A Five-Step Recovery Plan for Health Care

By Mike Weitekamp, MD

Alan S. Blinder, professor of economics and public affairs at Princeton, recently offered a 10-step recovery plan targeting our recent national financial collapse. He reminds us yet again how poorly we learn from history and, as a consequence, are often sentenced to repeat it. While the professor’s program is directed at participants and regulators in the financial sector, I was struck by how at least five of his 10 steps might be co-opted to serve as guideposts, or warning signs, for the health care enterprise.

The five-step version applicable to health care is as follows (I encourage you to read the professor’s article first, so that this co-optation might flow better):

  1. Remember that people forget. We tried HMO/capitation-style “managed care” in the 1990s and look what happened: provider and payer consolidation, “spot pricing,” network and choice limitations, acrimonious and lopsided contract negotiations, bitter patients and providers—you remember. Even Hollywood got involved. Laura Dern starred in a movie based on true events, Damaged Care, profiling the evils of corporate medicine. Helen Hunt’s managed care-bashing was the biggest applause line in As Good As It Gets. Payers and providers are again merging, with market consolidation on a scale that might ultimately make the 1990s look tame. Some believe we are delusional if we expect that “accountable care” will be any different.Time will tell if capitation can ride again, perhaps this time with improved physician engagement, better severity adjustments, improved data systems/electronic health records (EHRs), “value-based payments” and “empowered /activated patients.”  The accountable care model can only live up to its potential if payment reform goes hand-in-hand with clinical redesign and incorporates both public and commercial payments. If not, we will be left with even more monolithic provider organizations and consolidated payers once again expending valuable energy and precious resources—not improving care, but beating each other up in bitter negotiations and shifting costs from the public sector to the private.
  2. Elevate risk management. Any health services payment scheme that places both actuarial risk and clinical risk on providers can be dangerous to the financial health of the provider and the clinical health of patients. Actuarial risk, the risk of random and usually unpredictable events, should be insured by large numbers participating in a pool. Clinical risk can, and should, be assumed by patients and providers given proper analytic tools, data, and incentives.
    We need to focus on the fact that 10 percent of patients account for over 65 percent of costs in any large population. The closer providers can get to either owning the premium dollar, with adequate risk corridor protections—or at least sharing in savings derived from appropriate, cost-effective care—the better the opportunity to integrate the payment and provision of services that make clinical sense rather than simply business sense.
  3. Keep it simple, stupid. The byzantine nature of coding and billing, not unlike the US tax code, is wasteful, abets the criminal-minded, and too often torments the innocent. There is no good reason to have as many different mechanisms to pay for health care services as we do. Administrative complexity and redundancies waste hundreds of billions of the $2.6 trillion spent on health care in America in the past year. We will eventually get to either a single-payer, or at least a standardized, payment platform for all payers; but, as Winston Churchill observed, perhaps only after we exhaust all other possibilities.
  4. Fix perverse incentives. Patients and providers are too often clueless when it comes to the actual cost of their medical decisions. Without understanding cost, how can anyone make an informed judgment with respect to “value” (cost and quality)? You cannot! Health insurance coverage that resembles pre-paid medical care rather than insurance against unpredictable catastrophic loss, lack of transparent pricing, and payment mechanisms rewarding only volume all contribute to the perversity.
  5. Watch out for consumers. At the end of the day, health care is all about the patient. Patient-centered care must be more than a buzzword or a message on a billboard. Additionally, “patient-centered” is not tantamount to “patient entitlement.” Recent observations about the potential inverse association between patient satisfaction and clinical outcomes should give everyone pause. To me, “patient-centered” includes access/availability—visits, phone calls, e-messaging, “patient portals,” and so forth—but also includes patient engagement and personal accountability and the tools required for that:  truly informed consent processes, number-needed- to -treat (or harm) for common medical prescriptions and diagnostic procedures, and an array of alternative and complementary options for those whose problems cannot be “fixed” in the traditional bio-reductionist mental model of western medicine.

Quality health care will always be expensive. Technology will continue to advance and the aging demographic of 10,000 Baby Boomers turning 65 each year for the next 18 years cannot be denied. However, these five steps might be steps toward a sustainable solution.

WeitekampMichaelMichael R. Weitekamp, MD, MHA, FACP, is a practicing physician and Vice Chair for Community Engagement in the Dept. of Medicine at the Milton S. Hershey Medical Center of the Pennsylvania State University in Hershey, PA. A former Robert G. Petersdorf Scholar-in-Residence at the Association of American Medical Colleges, he is a member of the External Advisory Board for Wing of Zock.