A Business-Based Prescription for Health Care

We recently posted about the travails of the leadership of Caritas Christi Health Care System in Massachusetts, culminating in the firing of the system’s CEO for violating the regulations he, himself, had signed about sexual harassment. This weekend, the Boston Globe ran a commentary on a prescription for “Giving Caritas a healthy future.” It was a prescription that said essentially nothing about the essence of health care, taking care of patients.

The writer was Ellen Lutch Bender, CEO of Bender Strategies LLC, a “healthcare consulting firm,”whose goals are “to enhance bottom line performance and increased market position for our health care clients as they plan for the future,” and a self-proclaimed “visionary.”

She advocated “hiring a strong, visionary, business-minded CEO ... [as] crucial to Caritas's long-term stability.” She asserted that hiring such a leader would be essential to support Caritas’ “healing mission,” but “that mission must be examined for what it is: a sprawling business in a complex, increasingly competitive, capacity-strained environment.” Furthermore, “the healthcare business demands specialized leadership and an organizational structure that supports innovative thinking and fearless decisions. Hospital CEOs must seize business opportunities when they arise.” Particularly, “the next CEO must possess exceptional fiscal management skills....” So, “the challenges facing Caritas argue for a CEO search beyond the traditional physician candidates.” And, “the church, the board, and the new CEO must craft a guiding philosophy balancing religious tenets, sensible business practices, and executive independence.”

Bender’s prescription never once acknowledges the real mission of hospitals, taking care of (mainly sick) people. To her, a hospital is only a “business” in a “competitive environment.” Her description of the ideal leader of a hospital requires no knowledge of health care, nor any commitment to the values of health care. In fact, Bender warned that a sufficiently “quick and nimble” leader would not be attracted “by a constraining, bureaucratic reporting system,” presumably one that actually required that leader to conform to a code of ethics, or put patients ahead of making “bold, foundational changes.”

This commentary makes very clear what sort of thinking pervades the current leadership of health care. Health care is a business, like any other, without any particular values or ideals that set it apart from manufacturing automobiles, or hauling trash.

This thinking has been going on at least since the 1980's, when Einthoven, one of the leaders of the managed care movement, called for breaking up the “physicians guild” and putting managers and bureaucrats in charge of health care in order to constrain health care costs. (See post here.)

Doing that, of course, has not constrained costs, not improved access, and not improved quality. It has lead to a huge increase in the number of health care managers, who now out-number physicians (see post here.) It has let top health care executives make a tremendous amount of money (see post here). It has given health care a few leaders hailed as “visionaries,” some of whom have been monumental flops. (See for example the case of the “visionary” CEO of Allegheny Health Education and Research Foundation, who ended up in federal prison, and whose health care system ended in the second-largest bankruptcy at the time in US history, here on pages 5-7.)

Maybe it’s time to get health care leaders who understand something about taking care of patients, and who put the mission first (and then let them hire savvy business-people to keep the finances in order).

ADDENDUM (July 16, 2006) Ms Bender also urged Caritas to follow the example of Catholic Healthcare West, which she described as "enormously succesful." Yesterday, the San Francisco Chronicle reported that Catholic Healthcare West just settled a lawsuit which alleged that the system "charged excessive and unfair amounts to the small percentage of patients who were not covered by Medicare, Medicaid, or private insurance, and then set aggressive collection agencies on them when they couldn't pay." These practices seemed to directly contradict part of Catholic Healthcare West's stated mission: "serving and advocating for our sisters and brothers who are poor and disenfranchised." Again, what may look like an "enormously succesful" organization to a businessperson may not appear to succesful to patients and physicians. I repeat: maybe it's time to get health care leaders who understand something about taking care of patients, and who put the mission first.

A Skeptical Look at Pay for Performance

The latest issue of the American Medical News took on pay for performance (p4P), including the views of some skeptics. We had posted about some of the potential problems with the pay for performance concept here. Note that P4P in health care these days pretty much is restricted to payers (managed care, government agencies, and/or employers) rating physicians on their "performance," and then giving them financial incentives accordingly.

Let me suumarize some of the concerns about pay for performance, quote some of the skeptics interviewed by the American Medical News, then quote responses from the P4P advocates, and add my comments.

P4P May Use Outcome Measures Without Adjusting Adqeuately for Patients' Characteristics, Leading to Perverse Incentives

Dr Randall Maxey said, referring to patients' ability to comply or to afford care:

It's going to be a lot easier to treat a little old lady from Beverly Hills. Some communities are more compliant and more health-literate and have more resources to influence outcomes than others. I may treat you exactly correctly and give you the right pills, but if you have to choose between buying pills and giving your baby milk, that drug may lose out and my performance may be judged as poor because of it.

Dr Roy M. Poses (that's me) said:

Outcomes are determined not just by what the physician does but by how sick the patient is, what his or her other characteristics are, and to some extent, by chance. If you don't control for patient characteristics, you can have a perverse system.

In response, Janet Corrigan PhD, CEO of the National Quality Forum, said,

It's recognized by everyone that these are not measures that are under the control of an individual clinician, but there are important things a primary-care provider can to do to encourage patients to adopt the right behaviors.

