Meaningful Healthcare Reform: Challenges and Solutions

David Koitz of The Concord Coalition, who is a former analyst for The Congressional Research Service and the Congressional Budget Office, just published a provocative paper entitled: Electronic Record Keeping, Wellness Programs, and Care Coordination -- Would They Yield Real Savings, and When? While he makes many good points about the shortcomings and uncertainties of current strategies being proposed to realize meaningful healthcare reform, the paper overlooks certain important factors. Here are some excerpts from Mr. Koitz's paper, followed by my comments:

The Obama Administration has proposed a number of changes aimed at increasing efficiencies in the nation's health care system… But their potential to control rising medical costs should not be overstated. It is unclear whether…they would have a positive effect on the tendency of an entrenched fee-for-service health care system to encourage excessive services and other forms of volume driven expenditures.

Even assuming that they would have a positive effect, it is unlikely to be seen for many years...[and] health care costs are projected to grow by $2 trillion between now and 2018, and at an annual rate of 6.2 percent, or about one third faster than the economy.

The Congressional Budget Office (CBO) projects that the current effort to promote health IT would reduce health care spending by less than half of one percent over this period…[The] effort would do little to ease rapidly growing health care costs at a time when population trends are expected to exacerbate them. And while promoting wellness programs and care coordination may prompt healthier life styles and better treatment outcomes, studies suggest their potential to create long-term savings has not been demonstrated.

…Many health providers have not made the investment because the cost is greater than the potential savings in lower office costs or increased revenues…Overall, startup costs can exceed $40,000 per physician…No one really knows the true potential of health IT, not only to improve outcomes of medical care, but to control costs. Moreover, CBO's projections suggest that the development process would be lengthy with any real benefits not materializing for a number of years. And even if the rise in health care spending is slowed…any such effects would eventually diminish. CBO further points out that by improving adherence to treatment protocols, the proliferation of health IT could increase the amount of care provided, and thus offset the potential savings…For health IT to succeed, the security of those records is paramount.

...Wellness programs are intended to alter lifestyle choices that people make which contribute to ill health and disease, and that eventually may require medical intervention to ease or remedy… As with efforts to promote health IT, expectations of savings from wellness programs may be inflated…[Wellness programs] have been adopted by too many businesses, insurance companies, and health care providers with success to dismiss their significance in improving the nation's health…However, they too carry costs, and other factors can limit or offset their potential to contain the nation's health expenditures…[because] modification of the public's adverse behavior can take years of costly information campaigns and financial incentives, so the immediate impact on health spending may be limited…[and because such] efforts can lead to greater expense…[if preventive medicine leads] to additional services for some who are generally in good health and don't need costly medical care…[Futhermore,] spending on diseases caused by unhealthy behavior could decline substantially in the long run, but the impact on federal entitlement spending would rise as people live longer… As with health care IT, the investment in wellness is better justified as a public good than as a strategy for controlling overall costs.

Yet a third initiative suggested by the Administration involves…"care coordination," [whose] goal is to improve medical outcomes, limit hospital and nursing home stays, and reduce cost by…[delivering care in] a more comprehensive or holistic fashion… Medicare experiments and demonstrations with care coordination, disease management, and case management, have shown some positive impacts on the quality of service and patient satisfaction, but…none yet has conclusively shown it can reduce program costs significantly.

…The basic concept of the medical home model is to have a designated primary care physician coordinate all types of care and services needed by a patient -- preventative, acute, and chronic -- from a full range of potential providers, whether they be medical specialists, hospitals, rehabilitation facilities, laboratories, or other… Proponents believe that the continuity of oversight and better coordination of care will yield health care savings…[by reducing] health care spending by ensuring that services and treatments are based on a comprehensive view of the patient, follow evidence-based guidelines, and avoid unnecessary or duplicative tests and procedures.

However,…it relies on an adequate supply of primary care physicians, which appears to be lacking today…[In addition,] the medical home model could actually lead to increases in health care spending if patients responded by seeking more services -- or if payments to primary care physicians merely added to Medicare expenditures…The bottom line is that the impact on spending from improved care coordination of the chronically and multiply impaired patient remains unclear.

