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Reasons for Optimism About U.S. Healthcare by Mary Tolan


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Vital Speeches of the Day | Reasons for Optimism About U.S. Healthcare | Addressed by Mary Tolan

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Reasons for Optimism About U.S. Healthcare by Mary Tolan

  1. 1. Cl. i‘. .l§§ ii-TiOf it t0l. ?lil, |.li. ll5l, i‘i. WM‘ 31412-1:-». .u: tI4r’i! ,' wsmurml / ’IIm1n/ Il. wtI= ' llm‘/ ‘ ’I4ii1u§qix mm“ illliinljéf / lljgililll? /fr): rlin it in, 3 .2‘ (T «ham: .1» ruarma, -4?’-Iillltllmigf mliratluvtllw Ilruuga‘ mu? ’ ’nunxjInnI1I: m‘! IIIt Address by MARY TOLAN, Chairman of the Board, Accretive Health Inc. aving founded a company in healthcare and now serving as its chairman, I’ve had a chance to observe some interesting develop- ments over the past decade. Iwant to share with you what is going on in healthcarc and what some of the key challenges are, as well as those initia- tives that should give us optimism that we might actually be at a point where some really positive transformation is beginning to take hold. As many of you know, we have dramatically higher healthcare costs in the U. S. than the rest of the developed world whether as a percentage of GDP or on a per-capita basis. Currently, Or- ganization for Economic Corporation and Development (OECD) countries’ average healthcare costs are running about $3,200 per person, whereas in the United States they have reached 358,200 per person. If we look at the disparity in GDP, OECD nations are running at 9.5 percent of GDR In the United States, the figure is 17.6 percent of GDP But that is not engendering any advantagesriat least as it relates to longevity. / Vhile we’re the leader on spending, we are not even near the top of the class in terms of longevity. / Vhat then are the pressures that our healthcare providers are experi- encing? When we talk about provid- crs, we’rc talking about physicians and hospitals. Here in the United States, the typical hospital system is not-for- profit and earning just a two-to-four percent operating margin. Even though that’s tax exempt, it’s really not a very fiscally strong infrastructure with sufficient capital to invest in mak- ing things better. Significant initiatives are, indeed, now going on in healthcare reform, / / seeking to move the delivery infra- structure from a focus on volume to value. VVe have expansion of Medicaid and coverage of people who in the past had no coverage. 'l"hat’s a good thing. On the other hand, we have the advent of state-based insurance exchanges with products likely to shift much more of the cost of healthcare to the individual and to households. Compliance is one area where a great deal is happening. There is a wholesale changing of medical nomenclature and coding into a more granular infrastructure. It will be great for data. It will be great for under- standing. But it’s also a massive. change in the skill set required for coders. Government and private payers are now looking at patient satisfaction as a key determiner of how providers are going to get paid, which is a positive from an incentive standpoint. At the same time, new pressures are | )ubbling up in light of all these forces. The interesting thing is we do not have equivalent inflationary pressures in healthcare in the United States. VVhat do 1 mean by that? The cost of a day in a hospital or the cost and billing of physician time is gener- ally going up at the same rate as the Consumer Price Index (CPI). It was surprising to me the first time I learned that. / Vhat is causing the 2.5 times above normal inflation growth in medical expenditures? It is what we call utilization inflation. One of its unintended consequences is that physicians have less time to spend with each patient. As we take down their reimbursement, they have to see more patients just to remain constant in their income. Physicians now spend less time with each patient and give vA‘n_mI_. f: i;i; i;rcx: ii; i.3. <o): *"iI: l9I it-rm‘ i *lL3li ililfii. ll “gt}illltiiifliti A1)‘ . a'mm- #:4111141- / Iin / I'iImfl1llN4 / hurls‘ Delivered at the Harris School of Policy Studies, University of Chicago, Chicago. Ill. , May 10, 2013 less coordinated care as utilization rates take off. It is a phenomenon that is not uncommon. A primary care physician might have a 15-minute appointment with somebody who has symptoms of a sore throat and the same 15 minutes for Mrsjones, who is on 20 medications, has three very serious co- morbidities and is seeing four differ- ent specialists. We know instinctively there’s something wrong with a system that is allocating time and expertise in this fashion. What one may ask is causing this utilization inefficiency? It is simply the lack of the old model’s ability to focus on coordinated care with the patients who need it most. What you see, if you look at any measure of consumption in the U. S., is almost two times the utilization of MRIs, tonsillcctomies, coronary bypasses, or knee replacements than in any other OECD country that we looked at. Thomson Reuters, the global news services, even tried to ascribe a value to excessive, nonpmductive treatment on the economy. They pegged it at $700 billion a year —a direct result of lack of coordinated care. That cost is very, very significant. Let me use another frame of refer- ence———'tl1e work that the Dartmouth Institute has done, examining varia- tion of so-called bed days in America by each of the 50 states. What we see is that the lightest states, Oregon and Utah, are consuming roughly 350 bed days per 1,000 population an- nually. On the highest usage end, we see D. C., where the average bed days per 1,000 is 1,500. Think about that variation. We can even see meaningful variation at the midpoint with most VSOTD. COM