Then what sense does it make to use the measures to assess physicians? Outcomes that are beyond an "individual clinician's" control do not reflect that clinician's performance.

Furthermore, Dr Greg Pawlson, executive vice president of the National Committee for Quality Assurance, said,

Not everybody's patients can be sicker.

No, but a system that gives poorer grades to physicians whose patients actually are sicker would be perverse.

Process-Based Measures Should Reflect Processes Actually Under the Control of Physicians

Dr Chuck Kilo said,

Do I get dinged if a diabetic chooses not to have their A1c tested, or is my recommendation sufficient to get credit? If so, then that leaves a lot of room for gaming the system.

Measures Based on Administrative Data are Suspect Because the Quality of the Data May be Poor

Dr Kilo also said,

Health plans have been measuring practices and sending data back for a long time, and most doctors would throw them in the circular file. Somewhere between 10% or 50% of the patients they have listed as mine are not mine. It doesn't take a whole lot of erroneous data built into it for doctors to write off the whole thing.

Measures Meant to Control Costs Will Not Measure Quality

I said,

If the measurement systems or incentives are really designed to save costs for health plans, they may push physicians not to do that which would be the best for the patient in terms of clinical care and clinical outcomes. The devil is in the details.

Summary

It's nice to see some balanced coverage of this issue, given all the hype it's getting from managed care, government agencies, and payers.

Remember that there are problems with P4P as it's currently formulated that were not addressed by this article. In particular, most pay for performance measures so far are about primary care, or primary and secondary prevention. Few are about specialty care, diagnosis, or management of acute illnesses. Furthermore, most measures are targeted at single diseases, and developed from studies of patients with only one disease. Few take into account management of patients with multiple diseases (who are not rare), or management of patients with ill-defined complaints. Measures focused on only a fraction of medical care can lead to another kind of perverse effect. Pushing doctors only to improve their performance in very limited areas may reduce their time and resources to even maintain performance in other areas. Since performance in those other areas is not measured, no one may notice it declining.

Health Affairs Interview Lets Dr David Baltimore Sing the Praises of Biotechnology

Health Affairs recently interviewed Dr David Baltimore, the current President of the California Institute of Technology, and winner of a Nobel Prize. Its abstract stated, "as a man with equal interests in science and science policy, David Baltimore has been at the forefront of many of the important debates that have shaped science since the 1970s." [Culliton BJ. Science for life: a conversation with Nobel Laureate David Baltimore. Health Aff 2006; 25: w235-240.]

The interviewer pretty much let Dr Baltimore sing the praises of biotechnology. The article included his justification for the extremely high prices of biotechnology drugs. He acknowledged prices were high, but felt the prices were justified by the benefits, and to some extent the small size of the market for the drugs.

Well, the people who do benefit, benefit enormously. I would only support a system that enabled those people to get them. Now, the cost of their getting it could be very high. But we’re willing to pay enormous sums of money for people to get drugs that are worthwhile.... But they’ve been able to charge hundreds of thousands of dollars per patient per year for the drug because people believe that it’s important for it to be available. And it’s not because the drug is so expensive to make. It’s because there are so few patients who need it that to have a supply of it and therefore to make it valuable to the company to produce it, they’ve got to charge a lot for it.

Furthermore, Dr Baltimore argued that the US is rich enough to afford high-priced biotechnology drugs.

We’re in a highly developed country where it’s a matter of, Do you spend the money to keep a few people alive, or do you spend the money on something crazy like the war in Iraq? In my opinion, it is much more important to keep those few people alive.

Also

That industry has provided expensive treatments for life-threatening diseases. It’s clearly met previously unmet medical needs. And the overall financial burden on the health care system, as I understand it, is not enormous because drugs are still 10–15 percent of medical costs. So for all the development of biotechnology, it has not overwhelmed the health care industry.

Finally, he argued for the economic benefits of the biotechnology industry.

And the amount of revenue that comes to the state of California is clearly in the billions of dollars. You know, a company like Amgen—one of the early biotech companies—probably employs 15,000 researchers and other workers. So, sure, these are big companies. Amgen is the cornerstone of the wealth of Thousand Oaks.

The interview did include a brief aside about conflict of interest, an issue that Dr Baltimore did not find very problematic.

This can be a sticky issue, but I think most universities have handled it well. The major conflicts relate not to basic research but to clinical research.
We have not instituted new policies at Caltech, but we do monitor the situation closely.

All in all, it amounted almost to a hymn of praise for biotechnology, unmarred by any doubts about its usefulness or value to society, or any doubts that society should pay every dollar charged by biotechnology companies. It was quite a striking testimonial, coming as it did from a Nobel Laureate.

What the article left out was that it was also coming from someone with very strong financial ties to the biotechnology industry. In fact, Dr Baltimore sits on the board of directors of three biotechnology companies: Amgen, MedImmune, and Cellerant Therapeutics. Note that Dr Baltimore above praised the economic contribution of Amgen to California without acknowledging his legal responsibility to maximize the profits of that self-same corporation.

Perhaps the interviewer could be excused for not discovering these apparent conflicts of interest. Caltech's main presidential biographical page on Dr Baltimore fails to list his board memberships, as does his page in the Biology Division, as does the press release announcing his appointment as president.

