Monday, August 31, 2009

A few links

Article on the health system and reform from a doc living in NC in yesterday's News and Observer.

Article from Newsweek, suggesting that deficit spending and not talking about the choices necessary to have a long term balanced budget (only had 4 in the past 49 years) is the one truly bipartisan issue (meaning neither party is honest about it).

From the NY Times, a hospital suggesting a couple divorce due to the onset of Alzheimer's disease, and the effect of the disease on long term care costs.

Op-ed from one of the WaPo editorial writers reprinted in the News and Observer discussing the very divergent views folks have about Ted Kennedy. This is mostly interesting because it points out the strong differences that people have of all sorts of things and people....makes it seem like we live on different planets at times.

Not so much posting this week....beginning of the semester and life intervening....back up to speed after Labor Day.

Friday, August 28, 2009

Ted Kennedy, Cancer and are there any limits?

I have seen several places where folks ask would Ted Kennedy have gotten the same care had he had a 'public option'? I think the answer is most likely yes.

He was a federal employee. He had the federal employees health plan, which provides a series of insurance choices to employees. When you read about various reform plans setting up health insurance exchanges and the like in states whereby people can purchase plans, they are mostly based on the idea of the federal employees health plan (again, lots of options, individuals choosing what they want, and having different premiums, deductibles and the like based on their choice). The federal gov't paid premiums on behalf of Sen. Kennedy and he paid premiums as well. I don't know which plan he chose.

Since he was over 65, Medicare was a secondary payer of all of his care. If he retired, then Medicare would become the primary payer of his health insurance, and he could elect retiree Medigap insurance from the federal gov't. Medicare is a huge, federal insurance program that is primarily tax financed and covers about 45 Million Americans. It provides the best evidence of what a public option might cover, how it would work. And the answer is it covers just about anything that is not experimental. So, the short answer to the question, 'would Ted Kennedy have gotten the same care if he had a public option?' is most likely yes. I say most likely because I don't know exactly what he got. If he got something that was experimental, neither Medicare nor any private insurance company would have likely paid for it. Such care is typically received via a research study or must be paid for out of pocket.

You have a far greater chance of being denied care by a private insurance company than you do by Medicare. That is part of why Medicare is going broke and insurance companies are very profitable!

Here is a straightforward discussion of Sen. Kennedy's care, and the reality of certain types of cancer diagnoses, about 40 years after President Nixon declared the War on Cancer. There are discussions of costs, benefits, perspectives of fighting, American culture and the like. Here is an interesting discussion of progress against cancer. Most interestingly, is the distinction between increased survival after detection of cancer (that has occurred) and the relatively limited success in curing cancer, and causing/allowing someone to die of something else. Meaning for many cancer diagnoses but not all, treatments forestall death for different periods of time and improve quality of life as well. But, the notion of 'War on Cancer' implies defeat of an enemy, and that is not very likely. It doesn't mean increased research and treatment hasn't been worth it, just that the metaphor doesn't match the reality of cancer. And of course if cancer were eradicated, there would be an explosion in heart disease mortality, because the mortality rate of being born, is of course, 100%.

The health reform discussion has been mostly heat and no light on these basic questions:

(1) Are there limits to what should be done in terms of medicine/health care?
(2) Do we actually now provide treatments for which the costs are greater than the benefits?
(3) How much are benefits worth....is any incremental benefit worth any cost?
(4) If yes is the answer to question 3, how will we pay for it? What else will we forego?**
(5) If no is the answer to question 3, how do we practically work out the principle that there are limits....the principle has to be operationalized to actual care provision?
(6) How do we address all of these questions (there are many related questions and controvseries) in an American way, meaning in a way that works for our culture?

We really need some grown up discussion.

**The federal budget in 2009: Social Security (22%); Military (20%); Medicare 14%; Interest on the debt (8%); Medicaid (7%). Everything else 29%.

No column in News and Observer today

I am taking this week and next week off, but my column in the News and Observer on health reform will start back on Sept. 11. I will still be blogging in the meantime.

Wednesday, August 26, 2009

Private insurance, competition and who pays

This is a very interesting post with many links, discussing the limits of the competition among insurers to hold down costs in a system in which so many people get employer provided health insurance. The argument goes like this: On the one hand, employers are not great purchasers/arrangers of health insurance because employees pay for insurance costs via lower wages, so employers aren't incentivized to try harder. On the other hand, because premiums paid by employers on behalf of their employees are excluded from taxation, this means that workers do not face the true costs of their insurance.

This means that neither of the purchasers (employers or employees) are properly incentivized to try and hold down costs.

More on what if the umpire is wrong

Jon Gabel writes an op-ed in the NY Times, noting that the CBO has historically been too conservative in estimating savings due to Medicare policy changes.

I have written about the issue of scoring, mainly because of a private scoring group that claims they out-predicted CBO on the issue of uptake of high deductible plans earlier this decade.

Here is a post criticizing HSI, the private scoring firm that has academics that were supporters of Sen. McCain's presidential bid. Steve Parente responds in the comments, and he is correct that he and Roger Feldman and others working with this group are proper academics who have much peer reviewed research, that is linked off their web site (all contained in the issue of scoring link above). I should also say when I have called Steve Parente to ask him some questions about his model he responded and discussed them in a very transparent and helpful way, as I would expect a professor to do for another professor.

Also, for those of you watching the NC Public TV call in show last night, when Sen. Burr said his plan (Patients' Choice Act, past links where I have written about PCA here and here and here and here and here ) would insure 34 Million persons, he is using HSIs private score. As far as I can tell, the PCA has still not been scored by CBO, which means the sponsors haven't given the necessary information to CBO to do so. To put the 34 Million that Sen. Burr claims in perspective, HSI's private score says Senate HELP bill will move to nearly universal coverage....so CBOs scores are consistently showing less effect on insurance increases (and therefore cost of bills) than is HSIs.

Sen. Burr really needs to have to the PCA scored by CBO so comparisons amongst bills can be apples to apples.

UPDATE, 11:10am, 8/26/09: Someone in Sen. Burr's office that would know the details told me that they want PCA to be scored but that CBO is back-logged and that is why it hasn't been scored yet. The Patients' Choice Act was introduced in May, 2009....but I will take this person at their word that the scoring delay is due to CBO workload.

Smoking deaths worldwide

Interesting new study from the American Cancer Society estimating that around 1 billion people smoke worldwide; around 35% in high income/developed nations like the USA and around 50% in low income/developing nations. Actually, the USA now has one of the lowest smoking prevalence rates of high income nations at about 23-24% of adults (it was around 55% in 1950). However, the rate of decrease has slowed quite a bit. It went from 55% in 1950 to around 25-26% in 1990, and now down to 23-24% almost 20 years later. This suggests we might be approaching the background rate of smoking, or the rate below which it will be quite hard to go below. Canada's smoking prevalence is a bit lower than ours, but most of continental Europe and certainly Japan, where smoking rates are over 40% has much higher smoking prevalence.

There are lots of factoids about China highlighted. For example, ~60% of Chinese men smoke, and China consumes 37% of the world's cigarettes. This is part of the reason the smoking settlement went through so quickly. The tobacco companies were trying to fix and make predictable their costs in the USA, and then focus on selling cigarettes in other nations.

I co-authored a book with several colleagues from Duke called, The Price of Smoking, published by MIT Press in 2004. We estimated that in $2000 dollars, the true societal cost of a pack of cigarettes was $40, with costs distributed as follows:
*The smoker bears about $33/pack, mostly through shortened life.
*The family of the smoker bears around $5.50/pack via things like second hand smoke.
*The rest of society (external costs) are about $1.50/pack.

We didn't estimate intangible costs. For example, my wife's father died at age 64 of lung cancer, and had COPD and was a life long smoker. He died before my youngest child was born, which my wife would say is costly (she wouldn't use the word costly, but stick with me). We assigned value of $0 to such costs, basically because we didn't know how to estimate such costs in dollar terms. If you would like to monetize such costs, just add zeros....

Tuesday, August 25, 2009

Medical errors

interesting article on medical errors and trying to learn from mistakes.

10 year deficit estimate

us up to $9 Trillion, from $7.1 Trillion. For health reform, some will say this means we can't afford it. For others, they will say what Medicare and Medicaid will do to deficits sans any change mean we can't afford NOT to do something about it. Put me in the second category. But, there has got to be some real proposals to slow the rate of spending increases in health care. It is really time for the grown ups to talk turkey. Are there any? Anywhere?

Private insurance care costs

Story on projected increase in health care expenditures of private health insurers of about 10% this year over last. Note the discussion of the idea that some employers will eat some of these costs and not pass them on via increased premiums since many workers got little/no salary increase this year, while others will move to further limit wage growth due to these costs and/or alter insurance options toward more high deductible options that make employees more responsible for more of their initial care. They note rising demand at least partly linked the aging of the workforce that is still employed. As the workforce ages due to the fact that the baby boomers had fewer kids than their parents, this will be an upward pressure on spending. Note that moving toward higher deductible options is a way to reduce the subsidy of healthy, younger workers of older, sicker workers because the employer can provide the same premium amount on behalf of each employee, but the younger workers are (probabilistically) less likely to use care.

