Tag Archives: patient protection and affordable care

The Most Dangerous Place In The World

One Friday afternoon three years ago, Harvard Professor Ashish K. Jha found out his father had been taken to “one of the most dangerous places in the world.” Knowing as I do the energetic and courageous Professor Jha, I pictured a more senior version of him sky diving or climbing Mt. Katahdin. Unfortunately, the reality was far more banal, though still dangerous — Dr. Jha's father was taken to an American hospital.

The good news is Dr. Jha's father made a full recovery after only a few days in the hospital. The bad news: at least three potentially harmful errors occurred during those days. “On Saturday afternoon, he was given an infusion of a medicine intended for another patient — an infusion that was stopped only after I insisted that the nurse double-check the order,” recounts Dr. Jha. “After she realized the error, she tried to reassure me by saying, 'Don't worry, this happens all the time.'”

Indeed, Dr. Jha agrees this “happens all the time,” but it's not reassuring to him at all. In addition to being a concerned son, the professor is an expert in patient safety. He knew only too well the dangers his father faced — the legions of rampant errors, accidents and infections in hospitals throughout the United States.

The safety problem is an open secret among people in the health care industry. “When I tell this story, most of my colleagues shake their heads, but they are rarely surprised. We have come to expect such failures as a routine part of health care,” says Dr. Jha. The statistics are staggering. Each year, one in four people admitted to a hospital suffer some form of harm, and more than 500 patients per day die.

Dr. Jha has three recommendations. First, he calls for a better approach for tracking harm in the hospital. For a variety of reasons, this is not as easy as it should be.

Second, he says that hospitals need to feel the financial consequences of providing unsafe care. “A large proportion of hospitals have not adopted cheap and easy interventions that substantially reduce harm,” he points out.

Why is this? For one thing, the financial incentives aren't there. Most hospitals get paid for all the work they do, regardless of whether it helped or harmed the patient. The more they do, the more they make. There have been efforts to address this nonsensical financing system by paying hospitals for achieving the right outcomes for patients, including in the Affordable Care Act. But a recent study by Catalyst for Payment Reform found that only 11 percent of payments to hospitals or doctors are in any way dependent on good quality or safety.

Professor Jha's third recommendation is to create accountability for patient safety: “Senior health care leaders have to feel that their jobs depend on delivering safe care.” I would add another level of accountability implied but not stated in this recommendation: accountability to the American public. Hospital performance data should be publicly available to consumers, so we can choose doctors and hospitals with the best records. Hospitals that fail should lose market share. Last year, my organization, The Leapfrog Group, initiated one such effort, the Hospital Safety Score, a letter grade rating the safety of 2600 hospitals, which Dr. Jha advises us on. The Score is available to the public for free on our website or as an app, and it holds promise for driving a new market for safe care.

The Hospital Safety Score is useful to consult before you or your family members are admitted. But what should you do when you're already in the hospital and worried sick? Every hospital inpatient in America should navigate right now to this just-published AARP Magazine article and its virtual hospital room. The magazine noted features used in safer hospitals that all of us should look for in our own hospital. Among them:

  • readily available faucets with infrared lights that remind people entering the room to wash their hands when they see a patient;
  • IV poles, bed rails and faucets made with copper alloys, which prevents transmission of germs;
  • sensors that alert nurses when patients are attempting to get out of bed;
  • linen closets designed so staff can replenish supplies without having to enter the patient's room, which minimizes the spread of infection and disruption of the patient's rest.

The article also notes how safer hospitals use electronic systems for managing prescriptions — the best known way to prevent the kind of error Dr. Jha encountered during his father's hospital stay.

No doubt hospital leaders will read the AARP coverage without much surprise; all of this is well-known among clinicians and taught and studied throughout the health sciences. The premier textbook on patient safety advises most of what AARP found in its observations of excellent hospitals. Yet, too many hospitals still don't have the right precautions in place, and most consumers don't know to look for them. Until families make it clear to hospitals that safety matters to us, none of us, not even Harvard professors, can depend on safety when the ambulance arrives.

This article first appeared on Forbes.com.