If Health Affairs wants to let a member of the board of directors of Amgen sing the praises of biotechnology, that is fine, but the journal should thus identify that person. Readers ought to know about strong financial interests, and in this case, fiduciary interests, that may have bearing on the content of what they publish.

Blaming Physicians Who Do Not Contract With Managed Care

The Center for Health System Changed just released a tracking report (available here) on physicians' relationships with managed care networks. The most important findings were that there has been a relatively large increase in the small numbers of physicians who do not contract with any managed care organization (MCO), from 9.2% of physicians in 2000-1 to 11.5% in 2004-5, or get no revenue from any MCO, from 5.8% to 8.6%.

How the press release from the Center summarized these findings is instructive. It quoted Paul B Ginsburg, President of the Center:

While physicians have not dropped out of managed care networks in large numbers, this small but statistically significant increase could signal a trend toward greater out-of-pocket costs for patients and a decline in patient access to physicians.

Note that this quote managed to suggest two things:

• That physicians, not managed care organizations, were responsible for the problem.
• That physicians' actions would increase costs and decrease access.

Excuse me? Just as good an explanation is that a small but increasing number of physicians can no longer tolerate working with contemporary managed care. In fact, the full report is more balanced, mentioning "physicians are frustrated by costly and time-consuming administrative burdens and low payment rates associated with health insurance contracts...." It also acknowledged that the effects of this pheonomenon on cost and access may be complex, and in fact could improve access for some patients involved.
Perusal of Health Care Renewal will reveal that managed care organizations, like other large health care organizations, are beset by problems that go far beyond bureaucracy and low reimbursement rates. Some of our more recent posts on Health Care Renewal have featured how:

• Kaiser Permanente mismanged the initiation of its kidney transplant program (here)
• WellPoint in California allegedly had a unit which retroactively denied patients coverage if they made mistakes on their applications form (here)
• UnitedHealth gave its CEO a cache of stock options now worth a staggering $1.6 billion, while its mission proclaims its support of "affordable health care" (here), while UnitedHealth's board of directors include academics with potentially major conflicts of interest (here and here)
• Many US urban health care markets have become dominated by one or a few managed care organizations or insurance companies (here)

Such problems, and many others reported earlier on Health Care Renewal, and extensively in the early literature on managed care, suggest that managed care may in fact bear responsibility for increased costs, decreased access, and stagnant quality in US health care.
So perhaps it is not irrational, nor dishonorable for some physicians to want to back away from relationships with managed care organizations.
Yet too often the health services research and health policy literature seems quick to blame physicians for problems, and reluctant to assign any responsibility to large health care organizations, such as managed care organizations, and their leaders.

To Whom Do "Udidoos" Owe a Duty?

We recently posted at length about the negative consequences of the growing control of managers and bureaucrats over health care. This may have been inspired by the call of one of the key advocates of managed care, Alain Einthoven, to break up the supposed physicians' "guild."

This theme seems to be on many minds. Philip Alper writes an interesting, pithy column on medicine and health care for the Internal Medicine World Report, (unfortunately not available on the web). In his February column, he took up the issue of the intrusion of managers and bureaucrats into practice.

He coined the term "udoos" for those who say "you do this and you do that," "udids," for those who "chillingly remind us that 'you did this and you did that." He noted, "both types are familiar to physicians because authority figures and critics with whom we interact characteristically speak this language."

Further, the managers who must "redress our [physicians'] failures," he termed "udidoos, who offer 'because'-based prescriptions for doing better in the future. Udidoos simultaneously creat guilt and the promise of expiation. Consequent anxiety pushes us to accept the controls of managed care, for example, no matter what doubts we may privately harbor about their utility or effectiveness."

Alper went on to critique The Future of Primary Care, edited by Showstack et al. He took particular exception to a chapter by Mary O'Neill Mundinger, RN, DrPH, Dean of the Columbia University School of Nursing, whom he would apparently would consider a "udidoo." The chapter was entitled "Advanced Practice Nurses: The Preferred Primary Care Providers for the 21st Century."

Mundinger's prescription as a "udidoo" was for advanced practice nurses (APNs) to take over from primary care physicians. As Alper wrote, "the underlying notion is that nurses are better suited than physicians to be primary care providers. There is no attempt at collegiality here. Dr Mundinger has previously written about why nurses should be paid the same as doctors (they get equal results). Now she wants not only to replace the primary physician but also commandeer their title." Alper finally decided,

Maybe the best thing to do is to just laugh. Even gallows humor certainly beats crying - or going crazy.

Although I do not have a copy of the book, Mundinger has made similar assertions elsewhere. For example, in Pediatrics,(1) she wrote that physicians should be subservient to nurses (and others) in health care teams, "the disease specialist - the pediatrician - merits leadership of the team only when disease is the major concern. At other times, it may be the nurse practitioner... who directs the team." And she asserted that pediatric nurse practitioners are more competent than some physicians in caring for children: "it is questionable that non-pediatric physicians are more qualified to care for children than pediatric nurse practitioners. Education for non-pediatric physicians is often limited to 1-month clerkships in pediatric medicine during the third year of medical school." Furthermore, she claimed these nurse practitioners spend five times as much time in pediatric training than do family physicians.