Monday, August 24, 2009

Leadership

One of my jobs is directing the Benjamin N. Duke Scholarship program at Duke University. This scholarship is for kids from North or South Carolina who have shown leadership potential and an interest in service. I was looking over our vision documents in preparing to address the newest crop of BN Dukes, and read again what we try and teach these students about leadership. And it got me to thinking that this perspective would be useful about now in the whole health reform discussion.

The Benjamin N. Duke Scholarship Program's Understanding of Leadership
*Leadership is a community or group activity
*A healthy community needs many perspectives; withholding ones voice harms the community
*Everyone can grow as a leader
*We want to encourage leadership that improves the common good
*There will be disagreement about what equals the common good
*A key leadership role is inspiring critical and creative thinking about the tension related to determining the common good.

The last three points are the most important for the health reform discussion. It seems as though there are very few saying our health system doesn't need to be changed. But, we have large disagreement about what equals the common good. This is the reality of our time, and probably has always been the case. We need leaders who can lead creatively in the reality of disagreements regarding the common good in health care.

A final point is that I think that it is very important for me to look at myself and see where I need to improve in these areas. It is quite easy to point out how others need to change. If we all do only that, of course, nothing will.

Geriatrics training

interesting article on trying to encourage more medical students to choose geriatrics....incl students living in a NH for 10 days. Here is a report from the Institute of Medicine, National Academies, on developing appropriate workforce for an aging society, called "Retooling for an Aging America."

Sunday, August 23, 2009

Senate Finance Committee

Article from WSJ on gang of six discussions. No big changes, heading for what we have been headed for all summer:

Consensus:
*Individual mandate of some sort whether in name or function;
*Employer mandate whether in name or function; continued strong link of insurance with jobs, with attempts to get those falling through cracks to get coverage.
*end pre-existing condition, bring about guarantee issue, with some control of what premium can be charged
*subsidy for persons without insurance to buy insurance via some sort of mechanism to set up a market in which people can shop for policies; (house likely end up with bigger subsidies and subsidy higher up the income ladder)
*some Medicaid expansion
*part of 10 year financing of insurance expansions via cuts to Medicare and Medicaid

Big Stumbles/Differences
*public option whereby people could choose to buy into a publicly run insurance plan (house yea, senate nay).
*Other financing: house income tax increase; senate limiting tax exclusion of employer paid benefits aka taxing private health insurance benefits

Seems likely that none of the Republicans will vote for the bill....Snowe most likely....but negotiating with the Republicans is not that much different than negotiating with the 4 or 5 most conservative Democrats in the Senate who would be needed to break a filibuster (if Kennedy and Byrd and physically able to vote).

I think Sen. Snowe's comment in the article that this entire debate is 'one last chance' for the private insurance approach to work broadly for the US. There are those that think that is hopeless and those that do not.

Many other questions and lots of screaming to come, but this is the outline of the debate.
Big questions: how many can be covered in this way?
will there be increases in competition among private insurance companies that will lead to decreases in cost in the non-elderly market?
Will there be some sort of Independent Medicare Commission developed to address payment, quality, etc......I think the only hope of reasonably addressing cost inflation in the program.

The News and Observer has a bit in today's paper discussing competition in the insurance market; short version is that many states have a very dominant insurer. Blue Cross/Blue Shield of NC has 96.8% of the individual purchase market in NC, and 77.8% of group insurance sales in NC.

My hunch of what turns into the biggest political football of the fall: malpractice reform. In fact, I would stay up all night (after night, after night) watching the Senate debate a bill with two things: public option and a stringent malpractice reform.....

Who are the uninsured?

A useful editorial in today's New York Times that catalogues the various categories of who are the uninsured. Kaiser Family Foundation, has lots of detailed information on this topic.

Caregiving

Interesting article about caregiving, in this case for a parent with dementia. It notes that about 1 in 5 baby boomers are now caring for a parent.

Friday, August 21, 2009

Aug 21 News and Observer Column

Doing nothing is always an option in public policy discussions. My column today focuses on the costs of doing nothing to reduce the rate of cost inflation in Medicare and in employer based health insurance, and the role that patients play in making it hard to actually slow health care cost inflation. The more I have been listening to and talking with people I think the biggest barrier to actually slowing cost inflation and saving $ compared to the current track we are on is us--you and me. We say we want to spend less, but seem repelled if we actually try and do so. To reduce inflation, we actually have to spend less on SOMETHING and it means that someone's income will drop compared to what it will be with no changes. There is no magic fix whereby we do exactly the same thing and somehow save money.

I argue that we have to reduce cost inflation, because we cannot afford our health system and the projected rate of spending growth if we do nothing. If we do nothing, we are just giving more and more debt to my kids and yours to pay for Medicare, and we will eat up most wage growth with premium increases in the private, employment-based health insurance.

Here is the CBO report referenced in the column that reaches the conclusion upon reviewing the evidence that we can spend less without harming health.

Here is a news story from this week on wage and health insurance premium growth in NC the past 10 years.

The link to the right by Gruber in the New England Journal of Medicine describes the economics of ending the tax exclusion of employer paid health insurance premiums.

Thursday, August 20, 2009

Malpractice

Here is an article noting many sources saying that malpractice reform won't save that much money. I suspect that it won't save much money, but still think that malpractice reform is crucial to get to both a political deal for health reform, and also to get the docs on board with the functioning in any new system that has a hope of cutting costs, as I wrote a few weeks ago.

And, to reiterate, if you think docs are just money-grubbers and are completely self interested (I don't), this is the best way to call their bluff. If costs don't drop, they will be in a much weakened negotiating position. But, you have to give essentially the full monty reform (like a cap on non-econ damages), otherwise it will be like arguing with 'religious' tax cutters....you just didn't cut taxes enough, etc.

Blast from the past...and back to the future

A bit of history arguing against Medicare as socialized medicine and inevitable rationing in the 1960s, with some more recent links. Check out especially the brief video clip a few weeks ago of Rep. Mike Pence saying how terrible gov't involvement in health care is and then saying that he supports Medicare....

Palliative Care

An interesting and poignant article about palliative care.

Split the bill strategy

WSJ has article on the newest possibility, of splitting the reform bills into pieces and getting some of the least controversial portions passed first, and then moving to other portions later.

Seems a good tactic politically for the Ds, as it would allow the President to get a bill, and let a public option go down to a filibuster in the Senate. Meaning, not just a threat of a filibuster, but an actual 'get the cots in the back of the room and order 800 pizzas and read from the phonebook' filibuster. The Rs won't look good doing this. For every person thinking they are defending their interests, there will be 2 thinking they look like fools.

Depending on how the bills are packaged, it could be reasonable from a policy perspective, but the toughest choices (like something to deal with cost inflation in Medicare that is not just a provider reimbursement cut) are the most likely things to be dropped the smaller any bill gets. But, President Obama has to do something to gain control of the debate, and the let Congress lead the way approach hasn't worked out so well. In fairness to the Ds in the Senate, the Rs are 'negotiating' sort of like Lucy negotiates with Charlie Brown to hold the football to let him kick it--always pulling it away at the last minute, and declaring the newest D concession to still be socialized medicine and the first step to ending society as we know it.

Should be an interesting fall. And a good one for pizza delivery restaurants around Washington.

Wednesday, August 19, 2009

Interesting poll

on American's views on health reform from Ezra Klein's blog.

Most interesting is this: 47% disapprove of how Pres. Obama has handled health reform. But 62% disapprove of how the Repbulicans have handled it.

Two links

One on free market 'death panels'.

Another on increases in private health care costs outpacing wages over the past decade. Health insurance premiums a have doubled, while median wages have gone up less than 20%. The default with no reform is likely an escalation of this process whereby most wage growth consumed by health care premiums.

Students have descended upon Duke....

Tuesday, August 18, 2009

Are the wheels coming off...

the reform train? I don't think so, not yet. Nothing passing is still certainly a possibility, but I think the looming Medicare financing problems as the baby boomers retire make doing nothing not so good. If nothing passes this year, we will have to be back sometime in the next few years to address the fact that Medicare Hospital Insurance trust fund is going to be broke by 2019 or so.

The President's approval polls on health care are not so good....but they have been not so good for about a month. The didn't really get any worse during the last couple of weeks, even with all the town halls, etc. And the basic math has been somewhat clear for awhile: the house is going to pass some bill with a public option of some sort; the Senate will not. And the primary action will occur in a conference bill that produces a compromise between the two houses that must then be passed by both the House and the Senate to go to the President's desk. I think in a conference, bills typically move right, not left.

This is a very reasonable discussion of public option, I think. Not a panacea, nor a disaster. Need to keep moving ahead and try and address cost inflation, especially in Medicare, and increase health insurance coverage. I would prefer single payer (Medicare for all) with high deductibles for those less than age 65 (say $10,000 individual/$15,000 family) and a robust insurance market for the gap.