  2. 2. MARY TOLAN 287 of the states showing between 4-00 and 735 l)ed days per 1,000. What explains this within one culture, one country, using similar technology? There is, in fact, a genuine human (: ost to this over-treatment. It has been estimated by Shannon Brownlee, who wrote the book, Oz/ er—Trral1:d: Why 7&0 M uch {Medicine is Making Us and Poorer. Researchers put the number of deaths due to unnecessary care for elderly Americans at 30,000 a year. This would be the rough equivalent of actually losing a 747 airliner with complete fatalities once a week. What are the core issues that are driving this over-use? Let’s start with a variation that can be sourced back to where a physician went to medical school, what they were taught, and how that plays out over time. I was talking to Dr. Arnie Milstein, a Professor at Stanford, who runs the Stanford Clinical Excellence Research Center. I said: “Arnie, where are the people in academic medicine in America, who are studying how to get the best quality at the most affordable price with the best patient experi- ence? ” He answered: “Mary, that’sjust not the way our academic medical en- terprise is set up. There’s nobody that I am aware of who is studying that. However, at our research center that’s exactly what we have been trying to pull together and inviting academics from around the world to participate. But, to the best of my knowledge, this is still a relatively early, modest elfort. ” That’s amazing when you think about it. The path of inquiry about how we get the best care at the most affordable or best price has not yet framed a meaningful path of inquiry. That’s disappointing, but, on the other hand, it also gives us room for hope that we are going to be discovering some great future opportunities. In this country, the incentives we have now revolve around paying providers to do things. / Vhy should we be surprised that, on the margins, we actually do much more medically than any other society that doesn’t pay on that basis? We also have a situation referred to as supply-in- duced demand. As Shannon Brown- lee chronicled in her book, if you’re in Los Angeles, a Medicare benefi- ciary, and you live closer to Hospital A versus hospital B, the number of You can see it in the Dartmouth Institute study of differences across the country. Many areas are twice as expensive as others. The mortality rates in those more expensive regions are two-to-six percent higher. Higher “Why do we remain hopeful? What is it that is leading us to see that there really are breakthroughs? ” ICU days you will experience in your last year of life will be two times less than at Hospital B. Why is that? Well, hospital B has twice as much ICU bed capacity. Supply-induced capac- ity is the answer. Another thing to consider is so- called “Gizmo Idolatry. ” An impor- tant paper, written by physicians from Johns Hopkins, chronicled the urge that we have to admire new technol- ogy without asking if its increased cost has beenjustifietl by increased ef- ficacy. Dr. Charles Sorenson, CEO of Intermountain Healthcare, recently told me: “Mary, when somebody has a prostate cancer diagnosis, there’s a very effective surgery. It costs about $10,000 and has very good prognosis and outcomes. There’s also this new technology that’s been developed called the Proton Beam Accelerator. And it has very similar good out- comes. It’s just that it costs several times more than the surgery that we use today. And yet, somehow these two procedures persist side by side in our society as if it were unclear that one is several times more expen- sive than the other while getting the same outcomes. ” Still another very interesting part of this challenge is that there is sub- stantial variation in how patients are engaged in decision-making about their care and their ability to manage their own desires and values through end-of-life and palliative hospice care. There are numerous reasons why this exists. costs and more expenditures are not getting us better outcomes. It is almost certainly linked to that earlier statistic we citedfunnecessary deaths that are happening due to ad- ditional procedures. Why do we remain hopeful? What is it that is leading us to see that there really are breakthroughs? We actually have done national research to learn that somebody is, indeed, breaking through. Somebody is really figuring out how to keep populations health- ier; how to engage with the patients; how to work with and empower physicians; and how to achieve de- monstrably better outcomes. / Ve have found those proof points and they are very exciting. Let me share an example with you. One of the largest physician groups in the United States decided a number of years ago that they would become fully accountable for the patients they were caring for. It also agreed to accept an aggregate amount of money to care for pa- tients. Physicians would be account- able to five-star and quality ratings. And they would be asked to steward those resources for the betterment of their patient population, getting paid essentially for value. This was not a small test. It involved one million patients in California, Nevada and Florida and about 1,000 physicians. This group of physicians was es- sentially saying to insurance com- panies: “We’ll take on these patients at a percentage of premium, ” I. .et’s m_ SEPTEMBER 2013
