Brilliant

This is an op ed from the New York Times and is critical for health care reform
July 6, 2009
Op-Ed Contributor
Health Care’s Infectious Losses
By PAUL O’NEILL

Pittsburgh

HEALTH care reform seems to be on the way, whether we want it or not. So I have been asking questions about the various proposals. Here is a sampling.

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Which of the reform proposals will eliminate the millions of infections acquired at hospitals every year?

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Which of the proposals will eliminate the annual toll of 300 million medication errors?

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Which of the proposals will eliminate pneumonia caused by ventilators?

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Which of the proposals will eliminate falls that injure hospital patients?

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Which of the proposals will capture even a fraction of the roughly $1 trillion of annual “waste” that is associated with the kinds of process failures that these questions imply?

So far, the answer to each question is “none.”

Let’s consider that $1 trillion of waste. If we could capture all of it, the savings over 10 years would be five times what President Obama has said he will extract from insurance companies over the same period. The president’s vision of bringing down health care inflation by 1.5 percent a year over the next decade would not be a victory, but a capitulation to the enormous waste in the delivery of medical care.

The president says he likes audacious goals. Here is one: ask medical providers to eliminate all hospital-acquired infections within two years. This is hardly pie in the sky: doctors and administrators already know how to do it. It requires scrupulous adherence to simple but profoundly important practices like hand-washing, proper preparation of surgical sites and assiduous care and maintenance of central lines and urinary catheters. With these small steps, we would no longer have the suffering and death associated with infections acquired in hospitals and we would save tens of billions of dollars every year — money we should have in hand before new health-care entitlements are enacted.

What policymakers tend to forget is that only the people who do the work can make this happen. Legislation can’t do it, regulation can’t do it, infection-control committees can’t do it, financial incentives and disincentives can’t do it. But excellence is possible, and it has been demonstrated.

Where it works, the common denominators are strong leadership and a committed work force. Among those doctors showing the way are Brent James at Intermountain Health in Utah, Gary Kaplan at Virginia Mason Clinic in Seattle and Richard Shannon at the University of Pennsylvania, who have helped bring infection rates down drastically at their own hospitals and at others.

Hospitals and medical schools have great impetus to increase the ranks of such doctors: these improvements in patient care don’t cost money, they save money. And they represent only the tip of the iceberg in opportunities for improving outcomes and reducing costs at the same time.

A next step would be for the government to finance a prompt, detailed and hard-headed study of every example of error, infection and other waste in five major medical centers. Such data would give policymakers and caregivers a clearer picture of the possibilities for cost-saving improvements.

It would also help if reporters and pundits became more informed about the opportunities for improvement, so they could help educate the public and improve the level of the reform debates. As for members of Congress, perhaps it would help them to understand the problem if we assembled the data, by House district, on hospital-acquired infections, medication errors and other waste indicators. They are more likely to push for the right sort of change when they realize that people they know and represent are being hurt or killed by practices we know how to stop.

In the end, any health care reform that does not address the pervasive waste and the associated burden of needless suffering for patients and staff alike will give us little to celebrate.

Paul O’Neill was the secretary of the Treasury from 2001 to 2002

Is Reduction in Physician Fees Rationing of Care?

President Obama is prepared to cut spending for Medicare and Medicaid. Doctors and hospitals will be paid less for services provided under Medicare.
Is that an example of rationing in action?

A radiologist, may argue:

"The proposed fee schedule for 2010 for radiologists and cardiologists is 21% less than this year! Instead of being reimbursed 36.00 per RVU, CMS proposes to reimburse at 28.00 per RVU. These reductions are the first signs of removing economic incentives for medical practice.
Please give us your thoughts about capping the number of work units and how this will put RATIONING on steroids?
There will be few radiologists and cardiologists working after they hit the magical cap number."

Let us be clear about who is rationing what here.

When Medicare reduces its payments to doctors, it rations money to them. It does not directly ration the health care the doctors might render patients.

If physicians refuse to treat patients at the lower fees, it is they who ration health care, even if the incentive to do so came from Medicare.

While I doubt that the payments to radiologists and cardiologists actually will be cut by 21 percent soon — more on that next time — let us suppose it were so. Would there then be “few radiologists and cardiologists working” after such a fee cut?

Presumably, the afflicted physicians would withhold their services only from Medicare and Medicaid patients, assuming that private insurers pay more. But could most radiologists and cardiologists actually earn an adequate livelihood only from privately insured patients? I have my doubts.

Like everyone else, radiologists and cardiologists certainly can claim to be sorely underpaid relative to the extraordinarily high compensation of bankers and corporate executives, which appears to have little correlation with contributions to society. But relative to their colleagues in internal medicine, pediatrics and family practice, radiologists and cardiologists actually are very well paid.

There are a number of sources on physician income (see, for example, this). All of them suggest that the median annual net income of radiologists and of cardiologists (around $400,000) is more than twice that of family practitioners, internists and pediatricians (less than $200,000). The median is a statistic such that half of physicians earn as much as the median or more, and the other half as much or less.

So even if Medicare cut fees of radiologists and cardiologists by 21 percent, the income of these specialists would still exceed that of their colleagues in primary care by 60 percent or more.

