17 February 2017 Dear Interested Readers, What’s Inside, An Anniversary, and a Few Political ThoughtsI don't know when the last of these letters will be written, but I do know when the first one came out. It was the first Friday after the first full week that I was the CEO of Harvard Vanguard Medical Associates and Atrius Health nine years ago in February 2008. Since then there has been a letter every Friday, over 450 letters, except for the first three Fridays after I announced my retirement. When I retired I thought my job was done, but my good friend and personal Lean guru, John Gallagher disagreed. He encouraged me to recognize that although I should no longer be sending a weekly letter to the 8000 employees of Atrius, there were a few hundred “Interested Readers” locally and around the country who did not work at Atrius but did read the letter each week who would still like to get a letter. He was right. I remain grateful for his encouragement to me at a time of transition. I also appreciate him for the continuing wisdom that he imparts to me in our frequent conversations. John and I were together again this week in Scottsdale, Arizona for a conversation with other advisors and executives of Simpler Consulting. We were in an intense discussion about the future of healthcare and how external change demands that all of us process how we as individuals and organizations must change if we wish to continue to be effective and make a meaningful contribution to our collective goal of achieving Care better than we’ve seen, health better than we’ve ever known, cost we can afford,…for every person, every time…in settings that support caregiver wellness.My connection to Simpler Consulting has been a continuing source of personal growth for me. Twice a year its external clinical advisors meet with its senior executives in a retreat environment to discuss what is happening in healthcare, and how Simpler can continue to make meaningful contributions to the transformation of healthcare. Physician groups, hospitals, insurers and health systems are changing their configuration and relationships in response to external forces and the demand that we provide higher quality care for everyone at a price that is appropriate to our economy. Simpler feels and has been changed by the same forces. Simpler was initially acquired by Truven a few years ago and now Truven and Simpler have been acquired by IBM Watson Health. That is a lot of change in less than three years. Change has created both challenges and new opportunities for Simpler as it tries to imagine how to use Watson’s ability to analyze unstructured data to help us create better processes of care with better outcomes. I am reassured by my observations at each Simpler meeting that through all the change what has not changed is Simpler’s desire to evolve new ways to use its expertise in Lean values, philosophy, and tools to the benefit of those who believe that we must not lose hope as we move toward the ideals of the Triple Aim. Simpler wants to evolve and get better, just as healthcare is evolving. One of the biggest challenges we discussed was how to get better at explaining and demonstrating to a harried and frightened industry the value that Lean can add to the effort to transform healthcare toward a common vision of better health. I want to thank all of my colleagues on the Advisory Group for the fellowship and the stimulating discussions that mean so much to me. We hear about the 30 million people who will lose their access to care if the published desires of Tom Price, the recently confirmed Secretary of Health and Human Services, are realized. I wish that that was the worst possible outcome, but I fear that it is not. The discussions at the meeting renewed my realization that the population that faces the biggest challenge over the foreseeable future is the almost 80 million people who are covered by Medicaid. Many of those people will retain coverage if the ACA is repealed, but they will suffer because if there is an erosion in the funds coming to the states in an environment of “ block grants”. I also worry about the potential for long term changes to Medicare and the potential for Paul Ryan and Tom Price to win movement toward a voucher system of purchasing care as a result of all of the “horse trading” that will occur in a discussion of “retaining but improving” the ACA. Ryan has presented his ideas again and again, and they are published in his “ A Better Way” document of June 2016. Beyond my concerns about Medicare and Medicaid, I worry about public support of consumers who are purchasing healthcare in the exchanges assuming the “mandate” survives. HSAs and tax credits may have potential but the issue is the “delta”, the difference between the subsidy received and the cost of the coverage. The ACA is a complex concept and it is clear that most consumers have not yet mastered their understanding of its benefits and flaws. We have all been on a learning curve. There are many things that cause people not to like it. Out of pocket expenses remain high because of the way the ACA is funded and because the healthcare industry’s efforts to lower the cost of care remain feeble and are in conflict with self interest. Much of the complexity of our system arises from the fact that its funding is a “public-private” partnership in a system that is largely held privately. The concept requires establishing forms of means testing and collective decisions about levels of individual financial contributions. It is the rare individual who has both a living wage and “has everything” covered by a policy purchased for them by their employer. It is the rare employer that could not redirect the expense of healthcare toward lowering the cost of their product, expanding production or investing in infrastructure. The realities of the market require regulations, decisions, and potential penalties that will always seem unfair to someone and attract the ire of many. There is a natural desire for those who must pay to resist increases in their taxes and fees to provide coverage for those who can’t pay. The success of the ACA requires a negotiated sense of purpose, a negotiated methodology to achieve that purpose, a negotiated willingness to experiment, and a willingness to measure the benefit or failure of what is passed and then make serial changes toward a shared vision. The body of this week’s letter will try to explore the work ahead for all of us by following the principles of Lean. Did you ever try to do a complicated mental task in an environment of