ObamaCare: Taxes versus Penalties & The Games Politicians Play

Oh, the games people play, especially politicians. Only political junkies really care about the difference between taxes and penalties contained in ObamaCare. What Americans care about is “What is it going to cost me?” Sure, the Republicans can holler that the president lied that the health reform costs were not taxes. And, the Democrats can continue the canard that the now constitutionally defined taxes are still penalties.

The reality is that there are no new costs in ObamaCare. They have been there all along. But, most Americans never knew. As Nancy Pelosi famously said, “We will have to pass the bill for you to find out what is in it.” That is how they did it. Politicians violate Americans’ trust with the “Fooled Ya” game.

The “Fooled Ya” game is played by the unique Washington, DC rules of the Congressional Budget Office (CBO). Costs are estimated over a 10 year period. What happens after ten years doesn’t count in this game. Here is a Real Life vs. Washington, DC example of how the “Fooled Ya” game works:

If you have a 10 year contract to lease a car for $500 per month, what is the cost? Most would say $500 for 12 months yields an annual cost of $6,000. Therefore, the cost of the contract over 10 years would be $60,000. But what if your 10 years of payments for that contract were delayed by 4 years? Under the “Fooled Ya” rules your contract costs would only be $6,000 for 6 years or $36,000. The last 4 years of the contract are initially ignored as outside their calculation period.

Of course, in the real world the actual cost of your contract is still $60,000. In the “Fooled Ya” game the actual total costs are not disclosed until time passes and the added years are made a part of a new 10 year calculation period. That is, only after 4 years would the full $60,000 cost be recognized under “Fooled Ya” estimates.

That is the essence of the initial “Fooled Ya” ObamaCare cost estimates. The original 10 year $940 million cost estimate was made in 2010 for the period 2010-2019. So the public was told health reform would cost less than $1 trillion. But, the full Act is not fully implemented until 2018. The actual on-going 10 year costs will be more fully disclosed with each passing year, until we get to full implementation in 2018. In 2012, the Congressional Budget Office cost was updated to be $1.8 trillion. By 2013, the cost will be about $2 trillion. By 2018, the full-implementation, 10 year costs will be closer to $2.5 trillion.

So, when you read that the cost of ObamaCare is increasing, the truth is those costs have always been there. The true costs are becoming part of each new 10 year calculation. The previously unrecognized “Fooled Ya” costs are now being exposed. Some supporters of ObamaCare don’t care what the costs are. They believe that whatever the costs are, the benefits of universal coverage matter most.

The Supreme Court decision has provided a new opportunity for the general public to become aware of the real costs and the “Fooled Ya” game. The game now shifts from the Supreme Court to the Court of Public Opinion and the November election. Americans can now make their choice with an honest discussion of knowing the Act’s taxes and future cost estimates. It is time we and politicians stopped fooling around with our kids’ future. You know the old saying, “Fool me once shame on you, fool me twice shame on me.” Don’t be fooled twice.

Surprise, Surprise, Surprise! The Mandate Lives!

Like many others I was glued to the TV set in my hotel room waiting for the news from the US Supreme Court about the Patient Protection and Affordable Care Act Mandate. I had predicted it would be rejected under the Commerce rules (i.e., which did happen), but I was surprised that it was upheld in terms of the Tax rules. Although presented by the Administration as anything but a tax when passed, their arguments at the US Supreme Court caught traction with the justices leading to a victory for the Administration. It truly was a surprise, and in the words of Gomer Pyle “Surprise, surprise, surprise!”

Once the dust settles I also believe that it will be a pleasant surprise for all of us. Without the mandate, our attempts at health care reform were destined for failure under the Patient Protection and Affordable Care Act reform bill. “Hall Passes” to some hurt everyone. Unless everyone is included in the reformed system (i.e., universality), the likely outcome for Patient Protection and Affordable Care Act is dismal. I don’t agree with everything that is in the bill in the first place, but it does include several serious attempts at trying to get a control on our escalating health care costs. Without this our country is faced with a serious economic challenge. I dislike being told what to do by the government, but sometimes I don’t want to do what I should do.

What will the near-term impact be?

