

And other articles from 1991 show similar perspectives on health reform and the urgency for action:

Washington Post, February 17, 1991 “Devising a Cure for High Costs of Health Care: Support Grows for Concept of National Medical Insurance. … The idea [of government-imposed universal health care that would provide quality coverage for everyone], in various forms, is gaining the support of groups ranging on the political spectrum from the AFL-CIO and the American Association of Retired Persons to the National Association of Manufacturers and the American Medical Association. For the first time since the mid-1970s, supporters of national health insurance believe they have a legitimate chance of winning congressional approval for a universal health care bill, if not this Congress, then the next. ‘This is the best shot we’ve had in 15 years,’ said a key congressional aide. With health care costs climbing more than 20 percent a year for major corporations and even more for many small businesses, disparate political groups are beginning to form a coalition for reform.

USA Today, March 11, 1991 – “Health care costs more, serves fewer. No other part of the US economy seems less understood than health care. Few realize why health care costs are so stubbornly high ($2,700 per American per year) or why health care seems to defy free-market economics. … What a growing number of people are coming to know is dissatisfaction with a health care system that absorbs ever-soaring sums of money while letting more and more people fall through the cracks. … Of all the cold showers of reality falling on the USA as the ’90s dawn, none is as chilling as this: The healthcare system in this country is in deep, deep trouble.” (Graphic shows that of the 37 million people in the USA without health insurance 49% are working adults.)

Bottom Line – The more things don’t change the more they sound the same.

Next Up: Part 3 – Perspectives from a 1992 Medical School Class “The Crisis in the American Health Care System”

Making Sense of Health Reform

Posted on November 2, 2009 by Michael D. Miller MD

After spending a week in Washington DC talking to lots of people, and reading all sorts of information, I’m still not sure how to simply explain the the current state of health reform legislation – except to say that it is unfolding pretty much as expected:

It is taking a lot longer than planned, i.e. the August deadline never seemed realistic
There are pockets of agreement, but no solid majorities for a single bill
The Senate and House are operating in parallel, with the Senate being more conservative and focused on issues important to rural communities
Costs and spending are defining the framework within which all the ideas and packages are bouncing – like a 1970s video game
And political motivations and calculations are the firmament for many – if not most – positions and actions

Politics with Elections on 12 Month Horizon
On the last point, there has recently been ample evidence. For example, the National Journal’s Insiders Poll recently asked, “On health care reform, what outcome would most benefit your party in the 2010 midterms?” The results show that both Democrats and Republicans think that the best thing for their party would be “Enacting Legislation similar to the House committee bills.” (44% of Democrats chose this option compared to 35% of Republicans, 37% of whom chose “Enact nothing”)

While there isn’t bipartisan agreement about the substance for health reform, both sides think that health reform like the House committee’s bill would be best for them politically. As a Democratic respondent stated, “A strong health care package will be popular, especially when people see that none of the predictions from the town hall crazies came true.” And from the Republican side, “With more and more Americans distrustful of government, passing the House bill would be a gift to the GOP.” The problem with the Democrat’s substantive – and probably correct – insight, is that most of the bills’ provisions won’t start until 2013 because it will take that long to create the rules and infrastructure for implementing substantive reforms. To that point, another Republican noted, “Passing the most liberal version helps Republicans: The theme for 2010 and ’12 will be, elect more Rs so we can fix this before it goes into effect.”

Other articles in the October 17th issue of National Journal also point to the highly political stakes and schisms behind health reform legislation for the Democrats:

“Ultimately, the verdict on the efficacy of Obama’s style will depend in significant part on whether health care legislation passes, said Larry Sabato, a professor of politics at the University of Virginia. ‘Health care could be his hammer – if he gets it, he will have proven that his style works, that you don’t have to be an in-your-face LBJ type to get significant health reform. But if it falls apart or he gets a tiny piece of it, then there will be criticism that he is ineffective and not tough enough.’” (From “Is Obama Tough Enough?”)
“Although health care is becoming ground zero in the economic and values conflicts that loom within the Democratic majority, a host of other issues also have the potential to undermine party solidarity.” (From “Democratic Fault Lines Open Up.”)

To negate the Republicans’ ability to leverage people’s fear of change as they pick apart proposed rules and regulations – while also proposing legislative changes and repeals – some Democrats have called for more of the benefits to start earlier, i.e. before 2013. However, starting some benefits earlier would increase the 10 year costs of the new law, and – in contrast to expanding existing programs like Medicaid – many provisions would require new programs and rules. Both of these factors make earlier implementation both practically and politically very challenging.

