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U.S. 'Not Getting What We Pay For'
Since Obama's victory, official Washington has been racing to demonstrate its seriousness about expanding health coverage to every American, while at the same time improving the quality of care. But few of the politicians talk about the difficult trade-offs that will come with any real reform, said Kaplan in Seattle, whose health system follows Toyota's quality-control model.
One fundamental problem is how doctors are paid, he said. Under the current fee-for-service scheme, "the more you do, the more you make," Kaplan said. There is no incentive to keep people out of doctors' offices, hospitals, imaging centers and dialysis clinics.
More tests lead to more procedures, which often result in mistakes, complications, misdiagnoses or the use of untested therapies, said Donald Berwick, president of the Institute for Healthcare Improvement in Cambridge, Mass. "The current system is very hospital-centric," he said. "We wait for people to get sick, and then we invest enormous sums to fix them up. We should build primary care as the core."
It is possible to change the incentives, Kaplan said. Partnering with Starbucks and the insurer Aetna, Virginia Mason devised a new strategy for dealing with back pain, the leading medical complaint of Starbucks' coffee-pouring baristas. Virginia Mason made big money on MRIs, but there is little scientific data that the scans resolve the problem.
So they flipped the process, trying physical therapy first. To make up for some of Virginia Mason's lost revenue, Aetna increased its payment for the therapy. Today, the majority of Starbucks employees with back trouble return to work within 48 hours without an MRI or a prescription, Kaplan said.
"We've shown that you can have superior outcomes at lower costs," Kaplan bragged. He acknowledged, however, that the success on back pain is "one small vignette" in a mega-mess.
Moving from pricey, high-tech solutions such as MRIs to older, low-tech approaches such as physical therapy requires solid data and a culture change, said Helen Darling, president of the National Business Group on Health, which represents large employers. Americans are attracted to innovations, regardless of cost or whether they have been proven to achieve results.
A whole-body scan that is covered by insurance may seem like a bargain, Darling said. "But one way or another we're all paying" for it in higher premiums, increased government expenditures and even false-positive results that lead to more costly, invasive procedures.
The members of Darling's group are in the vanguard of a movement toward comparative effectiveness research, which evaluates various drugs, devices and treatments and publicizes which work best and at what cost. Ideally, doctors and patients armed with that data could make more rational decisions -- such as whether to choose a more expensive, but therapeutically equivalent, medication.
Former senator Thomas A. Daschle, Obama's choice to head the Department of Health and Human Services, endorsed the use of comparative effectiveness data in a book he co-authored.
Better data may also address what Dartmouth College researchers describe as large, "unwarranted" variations in medical spending. Analyzing Medicare payments for patients in the final two years of life, the school's Institute for Health Policy and Clinical Practice found that similar care -- when adjusted for differences in age, race and diagnoses -- cost as much as $93,000 at the UCLA Medical Center and as little as $55,000 at the Mayo and Cleveland clinics. The national average was nearly $53,000.
With those sorts of variations, the Dartmouth team concluded that as much as 30 percent of medical spending -- or $700 billion -- does nothing to improve care.
Even if only a third of that could be invested in critical programs, "imagine the possibilities," said Peter Orszag, head of the Congressional Budget Office, who was nominated last week to be director of the Office of Management and Budget in the Obama administration. "Given the scale of it, I am puzzled as to why we are not doing more to improve the efficiency of the health system."