  • Escalated implementation of exchanges and move to a new way of getting coverage
  • Most likely higher near term costs as carriers reveal their uncertainty of the future costs
  • Higher provider costs as providers become increasingly concerned about the burgeoning Medicaid population as many more are transitioned to Medicaid coverage
  • Expansion of existing initiatives to reduce the cost of care and improve quality (e.g., the Oregon Coordinated Care Organizations, ACOs, and other value based reimbursement initiatives)
  • Increased scrutiny by employers whether they should terminate their plans, particularly in industries with significant part-time employees
  • Increased exporting of manufacturing to other countries to minimize costs
  • Greater focus by the hospital community to validate their capacity and potentially reduce resources to improve cost effectiveness
  • Increased transition to self-funded programs to avoid some of the requirements of the Patient Protection and Affordable Care Act Mandate

For me, both personally and professionally, I am glad the mandate survived. I continue to wish that the Patient Protection and Affordable Care Act had better provisions to improve the affordability of health care, but it does take dramatic steps towards that even though they are buried in the 2000+ pages.

I hope it is enough, but am not as optimistic as I would like to be. The affordability equation is both a personal one (i.e., how much do I have to pay) and also a national one (i.e., how much can we afford in terms of GDP). Right now we are quickly approaching a cliff where none of us will be able to afford the system. With economic improvement (i.e., GDP growth) we will be able to push the edge of the cliff a few years out while we figure this problem out. So let’s get the economy going and hope for the best!

The Supreme Court Decides – The Mandate Survives

The Supreme Court has decided that the individual mandate to purchase health insurance is a form of tax, therefore constitutional. Click here to read a Wall Street Journal report on this. As we all know much of the rest of Obamacare hinged on that mandate. It is law.

This ruling does not surprise me. I predicted in a blog post on January 27, 2012, that The Patient Protection and Affordable Care Act would not be repealed by the Supreme Court. I was correct. I won’t spend words here on why I had doubts about repeal of the individual mandate. Click here to read that post.

Let me also refer you to a blog post I made on March 30, 2012. The drift was that no matter whether The Patient Protection and Affordable Care Act is overturned or not, we have a huge spending problem in the United States.

That post gave a link to an article written by Shannon Brownlee and Brian Klepper. They wrote, “Yet whatever the court decides, we will still be stuck with a problem that this contentious law was not likely to solve on its own: an out of control health care industry that threatens the stability of the U.S. economy and the federal government’s ability to deal with our long-term debt.”

Further, they say, “It is hard to overstate the gravity of the situation. A 2008 study by the consulting firm PricewaterhouseCoopers estimated that more than half of all health care expenditures provide no value — meaning we spend more than double what we should. In today’s dollars, that waste represents an extra $1.5 trillion a year.”

Let me emphasize this point … half of health care dollars provide no value. That did not surprise me either as I watched that waste occurring every day for decades as I managed health benefits for large corporations.

Between now and the year 2025, consumer discretionary income will shrink dramatically unless health care costs are reigned in. That will impact nearly all companies’ top line. Today, the biggest competitor of companies that produce or sell consumer products and services is rising health care spending. It is significantly impacting companies’ sales today, but in a nearly invisible way. This is a huge strategic issue for corporations. Many CEOs are looking at how their own company’s health costs are rising but may not be forecasting the impact on sales going forward.

I have been advising corporate executive committees and corporate executives of this impact on top line growth for over ten years. I wish I had been wrong, but my predictions on this are coming true too. This will not fix itself.

In benefit plans today about 6-8% of members, called outliers, spend 80% of plan dollars each year. With so much spending by so few plan members, success in managing health plan costs going forward will require a whole new approach, namely carefully managing the shrinking outlier population.

Certain things are known about the outlier population. Most have complex health problems with multiple co-morbidities and most are seeing multiple specialists who are frequently failing to coordinate diagnoses or treatments. Accordingly, about 10-20% outliers are either completely misdiagnosed or have a flawed diagnoses. This is impacting about 8-16% of total plan spending.

Furthermore, about 40% of outliers have erroneous or, at best, sub-optimal treatment plans. Again, their specialists are failing to coordinate care. This is impacting about 40% of health plan dollars. While primary and secondary care in U.S. hospitals is usually quite standardized, there is huge variation in tertiary care from clinic to clinic in the U.S. The variation is in quality of care, pricing, outcomes, diagnostic capabilities, and ethical standards.