Another strategy…is the creation of voluntary accountable care organizations…[which] would allow groups of providers meeting threshold requirements to share in the savings they achieve from serving a minimum number of patients. There would be no "gatekeeper" or other change from current payment systems or benefits. Instead, the ACO as a whole would be responsible for the overall cost and quality of care for those patients assigned to it. Savings to be shared by ACO members would be calculated from an estimated baseline for serving its assigned recipients, who would remain free to seek medical care beyond the ACO… Proponents believe that ACOs would provide a flexible approach to fostering cost control by creating an incentive, not currently in existence, for providers to reduce unnecessary volume of services while improving quality of care…While the general concept has shown promise…success in broader applications would depend on several factors that are far from certain… Still, according to CBO, "By encouraging providers to begin developing more efficient systems for delivering care, this option could be an initial step toward changing providers' current systems of delivering care and could pave the way for greater changes in the future."

…[In conclusion,] with the exception of ACOs,…[these three initiatives] don't address head on the proclivity of our fee-for-service systems to profit from more rather than less service…For the most part, the predisposition of the nation's health care providers will still be to spend whatever the public's mélange of health care financing options permits, which in the aggregate operates with few dictates of what constitutes the most cost-efficient care…[These] initiatives are probably best seen as only the beginning of what likely will be a complex and stressful search for health care savings.

The concerns raised by Mr. Koitz are valid, but he overlooks certain important things about the potential of health IT (HIT) if it is used in meaningful ways. Specifically, it fails to consider the possibility of very low-cost EHRs and PHRs bundled with next-generation clinical decision support tools providing patient centered cognitive support (PCCS). These tools would deliver the following benefits:

• They would not only reduce duplication in services and error rates, but also help lower overall expenditures by promoting consistent delivery of the most cost-effective care based on the most recent research.
• They would guide clinicians and patients in selecting the treatment and preventive options demonstrating the greatest efficacy for the lowest cost and with the least risk.
• They would promote ongoing clinical outcomes research by feeding an evolving data warehouse that researchers and other collaborators use to develop and evolve evidence-based practice guidelines that are incorporated into the decision support tools.
• They would enable clinicians to override guideline recommendations and offer valid justifications for such variance. The variant procedures and their outcomes would be added to the research data warehouse, thereby (a) reducing the likelihood of unnecessary, inappropriate, ineffective, and inefficient care and (b) continually improving the guidelines themselves.
• By including a cyberinfrastructure promoting development and evolution of PCCS-based decision support models, those tools would become ever more reliable and useful.
• All of this would counter the tendency for fee-for-service providers to profit from the delivery of unnecessary or excessively costly care by replacing the fallacious notion that more (expensive) care is better care. Instead, the focus would be on identifying and delivering cost-effective care and rewarding providers who render such high-value products and services.
• It would also facilitate the medical home, ACO, and care coordination strategies—which I contend have great potential—as well as make wellness programs more effective.

Mr. Koitz also make a valid point about how keeping people healthier longer through wellness programs and medical homes is more likely to result in greater number of elderly with multiple expensive chronic conditions (even though they may occur later in life). I don't have a solution for this since there is no way refute the fact that our healthcare costs would be much lower if many more people were to die younger, and even more so if they were healthy and young when they died (a disgusting proposition!).

When it comes to dealing with security and privacy of personal health information (PHI), there are innovative solutions in which the patient/consumer is in control of one's own PHI without great expense (such as I describe at this link).

I also agree with Mr. Koitz in his assertion that significant short-term savings are unlikely, no matter what is done at this time. This sad situation, I contend, is the result of years of inaction; it is not due to any inherent shortcomings of strategies focused on deployment of next-generation HIT, medical homes, and care coordination. I say this after years of frustration. Similar strategies were recommended over 20 years ago, but our calls fell on deaf ears. If such strategies were implemented back then, we would have already been enjoying the benefits of lower cost and higher quality. In fact, we may very well have avoided our current catastrophic situation!

Radical transformation of our healthcare system is a MUST DO, and if our priorities are right, it's also a CAN DO. Moving slowly or continuing to wait is unacceptable since the situation will only worsen. While I'm hopeful that fundamental change is about to happen, my enthusiasm is tempered by our history. After all, there's good reason to believe that Winston Churchill was correct when he said: "You can always count on Americans to do the right thing — after they've tried everything else." We've been engaged in slow, incremental change for decades and it has failed miserably. It's now time to do the right thing…and that's NOT more of the same!

My next post debates gradual versus radical change.