  3. 3. 288 say the premium was, in essence, the going price of covering a life in that market. The insurance company would keep the first l0-to-15 percent for marketing, claims processing and compliance. The physicians would get the other 85 percent to take care of everythingfland that’s exactly what they were doing. They had these physicians could begin to say: “No, I’ve got l00 patients here who need a lot more of my time. I need to bring Mrs. Jones in for a 90-minute iisk assessment. 1 need to understand what all these meds are for, who all these specialists are, and how I’m go- ing to finally take on a commanding role, coordinating Mrs. _]oncs’ care __. _._. _.. ____. _______. ___. ___ “ When patients are facing significant healthcare challenges, they should get time with someone they trust to carefully evaluate their alternatives. ” ___. __. _____. _.________. .__ actually built up a capability that was achieving 152.4‘ billion in revenue. And they were so successful at bend- ing the cost curve and improving live-star ratings that they racked up a 22 percent margin profit—unheard of in provider healthcare. Remember that before we talked about hospi- tals that are getting only two-to-four percent margins. Let’s explore these quality ratings even further. How do we know that they enjoyed higher quality outcome? / Ve saw lower mortality rates and higher five-star ratings. Another good indicator we saw was costs coming out ---out of bed days and out of acute care hospital stays. Nobody in the world wants to go to the hospital. We only go when something is very wrong. The idea here was keeping people healthier so that they don’t have to go to an acute care hospital. How did they do it? They became expert at zeroing in on the popula- tion and understanding that only five percent of that population would be driving 60 percent of the costs. Five percent! Ordinarily, a typical primary care physician might have 2,000 patients he, or she, seeg over the course of a year. And again, the old experience was 15 minutes with a sore throat, 15 minutes with the person who is seriously ill. Now, VSOTD. COM and making sure that things are not spiraling out of control. ” Yet another important strategy is to by-pass so-called laissez faire medi- cine, where a physician might very well know diabetics need to have their eyes and feet checked annually; their Cl blood panels checked monthly, and then actually write all those wonder- liil orders and scripts. But we also know oftentimes the patients who cost the most, are those who are the least engaged in their care and aren’t neces- sarily finding the wherewithal to follow through on those doctor orders. T be other thing that aware physi- cians began to understand is how to follow through with patients and find out if there’s a need for a social worker visit or if there’s a transporta- tion barrier that needs to be solved. If we solve such relevant problems, we know that there will be a major societal return. We’re going to have a win for the patient and costs are going to come down in a big way. For the first time, we have :1 group of healthcare providers who are put- ting that whole perspective together holistically and actually insisting on patient engagement. That leads me to address the issue of shared decision-making. There is a huge and growing body of evi- dence that, when patients are facing VITAL SPEECHES OF THE DAY significant healthcare challenges, they should get time with someone they trust to carefully evaluate their alternativesfisomeone who will listen to their concerns and listen to their second question, their third question and their fourth question. Looking again at the example of the large physician group that posted a 22 percent profit margin, it would have had to achieve at least 30 to 35 percent lower utilization of the diverse elements of healthcare. If we could achieve a 25 percent reduction in the cost of healthcare, we could claw back more than four percent of the nation's GDP. How should this all be most ef- fectively approached? There is one other critical area to explore, which is population health. We actually are working in our company with a group of leading oncologists, who have declared: “Contrary to the way the profession has really thought of itself historically, we aspire to become the quarterbacks of care for our patients who are in active cancer treatment. lnstead of our patients bouncing around from the surgeon to the oncology consult to the radiologist to the lab to the acute care stay, we want to assume that integrator role and make sure that our care team is really going to be there for the patient throughout this entire episode. ” What these doctors have said is that they believe in their work and their research, which can improve quality while reducing costs by as much as 35 percent. Up until now, oncology has seen great differences in the costs of very expensive chemotherapy drugs. But what we haven’t seen is the evidence- based protocols looking at the total cost of care. lt’s notjust that one drug is more expensive than the other. / Vhat are the downstream implications on pain and symptom management that might be causing additional bed days and so forth? We have to view the whole picture to find out what are really the better protocols. What these oncologists
