| 15 April 2016
Dear Interested Readers,
Study Guide For This Week’s LetterI had planned that this week’s letter would be a report from the GPIN meetings in New Orleans where I have been this week. I am putting off that report for a week and writing about two important publications that have captured my attention and imagination. It is rare for me to discover two papers in one week that excite me as much as “Finding Value in Unexpected Places — Fixing the Medicare Physician Fee Schedule” written by Berenson and Goodson in last week’s NEJM and “The Association Between Income and Life Expectancy in the United States, 2001-2014” by Chetty, et. al. in JAMA, published “free” online this week. An added bonus to the JAMA paper was the discovery that the New York Times had used it to produce two articles with interactive graphics that let the reader easily explore the impressive wealth of information that was published in the article. When you click on the New York Times link above you will open up to an article that has a map that will allow you to click on any spot in the country and understand what the life expectancy is there. A second article allows you to type in the name of a location and get even more gender and income specific information and to see a map of surrounding markets. The graphics also show Medicare spending per beneficiary in the area. For example if I type in the market where I now live, which is Merrimack County in New Hampshire, I can see that the average poor individual would lose a full year of life expectancy if they moved moved from Wellesley, MA. (Norfolk County) to New London (Merrimack County, Manchester Area) but would still be a half year better than the average for the poor across the country. The location specific information also allows me to see that in my area of New Hampshire 12.7 % of the population is uninsured and Medicare spends $8200 per individual or $1500 less than the national average of $9700. In Wellesley and Norfolk County 4.5% are uninsured and the average Medicare expense is $9800 or about $100 a year greater than the national average. The shocking reality though is that living in New London at my income level I am scheduled to live eight years longer than the average poor person in the country (income less than $28,000). When you look at my status in New Hampshire by income, adjusted for race, you see that I can expect to live a year longer than if I still lived in Wellesley (Norfolk County, MA). It is always great to know that you made the correct strategic call! The advantages for a retired old guy with some means makes sense to me. If you are financially secure, you are better off in rural New Hampshire than fighting the traffic hassles of living in Boston’s western suburbs. If you are poor you are better off in Eastern Mass even if it means sitting in traffic!
I hope that you realize that the silliness in the paragraph above is my attempt to get you to play with the data and draw your own insights. I believe the validity of the information, in part because of personal knowledge of some of the authors like Professor David Cutler of Harvard, and partly because it supports several of my “biases”. There are a couple of other tools that I would like to give you to process this new information. Big data is a new challenge for many of us in healthcare so the wealth of educational tools that JAMA has put out to help us understand the story that the data is telling is an effort that I hope you will find helpful. Processing complex population data is a new exercise for many in healthcare. There is a great video presentation of less than five minutes that explains the work and is well worth your time if all you have is five minutes to invest. There are also three editorials that you can read, the best by Nobel Laureate, Angus Deaton who won the Nobel Prize for economics in 2015 "for his analysis of consumption, poverty, and welfare" and finally a podcast of thirty minutes that is a conversation between the JAMA editor and Dr. Chetty the lead author and Professor Deaton who wrote the editorial. Finally, there is an executive summary! Someone really wants you to understand this work. Never fear, if you have no time to read the article, play with the interactive tool, or look at or listen to any of the broadcasts, just keep reading this letter because I am going to attempt to review for you the highlights of both the JAMA article and the NEJM article. There are connections between these articles and last week’s discussion of disparities in healthcare. The connection to the JAMA article on life expectancy may be more obvious to you but I will also make the case that the NEJM article contributes to our understanding of healthcare disparities because how we get paid substantially affects the attention that we give to populations. As the life expectancy paper stresses, access to better care for chronic disease probably makes more difference for the poor and the 99% than for the wealthiest 1% who have seen not only a disproportionate increase in their wealth but also in their longevity over the last fourteen years.The summary of the core of last week’s letter has been posted for several days now on strategyhealthcare.com under the title “Imagine a World Without Healthcare Disparities”. I hope that you find it useful. The site is also where you can send friends and colleagues to sign up to receive this weekly letter.Money and Health, Relationships We Must Understand and Fix, part 1Doctors and hospitals worry a lot about what they get paid. It surprised me several years ago to discover that a majority of the doctors and managers in our organization did not have an in depth understanding of the mechanisms and issues that really determined how we were paid. As I have traveled around the country I have discovered that our organization was not an exception. Misunderstandings about where the money comes from and the various components of the “revenue cycle” have sustained a small army of consultants and experts in revenue cycle improvement and the associated issues of coding. One of the most important processes that Lean can improve for a practice, hospital or health system is the revenue