noise, confusion, high emotion and fear for what might become of you and yours? That is what is going on now as we seek to improve healthcare in the middle of a riot between conflicting ideas and worldviews without leadership coming from the White House. I have promised you that I was going to limit my comments about President Trump’s actions and administration to the issues that affect healthcare, but the turmoil in Washington that seems to constantly follow the President makes a rational discussion about healthcare difficult if not impossible. What is coming from the White House has me walking around shaking my head and fearful and concerned that we will never have a productive and meaningful conversation about healthcare. Foundational to a productive conversation about healthcare is honesty and trust. The last month has been a downward spiral into an abyss of denials, lies, withheld information, violation of long held norms of behavior, and threats of future actions of retaliation. I do not think we have hit bottom yet. I fear that we are becoming numb to stimuli that should elicit outrage from all of us. With apparently no established management protocols and no decision making processes that follow predictable paths I feel that it is possible that his leadership and input about what to do about the ACA may get lost in the confusion. I fear that as the President tweets on about the latest affront to his sense of grandiosity those like Secretary Price who have an agenda for healthcare that would take us back to the nineties or perhaps even the early sixties will have their way. Last week’s discussion about population health is available to you on strategyhealthcare.com. I’ve named the piece “It’s Still the Truth, Ten Years Later.” It is a contemporary review and appreciation of Steven Schroder’s classic Shattuck Lecture and NEJM article from 2007. The nice thing about foundational truths is that they endure and offer continuing wisdom that should be a reason for hope for us in an era when established truth seems discardable by people who say so unabashedly, “I am very, very smart. Believe me!” Applying Lean Thinking to the Future of the ACA
Tom Price is in place at his office in the Hubert H. Humphrey Building at 200 Independence Avenue, SW in Washington and has released a YouTube video that does not say much about what he plans to do. Seema Verma had her first day of testimony yesterday before the Senate Committee that will presumably approve her and quickly pass her on to the full Senate for a confirmation vote as the administrator of CMS. Paul Ryan is throwing himself into the work of getting all his ducks in line for the repeal of the ACA and across the country real people are showing up at town meetings with their Congressman to defend the ACA and express their anger at feeling vulnerable to losing the coverage that has given them a ticket to ride in our complex delivery system. All the pieces are beginning to fall into place for a long process in the House and the Senate. Perhaps a long process is the best defense of the ACA. David Blumenthal has reminded us of the wisdom of Lyndon Johnson in his Commonwealth Fund blog this week. Johnson believed that any new president’s ability to get healthcare laws done eroded quickly. The flip side of the moment is that the ACA is even more complex than its opponents say and it supporters probably understand. Its complexity offers opportunities for its opponents to reduce its benefit without repealing it fully. Let me explain. The Secretary of Health and Human Services has many ways to undermine the law by not pursuing the options it offers to improve care. There are many components that need enforcement like the penalties for not having coverage. Much of the concern this last year was derivative of insurers pulling out of the exchanges because they were losing money. Most people do not know that those losses were anticipated and the law called for subsidies to cover those losses, but Republicans in Congress blocked the appropriation of funds to subsidize the exchanges as planned. You might remember that Marco Rubio bragged about this accomplishment a year ago in the Republican presidential debates. The greatest success in undermining the objectives of the original ACA was the successful request of the Supreme Court that states be allowed to reject the expansion of Medicaid to those below 138% of poverty. The Kaiser Foundation has recently published maps and data that everyone should review to enable them to appreciate the wide variation in Medicaid across our fifty states. Most Americans do not understand that prior to the ACA there was huge variation in the threshold for Medicaid that existed across the fifty states. Many “red states” denied Medicaid until the recipient earned much less than fifty percent of the poverty level while many “blue states” granted Medicaid to those who were at 200% of poverty. You can review this history in the Kaiser link above. Medicaid and Medicare were created in 1965 and are not apart of the ACA but they are interwoven with it. Changes in either will significantly impact the ACA, the number of Americans covered for care, and the cost we all experience for our care. Republicans have advocated for vouchers and block grants to control the expense of these programs before and are doing so again. My objective is to underline that as imperfect as our access to care and cost of care is at the moment, it is most likely to get worse for some period even if the ACA is not repealed. Perhaps even more worrisome is that so far the “replacement” that is proposed in documents like the one coming from Paul Ryan depend on ideas like tax credits, vouchers, and the selling of health insurance across state lines. It is hard to imagine how these maneuvers will accomplish anything other than a reduction in Federal spending and even that is not certain. What they will accomplish collectively is the loss of coverage for many millions of people, an increase in the bad debt of hospitals, and the loss of substantial Federal support to healthcare where you receive care. The Kaiser Foundation published an excellent paper this week outlining and refuting the “talking points” of the congressional champions of repeal and replace. We all have heard the President say that the ACA “is a complete and total disaster”. The Kaiser paper counters: Yet a careful analysis of some of the GOP’s talking points show a much more nuanced situation and suggest that the political fights over the law may have contributed to some of its problems...