Here is some interesting discussion of the reconciliation process, with the key issue being whether the Senate Dems will need 60 votes (filibuster proof) or whether they would try and pass it via reconciliation rules with 51. I suspect they will have to do it with 60, which will also move any conference bill right.

While the wheels aren't off, they are wobbling. The President is either a Jedi and about 8 steps ahead of everyone, or has really lost control of the messaging (I suspect the second). However, I think the 'left revolt' is actually helpful to the President, in part because the discussion by single payer advocates is typically quite clear, and also shows the President to be toward the middle of between 65-90 members of the House of Representatives. Their basic argument is that health care is different, it is not a commodity and that for profit administration of it is inappropriate.

For the House folks wanting single payer, public option is already a fall back, and that is going, going if not gone.

The Co-ops are a political solution mostly, and it is not clear what they are or how they would work. They don't seem worth it to me, and they won't attract Republicans. The Republicans seem to be consistently opposing everything as it comes about, including now saying the co-ops are also 'government takeover.' So, every Republican in the Senate save MAYBE 1 or 2 in the Senate are going to vote against any bill, no matter what, so the Dems need to focus on what can get 60 votes in the senate and 218 in the House. There is enough work to do within the Democratic party.

I guess in analyzing any bill that actually comes out of a conference, everyone has to figure out what they think doing nothing holds for the future; and then decide whether proposals that emerge are better than that, or not.

A vivid memory of the NHS

I did a post-doctoral fellowship at the University of Manchester, in Machester, England. My wife and I moved to Manchester when our oldest daughter was 2 months old (who is going to start high school next week, yikes!). This meant that we used the NHS a fair amount, because of well child visits, immunizations and little babies get sick. But, I will never forget my first interaction with the NHS.

We had been living in our (slightly) dodgy neighborhood for 4 or 5 days and I hadn't started to work yet. There was a knock on the door and I answered, only to to find an older woman at the door who identified herself as a nurse. She said simply, I am here from the local GPs office, and I hear that you have a small baby. I said, 'well yes' while thinking how do you know or care. She picked up on my puzzelment and said that the neighbors had told her that the newbies had a baby. The neighbors who told her were a couple of elderly women, each of whom lived alone. They told this visiting nurse because she checked in on them fairly often, to see how they were doing.

The nurse asked if she could come in, because she would like to meet my wife and the baby and check out the house. My wife and the baby were out shopping. She asked if she could check out our house for safety, and I said, well ok. I have a Ph.D. in Public Health, so I was filled with a mixture of awe (actual public health) and horror (invading my personal space).

She proceeded to measure the temperature of the hot water heater (too hot, scalding danger), measured the distance between the tines up the stairs (too broad, choking/hanging risk because the babies head could fit through), and showed me a place near the back door that was very sharp and said that as my daughter began to crawl, it would be a problem. OK.

Then my wife got home.

Who is that? I told her. She wasn't happy. My wife is a nurse, and in her experience when nurses visit your house it is as part of a home study when someone is about to be declared an unfit parent.

And when your first born is just 2 months old, you feel unfit!

The nurse began asking about my wife about breast feeding (already doing it), and asked about what immunizations our baby had and when we should come and get the next shots (this was a question she had), having you been feeling down (yes, we moved to another country with a 2 month old and it won't stop raining). We asked the nurse where we could go to get a GP to register with to receive care, and she replied, 'you can go to any GP, but most everyone in your neighborhood comes to the local GP.' In turned out that the GPs office was around one-third of a mile from our house. So, a few days later we went and registered.

The nurse spent most of her time visiting those with small babies, the elderly and persons with special needs who were cared for by the GP who employed her.

That was the GP practice we picked, just like most of the neighbors. These GPs and nurses cared well for our family while we were there. It was actually more like a multi-specialty group practice than what I expected to find, and they had one GP who tended to focus on caring for new babies. The care we received from the GP was good over the time we were there. But, our first contact with the NHS, was a nurse who came to me, and wanted to measure the temperature of my hot water heater.

**********
updated...this is an interesting overview of the NHS, inlcuding the author saying a nurse came to her house to get her to breast feed.

Monday, August 17, 2009

In defense of the NHS

Interesting op-ed by former minister of health and a prof in the U.K. defending the NHS, while noting they wouldn't subcribe it as a model for any nation; we have to figure that out.

Medicare demonstration project on hospital quality

Here is an article describing a demonstration project in which Medicare gives incentives (positive and negative) to hospitals based on quality, with evidence that it improved performance. High achievers get extra $, low achievers are penalized. Medicare is the only payer with the market share and the clout to do this sort of thing. These are the types of things that an IMAC would do.

Sunday, August 16, 2009

Senator Coburn Should Read His Own Bill

Senator Tom Coburn (R-OK) is the primary sponsor of the Patients' Choice Act, and he was on Meet the Press this morning discussing health care reform. This is a 5 minute tape, but he speaks from about 2min to 4min. Around 3:15 in he reiterates a claim that the Democrat bills 'will kill people' and then he then slams comparative effectiveness research and says that it will help 70% of patients and hurt 30%. Presumably, the application of such an approach is how Democratic bills will kill people.

Trouble is, pages 206-215 of his own bill, The Patients' Choice Act, includes detailed language setting up a federal board to comprehensively apply comparative effectiveness. The two boards, a Health Services Commission, and a Forum for Quality and Effectiveness in Health Care, that is designed to make use of cost effectiveness, develop guidelines to improve appropriatentess and quality of care and to reduce costs, and sets out penalties for providers who do not follow the guidelines developed, including banning them from billing federal health insurance (Medicare, Medicaid) and/or civil fines.

I think such panels, filled with experts from outside the government, and using the best research, are the best hope for slowing Medicare cost growth, as I have said. I have noted this as a potential point of compromise between the President and the Republicans. However, I also think this performance by Sen. Coburn on Meet the Press today is one of the most cynical and dishonest things I have seen said in the reform debate (and there are lots of candidates). He must have liked such an approach at one point...but it is really an embarrassment for him to slam something in someone elses bill that he has in his own.

Here is a link to the Thomas version of the Patients' Choice Act, S1099. It is the same bill as HR 2520 introduced into the house and which is linked here with guidance to relevant sections of the bill. The house version text is easier to navigate around...if you want to use the senate version relevant sections are sec. 801-823 of title VIII of the bill.

Saturday, August 15, 2009

IMAC and Health Services Commission in Patients' Choice Act

*Two key sources of information pointing out an important possible point of bipartisan agreement in seeking to slow cost inflation in Medicare, which was described in my Aug. 14 column in the News and Observer. (1) CBO assessment of of an Independent Medicare Advisory Commission; and (2) the Patients' Choice Act, with guidance to the portions of the bill that create the Health Services Commission and related Forum for Quality and Effectiveness in Health Care.

(1) CBO. Here is the letter from the CBO Director Elmendorf to Steny Hoyer, House Majority Leader, commenting on President Obama's proposal for an Independent Medicare Advisory Commission (IMAC). A very important quote from this July 25, 2009 document (entire second paragraph of Elmendorf's letter) is the following:

"Expanding the authority of the President to effect change in the Medicare program
might lead to significant long-term savings in federal spending on health care. The available evidence implies that a substantial share of spending on health care contributes little, if anything, to the overall health of the nation. Therefore, experts generally agree that changes in government policy have the potential to significantly reduce health care spending—for the nation as a whole and for the federal government in particular—without harming people’s health. However, achieving large reductions in projected spending would require fundamental
changes in the financing and delivery of health care."

He is saying that at least some of what we do in medical care does not produce very much (or any) benefit for patients, and that we could stop doing some of this without hurting the health of Medicare beneficiaries. This reality is presumably what has lead both President Obama and the writers of the main Republican alternative reform bill to try and look closely at this issue.

*Here is a link to the full Patients' Choice Act Co-sponsored in the House by Rep. Ryan and Nunes, and in the Senate by Sens. Coburn and Burr. You can read the entire thing and can navigate around it fairly easily with the find function in Adode Acrobat.

You can read it for yourself, but this is a very serious attempt (a good portion of title VIII, pages 206-215 in the bill) to apply cost effectiveness research in a comprehensive manner in order to develop guidelines and standards for what and how care is provided in the health care system, with provisions to penalize providers who do not follow them (guidelines, directives) by banning them from billing federal health insurance plans (Medicare, Medicaid) and/or civil fines imposed on providers. The legislation states that the best research is to be used to do this work, driven by experts from outside of government. This commission (and the Quality Forum, a sub unit of the Commission) is proposed in the context of a health system in which Medicare would remain independent, and individual's would be purchasing private insurance through state-based exchanges that would be regulated to cover a benefit package similar to the benefit package enjoyed by Congress. These provisions in the bill seem to focus on the entire health care system, but the Act allows private insurers to sell plans outside of exchanges. It seems to me it would be better to start with Medicare, then apply lessons learned more broadly, but this idea along with that proposed by President Obama provides a bipartisan way to get a handle on Medicare costs in a way that is driven by the best experts and the best research. This aspect of the bill, introduced May 20, 2009, was the first, and to this point, most serious effort to actually 'bend the curve' in my opinion, and the President has followed suit with consideration of a similar Commission.

