Tag Archives: health care costs

Get the Word Out: Ask for Help!

We need to focus on the root causes of suicide and help people feel okay about receiving help. There is no better place to do this than in the workplace, and this week is National Suicide Prevention Week, which gives us the opportunity to spread the word.

It’s important to understand some of the antecedents, like depression, because this is where the cure lies and where, because of our misunderstanding and fear, we often don’t act. Here are some statistics from the American Association of Suicidology that should open everyone’s eyes:

  • Nine out of 10 people who die by suicide had a diagnosable mental disorder.
  • Only three out of 10 people who die by suicide received mental health services in the year before they died.
  • Depression is the most prevalent mental health disorder — 20.9 million American adults suffer from a depressive illness in any given year.
  • Treatment for depression is effective 60% to 80% of the time.

A 2007 study featured in the Journal of the American Medical Association found that depressed employees, who received “enhanced care,” defined as care management and optional psychotherapy, worked longer weeks and demonstrated greater job retention than other groups. This led to an annual average value of $1,800 per worker, which is estimated to be greater than the cost of “the outreach program and the roughly 10 additional mental-health specialty visits made by subjects in the treatment group.”

I realize that there are a lot of statistics that might make you zone out, so let me make what I am saying perfectly clear.

Educating the workforce about mental health and depression so that folks know that it is perfectly okay to seek help should be every employer’s goal. It is the right thing to do. It will also lead to higher productivity and lower safety and healthcare costs.

Once people feel comfortable admitting they have a problem, they will be more likely to seek help, which leads to the next thing employers or insurers should do. They need to have some sort of behavioral health service that will do a confidential but thorough assessment so that they can facilitate a referral for the right kind of assistance for each person in need. An employee assistance program (EAP) can help in both aspects of this process; education and assessment/referral/follow up.

This year, make National Suicide Prevention week the time when you kick off the process of education — and make sure that this is the beginning, not the end, of your efforts.

For assistance in doing this, visit the National Alliance for Suicide Prevention, Workplace Task Force.

A Simple Way for Physicians to Take Action Against Overtreatment

“The plural of 'anecdote' is 'policy',” medical historian and health policy expert Dan Fox famously stated. Sometimes a good anecdote can be worth a thousand academic papers in motivating change, and right now healthcare is at a cultural crossroads.

In the current medical world, the default is for more healthcare – more testing, more treatments, more surgery, more stents and more screening. The public understandably, and often correctly, infers that more must be better when it comes to medicine. Physicians have not been able to effectively explain the paradox that in some cases more healthcare does not equal more health, and in fact it sometimes means the opposite.

But we physicians have seen the harms of overtreatment. We have seen patients go on dialysis machines because the contrast from a CT scan destroyed their kidneys. We have seen patients suffer from severe bacterial infections that develop following the inappropriate use of antibiotics (e.g. C. Difficile colitis). We have talked about patients in our “M&M” (mortality and morbidity) conferences that have died on the cardiac cath table undergoing a procedure that they may not have needed.

It is time for us to tell these stories on a broader scale. The innate power of storytelling has been successfully harnessed to improve care and advance medical culture before. More than a decade ago, the infamous analogy likening the number of deaths due to medical errors to a jumbo jet crashing every day gave readers a disturbing visual that drew a visceral response in a way that raw numbers just never will. It helped galvanize the professional and public momentum behind the patient safety movement.

More recently, stories have been paired with data to help drive a new movement that encourages appropriate, rather than just more, care. Atul Gawande’s anecdote about unwarranted Medicare spending in McAllen, Texas, started as a magazine article; it has now become a call-to-arms that was required reading in the Obama White House. The Costs of Care essay contest started as an effort to encourage patients and their caregivers to think about opportunities to improve value; it has now become a robust crowdsourcing mechanism that added necessary clinical detail to the Institute of Medicine’s Best Care at Lower Cost report.

While we modern physicians all (rightfully) worship around the altar of evidence-based medicine and data-driven decision-making, our hearts are still very much shaped by our own stories, experiences and those that we hear from our colleagues. Morning reports, conferences and resident workrooms buzz with the harrowing tales of “I have this patient who…” and “I once saw….” As a result, case reports hold an important place in the history and development of our medical knowledge.

