President Obama stated two goals about health care reform: Reduce costs and improve quality. What is the best way to achieve both of those at the same time?
DEFUR: Well, I think one approach to that is clearly pay-for-performance incentives. That’s a good way of simultaneously improving quality and decreasing costs. Primary care access—really looking at how we compensate primary care, how are we supporting them, how you get more people to go into primary care—is a key piece because primary care can be very effective in early intervention and prevention and wellness.
There are a lot of costs in the system today related to people not going to primary care but rather waiting until they become so ill that they show up in the emergency department. If a patient shows up in the emergency department with full-blown pneumonia, they may be hospitalized, put in an intensive care unit for two or three days, and then stepped down to a medical unit for two or three days, and then discharged and have a bill of $20,000 or $30,000. If they had gone to a primary care physician a couple [of] weeks ahead of that, they could have been treated with $4-a-day antibiotics.
One of the other things is utilizing Lean Process Improvement Methodology, taken from the manufacturing industry, implementing what’s also referred to as the Toyota Production Model. It really focuses on elimination of waste within our processes. As we know, variability is the enemy of quality. We eliminate waste and hardwire the more efficient processes. You really do simultaneously increase quality and decrease costs by getting waste out of the system because waste is extra steps in a process, it’s duplication. And when you eliminate those additional steps, you eliminate possibility for error as well.
BRATER: There’s no way you can really get meaningful cost out of the system unless you do something about over-utilization. That’s a big elephant in the room.
You can nibble around the edges with all this pay-for-performance stuff. That’s got all sorts of issues. Let’s say you have a pay-for-performance plan but your patient has low health literacy, and so no matter what your efforts are, you have trouble getting them to adhere to a certain regimen. So your pay-for-performance plan punishes you. Well, it turns out that the people with the lowest health literacy are probably the people who need your services the most, so then you end up with yet another perverse reimbursement system. Some of this terminology sounds nice on the surface, but if you drill down a little bit, there’s a lot more to it than that.
I’m worried that there’s too much tinkering around the edges. We have a system that rewards doing stuff instead of spending time with patients. So it’s a completely broken business model. We are here for the IBJ, so if you want to talk about the “business” of it, people are rewarded for doing more and more things. Well, that’s not always in the best interest of the patient, so how are we going to get our arms around that? Pay-for-performance doesn’t do it.
EVANS: If we pay for more stuff it doesn’t matter how efficient we get, we just do more stuff more efficiently. If we’re doing stuff that shouldn’t be done in the first place, we’re all complicit in that. What am I talking about? Futile care. Most health care expenditures are in the last few months of life. Many people in this room, because of your ages, are dealing with elderly parents right now. Does Mom have a living well, yes or no? Does every family member understand what it means, yes or no? Did you discuss it last Thanksgiving when you all were sitting at the dinner table, yes or no? If you answered any of those questions as “no,” [then] when the moment comes, you’ll become a maximum utilizer.
The tinkering around the edges that the Dean just talked about will not affect the profound implications of that lack of preparation. That’s a psychosocial issue in this country. What happened in the House bill where it mentioned $200 a primary care physician got paid for [end-of-life] counseling one time a year? One time a year, a family could get counseled and the doc could get reimbursed on palliative and end-of-life care. And instantly that was converted into a “death panel.” So that became the third rail. Wow, did those guys drop that one right away.
Anyway, the general assumption is that a third of critical care is futile, doesn’t make any difference, the patient dies in two months anyway. Who decides in our culture who gets the care and who doesn’t? If you’re an actuary from Mars and landed here and had a choice of a million dollars to spend on an 80-year-old or an 8-year-old, you know what you’d do, right? We do not make that kind of a decision. We pay people for more stuff, so we have overutilization. The hospital systems in Indianapolis do the best they can to be more and more efficient, but essentially they’re doing the same stuff.
So the only way to cut health care costs, and it’s implied in many of the articles you read, is eliminate innovation. Who is in favor of that? That’s one quick way—just get rid of innovation, no more improvements in medical care. Or ration care. Who’s in favor of that? I believe I just heard a resounding nobody in the room, which means status quo.
KRAJNOVICH: I couldn’t agree any more on the innovation piece of that and also to Dr. Brater’s point, I think clearly he hit it right on the head—overutilization. It’s something that we do believe that we need to get our arms [around]. A lot of that does start, too, in the area of prevention and wellness—what we can do to take better care of ourselves, making sure people understand how their health status impacts the cost of health care. Kyle, clearly, brought up a very legitimate point in terms of the waste in the system. The American Medical Association estimates that it costs $90 billion a year to process claims. We’re working with physicians and hospitals alike to take advantage of swipe card technology, take advantage of real-time adjudication, because we do believe we can wipe out a substantial amount of that waste in that system. So there are a lot of efficiencies that we can tap into.
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