The federalization of health benefits is unnecessary for most of us, including those of us in Wisconsin. Let’s make sure our legislators don’t strip the states of the power to manage real health reform.
Here are the facts:
Currently, 98 percent of Wisconsin residents who desire health insurance have access to it through the governor’s BadgerCare and BadgerCare Plus programs, employer sponsored insurance, and Medicaid.
Quality data on most physicians and hospitals is available in the state thanks to the Wisconsin Collaborative for Health Care Quality www.wchq.org and The Wisconsin Hospital Association Checkpoint Soon, the Wisconsin Health Information Organization (WHIO) will report resource utilization performance (cost) on physician groups from around the state.
In addition, the governor’s e-health board will be transitioned to a new entity, most likely involving a public private multi-stakeholder board, which will over see the implementation of electronic health records and health information exchange for the state.
Finally, both payment reform and improving the efficiency of our care delivery systems is taking shape in Wisconsin. The focus is on reducing cost and improving efficiency through efforts of WHIO and the Department of Health Services.
More Facts:
AHRQ (the government agency that studies and reports on the nation’s health care quality) released the health care quality performance data for the nation last month. Wisconsin is back in the number one position for 2008. www.ahrq.gov
Many communities in this state are extremely efficient in Medicare enrollees’ total cost and quality. LaCrosse is half the national average for the yearly cost of a Medicare beneficiary and Appleton, Green Bay, Beloit and Fond du Lac are not far behind.
Wisconsin is not unique in its efforts to provide insurance, quality and cost data, and electronic exchange of information for its residents. Similar work is going on in Minnesota, Massachusetts, Washington State, Vermont and Oregon. The point being that a federal solution to any of these issues is first of all, unnecessary for many of us, and secondly, less effective than what already exists in some cases.
Therefore, it makes sense that the federal government should set expectations for all states with regard to insurance coverage, quality and cost data, as well as health information exchange, including electronic health records. But the federal government should delegate authority to the states to implement these recommendations. Clearly if states don’t meet the federal standards, then federalization of any or all of these programs is appropriate.
It’s important that the good work that’s already gone in to solving many of these issues in this state and other states not be usurped by some inefficient new federal government program.
Senate majority leader Harry Reid declared yesterday there would be no vote on a health care bill until at the earliest September.
As there is time now to try and get the health care bill done correctly the following are a series of questions we need to make sure legislators are able to answer:
If a public insurance option is enacted will it lead to lower cost and higher quality? In other words are we going to change the payment process to encourage providers to deliver care of higher value to patients?
Who is actually going to pay for this new trillion dollar entitlement? How much will they pay?
How will the new plan tackle the real problem in American Health Care which is the massive waste that exists in the delivery of care?
If states are already well along the path of having insurance coverage for all will federal policy allow their good work to continue or will this new plan derail everything that has already been accomplished?
Does the new plan require doctors and hospitals to report their clinical performance publicly?
These are just a few of the many questions that need to answered in the ensuing debate. It is important to realize that the true cost of health care is not in the insurance administration.That only makes up 7% of the health care bill. More than 80% of the cost is in the delivery of care. We have claimed at least 40% of the delivery of that care is waste.If we could remove that it would be a trillion dollars,which would pay for covering everyone.
A number of states are already fixing the uninsured problem. In fact, in Wisconsin 98% of residents have access to health insurance and Governor Doyle is not done yet.We will have 100% access with what is being proposed in this state. In addition we have very robust quality reporting mechanisms through the Wisconsin Collaborative for Health Care Quality and the Wisconsin Hospital Association Checkpoint.We don’t need a new federal program to comply with. The new legislation should allow states that have already tackled and solved these problems to continue with their own plans as long as they meet the goals established by the federal program.
There is much left to do on these existing bills but let’s start by getting detailed answers to the above questions.
The discussion on health care continues to be remarkably silent on the issue of creating better value.How do we know a federal insurance plan is going to provide better value to patients? Nothing in the proposed legislation ensures that it will.
It is a sad fact that instead of being able to talk about true health reform we have reverted back to partisan politics and attacks from both the democratic and republican side. As soon as the Mayo clinic pronounces the congressional bills are flawed the republicans jump all over the statement and use it to leverage their position.As soon as the Congressional Budget Office back tracks on their statement that neither Congressional bill would lead to a budget neutral health care spend over the next 10 years the democrats tout their work as “see we’re doing the right thing”.
So far no one is doing the right thing and it is beginning to frustrate all of us. As we’ve written before, the only way we will pay for full coverage for Americans is to take the waste out of the present delivery of care.The only way we do that is to have government and commercial insurers pay for health outcomes rather than volume but that means the providers and payers have to change.