Toward this goal, JAMA Internal Medicine has created “Teachable Moments,” a series for trainees at all levels to tell the stories from the frontlines of healthcare when overuse causes harm.

Together we can change the national narrative and lead to smarter, safer and more thoughtful healthcare that once again is aimed at achieving our shared goal of actually improving people’s health.

Authors

Neel Shah collaborated with Christopher Moriates, MD in writing this article. Dr. Moriates co-chairs the Costs of Care Teaching Value & Choosing Wisely Competition and advises Teaching Value Project development. He speaks locally and nationally about cost-awareness education for physicians and has implemented a cost curriculum for residents at University of California, San Francisco (UCSF) that was highlighted by the New England Journal of Medicine. Dr. Moriates is an assistant professor at UCSF and the co-chair of the UCSF Division of Hospital Medicine High-Value Care Committee.

Why Can’t U.S. Health Care Costs Be Cut in Half?

Technological improvements in health care have given us the quality of life we enjoy today. But chronic conditions, end-of-life care, and an aging society will bankrupt the United States if it doesn’t make dramatic changes to its health care system. America — and many other countries — need an audacious goal to get off the unsustainable path.

What if the United States set itself the goal of cutting healthcare costs in half — without sacrificing quality, and in about a decade?

Sound undoable? In “Delivering World-Class Health Care, Affordably,” we argued that some Indian hospitals are delivering high-quality care at 5% to 10% of U.S. prices. Of course, the United States is not India, so its costs will always be higher. But even with all the constraints, cutting U.S. healthcare costs in half is not preposterous. After all, it’s been done in other industries, sometimes in less time (think computers or consumer electronics).

Or take the example of autos. When Karl Benz introduced the Mercedes Benz in 1876, each car was handmade from start to finish. Every customer was assumed to be unique and so was every car. Making autos was a craft, and very few people were skilled enough to put one together. Buyers visited the Benz factory and stayed for a week to test drive the car and fix any bugs before taking delivery. The net result: The craft approach produced only a few automobiles at extremely high cost for the very rich.

Enter Henry Ford, who revolutionized the industry with his manufacturing innovations, lowering the price of cars from $2,000 in 1908 to just $260 by 1925 — an 87% reduction! He didn’t do it by making cars shoddier or offshoring production to low-wage countries. His secret was mass production in a “focused factory,” using interchangeable parts, specialization, and the assembly line. (See this HBR article on attempts to apply the focused factory concept to health care.) By making only one type of car (Model T) in volume, he cut unit costs dramatically. Ford shifted the auto industry from craft to mass production, and the Japanese later took it a step further to lean production. At each step, costs fell sharply yet quality improved.

If we go back a hundred years, medicine had to be practiced in a craft mode since each patient was unique and our ability to diagnose diseases and treat them was rather limited. Knowledge and technology have advanced at a such a rapid pace that today that quite a number of medical conditions can be treated using a “process” approach. Yet, too much of U.S. health care is stuck in the craft mode. It is producing a Rolls Royce for each patient! Why can’t U.S. health care go vastly farther in streamlining operations, standardizing protocols, and rationalizing facilities to create focused hospitals for heart surgery, hernia repairs, cataract surgery, hip and knee replacements, organ transplants, or even cancer treatment — anything that’s not an emergency procedure and can be scheduled in advance?

Many U.S. health care providers are going down this road (see “Fixing Health Care on the Frontlines”). But the most innovative Indian hospitals are doing much more. Narayana Health in Bangalore, India, uses the focused-factory approach to perform open-heart surgeries for $3,000, versus $75,000 to $150,000 in the United States. The total number of open-heart surgeries performed in the United States is about 550,000 — six times India’s — but this volume is spread across too many hospitals. The same can be said of other procedures that might lend themselves to mass or lean production.