cycle. Harvard Vanguard/Atrius has a terrific VP of Contracting, Beth Honan, who during my tenure would travel around to our sites giving a talk entitled “How We Get Paid”. It was a presentation of the “facts of life” for smart people who, more often than not, were amazed by what they did not know or had misunderstood for years and years. In May I will be speaking to a group about “How to Manage the Financial Transition from Volume to Value”. The answer is simple. No matter what your revenue source, focus on providing quality care that is patient centered, safe, efficient, effective, timely and equitable. While in pursuit of those objectives focus on creating value for the customer by improving service and removing waste. Realize that managing cost, managing processes of care to reduce waste, and focusing on growing the practice by attracting patients with your quality and service is the only way to go no matter whether you are paid FFS or you are seeking new revenue for the care of a population. Taking the bugs and waste out of a revenue cycle that you understand also helps.When I was a child my mother read Joel Chandler Harris’s Uncle Remus stories to me over and over again. It did not hurt that Walt Disney gave me great visuals and music with “Song of the South” (1946) which has never been released on DVD, perhaps because Disney was criticized by some for racial insensitivity that they saw in the movie. Harris should not be branded with Disney’s faults. Harris wrote out of respect for the African American oral culture. He was also writing to diminish tensions in the post Civil War period (Uncle Remus was published in 1880). Harris never experienced the criticism for the Uncle Remus stories that met the Disney presentation. Ralph Ellison and Toni Morrison have been influenced by Uncle Remus. My favorite story is “Br’er Rabbit and the briar patch”. You probably remember that the briar patch is where old Br’er Rabbit was born and it was into the briar patch that he convinced Br’er Fox to throw him when he famously said, “Whatever you do. Don’t throw me into the briar patch!” We, Harvard Vanguard/Atrius Health, had been born in the “briar patch” of capitation and I always dreamed that the briar patch of value based reimbursement was more like our birthplace than FFS payment! I look forward to the day when we are back in the briar patch.As you can see in the visual that is the header for this week’s letter, I love to markup journals and books as I try to extract what the authors are trying to give me. I had a field day with last week’s NEJM. I really enjoyed the message in “Finding Value in Unexpected Places — Fixing the Medicare Physician Fee Schedule”. The authors of this very informative piece quickly point out that if we look under the covers of value based reimbursement, we will discover that for a long time it will be built on a fee for service infrastructure. They are convincing when they insist that we should give that fact deep thought.What payment reformers often fail to recognize is that the specific MPFS [Medicare Physician Fee Schedule] payment rates have important implications for Medicare and its beneficiaries. The relative payment levels for the thousands of service codes and the absence of payment for other activities powerfully influence how physicians spend their time — and their tendency to perform unneeded tests and procedures. The mix of services that physicians provide under a particular fee schedule can affect value at least as much as any improvements derived from rewarding physicians on the basis of quality measures — the approach Congress took in the Medicare Access and CHIP Reauthorization Act of 2015 [MACRA]Variation in payment rates — and resulting incomes — also influences new physicians’ specialty choices and contributes to growing shortages of primary care physicians and geriatricians. A substantially improved, carefully managed MPFS could not only pave the way to more fundamental value-based payment reform but also improve performance among physicians who are likely to be paid according to fee schedules for the foreseeable future.
...The Department of Health and Human Services categorization of payment methods acknowledges that most value-based, physician payment models being tested are built on top of the MPFS, as are the two value-based payment initiatives that replaced the sustainable growth rate formula — the Merit-Based Incentive Payment System and Alternative Payment Models. If the foundation of Medicare’s fee schedule isn’t sound, these systems will be unstable.From this start, which may represent news for some, the authors go on to examine the Medicare Physician Fee Schedule as it exists and probably will exist for sometime. They discuss the origin of the resource-based relative value scale (RBRVS) and of relative-value units (RVUs). They point out how the scales were created to try to fairly compensate both procedural specialists as well as physicians whose tasks were primarily “cognitive”. I have heard Thomas Scully who was the administrator or CMS under George Bush in 1992 admit that RVUs produced exactly the opposite effect from what they were designed to do. As a mechanism for producing compensation equity, RVUs have been a total failure as a strategy. Everyone of us knows that the gap in compensation between specialists and primary care and other cognitive specialties continues to grow. The authors show us that since 1992 the increase in comp of radiologists and cardiologists is up 2-2.5 times the increase for family physicians, pediatricians, internists and psychiatrists.I have found that many doctors and administrators do not know the role of the AMA in determining the value of individual RVUs for E/M codes. The authors review this as they discuss the RUC (the RVU Update Committee of the AMA). The RUC is populated by a majority of specialists and many feel that there is a conflict of interest in the way the process works since after review by MedPac, CMS essentially copies and pastes the recommendations of the RUC into the Medicare Physician Fee Schedule and then the commercial payers copy and paste the same schedule with some increase into their payment mechanisms.