Change is hard but some of us are changing and we know it’s possible. We have great examples on the provider side of change.Take Group Health of Puget Sound who delivers a PMPM premium that is 15% below their nearest competitor. Or the University of Michigan in Ann Arbor who has delivered care for seniors at 4% less when compared to their peers year over year. Gunderson Lutheran’s work on end of life care has resulted in the medicare costs being half of the national average.At ThedaCare the redesigned inpatient care process called Collaborative Care has delivered a 25% reduction in cost with improved quality. In almost all these examples delivering better value has led to lower reimbursement. These penalties are what need to be removed in any health care reform bill yet nothing yet exists in any proposal that would change reimbursement or care delivery.
More than 80% of the money spent on health care in the U.S. is spent on care delivery.Only 7% on health insurance administration. The answer to cost and quality is not insurance products. It makes sense for all Americans to have basic health plan coverage but this alone will only take a 2.3 trillion dollar problem to a 3.3 trillion dollar one.If we don’t change care delivery and the way we pay for it insurance for all will make little difference in the overall problem facing America.
This is an excellent summary of the various payment methods that are being considered by Massachusetts.With their health reform plan costing much more than they expected they have a burning platform.
This summary describes why the state has decided to focus on “global payments” rather than “episode payments”. Global payments, the authors argue, are focused on appropriateness of care in addition to quality and cost. Episodes of care payment systems assume what is being done medically is appropriate and necessary. How do we know whether treatment is appropriate and necessary? This paper suggests that total cost of care payment is the best way get providers to focus on appropriateness. Of course, there is no perfect answer here as our experience with global payments otherwise known as capitation in the ’90s taught us.The authors also argue global payments are the best method to support the concept of a medical home because the global payments can be redistributed more easily to support the expertise needed to better manage the entire condition.
There is an excellent executive summary which I would suggest reading first.
“We do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount”…Douglas Elmendorf, Director of The Congressional Budget Office.
CBO gets it. The proposals on the table will increase the cost of health care in the U.S. – not decrease it. If we don’t make some very fundamental changes, we are headed for reduced services,reduced reimbursements, and worst case but possible scenario; rationing.In a 30-second sound bite(which is all we get with legislators) what do we need to do?
I. Payment reform
a. Reward physicians to provide preventive and chronic care management
b. Bundle payments by episode of care, not units of service
c. Monitor and pay for population health
II. Regional Health Authorities
a. Money to support organizations/initiatives to collect clinical and administrative data and report quality and efficiency performance of providers at the state or region level
b. Public reporting of data
c. Include Medicare and Medicaid data
III. Accountable Care Organizations
a. ACOs should be held accountable for the outcomes of patients with certain conditions across the entire condition.Payment should be bundled for the entire condition and pay should be based on performance.
IV. Individual Responsibility
a. Primary Care Medical Home.Patients should be encouraged to choose a primary care doctor and be attached to a medical home.
b. Require Health Risk Appraisals
c. Strong incentives should be created to steer patients to high quality, efficient providers
The following is the Wall Street Journal article describing the CBO Director’s reaction to the bills on the floors of the House and the Senate.
The Senate Health Committee released their version of the health reform bill on July 15th.
One thing is for sure, there will be a proliferation of new agencies and a bolstering of the power of AHRQ. In other words,more centralization of quality measurement oversight, quality improvement activity, and best practices.
I see this as the antithesis of what it is going to take to reduce the cost and improve the quality of the American health care industry.This bill should be focused on pushing quality measurement and improvement to the regional level where excellent efforts are already in place such as at the Wisconsin Collaborative for Health Care Quality and the Minnesota Measurement Community. These organizations already report on many physician quality measures and could easily do what the bill is suggesting needs to be done in Washington.In addition,someone in Washington is going to determine health care best practice? I doubt it. In fact, bureaucrats responsible for determining and disseminating best practices will end up doing just the opposite. Those true innovators will be handcuffed with useless projects and rules coming from bureaucrats who have no experience in improving the quality and cost of health care delivery.
This bill does nothing to promote value and,in fact, will reverse the progress many healthcare providers have been making.
I would suggest that congress ought to spend time listening to the organizations who have joined the Health Care Value Leaders Network facilitated by this Center and the Lean Enterprise Institute These organizations understand delivery of better value and are committed to lowering the cost of care and improving quality.
The following is list of network members who our congressional representatives ought to be listening to.
Group Health Cooperative – Seattle, WA
Gundersen Lutheran Health System– La Crosse, WI
Harvard Vanguard Medical Associates – Boston, MA
Hotel Dieu-Grace Hospital – Windsor, Ontario, Canada
Iowa Health System – Des Moines, IA
Johns Hopkins Medicine – Baltimore, MD
Lawrence & Memorial Hospital, New London, CT
Lehigh Valley Hospital and Health Network – Allentown, PA
McLeod Health– Florence, SC
Mercy Medical Center – Cedar Rapids, IA
Park Nicollet Health Services – Minneapolis, MN
St. Boniface General Hospital – Winnipeg, Manitoba, Canada
St. Joseph Health System- Orange, CA
ThedaCare – Appleton, WI
UCLA Health System– Los Angles, CA
University of Michigan Health System – Ann Arbor, MI
Yesterday, the House released its 1000+ page bill regarding health reform. What’s interesting is what is not being discussed about the bill.