Aravind Eye Care in Madurai, India, performs cataract surgery in assembly-line fashion. Doctors focus their time on diagnosis and the most intricate aspects of surgery, while less-skilled paramedics take care of everything else. Care Hospitals in Hyderabad performs angioplasties with remarkable efficiency and efficacy. Lifespring focuses on uncomplicated maternity care for the urban poor. HCG Oncology performs advanced diagnoses and procedures in its Bangalore “center of excellence,” while its spoke facilities provide radiation and chemotherapy treatments. Onco-pathologists and medical physicists, who are scarce in India, sit in Bangalore and provide services remotely, using telecommunication links to patients at spoke hospitals. (See this HBR article on how to redesign knowledge work, including health care.)

Changing U.S. health care to achieve a 50% cost reduction will require patients, providers, insurers, and others to make major adjustments. But such changes happen routinely in other industries. With costs spiraling out of control, the day has come when the same must happen in health care.

Authors

Vijay Govindarajan collaborated with Ravi Ramamurti in writing this article which first appeared in the Harvard Business Review. Ravi Ramamurti is the D’Amore-McKim Distinguished Professor of International Business and Strategy, and the Director of the Center for Emerging Markets at Northeastern University.

India’s Secret to Low-Cost Health Care

A renowned Indian heart surgeon is currently building a 2,000-bed, internationally accredited “health city” in the Cayman Islands, a short flight from the U.S. Its services will include tertiary care procedures, such as open-heart surgery, angioplasty, knee or hip replacement, and neurosurgery for about 40% of U.S. prices. Patients will have the option of recuperating for a week or two in the Caymans before returning to the U.S.

At a time when health care costs in the United States threaten to bankrupt the federal government, U.S. hospitals would do well to take a leaf or two from the book of Indian doctors and hospitals that are treating problems of the eye, heart, and kidney all the way to maternity care, orthopedics, and cancer for less than 5% to 10% of U.S. costs by using practices commonly associated with mass production and lean production.

The nine Indian hospitals we studied are not cheap because their care is shoddy; in fact, most of them are accredited by the U.S.-based Joint Commission International or its Indian equivalent, the National Accreditation Board for Hospitals. Where available, data show that their medical outcomes are as good as or better than the average U.S. hospital.

The ultra-low-cost position of Indian hospitals may not seem surprising — after all, wages in India are significantly lower than in the U.S. However, the health care available in Indian hospitals is cheaper even when you adjust for wages: For example, even if Indian heart hospitals paid their doctors and staff U.S.-level salaries, their costs of open-heart surgery would still be one-fifth of those in the U.S.

When it comes to innovations in health care delivery, these Indian hospitals have surpassed the efforts of other top institutions around the world, as we discussed in our recent HBR article. Today, the U.S. spends $8,000 per capita on health care; if it adopted the practices of the Indian hospitals, the same results might be achievable for a whole lot less, saving the country hundreds of billions of dollars.

A key to this is that, faced with the constraints of extreme poverty and a severe shortage of resources, these Indian hospitals have had to operate more nimbly and creatively to serve the vast number of poor people in need of medical care in the subcontinent. And because Indians on average bear 60% to 70% of health care costs out of pocket, they must deliver value. Consequently, value-based competition is not a pipe dream but a reality in India.

Three major practices have allowed these Indian hospitals to cut costs while still improving their quality of care.

A Hub-and-Spoke Design

In order to reach the masses of people in need of care, Indian hospitals create hubs in major metro areas and open smaller clinics in more rural areas which feed patients to the main hospital, similar to the way that regional air routes feed passengers into major airline hubs.

This tightly coordinated web cuts costs by concentrating the most expensive equipment and expertise in the hub, rather than duplicating it in every village. It also creates specialists at the hubs who, while performing high volumes of focused procedures, develop the skills that will improve quality. By contrast, hospitals in the U.S. are spread out and uncoordinated, duplicating care in many places without high enough volume in any of them to provide the critical mass to make the procedures affordable. Similarly, an MRI machine might be used four to five times a day in the U.S. but 15 to 20 times a day in the Indian hospitals. As one CEO told us, “We have to make the equipment sweat!”

U.S. hospitals have been developing similar structures, but there are still too many hubs and not enough spokes. Moreover, when hospitals consolidate, the motive often is to increase market power vis-à-vis insurance companies, rather than to lower costs by creating a hub-and-spoke structure.