Most physicians do not really understand the origin of their pain as the Medicare compensation schedule is translated into the entirety of their compensation or realize that since most payers base their fee schedules on the same RVUs from the RUC, the damage is compounded. What the authors also suggest is that technology has reduced the “work” of many procedures but the compensation has not changed to reflect the reduced effort. Simultaneously, the work of the “cognitive specialties” has become much more complex and tedious. The work of cognitive practice has increased as the relative rewards have fallen and much of the work is not compensated at all. The combination of these realities has been why I have always favored a capitated payment system that allows a system to set its own “internal” RVUs which can partially repair the problem. At Harvard Vanguard our “internal RVUs” could not completely eliminate the problem of inequity in compensation between specialties since all organizations are vulnerable to the “market” compensation ranges in their service areas. The authors rightly recognize that the system must be repaired centrally. Presumably, the solution will require political will within CMS where the repair must occur.We believe that two key flaws in the RBRVS are its substantial misvaluations of physician work and the failure of current service codes to capture the range and intensity of nonprocedural physician activities, known as evaluation and management (E/M) services. Correcting these flaws could improve outcomes and support movement toward payment models that will better serve Medicare beneficiaries...Implementing new incentives and quality measures in new payment models while maintaining a broken fee schedule is a prescription for failure.I hope that many physicians and healthcare managers and executives will read the whole article and find a way to respond to the issues that are addressed. I have long predicted that these inequities in the relative compensation between the various specialties undermine our ability to collectively address the larger changes that are required to make progress toward the Triple Aim. This issue will be further aggravated by the implementation of bundled payment and is a huge issue in the effectiveness of ACOs. Inequity in compensation breeds anger and undermines the movement toward the level of collaboration that I refer to as “I to We”. I think that it is unlikely that this issue will be resolved easily. There could be “blood on the floor” before a solution is found which not only explains why it persists but also points out that the solution will be dependent on leadership capable of a very long view.Money and Health, Relationships We Must Understand and Fix, part 2Last week’s letter circled the issues associated with healthcare disparities. I hope that the case I made convinced you that only focusing on improving care in the office, our efforts will be insufficient to maximize health in any individual who lives in a community where there are healthcare disparities. I implied that government policy to improve the social determinants of health or community action would be required to achieve the Triple Aim. Good office and hospital care is necessary but insufficient for realizing the Triple Aim. My inference was that many of the social determinants of health are beyond the direct intervention of our current health system. Investments in new and more robust social programs are needed. Determinates of health like better education, job opportunities, housing, stable families, improved cultural opportunities and all of the things that we would associate with a better life for everyone that would support improvement in health will require social and political solutions that seem nearly impossible to us. As Bert, the old Mainiac, said, “You can’t get there from here!”Last Friday when that letter was sent I had no idea that on Monday JAMA would release a monumental economic study demonstrating the impact of poverty on life expectancy over the past fourteen years, “The Association Between Income and Life Expectancy in the United States, 2001-2014” by Chetty, et. al. One of the things that needs to be understood about the study is that it looks at life expectancy after reaching forty. That takes out the issues of death from poor maternal child health and many of the issues of death from violence and drug use in teenagers and young adults. The study also is adjusted somehow for race, presumably since race naturally varies by geographical area. Perhaps the life expectancies are longer than if these issues were included but the analysis is cleaner in terms of judging longevity of adults as a function of income.The data is complex but underneath it all is the same question, “How do we reduce socioeconomic disparities in health outcomes?” This article definatively proved that income does make a difference in health. What was surprising was that geography perhaps makes a bigger difference or said another way, a community can mitigate the impact of low income on health outcomes by ensuring better care for everyone no matter what their income. The study also suggests that access to good care can ameliorate much of the negative impact on longevity of healthcare disparities.
The authors used data from 1.4 billion anonymous earnings and mortality records to construct better estimates of the relationship between income and life expectancy at the national level than has ever before been possible. This was an exercise in “big data”. The character of the data was so robust that they were able to construct county and metro area estimates of life expectancy by income group and identify factors that are associated with higher levels of life expectancy for low-income individuals.