The key sections for what I wrote about today, creation of a Health Services Commission can be found in Title VIII of the Act beginning on page 206 and running to page 215. Several key aspects of this part of the Patients' Choice Act.
*Purpose, sec. 801 (b), p. 207
(b) PURPOSE.—The purpose of the Commission is to
11 enhance the quality, appropriateness, and effectiveness of
12 health care services, and access to such services, through
13 the establishment of a broad base of scientific research
14 and through the promotion of improvements in clinical
15 practice and in the organization, financing, and delivery
16 of health care services.

*Duties, sec. 802 (a), p. 207-08
(a) IN GENERAL.—In carrying out section 801(b),
23 the Commissioners shall conduct and support research,
24 demonstration projects, evaluations, training, guideline de
25 velopment, and the dissemination of information, on
1 health care services and on systems for the delivery of
2 such services, including activities with respect to—
3 (1) the effectiveness, efficiency, and quality of
4 health care services;
5 (2) the outcomes of health care services and
6 procedures;
7 (3) clinical practice, including primary care and
8 practice-oriented research;
9 (4) health care technologies, facilities, and
10 equipment;
11 (5) health care costs, productivity, and market
12 forces;
13 (6) health promotion and disease prevention;
14 (7) health statistics and epidemiology; and
15 (8) medical liability.

*The Act also creates, under subtitle B, a sub-unit of the Health Services Commission, a 15 member Forum for Quality and Effectiveness in Health Care.

*Membership, sec. 812, p. 210-11
(a) IN GENERAL.—The Office of the Forum for Qual23
ity and Effectiveness in Health Care shall be composed
24 of 15 individuals nominated by private sector health care

p.211
1 organizations and appointed by the Commission and shall
2 include representation from at least the following:
3 (1) Health insurance industry.
4 (2) Health care provider groups.
5 (3) Non-profit organizations.
6 (4) Rural health organizations.

*Duties of the Forum, sec. 813, p. 211-12
(a) ESTABLISHMENT OF FORUM PROGRAM.—The
24 Commissioners, acting through the Director, shall estab
25lish a program to be known as the Forum for Quality and

p. 212
Effectiveness in Health Care. For the purpose of pro
2moting transparency in price, quality, appropriateness,
3 and effectiveness of health care, the Director, using the
4 process set forth in section 814, shall arrange for the de
5velopment and periodic review and updating of standards
6 of quality, performance measures, and medical review cri
7teria through which health care providers and other appro
8priate entities may assess or review the provision of health
9 care and assure the quality of such care.

*How will guidelines and standards be developed, p. 212
(b) CERTAIN REQUIREMENTS.—Guidelines, stand
11ards, performance measures, and review criteria under
12 subsection (a) shall—
13 (1) be based on the best available research and
14 professional judgment regarding the effectiveness
15 and appropriateness of health care services and pro
16cedures; and
17 (2) be presented in formats appropriate for use
18 by physicians, health care practitioners, providers,
19 medical educators, and medical review organizations
20 and in formats appropriate for use by consumers of
21 health care.

*When they will bring about guidelines, p. 213
(e) DATE CERTAIN FOR INITIAL GUIDELINES AND
15 STANDARDS.—The Commissioners, by not later than Jan
16uary 1, 2012, shall assure the development of an initial
17 set of guidelines, standards, performance measures, and
18 review criteria under subsection (a).

*Enforcement Standards, sec. 814, p. 213-214
SEC. 814. ADOPTION AND ENFORCEMENT OF GUIDELINES
20 AND STANDARDS.
21 (a) ADOPTION OF RECOMMENDATIONS OF FORUM
22 FOR QUALITY AND EFFECTIVENESS IN HEALTH CARE.—
23 For each fiscal year, the Commissioners shall adopt the
24 recommendations made for such year in the final report
25 under subsection (d)(2) of section 813 for guidelines,

1 standards, performance measures, and review criteria de
2scribed in subsection (a) of such section.
3 (b) ENFORCEMENT AUTHORITY.—The Commis
4sioners, in consultation with the Secretary of Health and
5 Human Services, have the authority to make recommenda
6tions to the Secretary to enforce compliance of health care
7 providers with the guidelines, standards, performance
8 measures, and review criteria adopted under subsection
9 (a). Such recommendations may include the following,
10 with respect to a health care provider who is not in compli
11ance with such guidelines, standards, measures, and cri
12 teria:
13 (1) Exclusion from participation in Federal
14 health care programs (as defined in section
15 1128B(f) of the Social Security Act (42 U.S.C.
16 1320a–7b(f))).
17 (2) Imposition of a civil money penalty on such
18 provider.

Patients' Choice Act

A few friends have emailed and asked if I was now fully supporting the Patients' Choice Act. I do support the Health Services Commission and Forum on Quality that I wrote about yesterday that is contained in the Act; I think this is the best way to address cost inflation in Medicare. And it is an area of emerging bipartisan agreement with the President being open to a similar approach (Independent Medicare Advisory Committee). Regarding the full Act, it hasn't been scored by CBO, so it is impossible to make a complete judgment on it.

If I were the king, I would have Medicare for everyone, with persons younger than age 65 having high deductibles (say $10,000 individual/$15,000 family) and a robust private insurance market for the deductible amount. I would have people purchase the 'gap' insurance with after-tax dollars, whether it was arranged by employers or individually arranged. You could certainly have premium support for the gap insurance for low-income groups, and you would need to have an annual physical covered for kids and to cover pre-natal care first dollar. Of course, I am not the king, and we will have to find a compromise that moves us ahead.

Friday, August 14, 2009

Aug. 14 News and Observer Column

Today's column in the News and Observer looks at end of life costs in the Medicare program.

This is a key issue because Medicare pays for the health care of about 8 in 10 Americans who die each year, and costs rise rapidly near death. As the baby boomers retire, something must be done, and there are really only two basic possibilities: increase what is coming in, or decrease what is going out.

**Here is a paper discussing the issue of one fourth of Medicare spending going for care provided to someone in their last year of life.
**Here is the paper referred to that shows hospice saves Medicare money.
**Here is a paper describing desires/wishes of patients, families and providers near the end of life.
**Here is a paper demonstrating relationship between age at death and costs for acute and long term care.
**Here is a useful link to the Medicare section of the Kaiser Family Foundation web site, the best source of basic health policy info.
**Here is a nice (or not so nice) visual about what happens if we do nothing.
**Since the column talked about death quite a bit, I have included a link to the full gory details of all deaths in the USA in 2006 (last year with fully verified info.). Death statistics.

There are many, many other sources that could be used to demonstrate the aggregation of costs as people age, and particularly as they near death.

*Two key sources of information for the column today: (1) CBO assessment of of an Independent Medicare Advisory Commission; and (2) the Patients' Choice Act, with guidance to the portions of the bill that create the Health Services Commission and related Forum for Quality and Effectiveness in Health Care.

(1) CBO. Here is the letter from the CBO Director Elmendorf to Steny Hoyer, House Majority Leader, commenting on President Obama's proposal for an Independent Medicare Advisory Commission (IMAC). A very important quote from this July 25, 2009 document (entire second paragraph of Elmendorf's letter) is the following:

"Expanding the authority of the President to effect change in the Medicare program
might lead to significant long-term savings in federal spending on health care. The available evidence implies that a substantial share of spending on health care contributes little, if anything, to the overall health of the nation. Therefore, experts generally agree that changes in government policy have the potential to significantly reduce health care spending—for the nation as a whole and for the federal government in particular—without harming people’s health. However, achieving large reductions in projected spending would require fundamental
changes in the financing and delivery of health care."

He is saying that at least some of what we do in medical care does not produce very much (or any) benefit for patients, and that we could stop doing some of this without hurting the health of Medicare beneficiaries. This reality is presumably what has lead both President Obama and the writers of the main Republican alternative reform bill to try and look closely at this issue.

*Here is a link to the full Patients' Choice Act Co-sponsored in the House by Rep. Ryan and Nunes, and in the Senate by Sens. Coburn and Burr. You can read the entire thing and can navigate around it fairly easily with the find function in Adode Acrobat.

You can read it for yourself, but this is a very serious attempt (a good portion of title VIII, pages 206-215 in the bill) to apply cost effectiveness research in a comprehensive manner in order to develop guidelines and standards for what and how care is provided in the health care system, with provisions to penalize providers who do not follow them (guidelines, directives) by banning them from billing federal health insurance plans (Medicare, Medicaid) and/or civil fines imposed on providers. The legislation states that the best research is to be used to do this work, driven by experts from outside of government. This commission (and the Quality Forum, a sub unit of the Commission) is proposed in the context of a health system in which Medicare would remain independent, and individual's would be purchasing private insurance through state-based exchanges that would be regulated to cover a benefit package similar to the benefit package enjoyed by Congress. These provisions in the bill seem to focus on the entire health care system, but the Act allows private insurers to sell plans outside of exchanges. It seems to me it would be better to start with Medicare, then apply lessons learned more broadly, but this idea along with that proposed by President Obama provides a bipartisan way to get a handle on Medicare costs in a way that is driven by the best experts and the best research. This bill, introduced May 20, 2009, was the first, and to this point, most serious effort to actually 'bend the curve' in my opinion, and the President has followed suit with consideration of a similar Commission.