Task Shifting

The Indian hospitals transfer responsibility for routine tasks to lower-skilled workers, leaving expert doctors to handle only the most complicated procedures. Again, necessity is the mother of invention; since India is dealing with a chronic shortage of highly skilled doctors, hospitals have had to maximize the duties they perform. By focusing only on the most technical part of an operation, doctors at these hospitals have become incredibly productive — for example, performing up to five or six surgeries per hour instead of the one to two surgeries common in the U.S.

This innovation has also reduced costs. After shifting tasks from doctors to nurse practitioners and nurses, several hospitals have even created a lower tier of paramedic workers with two years’ training after high school to perform the most routine medical jobs. In one hospital, these workers comprise more than half of the workforce. Compare that to the U.S. system, where the first cost-cutting move is often to lay off support staff, shifting more mundane tasks such as billing and transcription onto doctors overqualified for those duties — precisely the wrong kind of task shifting.

Good, Old-Fashioned Frugality

There is a lot of waste in U.S. hospitals. You walk into a hospital in the U.S., and it looks like a five-star resort; half of the building has no relation to medical outcomes, and doctors are blissfully unaware of costs. By contrast, Indian hospitals are fanatical about wisely shepherding resources — for example, sterilizing and safely reusing many surgical products that are routinely discarded in the states after a single use. They have also developed local devices such as stents or intraocular lenses that cost one-tenth the price of imported devices.

These hospitals have also been innovative in compensating doctors. Instead of the fee-for-service model, which creates an incentive to perform unnecessary procedures and tests, doctors at some Indian hospitals are paid fixed salaries, regardless of how many tests they order. Other hospitals employ team-based compensation, which generates peer pressure to avoid unnecessary tests and procedures.

Innovation has flourished in the U.S. in the development of new pills, clinical procedures, devices, and medical equipment, but in the field of health care delivery, it appears to have been frozen in time. In too much of the U.S., system, health care is viewed as a craft and each patient as unique. But by applying principles of mass production and lean production to health care delivery, Indian doctors and hospitals may have discovered the best way to cut costs while still delivering high quality in health care.

Authors

Ravi Ramamurti collaborated with Vijay Govindarajan in writing this article which first appeared in the Harvard Business Review. Vijay Govindarajan is the Earl C. Daum 1924 Professor of International Business at the Tuck School of Business at Dartmouth College and a Distinguished Fellow at The Dartmouth Center For Healthcare Delivery Science.

A New Focus for Health Insurance: ‘Negaclaims’

Historically, the “do more, bill more” fee-for-service model of healthcare measured success by increased billings. In the fee-for-value era, we need a new framework for assessing healthcare results. Quality indicators are logical, but they are mostly geared toward measuring actions taken. We can borrow a concept from the energy sector for an additional metric.  We need a concept for removing waste and unnecessary care that could be inspired by a concept from the energy sector described in this blurb from Wikipedia for something called Negawatts.

Negawatt power  is a theoretical unit of power representing an amount of energy (measured in watts) saved. The energy saved is a direct result of energy conservation or increased energy efficiency. The term was coined by the chief scientist of the Rocky Mountain Institute and environmentalist Amory Lovins in 1989, arguing that utility customers don’t want kilowatt-hours of electricity; they want energy services such as hot showers, cold beer, lit rooms, and spinning shafts, which can come more cheaply if electricity is used more efficiently. Lovins felt an international behavioral change was necessary in order to decrease countries’ dependence on excessive amounts of energy. The concept of a negawatt could influence a behavioral change in consumers by encouraging them to think about the energy that they spend.