Here are the four major points they make.
1. The individual health insurance market is collapsing.
— House Speaker Paul Ryan (R-Wis.), on Meet the Press, Feb. 5, “the law is literally in the middle of a collapse.”
— Senate Majority Leader Mitch McConnell (R-Ky.), on the Senate floor Jan. 9: “Obamacare continues to unravel at every level, leaving Americans to pick up the pieces.”
Kaiser’s response:
But even with these challenges, the health law’s marketplaces, also called exchanges, are providing coverage to more than 10 million Americans. Some analysts say they are far from collapse...“I have never believed the individual market was in a true death spiral,” said Joe Antos of the conservative American Enterprise Institute. A death spiral is when so many healthy people leave a market that only sick people are left and insurers cannot spread costs.
2. Out-of-pocket spending is too high.
— Speaker Ryan, at CNN Town Hall Jan 12: “Deductibles are so high it doesn’t even feel like you’ve got insurance anymore.”
— Senate Majority Leader McConnell (in a CNN op-ed): “It’s raising health care costs by previously unimaginable levels, and it’s hurting the very people it was intended to help.”
Kaiser’s response:
People who are most angry about the Affordable Care Act, said Chris Jennings, a health official in the Clinton and Obama administrations, “want deductibles lower and more benefits.”
But Republicans’ most popular proposals for replacing current individual insurance plans — cutting back on required benefits and giving more people access to tax-preferred health savings accounts — would likely increase out-of-pocket spending for those who use health services (although it would be less expensive for people who are healthy all year long).
3. Medicaid patients can’t find doctors to treat them.
— Sen. Bill Cassidy (R-La.), on the Senate floor Jan. 9: “It is the illusion of coverage without the power of access.”
— Speaker Ryan, from CNN Town Hall Jan. 12: “… so our concern is, that people on Medicaid can’t get a doctor and if you can’t get a doctor, what good is your coverage?”
Kaiser’s response:
Benjamin Sommers of the Harvard School of Public Health, ....said the idea that patients with Medicaid can’t get care comes from looking overall at how many doctors and other providers accept the program’s generally lower payments and higher administrative burdens. ...“The best question … is when you talk to the people with coverage and ask them if they can get the care they need.”
And he said “study after study” shows that “when people get Medicaid, their access to care improves dramatically,” including greater use of primary care, preventive screening, and care of chronic conditions. “Even with some potential limitations of provider participation, patients are much better off once they get that [Medicaid] coverage,” he said.
4. The ACA has reduced jobs.
— Tom Price, the secretary of Health and Human Services, during a confirmation hearing before the Senate Health, Education, Labor and Pensions (HELP) Committee Jan. 18: “The ACA has decreased the workforce by the equivalent of 2 million FTE’s (full time employees).”
— Senate HELP Committee Chairman Lamar Alexander (R-Tenn.), on the Senate floor Jan.
9: “Across the country … employers have cut jobs to afford Obamacare costs.”