The key sections for what I wrote about today, creation of a Health Services Commission can be found in Title VIII of the Act beginning on page 206 and running to page 215. Several key aspects of this part of the Patients' Choice Act.
*Purpose, sec. 801 (b), p. 207
(b) PURPOSE.—The purpose of the Commission is to
11 enhance the quality, appropriateness, and effectiveness of
12 health care services, and access to such services, through
13 the establishment of a broad base of scientific research
14 and through the promotion of improvements in clinical
15 practice and in the organization, financing, and delivery
16 of health care services.

*Duties, sec. 802 (a), p. 207-08
(a) IN GENERAL.—In carrying out section 801(b),
23 the Commissioners shall conduct and support research,
24 demonstration projects, evaluations, training, guideline de
25 velopment, and the dissemination of information, on
1 health care services and on systems for the delivery of
2 such services, including activities with respect to—
3 (1) the effectiveness, efficiency, and quality of
4 health care services;
5 (2) the outcomes of health care services and
6 procedures;
7 (3) clinical practice, including primary care and
8 practice-oriented research;
9 (4) health care technologies, facilities, and
10 equipment;
11 (5) health care costs, productivity, and market
12 forces;
13 (6) health promotion and disease prevention;
14 (7) health statistics and epidemiology; and
15 (8) medical liability.

*The Act also creates, under subtitle B, a sub-unit of the Health Services Commission, a 15 member Forum for Quality and Effectiveness in Health Care.

*Membership, sec. 812, p. 210-11
(a) IN GENERAL.—The Office of the Forum for Qual23
ity and Effectiveness in Health Care shall be composed
24 of 15 individuals nominated by private sector health care

p.211
1 organizations and appointed by the Commission and shall
2 include representation from at least the following:
3 (1) Health insurance industry.
4 (2) Health care provider groups.
5 (3) Non-profit organizations.
6 (4) Rural health organizations.

*Duties of the Forum, sec. 813, p. 211-12
(a) ESTABLISHMENT OF FORUM PROGRAM.—The
24 Commissioners, acting through the Director, shall estab
25lish a program to be known as the Forum for Quality and

p. 212
Effectiveness in Health Care. For the purpose of pro
2moting transparency in price, quality, appropriateness,
3 and effectiveness of health care, the Director, using the
4 process set forth in section 814, shall arrange for the de
5velopment and periodic review and updating of standards
6 of quality, performance measures, and medical review cri
7teria through which health care providers and other appro
8priate entities may assess or review the provision of health
9 care and assure the quality of such care.

*How will guidelines and standards be developed, p. 212
(b) CERTAIN REQUIREMENTS.—Guidelines, stand
11ards, performance measures, and review criteria under
12 subsection (a) shall—
13 (1) be based on the best available research and
14 professional judgment regarding the effectiveness
15 and appropriateness of health care services and pro
16cedures; and
17 (2) be presented in formats appropriate for use
18 by physicians, health care practitioners, providers,
19 medical educators, and medical review organizations
20 and in formats appropriate for use by consumers of
21 health care.

*When they will bring about guidelines, p. 213
(e) DATE CERTAIN FOR INITIAL GUIDELINES AND
15 STANDARDS.—The Commissioners, by not later than Jan
16uary 1, 2012, shall assure the development of an initial
17 set of guidelines, standards, performance measures, and
18 review criteria under subsection (a).

*Enforcement Standards, sec. 814, p. 213-214
SEC. 814. ADOPTION AND ENFORCEMENT OF GUIDELINES
20 AND STANDARDS.
21 (a) ADOPTION OF RECOMMENDATIONS OF FORUM
22 FOR QUALITY AND EFFECTIVENESS IN HEALTH CARE.—
23 For each fiscal year, the Commissioners shall adopt the
24 recommendations made for such year in the final report
25 under subsection (d)(2) of section 813 for guidelines,

1 standards, performance measures, and review criteria de
2scribed in subsection (a) of such section.
3 (b) ENFORCEMENT AUTHORITY.—The Commis
4sioners, in consultation with the Secretary of Health and
5 Human Services, have the authority to make recommenda
6tions to the Secretary to enforce compliance of health care
7 providers with the guidelines, standards, performance
8 measures, and review criteria adopted under subsection
9 (a). Such recommendations may include the following,
10 with respect to a health care provider who is not in compli
11ance with such guidelines, standards, measures, and cri
12 teria:
13 (1) Exclusion from participation in Federal
14 health care programs (as defined in section
15 1128B(f) of the Social Security Act (42 U.S.C.
16 1320a–7b(f))).
17 (2) Imposition of a civil money penalty on such
18 provider.


*********

Thursday, August 13, 2009

Interview with Senator Burr on WRAL

Here is an interesting interview with our (if you live in N.C.) senior Senator, Richard Burr (R-NC) where he discusses reform issues at length. The full interview is about 20 minutes long, but the first 5 minutes include a fairly detailed, and clear statement by him of his views on reform.

At 3:45-4:50 of the interview he talks about 3 things that are necessary for any bill that would garner his support.

(1) cover everyone. This is about as clear a call as I have heard anyone make for universal coverage in awhile, other than single payer advocates. He states that without covering everyone, you will never get rid of cost shifting, and it will harm his goal 2.

(2) create incentives for prevention, wellness, and chronic disease management, which he notes as the only hope of controlling costs.

(3)financial sustainability. He then states the unsustainability of the current system we have.

A few points. The bill Senator Burr co-sponsors, The Patients' Choice Act, doesn't meet all these criteria [Note, this is introduced into the House by Rep. Ryan (R-WI), but is the same bill that Sens. Coburn and Burr have co-sponsored in the Senate; this version is much easier to work with and navigate if you want to read the entire thing]. It won't cover everyone. But, neither will any of the other bills being seriously considered at this point, according to the scoring by CBO. A private score of the Patients' Choice Act says it will cover about 34 Million folks, but keep in mind that HSI's private scoring is showing more insurance coverage for all the bills than is CBO as I have written about earlier. I still can't find where CBO has scored the Patients' Choice Act....if anyone has evidence that they have, please send it to me, maybe I just missed it. At another point in the interview Sen. Burr talks about covering as many persons as possible. I don't mean to picky about this, I was just surprised how clearly he stated universal coverage as a criteria for his support. It will be impossible to get to universal coverage without some sort of public option in which people are automatically enrolled if they do nothing else.

Second, Senator Burr seems very clear in this interview that he considers that current track of the health care system to be unsustainable, so that doing nothing is not a good option.

Third, he seems open to dialogue and discussion of a compromise bill in the fall, though he says that he has been shut out, and actually says the Republicans have been shut out, but presumably the 3 Republicans on the Senate finance committee have been deeply engaged in negotiations. I see several places of obvious compromise between this bill and the various Democratic bills in Congress. First and foremost seems to be an agreement to ban pre-existing conditions. Folks seem to gloss over this, but it is really a big deal (and a bit puzzling). Many seem to be saying we don't want a gov't solution, we want private insurance. Then they set out to put in place policies that stop private insurance from doing what it does (refuse to write policies for really bad risks and to underwrite premiums to assing a premium based on risk). There also seems to be a general agreement that if you are going to go with a private based insurance approach that indivdiuals need to have a responsibility to sign up. As I wrote before, the difference between what Patients' Choice Act and Democratic indivdual mandate provisions in various bills seem to offer is mostly semantic in my opinion if auto-enroll procedures are robust.

Fourth, for me, the least comprehensive a bill is the more that I would want ending the employer-paid premium tax preference to go away (as it does in this bill) For me, this is a much preferred way to raise financing for any new proposal than is an income tax surcharge.

So, this wouldn't be my preferred way of doing it, but I do think Sen. Burr has offered a serious proposal.

Wednesday, August 12, 2009

Laugh or cry?

Not sure which this story makes me want to do....so Investors Business Daily Opined negatively about health reform, and was talking about slippery slopes toward euthanizing everyones grandma at dawn, and then bizarrely used as an example the brilliant scientist Stephen Hawking (who has a neuro-degenerative disorder) saying he would be cast aside and let die in an NHS-like health system because he is disabled. Except that he is English and lives in Cambridge, England and has for his entire life, so he actually has the NHS, the real one. Memo to self IBD: hire research assistant. Hawking's quote in today's Guardian:

"I wouldn't be here today if it were not for the NHS," he told us. "I have received a large amount of high-quality treatment without which I would not have survived."

I will write later about my family's experience using the NHS when we lived there, especially navigating sick care there with a small baby versus here at Duke.

Interesting discussion @ American Conservative

A blog post from The American Conservative on health care and interesting replies in the original blog. Most interesting were commenters talking about job lock and difficulty with insurance as a barrier to entrepeneurship.