The healthcare parallel would be a “Negaclaim™” — i.e., an unnecessary claim avoided. This isn’t about simply denying care. Just as consumers aren’t interested in kilowatt hours, patients aren’t interested in claims — they want health restored and diseases prevented, which can be done more efficiently and effectively. When individuals are fully educated on the trade-offs associated with interventions, they generally choose the less invasive approach. A nice byproduct is that the invasive approaches are frequently more costly and medically unnecessary. The following are a few of many examples of how unnecessary care can be eliminated while improving the patient experience:

  • Day-to-day and chronic disease care: One of the key reasons Direct Primary Care (DPC) has proven itself to be the Triple Aim  leader is that a proper primary care relationship involves time spent with patients to explain trade-offs of various medical options.  Without incentives to push for “more,” DPC providers have demonstrated that they can reduce unnecessary utilization by 40-80%. By contrast, “hamster wheel” primary care has effectively turned primary care into 7-minute, drive-by appointments that leave little time to do anything but direct patients toward additional costly items, whether it’s ordering a prescription, test, hospitalization or specialist visit. In many cases, those could be avoided with a robust primary care relationship.
  • High Cost Procedures: Leah Binder wrote about what major employers such as Walmart, Loews, Pepsico and others are doing to reduce risk to their employees while also saving money, in What We Can Learn From Walmart: How Our Healthcare System Can Save Lives and Dollars. Employees found that 40% of the transplants that were recommended by local hospitals were deemed medically unnecessary by top physicians at the Mayo Clinic and other nationally renowned facilities. Employees were thrilled to avoid risky (and expensive) procedures. It also sent a great message to employees that their employer valued them enough to send them to the best medical centers in the world for second opinions.
  • End of Life: Quality of life is affected dramatically by the end-of-life decisions we make. This was outlined in How Not to Die. The system is oriented to do more even if it is at odds with quality of life. Doctors themselves recognize this when they are the patient, as described in Why Doctors Die Differently. While quality of life is the driving factor for patients and families, there is a second-order benefit that the procedures that reduce quality of life are typically very expensive.

The problem in healthcare has been that providers have incentives to do stuff because of the flawed reimbursement models that dominate our present healthcare system. Respected studies such as from the Institute of Medicine demonstrate that there is more than $750 billion in waste. PwC stated that more than half of healthcare spending is waste. Incentives have driven providers to encourage more interventions, and consumers have been led to believe that more is better even though, in many cases, less is more.

That has added a challenge for health insurers. The general perception is that health insurers reflexively deny claims (sometimes getting in trouble for that). This has resulted in health insurers having the lowest Net Promoter Score of any industry. Consumers have clearly decided that health insurers aren’t doing this for consumer benefit. Fair or not, they have concluded it’s simply for the financial health of the insurer. Clearly, health insurers need a different approach if they want to improve their image and the health of their customers while ensuring their financial viability.

One incentive that has changed revolves around the Medical Loss Ratio (see Aetna’s explanation here).  In contrast to “customer service” reps focused on claims, an investment in patient engagement can have the same or greater effect on reducing claims while qualifying as a healthcare expense. Enter patient engagement.

Patient Engagement Is the Blockbuster Drug of the Century
Leonard Kish made the case that if patient engagement was a drug, it would eclipse all blockbuster drugs before it. Kish cited results of studies showing benefit when patients were successfully engaged in their health.

Compared to those not enrolled in the study, coordinated care “patients have an 88 percent reduced risk of dying of a cardiac-related cause when enrolled within 90 days of a heart attack, compared to those not in the program.” And, clinical care teams reduced overall mortality by 76 percent and cardiac mortality by 73 percent.

Rather than reflexively denying claims and building up a mountain of ill will, insurance companies should invest resources in helping their customers get engaged in their health. Their customers would, in effect, “self-deny” their own claims.

Note that when I describe patient engagement, I’m including family members and caregivers. Did you know that families provide care valued at more than $450 billion per year  – more than our total spending on Medicare! Thus, much of what is outlined below speaks to caregivers (particularly with elderly patients), not just the patient. Having more resources/tools as a caregiver would be welcomed, as most of us have no clinical background and are thrown into a caregiving role virtually overnight.

[Disclosure: My patient relationship management company is one of the organizations providing patient engagement tools to healthcare providers, which is why I'm familiar with these examples.]

Just about every myth has been debunked about how patients of all types supposedly won’t get engaged in their health, whether it’s low-income diabetes patients, native American populations or the elderly. However, providers are largely failing in their efforts at engaging patients as they haven’t had the incentives, tools or training.  Provider-patient communications guru Stephen Wilkins points this out clearly in a few pieces.