In a review article in Academic Medicine,(2) Mundinger claimed "APNs - whose advanced primary care is delivered with full accountability and is indistinguishable from such care delivered by physicians - offer a different style of practice, which involves caring, nurturing, support, engagement with patients, attention to illness prevention and health promotion, and patient education."

Mundinger was the lead author of the study that claimed outcomes of patients seen by nurse practitioners in ambulatory settings were comparable to those seen by primary care physicians.(3) The study received wide attention, although its external validity was questioned.(4)

Mundinger's advocacy of nurse practitioners as substitutes for and superiors to physicians is helpful for the managed care organizations Alper criticized. Nurse practitioner care currently costs less than physician care. Although physicians have not always loudly expressed their doubts about managed care, as Alper noted above, nurses are not likely to be more vocal.

But while I read Alper's commentary, and then Mundinger's writing, a small voice in my head reminded me that I had just seen her name before. But where?

Ah yes, it was here. A while back, we commented on the irony that Donna Shalalaw, living the good life as president of the University of Miami, was as on the board of directors of UnitedHealth Group, a large commercial managed care organization whose public mission includes making health care more "affordable," while the University of Miami's outsourced maintenance workers, including those who worked at its medical center, had no medical insurance.

On the roster of UnitedHealth Group's board of directors also was the name of Mary O'Neill Mundinger DrPH. She has been on the board since 1997. If one goes to the Columbia University School of Nursing web-site, Dr Mundinger's biographical page does include her directorships (of Welch Allyn, Gentiva Health Systems, Cell Therapeutics as well as UnitedHealth Group). However, none of the articles cited below(1-3) mention her seemingly important conflict of interest. And Dr Alper informed me he saw nothing about it in the book chapter she wrote that he critiqued.

Thus, she has had a fiduciary duty to UnitedHealth Group and its stock-holders since 1997. And it would clearly seem to be in the interest of UnitedHealth Group to reduce its costs by paying for more care by nurse practitioners, and less by physicians. So how much of Mundinger's advocacy of advanced practice nurses to replace physicians is based on her academic work, and how much is based on her duties to UnitedHealth? I cannot tell.

But readers of her work up to now would never have thought of this question, unless they fortuitously had learned about her responsibilities to UnitedHealth from some other source.

In summary, it seems that the more one looks, the more examples one finds of leaders of academic health care organizations who also are directors of health care companies. Yet these often influential figures have not always revealed their conflicts when writing about health care, even when their works relate to the interests of the companies whose interests they are legally bound to protect. So how much of their influential work reflects their professional and academic research and beliefs, and how much reflects their fiduciary responsibilities to commercial organizations? Inquiring minds really want to know.

References
1. Mundinger MO. Toward a quality workforce. Pediatrics 2003; 112: 416-418.
2. Mundinger MO. Twenty-first century primary care: new partnerships between doctors and nurses. Acad Med 2002; 77: 776-780.
3. Mundinger MO et al. Primary care outcomes in patients treated by nurse practitioners or physicians: a randomized controlled trial. JAMA 2000; 283:59-68.
4. Sox HC. Independent primary care practice by nurse practitioners. JAMA 2000;283:106-108.

The Consequences of Breaking the Physicians' "Guild"

In 1988, Alain Enthoven, an original member and driving force of the Jackson Hole group, published a short manifesto about "managed competition." (Entoven AC. Theory and Practice of Managed Competition in Health Care Finance. Amsterdam: North Holland, 1988.) This is now not easy to find (but see Amazon here).

In this volume, Enthoven expounded on his scheme to wrest power over health care from physicians and give it to managers and bureaucrats. Enthoven thought of physicians as part of a tightly organized "guild," that is, an economic alliance. His model for this was a pre-World War II document from a French medical society. Basically, he thought such guilds, which he believed to be in place in all Western democracies except in the UK and Scandinavia, were based on principles that were "not the natural expression of a free market in health care," (p.33) and furthermore, that the guild model associated with health insurance "makes it very difficult for government or private payors to control cost growth," (p.41) while they paradoxically "can also produce poor service (p. 42). To combat physicians' overwhelming economic power, Enthoven called for managers to use "tools they have found to counteract market failure." (p. 98) Finally, he suggested using a coordinated strategy to "break up the guild," noting that "overcoming the guild has not been easy in the United States.... However, the guild has broken down." (P. 122)

Some recent opinion pieces document the consequences of breaking up the guild, and turning health care over to managers and bureaucrats.

Debunking Business Dogmas

US News and World Report reminds us that the conventional wisdom among business managers has often proved to be wrong. Yet many health care managers were big supporters of the dogmas debunked by two two management professors, Jeffrey Pfeffer and Robert Sutton. (See the amazingly titled Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting From Evidence-Based Management) :

• Financial Incentives Drive Good Performance (but instead, they have driven a huge number of health care dollars into the pockets of management, for example, see this recent post).
• First Movers Have the Advantage
• Layoffs Are Good Ways to Cut Costs (still the philosophy of too many health care executives who see everyone, except themselves, as interchangable, and are quick to dispatch those with whom they disagree)
• Mergers Are a Good Idea (but remember the mergers of NYU-Mt Sinai, UCSF -Stanford, and especially the mergers that created the Allegheny Health Education and Research Foundation, all now defunct)
• Life and Work Should Be Kept Separate (which really meant don't treat your employees very well, because they can always return to their lives outside of work).