More China

New York Times article about American college graduates getting jobs in China. I just spent 10 days in China teaching at Peking University. And had dinner with a 2007 Duke graduate, Damjan Denoble, who also attended and blogged the classes. He has also started a business in China.

He has several recent posts that are interesting, one responding to a comment on freeforall from another Duke student, Danny Mammo, about how doctors are paid in China and the incentives involved.

Here is Damjan's blog of the last lecture I gave at Peking University. Interestingly, they asked me to talk about the current US reform which wasn't the plan at the start of the week. So, I tried to give them more a 'what not to do' as opposed to telling them 'what to do' in large part because I am not sure what they should do. Of particular worry was two things I heard. (1) many students saying to me they could incentivize the uptake of private insurance via making employer paid premiums tax free...good way to boost it in the short run, but later.....(2) And one student said payroll taxes would be a good way to fund insurance for elderly Chinese because China has ended its one child policy, and now couples can have two, so there will be lots of payroll tax payers over the next 30 years or so (they have set goal to cover all persons within 20-30 years)! I almost fell on the ground and had a seizure and muttered to him "but if the next generation is smaller there will be a financing problem" and he said "we will worry about that then!"

Damjan also has an interesting post of Traditional Chinese Medicine, and prescribing generally in Chinese health reform. This post notes that nearly half of chinese expenditures are for medicines which is much higher than high income nations (US and most of the usual suspects are between 10-15% of total system spending). Now physicians, whether TCM or western trained both prescribe and dispense and the dispensing is a large source of income. Damjan and others think this needs to be separated, but the cultural context is important.

The last day I was in China I was just loitering around and went into a very large drugstore. It was fascinating. They had raw ingredients for traditional chinese medicine (like herbs, roots, animal parts, etc.) and they would compound a medicine for you. They also had packaged TCM, much of it with English labels because lots is exported apparently. This was more likely to be things I had heard of like Gingko Biloba, or ginger or ginseng, etc. but lots of other stuff too. And they also had western medicine, including pharmaceuticals for sale. A quick look showed several anti-biotics (Cipro, Amocicillin), blood pressure medicine (nifedipine), and Selexa, which I think is an anti-depressant. I think for lots of folks, especially those with little money, the pharmacy and the pharmacist serves as a type of primary care doctor.

Bottom line from my visit to China:
(1) I think I am going to try and learn some chinese. Both so I can speak a bit if I go back and teach, but also just a nagging in my gut that told me it will increasingly be important to communicate in Chinese.
(2) Paradox. If you like markets, you will love China. There is a market for everything. It is essentially the Wild Wild West, but with 1.4 Billion people and the biggest army in the world. And getting ready to celebrate 60 years (on Oct. 1) since the founding of the people's republic of China where Hu Jintao will review the People's Liberation Army marching past in front of the picture of Mao Zedong in Tianamen Square and then saying that unfettered capitalism is just the next step in Chinese socialism.... I am sure we Americans are paradoxical from afar (heck from up close).

All in all, a great trip.

Tuesday, August 11, 2009

Proposal from a NC doc

Below is a proposal for dealing with adverse medical outcomes (injuries) that a doctor practicing in North Carolina emailed me. S/he wanted to remain anonymous.

Basically this proposal has two steps. The first is determining injury and what is needed to compensate for that. The second is determining whether the doctor was negligent. Obviously the details are important. One part that seemed interesting to me is the notion that providers would pay premiums for two things: (1) injury; and (2) malpractice. Thus, errors, mistakes and general quality problems would be everyone's problem as all such bad outcomes would influence everyone's premium (would it differentiate by speciality?; or would it also be funded by insurance premium tax?). The malpractice portion could presumably be aggressively underwritten.

Just one person's proposal that I thought was interesting. What do you think?


**********************
Adverse Medical Outcomes Reform

XXXXXXXX, MD
February 11, 2007

1. The First phase is used to determine if a compensation payment will be made to the patient or family.
2. Plaintiff lawyer reviews complaints and documentation and prepares summary statement
3. Defense lawyer reviews provider replies and documentation and prepares summary statement.
4. Establish Health Care Outcomes Review Boards
a. National standards and guidelines
b. Boards divided by states, regions … etc.
c. Boards headed by medical director(s) may be paid and full time or part time. All given national standards/guidelines education.
d. Board divided into Specialty Review Sections manned by appropriately trained health care providers. May also include appropriately trained lawyers and laypeople.
e. All actively licensed and practicing physicians may be required to participate and rotate through review sections. Well trained retired or semi-retired providers will also be considered for rotation. Will be paid.
f. Boards funded by premiums and fees/fines.
g. Funding pool(s) established nationally or by large regions to spread risk.

5. Medical directors or trained others will read/review summary statements and decide if case moves to review sections. May ask for and review additional information.
6. Review sections examine all pertinent/appropriate redacted medical records and other pertinent information. Patient and provider identity is never revealed. May request additional anonymous information from provider, patient, family, medical experts only through plaintiff or defense lawyers. All information/evidence provided under oath.
7. All outcomes considered accident or poor outcome for determination of compensation.
8. Results of Review Section analyzed and approved by medical director.
9. If Board determines that there was a true bad outcome for any reason and that the patient/family accumulated significant personal expenses related to the above and/or that the patient will have a significant ongoing disability which will require continuing care and/or the patient does not have the ability to earn a livelihood comparable to the pre-outcomes level, then the board may award a payment based on:
a. Actual expenses incurred because of the bad outcome. May not receive a reward for expenses paid by any other source such as health insurance, life/disability insurance, government payments… etc.
b. Continuing expenses incurred which are not covered by any other sources such as health insurance, life/disability insurance payments, workers compensation payments… etc.
c. Loss of reasonable lifestyle monies due to lack of the ability to work and produce an income because of the injury. This means the money required to live according to the pre-disability lifestyle or a lifestyle which provides for the necessities of life and a reasonable level of comfort, whichever if less. The system can’t afford to provide extravagant lifestyles even to those who lived or expected to live this lifestyle. Those who lived this lifestyle or who expected to live it probably/hopefully had significant disability insurance anyway.
d. Additional money may be awarded for pain and suffering, but this amount must be very reasonable and minimal for the system to work.

10. Lawyers will be paid by a national or regional formula only for work done.
11. Plaintiff lawyer still paid some amount even if the summary case does not move to the level of review. This lawyer may be paid more if the case does move on.
12. Defense lawyer paid for summary statement and for additional time if required.
13. The Second phase is for health care provider status determination. This can be done by the same review board (preferred), another board with or without input from medical director. Provider identity still remains anonymous.
14. This second separate phase will determine for the provider:
a. No consequence and no negligence by the provider
b. Negligence by the provider resulting in:
i. Retraining, mentoring, other skills improving
ii. Loss of license
iii. Limitations of license
iv. Penalties and fines

15. All monies paid go back into the national or regional income pool
16. Providers will pay two premiums
a. To national or regional review boards to cover patient compensation payments
b. To private malpractice insurers to cover legal costs, penalties and fines.


XXXXXXXX, MD 2/11/2007

Monday, August 10, 2009

Malpractice reform and broader reform

Several folks wrote saying that a $250,000 cap on non-economic damages won't actually do much (or anything). Just to be clear, standing alone I don't think it will do much. Krauthammer says it will save $200 Billion in defensive medicine. I think he is off by a decimal place, at least, and would be shocked if it saved $20 Billion/year. However, I think that most doctors I know worry alot about being sued. If you think they are simply saying that to enable them to continue to over-provide care out of monetary self interest and claim it is to prep for a potential med mal suit (several emailed me something like this) then think of the $250,000 damage cap as calling their bluff. If cost don't drop after getting the wildest dream proposal of the AMA re med mal, then the negotiating position of the docs will be much diminished. And there are many signs that quality/patient safety concerns have not improved since the IOM published To Err is Human in 1999. And taking this step could be a start to a more patient safety based approach which I think is needed.

So, the $250,000 cap is suggested as a way to get the docs on board in trying to develop a health system that is more focused on value and improving patient safety. It is the first step, not the last one.

A useful summary of issues/bills and a cultural puzzle

Here is a useful summary of some of the issues and a nice graphic that compares and contrasts different provisions of House and Senate bills.

Here is a short article describing two sources of fear: government and private insurance companies. Interestingly, they cite a poll that says 40% of Americans fear government more, 40% fear private insurance companies more, and the rest not sure. I find the fear of government as health care payer to be a bit of a cultural puzzle. Medicare (what you have if you are age 65+*) is a federal government insurance plan that is primarily tax financed. Medicare provides (and always has) absolute choice of doctor and hospital. My private insurance (which is quite good) doesn't even allow me to go to UNC hospitals which is 7 miles from my house (Duke is about 2 miles from my house). I can go to any doctor--so long as they are on the list provided by my insurance company. But, many docs near my house are not on the list. I like my doctor just fine, but he was assigned to me when the docs I kept asking for who were on my private insurance compnay list weren't taking new patients. I finally said to my private insurance company, why don't you just assign me one, and they did. And I like him.