Believe me it is a schlog to get through this bill but it is an incredibly thorough health care bill that touches on everything from insurance companies to provider reporting.Of course, the controversial components are the new public plan paying Medicare rates plus 5%,the new taxes on the wealthy, and the mandate that employers cover their employees unless total revenues are under $250,000/yr.
What is not being discussed is the language in the bill regarding public reporting of performance of physicians and hospitals.This bill would significantly expand the public reporting of physician quality measures and of certain defect rates such as hospital infections. It would also levy stiff penalties for anyone not complying. In addition, it would expand the trend of not paying for defects including readmission to the hospital for certain conditions such as congestive heart failure.The language gives great leeway for the HHS Secretary to implement broad changes in payment and performance reporting. It also encourages that payment reform decisions be made by the Med- Pac Committee.
There are provisions in the bill to pilot both Accountable Care Organizations and Medical Home. The detail of how to pay for these two concepts is sketchy and left up to the Secretary to decide. In addition, there is language concerning moving to bundled payments for health services.
Total cost 1 trillion dollars. Paid for by 500 billion in increased taxes and the rest in “improved efficiency” of health care delivery. This,of course, means reduced payments to providers. If this doesn’t work financially the government can then just increase taxes on the wealthy and reduce payments further to providers.
In summary, this “reform” plan is simply more of the same Medicare-like thinking. There is a mild attempt to try something different by allowing pilots of ACOs and medical homes, but most care will continue to be paid for in a traditional fee for service process with no attempt to truly reward high quality, low cost providers.The public reporting is positive, but not if it is done by CMS instead of regional authorities like the Wisconsin Collaborative for Health Care Quality. And although a feeble attempt is made to address the massive geographic discrepancy in provider payments, the fact is those of us who are most efficient continue to be severely penalized.When it is all said and done we better do better than this.It’s time to get to work on these legislators.
A group of about a dozen state hospital associations are fighting to make sure that a value-based incentive is included in any health reform proposal. The attached statement is their attempt at defining how value should be rewarded and our comments.
It seems like everyone is getting into the act to define value. This group of state hospital associations include Iowa, Maine, Minnesota, Montana, Oregon, South Dakota and Washington. The coalition is now defining how “value” should be rewarded.There are two proposals in this recommendation one is that hospitals get paid more if they are in an HHR or Hospital Referral Region that is more cost efficient. HHRs are reported by the Dartmouth Atlas, and are determined by geographic regions not by individual hospital performance.
I blogged a couple weeks ago on the first recommendation but reiterate that;
“The fact that a region or state has lower quality or higher cost doesn’t
mean that any individual provider is of low value. So if you have a high
quality, efficient doctor in a particular region, how do you justify cutting
his/her payment because all the other doctors in the region are, on average,
delivering lower value than the providers in other regions? This doesn’t
work well in markets where there are multiple providers — you want to
differentially reward those providers, not reward or penalize each of them
based on their collective performance.
A better approach is to reward each hospital by it’s HSA (hospital service area performance as reported by the Dartmouth atlas). This is specific to each hospital in a market and measures total medicare reimbursement per enrollee for the market(see my blog on this)
The second recommendation by the coalition is a payment system based on the clinical indicators each hospital reports to Medicare. Of course these are not outcomes measures but process indicators. We may be able to do better than that. USA Today reported http://www.usatoday.com/news/health/2009-07-09-baylor-heart_N.htm on a study that CMS just released which took a look at clinical performance data on hospitals including mortality and hospital readmission rates. These outcomes are what we should be focused on improving and paying for.The CMS study is reported on “hospital compare” at http://www.cms.hhs.gov/HospitalQualityInits/11_HospitalCompare.asp
Finally, the problem with using Dartmouth data is the most recent data is from 2006.If we are going to move in this direction we must have more timely data. My suggestion is six months updates with re- calculation of performance payments based on these updates.
The Lean Enterprise Institute and the ThedaCare Center for HealthCare Value have teamed up to bring lean to healthcare. Jim Womack the CEO of LEI and the author of the most important books written on lean such as “Lean Thinking” has been to Appleton three times to review the work of ThedaCare.
The following video is his message to ThedaCare physicians and staff regarding the ThedaCare journey. This was recorded at ThedaCare’s quality improvement “report out” on June 26. More than 200 staff members from ThedaCare attended.
Jim Womack CEO of the Lean Enterprise Institute in Cambridge, Mass. was back in Appleton on Friday, June 25. He was here because he believes this is where the true potential for health care reform lives.
The Lean Enterprise Institute and the ThedaCare Center for HealthCare Value have teamed up to bring lean to healthcare. Jim Womack the CEO of LEI and the author of the most important books written on lean such as “Lean Thinking” has been to Appleton three times to review the work of ThedaCare.
The following video is his message to ThedaCare physicians and staff regarding the ThedaCare journey. This was recorded at ThedaCare’s quality improvement “report out” on June 26. More than 200 staff members from ThedaCare attended.