Despite less than stellar results that Wilkins highlights, the initial attempts by providers at engaging patients are welcomed just as a muddy puddle of water in the Sahara Desert is welcomed. However, much more can be done.

Catalyzing Patient Engagement in Health Plans’ Best Interests
A wave of new requirements and challenges have crashed on top of providers. Insurers could help if they focus in the right areas and are mindful of the challenges. JAMA recently wrote a piece highlighting one facet of patient engagement — shared decision-making (SDM). Physicians aren’t going to magically take on this challenge without a change.

The brevity of visits constrains the opportunities to address these elements of SDM. Furthermore, clinicians are not adequately trained to facilitate SDM, especially eliciting patient values and preferences for treatment.

[Note: Resources to train clinicians on patient engagement are emerging. One would expect that a host of continuing education courses will emerge. One example is HIMSS (the professional association for healthIT), which released a seminal book on patient engagement.]

In the places where providers have successfully achieved the Triple Aim objectives with challenging patient populations, they have had payment aligned with outcomes. Teams were unleashed, led by doctors, to get creative about how to tackle the challenges. While doctors are vital, they use non-physicians for a substantial part of the interaction with patients. It turns out, for example, that doctors and even nurses can be less effective at effecting behavioral change in patients than non-typical care team members. Rather than being relegated to low-level tasks, medical assistants and health coaches play a vital role in the successful models. Once again, while the goal is an improved health outcome, there is a second-order benefit that being more effective lowers costs by avoiding complications, and the medical assistants and health coaches are generally paid less than doctors and nurses. Unfortunately, in a typical fee-for-service reimbursement model, these types of services typically aren’t compensated despite their impressive results.

Dr. Rob Lamberts described this problem in detail in Washington, We Have a Problem. He summarizes the conflict between people’s desires and healthcare’s flawed reimbursement framework.

This is why, I believe, any system that profits more from people with “problems” than those without is destined to collapse. Our system is opposed to the goal of every person I see: to stay healthy and stay on as few drugs, have as few procedures, and avoid as many doctors (and drug companies) as possible.

Health insurers have implicitly viewed their customers as adversaries by creating a claim-denying framework as the default. The smart health plans will figure out how to harness the consumer goals. This isn’t some fanciful dream as it has been demonstrated (profitably, I might add) by the physician-entrepreneur organizations outlined in The Hot Spotters Sequel: Population Health Heroes.

This isn’t about minor tweaks to a fundamentally flawed model. Rather, as one physician-entrepreneur put it, too many models are “putting wings on cars and calling them airplanes.” Rather, it’s supporting proven models where they have rethought care delivery – here’s how one physician-entrepreneur describes rethinking care delivery from the ground up (video).

While financial rewards are important, most physicians are not motivated primarily by money but by autonomy, mastery and purpose. In the successful models, the physician-entrepreneurs created their own autonomy and recognized that the focus of their mastery and purpose had to fundamentally shift. A nice byproduct was the growth of “Negaclaims” as the educated and empowered patients better understood the significant risks of overtreatment and errors.

Too frequently, health plans have tried to micromanage clinical processes. With proper financial incentives combined with a move toward enabling clinical teams to become masters at driving patient engagement, the health plan is much more likely to achieve the desired outcomes. As the Stephen Wilkins pieces referenced above illustrate, clinicians haven’t been trained or rewarded directly or indirectly for encouraging patient engagement. It should be no surprise that most haven’t achieved mastery in helping their patients achieve patient engagement. Instead, the language of medicine has been punitive and demeaning, talking about “non-compliant” patients as though they were petulant criminals. That doesn’t further the partnership between patients and their care teams, which is necessary for optimal outcomes.

Previously, I outlined the strong business case for patient engagement. Those who have understood that business case have moved on to practice the 7 habits of highly patient-centric providers. It’s clear that past efforts by health plans to reduce claims have fallen short and created ill will and sub-optimal health outcomes. Putting the patient/member at the center need not be a marketing gimmick. Rather, it’s central to the notion of “Negaclaims” and to a winning strategy in the fee-for-value era.