On the issue of denying care. One of the reasons that Medicare is in trouble financially is that it does almost nothing to limit what doctors and patients decide to do in terms of care, so long as it is not experimental. Private insurance typically provides for numerous steps to get care approved. Medicare does set rates of payment for doctors and hospitals, and eventually cutting too much can cause access problems for beneficiaries, and again, leading to cost problems because if you set the payment rate but do nothing to control what is done, this is not conducive to holding down costs, and can actually incentivize a provider to do more.

Finally, the most bizarre aspect of the reform debate are the various pictures/accounts I have seen/read of Medicare beneficiaries saying to keep the government out of Medicare. Just to repeat, if you are a Medicare beneciciary, you are covered by the largest tax financed single payer (aka socialized medicine) in North America. There are more Medicare beneficiaries than Canadians.

*Medicare also covers persons with end stage renal disease (regardless of age); and persons who are permanently disabled.

Sunday, August 9, 2009

A note from a reader

I got several notes from readers who are lawyers. Here is a representative sample of one email.

*********
.....Perhaps the facts and conclusions that you made in your article are true on a national basis. I have my opinions about that but I honestly do not know the truth. However, I do know the truth concerning the facts regarding what you wrote in your article concerning the medical malpractice system in NC. With all due respect, you could not be more wrong.

I have been a trial lawyer in this state for 31 years. I am not a TV lawyer and I do not advertise my services. All I do is personal injury cases, workers compensation cases and an occasional medical malpractice case. The reason I say occasional is because succeeding with a medical malpractice case is nearly impossible in light of the reforms this state made a number of years ago. The reforms are numerous, but the key one concerns what an expert can testify to regarding the applicable standard of care. It makes it nearly impossible to find an expert who is allowed to testify in our courts because of the foundation that must be laid concerning their knowledge of the standard of care say at [town in NC], where I practice. Of course, it goes without saying that a plaintiff's lawyer must spend 50-100 thousand dollars on experts to ultimately finish a case. Who can handle many cases such as this? There are other reforms that make nearly all attorneys decline a medical malpractice case. In fact, I constantly have clients tell me that they cannot even get a lawyer to listen to them, much less take their case.

The net result of the reforms is that medical malpractice cases have declined as have settlements in this state. I am not handling such a case for the first time in my career. I am on the Board of Trustees at [a large medical organization redacted by me to protect this person's identify] and I likewise have seen a decline in medical malpractice cases. In fact, it is not a major concern at all for us. Why any doctor in NC is really worried about being sued in NC surprises me. Frankly, I do not think the conclusions you make the article are true in NC.

As I noted to you, I handle WC cases. I see doctors constantly pursuing tests, pain management and other medical care that obviously does not need to be done. Clearly their motivation is money. In other words they get paid for all the care that is unnecessary. I understand that I am not a medical doctor. However, when you do the same thing for over 30 years, one learns a lot about the health care system and what motivates doctors.

In my opinion, reducing non economic damages to $250,000 would have zero affect in NC. In fact, it would make no difference to me because the hurdles are already there to prevent any success in helping a person wronged. I know you mean well with your suggestions. However, it also tells me that you do not have an understanding how the medical malpractice system works in NC.

******************

I will write a bit more tomorrow about the issue of the proposed $250k cap on non economic damages I proposed and what I do and don't think it would accomplish. I hope it came through that I DON'T expect that it will save the system much money.

Saturday, August 8, 2009

Article on French Health System

The Wall Street Journal had a nice article on the French health care system yesterday. The WSJ is a great newspaper. The comments section on their on-line stories are a bit like a ride at Walt Disney World; entertaining if you willingly suspend disbelief....but good reporting, typically.

The upshot is that France is struggling to deal with the cost of the system and that they are trying various reforms, including increasing out of pocket costs (the article fails to mention that France already has some of the highest out of pocket cost sharing in Europe). They essentially have a government insurance scheme and you can get private insurance on top. If you are long term seriously ill, the government scheme will pay virtually all costs, getting rid of the co-pays.

The article has the following sentence, "The result: As Congress fights over whether America should be more like France, the French government is trying to borrow U.S. tactics." This is a bit over the top and designed for maximum angst in the comments section of the WSJ, but there is a basic truth (or several) about comparing health systems embedded in the sentence.

When I teach my class in comparative health systems, I give them the following guidance about comparing systems.
*No nation can copy another system, because each system is born and exists in a political and cultural context and at a point in time.
*All the high income nations face fairly similar health problems (heart disease, cancer, stroke, dementia, etc.) and have different ways of addressing these.
*It is worthwhile to look at other systems to get ideas of what is done elsewhere, what has worked, what has not, etc. But, in the end, the U.S. has to figure out a system that works for the U.S.
*It is useful to compare actual per capita expenditures across nations and then to compare outcomes, it gives a sense of whether the U.S. or any other nation gets its moneys worth. I argue no for the U.S. I also note in that link that the percent of GDP spent on health is not as meaningful as it represents a societal value judgment about the relative importance of health spending versus other stuff.
*Every health system is desperately struggling to be able to afford their system. The U.K. National Health Service is about the most bare bones system in the high income world. They spend less than $3,000 per capita and the U.S. spends about $7,500 per capita and the politicians there are desperately worried if they can afford it or not. One note from the graph in the French story a few folks emailed me about, the rate of cost growth in the U.K. is up there with the U.S. the last decade or so. The Blair government set as a policy goal in mid-1990s to INCREASE per capita expenditures on health to try and get them to the OECD median. The biggest knock on the NHS is underinvestment on secondary (specialty) services which leads to waiting lists...so they have been trying to shorten these.
*There are only so many ways to skin a cat. Each nation puts them together in different ways but here are some of the big choices.

Providers: could be civil servants or private practioners who bill insurance whether it is gov't or private insurance. The UK NHS has specialists who are essentially salaried civil servants, but this is atypical. Just about all the systems have lots of public payers with private provision of care.

Insurance: Gov't or private is the big choice. U.S. has big role for private insurance as does Switzerland and Netherlands. There are lots of divergences about private insurance in other nations. In Canada and Japan, private insurance is essentially illegal for something covered by the government insurance or gov't organized sickness funds in the case of Japan. This is similar in Germany, but they allow persons in (roughly) the top 10% of the income distribution to opt out and purchase private insurance. But, if you go out, you are out...you can't wait and get sick and jump back in the public system. France has private insurance sitting atop the public insurance scheme, similar to Medigap insurance in the U.S. The U.K. has private insurance (about 15% of the population) but this is essentially que-jumping insurance. Meaning, private insurance doesn't typically cover GP care. Private insurance kicks in when you are referred for specialty care in the U.K. and then private will finance you to go outside of the U.K. and to avoid (or at least greatly lessen) any waits for care. Interestingly, this is viewed not negatively, but often as taking some heat off the public system. I guess if you have a Queen you are in touch with social stratification and not that surprised by it.

Taxes: Every nation uses taxes to finance health care and there are several choices. Payroll taxes are simple, hard to cheat on, and get everyone to pitch in at least something (they are typically viewed as regressive; this is the negative statement of the positive that everyone pitches in something because they are first dollar taxes). Japan and Germany use these very heavily, the U.K. doesn't use these for health care, the U.S. uses these for Part A of Medicare, etc. Income taxes are progressive, meaning lower income are not taxed. U.K. uses this almost totally, U.S. uses this to help finance Part B of Medicare, Canada uses these in mixed fashion with payroll and other taxes.

Consumption taxes: Sales, VAT, sin taxes, etc. are uses by all nations to fill in the blanks...some Canadian provinces use these heavily to raise the provincial contribution for Canadian system (which has been risking over time...federal mandate, provinces work out most of the financing).

Co-pays/point of service fees: Most nations use some of these. The U.K. NHS uses these the least. They have had a organizing statement since 1947: 'free at the point of service, resources distributed based on need.' There are a few examples of fees being brought in at various times and there is a nominal fee for prescription drugs with some groups exempted. Other nations use them heavily such as Japan, where you can pay about 25-30% up to a cap if you are less than 70 (after 70 almost no cost sharing). France has out of pocket fees, Canada has differences across provinces, the U.S. obviously uses these, even in Medicare with a hospital deductible, and cost sharing for both part A and B financed services.

That is more than I meant to write.

Friday, August 7, 2009

Column in Today's News and Observer

Today's column in the News and Observer is on malpractice reform, and its role in helping develop a consensus reform plan. I focus not only on some policies related to malpractice, but the fact that I see this issue as key to get doctors on board and engaged in a changed system that has a hope of reducing cost inflation. Some additional reading resources if you are interested:

*My colleagues from Duke, Frank Sloan and Lindsey Chepke have a book Medical Malpractice, published in 2008 by MIT Press. Very detailed discussion of the policy options regarding dealing with malpractice.

*Several key papers that form the background of what is in the article, much of it published by David Studdert, Michelle Mello and Troyen Brennan.

**2006 paper in New England Journal of Medicine that is the source of the finding that 4 in 10 lawsuits filed did not have an error in care provided.

**2004 paper in the New England Journal of Medicine that provides a comprehensive overview of the literature, including the finding that only 2% of all true negligence results in a lawsuit.