  4. 4. MARY TOLAN 289 have said to us is that this is the first time they’ve really looked at the issue in the context of cost and put the whole picture together to say: “No, we have equivalent or better care, but a lower cost option, and this is how we should choose our protocols. ” The other thing that they’ve said is: “When we engage the patient in shared decision-making, in oncology particularly, there’s a tremendously different outcome. ” One of the things that’s been done in the research is focusing on physicians who have personally had a cancer diagnosis. Their course of treatment is very different from that of_]oe Q_I’ublic*—often dramatically less aggressive. As they are informed by their colleagues, with whom they have ample time to consult, those ill physicians learn about where non- value, intensive over-treatment oc- curs. They begin to make thoughtful decisions: If this last course of che- motherapy might extend life by two months, is my quality of life really go- ing to be what I want to experience? They’re talking issues through with their families. They often come up with a very different set of decisions than ordinary people do. How do we get that information out to the general public? One of the things we know is sometimes it’s not that the doctor is going to be the best person to convey that knowledge. Sometimes it’s another member of the care team. It could be a social worker or a nurse, who is not time- pressured and can really follow up with the patient and also be very accessible for follow—up phone calls. VVe also know that a trusted advisor on the care team can be very effec- tive advising about palliative and hospice care at the right time. We see a tremendous opportunity. VVhat I’m excited about is we see promi- nent oncologists not fighting this, not disputing it, but wanting to lead and believing they can create genuine healing value for their patients. ln shared decision-making, there ac- tually has been a great deal of research. But what’s interesting to me is even those institutions, which have been at the forefront of the research, have found it diflieult to apply their findings in their own clinical operations because everything is centered on volume and time, not around a care team for the patient. This is key to how we move away from over-treatment. I’m going to give you one final example of quality at lower costs” hospital stays, or what we call intra- stay quality, because it’s very relevant. There is a leading hcalthcare institu- tion that has a vast number of what I would call infomaticists. They have been trying to understand major reasons why people come to the hos- pital. In this case, it’s about colorectal surgery a fairly common procedure in many hospitals around the country. They looked at the complete body of research out there and accumulated evidenced-based data into a concen- trated view of the best way to treat this procedure. They finally choreo- graphed what should happen and discovered that, if they could get the patient eating within six hours of sur- gery and escalated ambulatory time to six hours of sitting up or walking by day three, it was a game-changer. But when they discovered this, the staff was worried, arguing: “We don’t have nurses that can spend that kind of time with patients, walking them around and keeping them safe. ” But ingenuity prevailed and the team said: “You know what? I. .et’s work with the patients in advance and get them to think of who could be their advocate on recovery, a family member, a friend. And if not, we’ll get a volunteer so it’s not a burden to our nursing staff, but we can still achieve what we know to be clinically elfective. ” The outcomes were truly remark- able. They took the typical length of stay from eight to ten days across America for colorectal surgery down to three to four. At the same time, the patients were regaining gastro- intestinal function two to three days faster and, very importantly, six weeks shorter convalescence and faster re- turn to work and to life. We do not need to see the kind of investments we’ve seen in our country in building more bed days. ‘Ne do not need a skilled nursing facility that thinks to maximize stays to 26 days because Medicare will pay for it. Today, we see patients who are go- ing to be actively engaged in their own care through education and shared decision-making. We see a new path of inquiry where we’re actually going to find researchers trying to under- stand in a fact-based way what proto- cols improve quality, reduce costs and enhance the patient experience. That path of inquiry that Arnie Milstein favors has not been a big focus of our academic medical institutions. I think we are going to see fewer acute care bed days and much more capacity built around homecare, pal- liative care and hospice care. We have every reason to believe that things are coming together for the first time because the pressures have been so acute, demanding wholesale change and transformation. And that’s why I’m optimistic about the future of patients, doctors and making everyone healthier at less cost. SEPTEMBER 2013