Let's see how long it takes for the news to get out to health care managers.
A Melancholic Look at the Marketing of Pharmaceuticals
In the Atlantic Monthly, Carl Elliott's take on the commercialization of American health care, and how drug marketing has compromised physicians is a must-read. (Web access requires a subscription. The article was briefly posted in its entirety here, but the Atlantic Monthly forced the web-site to take it down. Therefore, I have provided some key quotes, and hope that the Atlantic Monthly will not find them excessive:

For better or worse, America has turned its healthcare system over to the same market forces that transformed the village hardware store into Home Depot and the corner pharmacy into a strip-mall CVS.

For decades the medical community has debated whether gifts and perks from reps have any real effect. Doctors insist that they do not. Studies in the medical literature indicate just the opposite. Doctors who take gifts from a company, studies show, are more likely to prescribe that company’s drugs or ask that they be added to their hospital’s formulary. The pharmaceutical industry has managed this debate skillfully, pouring vast resources into gifts for doctors while simultaneously reassuring them that their integrity prevents them from being influenced.

Doctors’ belief in their own incorruptibility appears to be honestly held. It is rare to hear a doctor—even in private, off-the-record conversation—admit that industry gifts have made a difference in his or her prescribing. In fact, according to one small study of medical residents in the Canadian Medical Association Journal, one way to convince doctors that they cannot be influenced by gifts may be to give them one; the more gifts a doctor takes, the more likely that doctor is to believe that the gifts have had no effect. This helps explain why it makes sense for reps to give away even small gifts. A particular gift may have no influence, but it might make a doctor more apt to think that he or she would not be influenced by larger gifts in the future.

The late 1980s and the 1990s [were] a period when the drug industry was undergoing
key transformations. Its ethos was changing from that of the country-club establishment to the aggressive, newmoney entrepreneur. Impressed by the success of AIDS activists in pushing for faster drug approvals, the drug industry increased pressure on the FDA to let companies bring drugs to the market more quickly. As a result, in 1992 Congress passed the Prescription Drug User Fee Act, under which drug companies pay a variety of fees to the FDA, with the aim of speeding up drug approval (thereby making the drug industry a major funder of the agency set up to regulate it). In 1997 the FDA dropped most restrictions on direct-to-consumer advertising of prescription drugs, opening the gate for the eventual Levitra ads on Super Bowl Sunday and Zoloft cartoons during daytime television shows. The drug industry also became a big political player in Washington: by 2005, according to The Center for Public Integrity, its lobbying organization had become the largest in the country.

Many companies started hitting for the fences, concentrating on potential blockbuster drugs for chronic illnesses in huge populations: Claritin for allergies, Viagra for impotence, Vioxx for arthritis, Prozac for depression. Successful drugs were followed by a flurry of competing me-too drugs. For most of the 1990s and the early part of this decade, the pharmaceutical industry was easily the most profitable business sector in America. In 2002, according to Public Citizen,
a nonprofit watchdog group, the combined profits of the top ten pharmaceutical companies in the Fortune 500 exceeded the combined profits of the other 490 companies.

During this period reps began to feel the influence of a new generation of executives intent on bringing market values to an industry that had been slow to embrace them. Anthony Wild, who was hired to lead Parke-Davis in the mid-1990s, told the journalist Greg Critser, the author of Generation Rx, that one of his first moves upon his appointment was to increase the incentive pay given to successful reps. Wild saw no reason to cap reps’ incentives. As he said to the company’s older executives, “Why not let them get rich?”

The industry began hiring more and more reps, many with backgrounds in sales (rather than, say, pharmacy, nursing, or biology). Some older reps say that during this period the industry replaced the serious detail man with “Pharma Barbie” and “Pharma Ken,” whose medical knowledge was exceeded by their looks and catering skills. A newer, regimented style of selling began to replace the improvisational, more personal style of the old-school reps. Whatever was left of an ethic of service gave way to an ethic of salesmanship.

Many doctors began to feel as though they deserved whatever gifts and perks they could get because reps were such an irritation.

The trick is to give doctors gifts without making them feel that they are being bought. “Bribes that aren’t considered bribes,” Oldani says. “This, my friend, is the essence of pharmaceutical gifting.” According to Oldani, the way to make a gift feel different from a bribe is to make it personal.

Such gifts do not come with an explicit quid pro quo, of course. Whatever obligation doctors feel to write scripts for a rep’s products usually comes from the general sense of reciprocity implied by the ritual of gift-giving. But it is impossible to avoid the hard reality informing these ritualized exchanges: reps would not give doctors free stuff if they did not expect more scripts.

Drug company–sponsored consultancies, advisory-board memberships, and speaking engagements have become so common,especially among medical-school faculty.... The industry as a whole is hiring more and more doctors as speakers. In 2004, it sponsored nearly twice as many educational events led by doctors as by reps. Not long before, the numbers had been roughly equal. This raises the question, Are doctors becoming the new drug reps?