Would that be a reason to quit medical practice? After all, doctors are not bankers. They do not work merely for pecuniary gain, but derive non monetary, psychic rewards from their jobs.

Cold hearted as it may seem, economists judge a profession’s income as adequate if it attracts enough young people into the profession. For the last half-century that has been so in American medicine. The constraint on the number of American-trained physicians has never been an inadequate supply of eager and qualified American applicants to American medical schools. Instead, it has been a deliberate constraint on the number of American medical-school slots.

For reasons that elude me, United States policy makers and the medical establishment have for decades preferred to deny thousands of eager and qualified American youngsters the opportunity to study medicine and have then met the resulting shortage of physicians by importing foreign-trained physicians from other countries.

But while there is no overall shortage of qualified young Americans eager to study medicine, there is now a nationwide lament over a shortage of American medical-school graduates willing to enter the primary-care specialties. For that reason Medicare may soon substantially increase the fees for primary-care physicians, assuming private insurers will swiftly follow suit, as usual.

The only question then is whether such fee increases will come at the expense of taxpayers or from other parts of the health care sector, perhaps even the more highly paid medical specialties, including radiology and cardiology. That is a political call.
United States taxpayers have been too stingy vis à vis the medical profession.

I shall also describe a highly ritualistic and entertaining form of Kabuki theater staged annually in Washington in conjunction with the year’s Medicare fee update.

Act I in the play is always the announcement of a 20-percent cut in the fees Medicare pays physicians.

That “cut” actually ends up as a increase of 1 to 2 percent and an annual increase in Medicare spending per Medicare beneficiary on physician services of 5 to 6 percent.

It will be so again this year.

Canadian healthcare

Canada is often praised or panned (based on ones political leanings) for its healthcare system. here is a model of how it works
Canadians can be of two minds about their public health care system.

Tommy Douglas, a former premier of Saskatchewan, was voted “The Greatest Canadian” by the Canadian Broadcasting Corporation viewers for setting up what became the model for the country’s health system. And a survey last year partly sponsored by the federal government found that Canadians ranked “universal health care” among the 10 defining factors of their country (along with Niagara Falls, beavers, hockey and a robotic space arm).

At the same time, Canadians can be quick to complain about that very system. Their chief complaints include wait times, access to doctors, unusual treatments and specialized imaging equipment as well as its overall cost.

Given that, it’s not surprising that Canada’s experience is being used to support the arguments of people on both sides of the American debate about health care.

But before judging Canada’s system, and its suitability as a model for the United States, let’s look at how the system’s financing developed.

The biggest problem in assessing Canada is that there are, in fact, 15 different systems rather than a single, national program like Britain’s. Each of the 10 provincial and 3 territorial governments administers and delivers health care to most residents. On top of that, the federal government is responsible for native people who live on reserves, as reservations are known in Canada, as well as members of the military and their families.

While broad pieces of federal legislation provide overall guidance for each provincial system, they have nevertheless developed largely on a piecemeal basis since the 1960s. Adding to the complexity is the tendency of provincial governments to bicker amongst themselves while vigorously opposing any federal efforts to usurp their constitutional powers over health care.

So when thinking about health care in Canada, bear in mind that for every general rule there can be a multitude of exceptions.

C. David Naylor, a physician and health policy analyst who is president of the University of Toronto, succinctly summed up the system in the title of a book in 1986: “Private Practice, Public Payment.”

Mr. Douglas’s socialist government in Saskatchewan introduced Canada’s first province-wide, government-financed health care system in 1962, immediately provoking a strike by doctors. But it was a Royal Commission established at roughly the same time that ultimately provided the framework for the rest of the country.

Canada’s health care insurance industry, which was growing quickly in the early 1960s, joined with the country’s medical association to campaign against publicly funded medical care for all but the poorest Canadians.

The Royal Commission ultimately rebuffed them. Dr. Naylor’s analysis is that mixing public coverage with private insurance would be a bureaucratic mess that could cause public monies to subsidize for-profit medicine and insurance.

But the doctors did get some of their demands. Canadian physicians are not government employees. They retain a great deal of control over when, how and where they work. Instead of being paid salaries, most of them bill provincial governments on a fee-for-service basis. Canadian hospitals are also autonomous institutions that are generally, but not necessarily, governed by local health authorities.

The details of how that operates become complicated very quickly. But for patients, it’s all invisible.

They never see a bill for hospital treatments or services provided by their doctor. Some hospitals and physicians once imposed surcharges and service fees on patients, but the federal government shut down the practice in 1984 by cutting off health financing to provinces that allowed it. Similarly doctors cannot moonlight and provide basic medical services to patients who are willing to pay for faster or more attentive service.

That doesn’t mean, however, that Canadians do not have health care costs that they have to pay out of pocket or through private insurance. Most dental work, prescription drugs for people not at retirement age, and eyeglasses are among the many costs not covered. The Canadian Institute for Health Information estimates that governments covered about 70 percent of the 171.9 billion Canadian dollars (roughly $148 billion) spent on health care last year.

The challenge for governments to come up with that money, and how effectively the system uses it