Methods are available to identify the few clinics and hospitals in the U.S. in which the best quality, highest ethical standards, and best pricing all come together and to connect plan members with those facilities in an employee-friendly, yet very cost effective, way.

One outlier solution is to set up employer-specific centers of excellence from among clinics in the U.S., ones that perform in a superior way for tertiary and quaternary care patients. Other solutions involve setting up highly specialized second opinion programs aimed at the outlier population, often involving on-site visits to a high performing clinic. These solutions have proven track records of success in companies such as British Petroleum, Burger King, and Walmart, plus many others.

Adopting these types of solutions will lead to genuine market driven health care informed by price and quality transparency for 80% of benefit plan dollars.

Unfortunately, the Patient Protection and Affordable Care Act does almost nothing to control our skyrocketing health care costs. In that sense the Supreme Court ruling today is a skirmish in a decades long battle to rescue America from the utterly out-of-control waste in health spending in America.

Going forward, health costs are a huge risk to be managed, rather than a traditional human resources construct.

How Will the Supreme Court's Decision Impact Health Care Reform?

Everyone is waiting for the US Supreme Court’s decision on the individual health care mandate anticipated the week of June 25, 2012. The hype is considerable, and the average individual is trying to figure out what this means. Experts disagree what the outcome will be. This articles tries to summarize some of the likely results of the decision.

I personally believe the mandate will be rejected by the Court, although it isn’t an obvious outcome. If rejected, this will have an impact on health care reform as currently defined. It is important that everyone is subject to the same rules so the various situations are consistently handled. For example, if one class of individuals do not have to participate in the reformed system, then the goal of significantly reducing the uninsured and under-insured will not be met. The Patient Protection and Affordable Care Act fails to eliminate the uninsured but takes a significant step towards that goal.

The development of exchanges, the additional rules required for rate filing and associated approvals of rates, the transition to government approved “metallic” plans will slow and perhaps even stop if the mandate is rejected. The benefit of this might be reduced administrative costs and may even result in a spike in health plan earnings as the pressure is relieved.

If the Patient Protection and Affordable Care Act is unraveled a bit, it actually might have a positive impact on the Federal deficit if spending is reduced and related provisions of the Patient Protection and Affordable Care Act are de-funded.

For example, some of the innovation will likely disappear (i.e., Accountable Care Organizations, comparative effectiveness research, electronic medical records, etc.). The Medicaid expansion will likely slow. Employers will reconsider their near term benefit strategies, perhaps taking a more serious look at what they can do to reduce costs in light of the easing of federal oversight.

However, what about the economy? What about the likely impact to the cost of care? One of the frequently ignored reasons why health care reform was so important is the impact on our national economy. The cost of care continues to escalate faster than general inflationary levels. The US health care system continues to be one of the most expensive both in terms of dollars and also as a percentage of Gross Domestic Product.

The continued economic woes facing the general economy exacerbate the health care cost problem.

Affordability is at an all-time low and costs continue to grow faster than we can afford. Providers are increasingly resistant to discount their charges further driving up prices.

The Patient Protection and Affordable Care Act, although imperfect at best, did provide some hope to control the unbridled increase in health care costs. The rejection of the mandate at a minimum disables any hope of meaningfully controlling health care costs within the Patient Protection and Affordable Care Act.

We still need a health care solution. We still need a broad solution that all can effectively be a part of. If the mandate fails to survive, we need a back-up plan to get everyone on board to solve the health care problems we all face whether we admit or not.

My prediction is that we are faced with two undesirable options:

  • Over-reaction against the Patient Protection and Affordable Care Act further dismantling some of the good it did, resulting in rapidly increasing costs from a false sense of relief, resulting in even greater problems down the road.
  • Quick transition to even a more severe solution of direct government take-over of the entire health system along the lines of social systems implemented in Europe.

I still am a big fan of the private sector taking the lead in creating a viable solution rather than succumbing to a government solution. Unfortunately, I don't see a sense of urgency like we need to be seeing. Too many ignore the reality of the seriousness of the financial issue and the significant impact on our overall economy.

I hope for good news and moderate reaction to the Supreme Court decision.