According to an internal study by Merck, reported in The Wall Street Journal, doctors who attended a lecture by another doctor subsequently wrote nearly four times more prescriptions for Vioxx than doctors who attended an event led by a rep. The return on investment for doctor-led events was nearly twice that of rep-led events, even after subtracting the generous fees Merck paid to the doctors who spoke. These speaking invitations work much like gifts. While reps hope, of course, that a doctor who is speaking on behalf of their company will give their drugs good PR, they also know that such a doctor is more likely to write prescriptions for their drugs.

The semi-official industry term for these speakers and consultants is “thought leaders,” or “key opinion leaders.” Some thought leaders do not stay loyal to one company but rather generate a tidy supplemental income by speaking and consulting for a number of different companies. Reps refer to these doctors as “drug whores.”
Thought leaders serve an indispensable function when it comes to a potentially very lucrative marketing niche: offlabel promotion, or promoting a drug for uses other than those for which it was approved by the FDA—something reps are strictly forbidden to do.

Now for the most melancholy conclusions,

In 1997, John Lantos, a pediatrician and ethicist at the University of Chicago, wrote a book called Do We Still Need Doctors? We will always need health care, of course. But, as Lantos observes, it is not clear that we will always need to get our health care from doctors. Many of us already get it from other providers—nurses, physical therapists, clinical psychologists, nutritionists, respiratory therapists, and so on. The figure of “the doctor” is not cast in stone.

We simply live in a country that has decided that the traditional figure of the doctor is not worth preserving in the face of modern economics. Instead, we put our trust in the market.

Not if Health Care Renewal can help it!

The Seven Minute Visit

Peter Salgo is a physician who is also upset about the demise of the traditional figure of the doctor, but seemingly despairs about doctors' prospects for challenging the managers and bureaucrats. He just wrote an op-ed in the New York Times. He sees the problem beginning when managers broke the physicians' "guild,"

Patients aren't unhappy just because health care costs too much (though they would certainly like it to be more affordable). Rather, people sense a malaise within the system that has eroded the respect they feel patients deserve.

As health-care dollars became scarce in the 1980's and 90's, hospitals asked their business people to attend clinical meetings. The object was to see what doctors were doing that cost a lot of money, then to try and do things more efficiently. Almost immediately, I noticed that business jargon was becoming commonplace. "Patients" began to disappear. They were replaced by "consumers." They eventually became "customers."

Doctors in hospitals all over the country began hearing the same business language and facing the same pressures to "keep things moving." I used to be asked how well my patients were doing. Suddenly administrators were asking how long I was planning on keeping sick people in the intensive care unit.

Yet, he seems to feel a degree of learned helplessness,

Doctors know you cannot provide compassion in seven-minute aliquots. But we have felt powerless to change things. The medical establishment has, many of us feel, simply rolled over and gone along to get along. It has sacrificed patients' best interests on the altar of financial return.
This leaves the solution to the problem in the hands of our patients. You, the patient, are the system's best hope. Evaluate what it is you expect from your doctor, then ask for it. If you are unhappy with your doctor, fire him. If you cannot get more than a seven-minute face-to-face encounter with your doctor, he needs fewer patients.

The problem with this scheme, of course, is that primary care doctors are getting scarcer and scarcer. The American College of Physicians just reported, for example, that the number of medical school graduates training in general internal medicine has reached a new low. So in my humble opinion, we doctors cannot just wearily leave the field, hoping that patients alone will be able to take on the bureaucrats and managers. The doctors, along with other health professionals, and patients are all in this mess together, and we will all need to work to clean it up.

I do agree with Salgo's hopes for the results of doing something.

In one respect the business people are right. Restoring the doctor-patient relationship will not save anyone any money. But I submit that it doesn't have to. There are other ways to curtail health care costs. Some involve high technology; others do not. None of them requires patients to sacrifice their self-respect.

We can and must reduce health care expenses. But we cannot do it at the expense of patients' well-being. The doctor-patient relationship is critical to the integrity of the health care system. It is not disposable. Turning doctors into shopkeepers who regard patients as customers is unacceptable.

Pay For Performance: The Train Has Left the Station, But Will It Stay On the Tracks?

There has been a bit of discussion of the pay for performance issue on several other health care blogs. Retired Doc's Thoughts kicked it off by highlighting discussion of the issue in Internal Medicine World Report by Philip Alper. Both Alper and Retired Doc were concerned about the American College of Physicians (ACP) new partnership with, among others, commercial managed care in the Ambulatory Care Quality Alliance (AQA). Retired Doc asked,

Whose interests will ACP represent as they swim with the sharks of the insurance industry?

Next to take up the topic was Medical Rants,

The ACP leadership has met with insurers and legislators. The quality train has left the station. Too many “experts” have espoused the value of quality measures for the ACP to ignore this movement.
Nonetheless, whether the ACP (or any organization) participates, we will have pay for performance. The ACP has chosen to participate in hopes of controlling the runaway train.

I reluctantly concur that physicians must engage with the proponents of pay-for-performance. But there are a number of important issues they will have to bring up if this movement is to have any net benefit for patients, and at least not heap further misery on physicians.