**2003 paper in the New England Journal of Medicine that has a nice historical discussion of the cyclical nature of the malpractice insurance premium crisis, including the factors that have nothing to do with actual claims experience.

*Institute of Medicine report from 1999 To Err is Human, altered the discussion away from only being on focused on a malpractice crisis, and to there being a patient safety/quality crisis. This report estimated that 44,000-98,000 persons died of medical errors annually, which would make it the 7th leading cause of death in the U.S. Update of this report from May, 2009 is here, published by the Safe Patient Project, an effort of the Consumers Union. Here is someone saying the IOM overstated deaths due to errors. Even if they were off by a factor of 10, then that is still about 25 people per day dying due to medical errors in the US.

*The Harvard Medical Practice Study has produced many papers over the past 17 or 18 years on the topic of malpractice. This is a key study because it had completely overlapping data on the legal system and the medical system. Probably the most important paper from this study is here (original source of 2% of negligence resulting in a claim) with a reprint of it here. There are many others.

Thursday, August 6, 2009

On the home front

Health care costs are rising faster for Duke employees this year than in any year in recent history, up 9-13% from this time last year, or about quadruple inflation.

What if the umpire is wrong?

When I was about 10, I had a vivid experience in Little league baseball that I can remember like it was yesterday. I got called out on strikes, and I argued with the umpire, telling him the last pitch was not strike 3, that it was a ball. After listening to me for a bit he said something I will never forget. "Son, it is nothing until I call it. Go sit down."

Doug Elmendorf, Director of the Congressional Budget Office (CBO) is the umpire for health care reform. There needs to be an umpire in Washington for these sorts of things, and CBO has a pretty good track record and is typically fairly conservative (and both Democrats and Republicans eventually get angry with CBO for not seeing things their way).

Steven Parente, a Professor at the University of Minnesota, who was a health policy advisor of Senator McCain's has an op-ed on scoring of health reform proposals here. Basically, he (and his consulting company, HSI) has his own 'scoring' model and he says that his is better than CBOs model, because it incorporates more recent data on the uptake of high deductible health plans in the private market that have become more common over the past 5 years or so. Now, there is nothing academics like better than dueling models (mine is better than yours/is not/is so) and they typically end in something like 'your mama.' As they say, when the stakes are low, the politics are vicious. But, the stakes are really high for this, because the CBO scoring of congressional bills has been very consequential in changing the debate. If you recall, when the Senate HELP committee bill came out mid-June, the CBO scoring estimate was devastating, and showed on a modest increase in insured persons of around 20 Million folks. Back to the drawing board they went.

Well, Parente's model said the HELP bill would insure about 47 Million people, or about 99% covered. In other words, if CBO used his model, then the headline if June would have been 'US on the Cusp of Insuring Everyone.'

His op-ed focuses on the cost of all the bills....meaning, he notes that cost estimates for the Democractic reform bills are much higher than CBO says, but that is primarily because he says they will cover many more people. He doesn't make this clear in his op-ed, which is an omission, I think. It makes it seem as though the Dem bills will just cost more to cover same number of people, but his models say they will cost more because they will cover many more people.

Of interest for folks in NC, he has a new score of the Patients' Choice Act, co-sponsored by Senator Burr (R-NC) which says that it will cover about 34 Million folks. Now, CBO hasn't scored this Act yet, so we can't compare CBO score vs. the HSI score. He also has a recent re-score of the House Tri Committee bill, that he says will cover about 40 Million people, many more than CBOs estimate.

It is clear that the HSI scoring model has much more behavioral action (insuring uninsured persons) than the CBO model. Which is correct? I have no idea. But, Parente notes that his model outperformed CBO in forecasting uptake of high deductible plans over the past few years...so he really is saying his model is better.

Here is a list of peer review papers that Parente and colleagues have published, many focused on health savings accounts and high deductible health insurance plans, which is their thing. Macro forecasting is not my thing, so I am not sure what to make of the differences between Parente's model and CBO, but they are big differences.

Research and Policy

Everyone says they are for evidence based policy, but it can be tricky because sometimes it goes against the accepted consensus. The New York Times has a story about vertebroplasty, a procedure that fills small cracks in the spine with cement. It has been widely used, but never subjected to a clinical trial--whereby people are randomly assigned to get the treatment and a placebo. This trial found that people getting the procedure were no different from those getting placebo in terms of pain and function. Medicare has long covered such procedures, with doctors and patients deciding whether to use the procedure or not. There are calls for no research...in fact, it was hard to do the study in the first place because many people just assumed the procedure worked, so were not willing to sign up for a clinical trial in which they could be randomly assigned to placebo.

Physicians have an obvious incentive to keep doing this as they get paid to do so. And apparently many patients swear it helps them. That benefit just couldn't be documented in the gold standard way in which medical science operates. For the time being, Medicare will continue paying and private insurance will follow the lead of Medicare. A case study of how hard it will be to actually use evidence based medicine to inform treatment coverage decisions....and also how it is the only way we have a chance of controlling health care costs.

Wednesday, August 5, 2009

Health Care Co-Ops

Rick Martinez has a column on health care co-ops in today's News and Observer. Co-ops are an attempt to develop a compromise between persons wanting a public option in a new system, and those desperately opposed. A co-op would presumably be a health insurance plan offered in a state and organized as a non-profit organization.

I think he is onto something when he says that liberals intuitively distrust insurance companies, and conservatives intuitively distrust anything government. No evidence to the contrary will sway either side. So, a co-op might offer a chance at a compromise. I would favor a public option in the context of the current debate, but I am not opposed to considering co-ops, though I am not sure that co-ops will work. Here are some general thoughts I had as a I read his column, and think about the public option v. co-op v. neither option.

*He uses the example of electric co-operatives in North Carolina. Howver, electric co-ops are monopolies, just like for profit electric companies. When I lived in Carrboro during graduate school, I got power via a co-op but am pretty sure I had no choice in the matter. If you lived at my street address you got power from the Co-op, or read by candle light. A co-op in the health insurance context would be just one option for an indivdiual to choose, just like a public option would be one choice. So, if electric co-ops have to serve members well, all the moreso that health insurance co-ops would do so because they are not guaranteed customers. This would argue in favor of co-ops.

*A co-op in health insurance wouldn't be able to take advantage of some of the scale benefits that a public option would have. Similarly, one knock of co-ops is that they don't have the profit motive that for profits do which would theoretically spur efficiency and which might mean they have trouble getting needed capital to start up. This would argue against co-ops, because they may not be robust enough to compete with private insruance companies.

*For competition to be fair and square, you would have to ensure that either a public option or co-op didn't get any more financial support other than premiums flowing based on consumers choosing those options. This is a legitimate concern for private insurers regarding a public option (or a co-op).

*Mr. Martinez notes that co-ops have more independence from governement than a public option, but that they will still have a degree of government involvement....this is an understatement generally in the insurance system. For profit (and not for profit) insurers currently have a big degree of government involvement via the tax exclusion of employer provided insurance premiums. No one in the health care business is free from government due to this huge tax subsidy of private health insurance.

*He ends his column with a puzzling sentence..."The last thing health care reform needs is a public option that offers little to no choice." It is public OPTION. No one has to choose it. It is just one choice. In fact, it is a little surprising that persons who truly think that government always gets everything wrong (not saying he says this, not sure if he thinks that or not) aren't actually salivating at the chance for there to be a public option....that might ultimately lose out and not get many subscribers. This is a big chance for private insurance companies to defeat a government plan head to head. No one has to sign up for it under any bill or idea being discussed. If private insurers make mince meat of public option fair and square, who knows, maybe the next step could be repeal of Medicare?

Tuesday, August 4, 2009

Getting out your message

Home from China, and of course awake at 4:30am due to jet lag....

The next month will be key for the health reform discussion as members of Congress are home and both trying to listen to their constituents as well as trying to get out their message. There is lots of confusion among the public as the Democrats and Republicans hone their message. The President and the Administration increasingly talk about 'health insurance reform' as opposed to health reform. I think this is an attempt to respond to the tried and true lingo of a 'government takeover of the health care system' that opponents are fond of. And insurance companies aren't as popular as doctors, so there is more focus on changing the ills of insurance, though Karen Ignani, President of American Health Insurance Plans notes in the last link above that insurers are in favor of many of the discussed reforms, including eliminating pre-existing conditions.

Several thoughts. One, 1 of every 2 dollars spent today in the U.S. health care system is paid by the federal government, and this doesn't include the impact of the tax exclusion of employer paid insurance premiums. So, we don't exactly have a system that is now devoid of government payers. Second, I get the need to have a message that people can understand, and they can get being harmed by an insurance company. But, there will have to be reform of how care is delivered if costs are to be changed/reduced. Finally, it is interesting how effective an argument about a government takeover is, and how people fear 'government bureaucrats making decisions.' Most of the horror stories about paperwork, care being denied, doctors having to jump through hoops to get approvals are about private health insurance, not Medicare, for example. In fact, one of the problems with Medicare costs is that almost nothing is done to determine whether care paid for is reasonable--it is left up to doctors and patients.