The data should give us all reason to be ashamed of the outcome of our collective political and economic choices. As it says in the executive summary:The richest American men live 15 years longer than the poorest men, while the richest American women live 10 years longer than the poorest women. The poorest men in the U.S. have life expectancies comparable to men in Sudan and Pakistan; the richest men in the U.S. live longer than the average man in any country. What is confusing is that the data also suggests that causality for the shortened life expectancies is a complex subject.Importantly, these findings do not necessarily imply that income has a causal effect on life expectancy: that is, giving someone more money may not increase their lifespan. The association between income and life expectancy may be driven by unmeasured factors correlated with both health and income, such as differences in education or health behaviors.There is good reason for urgent consideration of what this data means because the gaps seem to be growing fast. Inequality in life expectancy has increased in recent years at the national level. Between 2001 and 2014, individuals in the top 5% of income distribution gained around 3 years of life expectancy. In contrast, the lifespans of Americans in the bottom 5% of the income distribution did not increase between to 2001 and 2014. The study reveals that we have more to learn because there is significant variation across the country. It is better for your health to be poor in San Francisco, Brooklyn or the Bronx than in Detroit, Gary, Indiana, or Tulsa. Life expectancy for lower income populations varies by about 5 years from the best places to the worst places which seem to be clustered in the old “rust belt” regions in Michigan, Ohio, and Indiana. Nevada is the worst and Kentucky, Tennessee, Arkansas, Oklahoma, and Kansas get dishonorable mention. Some places in the country actually got worse in the fourteen years of the study. Tampa is an example of that sad fact.The study suggests that if you are destined to be poor your health is better if you are surrounded by the wealthy. The poor live longer in cities that have more educated affluent people who are practicing healthy behaviors. The best news in the study for the poor is that life expectancy for the poor is positively affected by a healthy lifestyle with less smoking, more exercise and less obesity. Indeed:The variation in medical care across areas at any given point in time may be small relative to other factors that affect longevity, such as smoking and obesity. The conclusion of the authors is surprisingly positive and hopeful:Our findings show that disparities in life expectancy are not inevitable. There are cities throughout America — from New York to San Francisco to Birmingham, AL — where gaps in life expectancy are relatively small or are narrowing over time. Replicating these successes more broadly will require targeted local efforts, focusing on improving health behaviors among the poor in cities such as Las Vegas and Detroit. It will take us a while to process all of the information in this study but I see a silver lining to the cloud. Waiting through the generations required to improve education, jobs, housing and income inequity is not necessary for us to see improvements in health across all populations. This study suggests that helping the poor find better ways to quit smoking, lower their blood pressure, and lose weight can make a difference even before we resolve the more daunting social issues. The scriptures say that we will always have “the poor with us”. This article in JAMA says that the poor can live longer in a supportive environment. It seems to me that the poor are a population where we should focus disproportionate efforts with the expectation that those effort will result in a significant improvement in their health. Is that not what we consider to be our work?This Week in NOLAI chose not to give you a picture from New Orleans this week because the weather was bleak. Despite a lot of rain and many clouds when it was not raining, I did get in some good walks in the French quarter and along the levees of the mighty Mississippi. It just seemed like a waste to show a river boat under a cloudy sky and I was bored pretty quickly with attempts to walk on Bourbon Street.
I did ride through the Ninth Ward which is much recovered from when I last saw it about 4 years after Katrina, but since I was riding and not walking a picture of that would not have counted. It is amazing that it has been over ten years since Katrina. The Superdome has been rehabbed and had another Super Bowl in 2013. Like the next recession, everyone knows that another Katrina will happen again, sooner or later. When it will happen seems to be the only question. The levees are only certified for a “category three storm” and like healthcare, to do better would require an investment that it seems no one is willing to make even after all of the loses of 2005.The last governor left the state in a downward financial spiral even as he imagined that he might make a good president. The sales tax is 10% on everything and yet they are about to cancel aid for poor students for higher education and close four hospitals that provide care to the underserved because there is more than a 500 million dollar problem with the state budget in a state that seems to think it is successful if it fields a great football team at the State U. I took a ride through a wealthier suburb and saw signs on several lawns that said “Please repair my street. I pay taxes.” I have close friends that love this city and my wife and I have family here who seem quite happy. The people I have meet are are hospitable and proud. They are survivors and they love their city but for me it is not home and I will be happy to get home where the only natural disaster that I need to worry about is a blizzard of some sort next winter.
I hope that wherever you are that you will be protecting your life expectancy by getting some exercise this weekend. If you have not got someone to walk with try listening to the podcast about the impact of income on life expectancy. Here is the link again.
http://sites.jamanetwork.com/health-disparities/jama-author-interview-the-association-between-income-and-life-expectancy-in-the-united-states.html |
| Let me hear your opinion on what matters to you and be well,
Gene
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