• How will pay-for-performance guard against perverse incentives? - As someone who has done research in the area, I am very concerned that outcome-based quality measures are likely to lead to perverse incentives. Bad outcomes occur to sicker patients, and we do not yet have reliable methods to control for how sick patients are when measuring outcomes. Thus, outcome-based performance measures are likely to penalize physicians who care for the sickest patients. Although many proposed pay-for-performance measures are "evidence-based" process measures, they too have the potential to create perverse incentives. Putting all the emphasis on a few process measures may distract physicians from doing other things for patients that may have a greater impact on their health. I am not aware of any studies that have tested to see whether stressing such measures has a negative effect on other aspects of health care quality or patient outcomes (but if you do not study it, you will not be able to find an effect.)
• Is pay-for-performance really about quality, or minimizing cost to commercial managed care organizations? - For example, the programs lately pushed by UnitedHealth to rate physicians(like this one, proposed for Kansas City) seem to weight quality of care and "efficiency" equally. "Efficiency" here means saving money for UnitedHealth (presumably so the company will have even more money to pay lavish executive compensation, as documented here and here.) Rewarding "efficiency" in this way tells physicians that they are valued most when they do the least for patients. Having primary care physicians do less could let UnitedHealth cut its costs further without having to address the uncomfortable issue of how well it reimburses for high-tech devices and hospitalizations (e.g. regarding the latter, see this).
• Why is all the emphasis on ambulatory care? - There is ample evidence that primary care physicians have been inordinately stressed by various methods used to control costs by the government and managed care. As we have discussed before, the result is fewer physicians going into primary care. Yet the AQA will deal only with "ambulatory care," and most of the current set of proposed measures would mainly impact primary care. There is no reason to believe that primary care doctors currently are less competent practitioners that specialists, or cause more quality problems than other people involved in health care. Why add to their stress while ignoring quality problems in other parts of the health care system? (For example, isn't producing implantable cardiac defibrillators [ICDs] that are liable to short-circuit and fail, and withholding this information from physicians and the public for years, as Guidant did, not a major quality problem? Why aren't managed care organizations, who may have paid $25,000 for each potentially faulty ICD, concerned about this aspect of quality?)

Finally, let me address the issue that the "train has left the station." Since health care has been dominated more and more by people from the business world, we have heard about a lot of trains that have left the station. Many of them derailed. For example, remember:

• Large, vertically-integrated health care systems - These were all the rage in the mid-1990s. For example, a New England Journal of Medicine Sounding Board article in 1994 proclaimed, "many academic medical centers are developing complex organizations of physicians and large health networks that provide managed care to large groups of people." "The rationale is that a surplus of revenues from clinical care provided by hospitals and professionals is needed to continue support for research and teaching." (1) Furthermore, Sherif Abdelhak, the then-CEO of the Allegheny Health Education and Research Foundation, the then largest health care system in Pennsylvania, proclaimed in Academic Medicine in 1996, "we will need to create new forms of organization that are more flexible, more adaptive, and more agile than ever before." (2) Of course, merger mania, as it was later called, produced financial disasters in some of its applications. Abdelhak's AHERF went bankrupt, and Abdelhak went to jail, convicted of misappropriating charitable funds. (3)
• Physicians as gate-keepers - This fad started in the 1980s, (unfortunately, promoted by John M. Eisenberg, among others, [4]), and lasted through the mid-1990s. For example, in 1992, another New England Journal of Medicine Sounding Board proclaimed, "over90 percent of health maintenance organizations (HMOs} use primary care physicians as gate-keepers. (5) Gate-keeping is all but abandoned now.
• Capitation - Again, from the New England Journal, "those who favor capitation seem to regard it as the sine qua non of effective containment of health care costs.... Meanwhile, health care coverage for more and more Americans is paid for in this way. Between 1987 and 1995, for example, the number of Medicare beneficiaries whose health care was paid by capitation (under so-called risk contracts) almost tripled." (6) Capitation is also now rare.

So just because pay-for-performance is now currently fashionable among health care management types does not mean that will remain so for long, or that it will work very well. Physicians have an ethical responsibility to contribute to this debate, but in a highly skeptical manner, informed by real evidence, and with the goal of improving patient outcomes, while not further fraying our already threadbare capacity to provide accessible, high-quality primary care.
References
1. Rogers MC, SNyderman R, Rogers EL. Cultural and organizational implications of academic managed care networks. N Engl J Med 1994; 331: 1374-1377.
2. Abdelhak SS. How one academic health center is successfully facing the future. Acad Med 1996; 71: 329-336.
3. McKinnon J. Ex-AHERF chief pleads no contest: Abedlhak faces two years in jail. Pittsburgh Post-Gazette, August 30, 2002. P. B-1.
4. Eisenberg JM. The internist as gatekeeper: preparing the general internist for a new role. Ann Intern Med 1985; 102: 537-543.
5. Franks P, Clancy CM, Nutting PA. Gatekeeping revisited - protecting patients from overtreatment. N Engl J Med 1992; 327: 424-429.
6. Berwick DM. Payment by capitation and the quality of care. N Engl J Med 1996; 335: 1227-1231.