Despite these realities, and the political intricacies of the US Senate, Majority Leader Reid has taken control of melding the Finance and HELP Committees’ bills and is apparently steering it in a direction to address his reelection concerns in Nevada – at least according to the Washington Post’s Dana Milbank.

Another political complication for moving health reform legislation forward this week – as Speaker Pelosi has indicated – is Tuesday’s elections across the country. Normally moving things forward in a speedy fashion would be good, but asking Members to vote on something so potentially politically contentious right after local elections in their home areas may make them hyper-sensitive about their reelection concerns.

Coverage Beats Cost Containment Like Rock Covers Paper
Within the twin goals of having health reform legislation cost less than $1,000.000.000,000.00 over ten years and not adding to the Federal deficit, legislation has evolved to focus on expanding coverage while drifting away from significant changes to healthcare delivery that would control long-term spending. This has occurred for two reasons: Spending money on coverage expansion is relatively easy, while changing the operations of the delivery system is much harder, and actually requires more than just financial incentives.

The extent of this shift is described in the recent analysis of HR 3200, (as passed by the Ways and Means Committee), conducted by the Actuaries Office at the Centers for Medicare and Medicaid Services. Although the Congressional Budget Office is the arbiter of the official cost estimates for legislation, they focus on federal costs, while the CMS Actuary analyzed the effects of the legislation for total healthcare spending, as well as expansion of insurance coverage. Looking at the numbers in their report for the years 2013 and 2019 are very informative:

First, the actuaries estimate that the four provisions intended to reduce healthcare spending would have minimal impact, with only comparative effectiveness research reducing spending by a few hundred million of dollars out of total spending estimated to be over $4.6 Trillion in 2019:

Second, the actuaries estimate that the legislation would increase insurance coverage through Medicaid/CHIP and via the Exchange, while having no effect on Medicare and little effect on employer provided health insurance. Overall, the legislation is estimated to reduce the number of uninsured by 33.9 million in 2019, leaving 23.0 million uninsured – including unauthorized immigrants, which others have estimated to currently total ~6-7 million:

Third, the actuaries estimate that the legislation would reduce spending on Medicare, and private out-of-pocket and direct insurance purchases, while increasing spending for Medicaid/CHIP coverage, and for insurance acquired through the Exchange – both private insurance and the proposed public plan option:

Bottom Line – Start Making Sense
It is looking more likely that a bill will be enacted before the end of the year – but that outcome is far from certain. If passage of legislation doesn’t occur by the end of December, there are three other possible outcomes:

The bill – and various amendments – could be brought to the floor to allow Members to go on record about health reform overall and various specific issues. (This presumes that a bill isn’t brought to the floor with the expectation of passage, but fails.)
Negotiations are carried over into 2010 because the Democratic leadership doesn’t have the votes to pass a bill in December.
With the outlook for getting enough votes for passage looking bleaker as the 2010 elections loom closer, the Democratic leadership could decide to shelve major health reform legislation, cobble together a bill of Medicare and related changes that are needed, and pass that bill at the end of December.

The first and third outcomes would bring closure (if not cloture) to the process and create space for other issues requiring Presidential and Congressional attention. The second route would prolong the debate and maintain the possibility of passage – but with decreasing likelihood.

In addition, as a major health reform legislation is being debated in Congress, it is very unlikely that the Administration will nominate an Administrator or Deputy Administrator for CMS. This makes sense because presenting a nominee would divert attention in the Senate, and whoever is nominated would face an armada sized barrage of questions about ever large and minute issue in the pending legislative proposals. However, it also leaves CMS without its full compliment of political leaders, which could be a problem in 2010 whether they are tasked with implementing large parts of a new health reform law, or more focused changes to Medicare and Medicaid.

So will healthcare reform start making sense to the average voter, or will the whole issue blow up for Democrats in the 2010 election – either through failure to pass anything or by overreaching and fueling the wild-eyed fires in the red and purple pockets on political strategists maps? The answers to these and other questions about the policies and politics of health reform will come sooner or later – and certainly by November 2010.

p.s. What the Talking Heads Said in “Stop Making Sense”
There are some interesting insights and parallels about the current health reform situation from the Talking Heads’ 1984 film “Stop Making Sense.” In particular, there seems to be some prescient message in the titles of a few of their songs included in the movie (with my annotations):

Psycho Killer – (Rabidly opposing health reform based on disparaging mischaracterizations?)
Slippery People – (No comment necessary)
Burning Down the House – (The goal of the Republicans? Or what the Democrats could achieve by overreaching or mishandling health reform?)
Making Flippy Floppy – (What is a public option and why?)
Swamp – (Will health reform get mired in a swamp?)
Once in a Lifetime – (What many health reform advocates think this is?)
Crosseyed and Painless – (How many people working on health reform feel right now?)

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