Kaiser’s response:
... the strengthening economy, including in the health care sector, has shrunk the part-time workforce and expanded full-time employment well beyond the numbers reduced by the Affordable Care Act, according to most analysts. In fact, so many jobs have been created in the industry since the ACA became law that it is becoming a problem itself, because having such a vast chunk of the economy devoted to health care makes it harder to reduce health spending. If the Kaiser analysis is correct, it is obvious that the primary Republican concern is not universal access to quality healthcare. It is the cost of care. The likely response will not be a reduction in the cost of care, but rather a reduction in funding resulting in a reduction of access and quality. What do hospitals and providers do when they encounter a loss of revenue or a reduction in revenue from a patient or a group of patients? Historically they have avoided those patients if possible, or shifted the cost of care to others who can pay if they must see the patient. People will not die in the street, as the President has famously promised, but they will die sooner than they would have if they had access to better preventative care. The truth is that we are spectators to much of what will be happening. There are ways that pressure can be applied to individual congressmen and senators, as has occurred at recent town meetings, but most of us will not get to say something until we vote in 2018. I actually share the desire of most Republicans that we reduce the expense of healthcare. This week HHS has predicted that the growth of the cost care will substantially exceed the growth of the GDP over the next ten years. By 2025 we will use 20% of GDP for healthcare. Most of the clinicians I know believe that the most reliable way to reduce the cost of care in the moment is to practice in a way that reduces waste by providing care that reduces the number of admissions and readmissions to hospitals that occur because of failures in chronic disease management. They believe in using generic drugs when possible, reducing use of the emergency room, not ordering tests that will add no benefit to management, and promoting patient engagement in self management. We know that fee for service payment structures make practice more expensive and that various forms of value based reimbursement support these objectives for better care. Many of us believe that the strategies listed above will reduce the cost of care in the moment. We have seen organizations like ThedaCare, Denver Health, Atrius Health and Virginia Mason Medical Center lower the total cost of care while improving the measured quality of care. Accountability and efforts at continuous improvement do produce the desired results. We are also believers in the benefit of the application of the principles of population health to make a difference immediately as well as over a longer period of time. Finally, we believe that we could make great gains if we could ever effectively address the social determinants of health and the behavioral origins of disease. We believe that good practice with the resources to address the needs of the patient as early as possible yields the best outcome for the patient at the lowest total medical expense. I believe that we can provide better care for everyone at costs that could represent hundreds of billions of dollars of savings using the principle and tools of Lean. Those savings would occur against the trends that we see developing. I also believe that to achieve those savings we need political leadership that we do not have. I have heard Don Berwick say on many occasions that healthcare transformation is a local exercise. Healthcare finance methodologies and regulatory policies are set outside the practice and far from where most of us have any influence. I do believe that to variable degrees every patient and every provider will experience difficulty sooner or later from the discussions and the outcomes that will flow from Washington over the next several months and perhaps over the next four years. I believe that those organizations that embrace the challenge of lowering their costs, improving their quality, and improving the work experience of their healthcare professionals as their primary focus will survive and perhaps thrive. They will be a huge benefit to those who get care from them. I also believe that there is no better way to organize for the challenges ahead than to embrace Lean or if you prefer, “continuous improvement science”. I have never seen a healthcare organization “cut” its way to sustained quality. I have seen savings which are the desired outcomes of “cuts” accrue to those who are willing discover and eliminate waste through process improvement. Escape to The SunI was closely watching the weather forecast as we rolled into last weekend. I was beginning to get a little concerned about the potential of my escape to Arizona on Monday. I have doubt these days about the science of predicting the outcomes of elections and athletic events, but I have a growing confidence in the ability of our meteorologists to predict the weather. They are amazingly accurate. If they say that we are likely to have snow arrive the day after tomorrow at 11 AM, the snow is very likely to arrive no earlier than 10:45 or later than 11:15. Observing that accuracy, which each of us can verify for ourselves, should give credence to their warnings about global warming! Last Friday my weather app suggested that starting around noon on Sunday we were in for a dump of snow that would last well into Monday. Experience told me that my flight Monday would be canceled and the airport would probably be closed long enough to make it impossible for me to get to Phoenix for my meeting. I would have hated to miss the meeting. I also hated missing Sunday at home. I went through various options and the end result was getting up at 4:30 AM on Sunday morning to make a 7:30 flight out of Manchester, New Hampshire, an hour’s drive from my home. The positive part of my decision was an extra day of walking in the Arizona sunshine. I am not really comfortable in Arizona. I am “nonplussed” by the excessive wealth in the resort areas around me while knowing that there is significant poverty and the angst of those fearing deportation not far away from multimillion dollar homes on the slopes of the gorgeous red rock mountains. I decided to just look at the mountains rising up from the valley floor and the hundreds of mountains that composed the horizon in every direction. The header today is a picture of Camelback Mountain rising from Paradise Valley. Looking past the opulence and into the desert was a good experience. There were quail, finches, mockingbirds and every variety of wildflower and cactus. I even saw “Roadrunners” but did not see Wile E. Coyote. Sometimes it is good to just have a free day with no agenda. I hope that this President’s Day weekend will offer you a little freedom to wander around in nature to see what you can see. Perhaps our President will give us a day off from avoidable conflicts and worries and we will be able to begin next week with renewed energy to search for solutions to the complex problems that challenge us. | 