Massive Health Care Waste? - Follow-Up

For Kling's response on the EconLog blog to the post below about waste in health care, go here. (For some comments on his Tech Central Station article, go here.) He raises some interesting issues on the cost of old technology versus "high technology." It will be interesting to see whether this generates any comments from those more expert in the economics end of this.

Is Massive Health Care Waste a Myth?

There is an interesting contrarian piece on the costs of health care by Arnold Kling on Tech Central Station, which was also picked up by Tyler Cowen on Marginal Revolution.

Like some other comments by libertarian economists on health care, I found it intersting and provocative. I also found myself agreeing with some, and strongly disagreeing with other points he made.

To summarize, he contends that the US spends more than other countries on health care, but also provides significantly better health care. He thinks that the "usual subjects" rounded up in arguments to support the massive inefficiency of US health care are not guilty as charged. These suspects include spending on the last year of life, drug company profits and overhead, and administrative overhead. Finally, he thinks we spend too much on physician compensation and high-technology procedures.

My comments, point by point, are

• Paying More to Get More - I think this idea is defensible, and I would like to see it discussed better and more often in the medical and health care literature. Surely, we can now cure illnesses that we couldn't cure before, and we can substantially improve the lots of patients with many other illnesses whom we couldn't effectively treat in the past.
• Spending in the Final Year of Life - His arguments are reasonable, and again, I would like to see this issue discussed more clearly and rationally in the literature, with a bit more attention to the clinical context and the clinical epidemiological issues.
• Drug Company Profits - This industry is often made into the bogey-man. In our criticisms of it, we should not ignore the fact that the industry provides us with many of the means to treat illness and alleviate suffering that we use to such good effect. On the other hand, their have been numerous abuses perpetrated by drug companies, some of which we have discussed on this blog. Furthermore, this is a bit of a straw man argument. I do think that if one considers the total profits and overhead not only of drug companies, but also of device manufacturers, information technology providers, managed care and health insurance companies, hospitals and hospital systems, and all the other miscellaneous players in our horribly complex US system, they would clearly in toto be excessive. Then, if you consider the various ways some of these organizations have acted in conflict with physicians' core values, the problem is even greater.
• Administrative Overhead - Admittedly, the data about this issue is not very good. But I suspect the reason it is not very good is that researchers have been timid about addressing the issue, not because there is not a lot of administrative waste and inefficiency. My personal observation is that physicians, especially primary care physicians are drowning in paperwork and bureacracy, and so are hospitals. I did find one study of interest. MGMA compiled detailed data on the administrative and bureaucratic tasks that physician group practices must perform. They found that group practices were spending about $24,750 per physician on some specific "unnecessarily complex or redundant administrative tasks." I suspect that the more researchers look for administrative and bureaucratic tasks that physicians, other health professionals, and hospitals must undertake, the more they will find. Adminstrative and bureacratic methods to control costs may cost more than they are worth. Yet the administrative and bureaucratic load on physicians seems to continue to climb.
• Physicians' Compensation - I am not sure where Kling got his numbers. My sense, and a brief web search suggests that the compensation primary care and "cognitive" physicians receive is comparable to that of physicians in other developed countries. For example, here is data on the compensation of UK physicians in 2002. Note that consultants, i.e., physicians who have finished their hospital training, get from 52,000 to 133,000 pounds sterling. On the other hand, here is data on average levels of physician compensation in the US in 2002 by specialty. Note that internists, family practitioners, and pediatricians average about $150,000 to $160,000. Correcting for the exchange rate in 2002, this would have been quite comparable to what UK physicians got. Of course, "procedural" specialists like anesthesiologists got much more. Kling suggested reducing physician compensation to levels comparable to those in other developed countries. My best guess is this would have little effect on "primary care" and "cognitive" as opposed to "procedural" physicians, perhaps even raising some of their pay. It would have major effects on "procedural" physicians. Its effect on total health care costs would be considerably less than Kling expects.
• High-Technology - Here I suspect Kling is very much on target. The question is why such interventions are so expensive. It's interesting that the examples he used, CT scans, MRI scans, and open-heart surgery, were of technologies developed 30+ years ago. CT scans, for example, were developed in the 1960's by Sir Godfrey Hounsfield. So his examples are actually of mature, not "high-" technologies. Outside of medicine, the price of technologies drop as they age. Admittedly, there have been many incremental improvements in CT scans, but there have been no revolutionary changes. In particular, the "C" in "CT" stands for computer. CT scans use computers to process multiple x-ray images into the images of body slices which we are familiar. The original CT scanners used main-frame computers to do the image processing. Main-frames were very expensive in the 1960's. Yet now one can get a personal computer that is just as powerful for a many orders of magnitude lower price. Since a large part of the expense of CT scanning used to be computer hardware and software, why hasn't the price dropped like the prices of other computer hardware and software? The biggest failure of managed care and government efforts to control costs seems to be their failure to address the huge costs of "high-" or old technology. One possible explanation is that the people charged with controlling costs in managed care organizations and the government don't really understand the technologies for which they pay. Thus, they don't realize it when specific ones are drastically over-priced.

I hope we can engage folks like Kling in some creative thinking about ussues like this related to health care dysfunction.