31 July 2015
Dear Interested Readers,
Inside this Week's Letter
Yesterday was the 50th anniversary of President Lyndon Johnson’s signing of the bill that created Medicare and Medicaid. The signing can be seen in today’s header. LBJ traveled to the Truman Library in Independence, Missouri to sign the bill as an honor to Harry Truman who had fought hard for the idea during his presidency. Given the fact that these two programs are the two largest providers of coverage in America, this anniversary was a good opportunity to take a look at their history as well as review some speculations from authorities about what might happen to them in the future.
Responses to the piece about physician engagement keep showing up in my mailbox. In the second section I share with you some more concerns that were shared with me. The letter finishes with a reflection on the story of “Shoeless” Joe Jackson. He was the controversial central figure of the “Black Sox Scandal” of 1919 which shares some similarities to the big news story this week detailing the latest chapter in the downward spiral of Tom Brady as “deflategate” continues its ridiculous hold on our attention.
Once again, I want to remind you to visit strategyhealthcare.com where you will find shorter versions of these ideas. I think of the blog as “Healthcare Musings” minus the “Musings”. The most recent posting is the core concept from last week’s letter and is less than 700 words. That is less than 20% of the original! As a bonus, your friends and colleagues can also sign up to receive the “Musing” on the website.
The Golden Anniversary of Medicare and Medicaid
I suspect that Medicare and Medicaid are the two programs that much of the healthcare establishment still loves to hate the most. Lyndon Johnson's signing on July 30,1965 of the Social Security Amendments of 1965, created two landmark programs. For the past fifty years these two linked programs plus the tattered VA system have represented the most “socialized” forms of healthcare in our society. The road to their existence was almost as long as the time that has passed since they were created. The road has also been much longer, more troubled and more tortuous than one would expect, given their current general cultural acceptance by the public and the centrality to the support to healthcare of the dollars these two programs bring to hospital finance and physician income.
Most of the resistance to the development and improvement of these two programs has come directly from physicians, channelled through their major lobbying tool, the AMA. Some resistance has also come from the American Hospital Association. Perhaps the current cultural mix of confusion and acceptance of the merit of giving seniors and the poor access to care, as well as the public’s confusion about the nature of Medicare, was best demonstrated by the angry letter a woman wrote to President Obama in 2009. She said, “I don’t want government-run health care. I don’t want socialized medicine. And don’t touch my Medicare.”
It is possible to begin the Medicare/Medicaid story at many places as far back as Teddy Roosevelt’s Progressive Party Presidential Campaign in 1912 (The Bull Moose Party). TR included the concept of a federally funded comprehensive program of medical care for the elderly along with other social programs that he called “a square deal all around” in his unsuccessful third party campaign for the Presidency. Franklin Roosevelt seriously considered including medical benefits for the elderly in the original Social Security Act that was passed in 1935. Healthcare was excluded as part of the economic safety net after much advocacy from many advisors to his administration. Within FDR’s inner circle there were many who conceptualized medical coverage as part of Social Security because of the economic harm to the poor and elderly associated with the cost of care. Roosevelt ostensibly justified the exclusion of healthcare from the scope of his programs because of his concern about resistance, especially from physicians. He feared that the resistance that the subsidy to healthcare might engender could defeat the whole Social Security program. The original act did include a provision charging the Social Security Board to continue to study new ways of providing health insurance. It is hard to imagine that something that is such a basic part of our social fabric today as Social Security was so bitterly disputed at its origin in the midst of the national near death experience of the Great Depression. Think about it. The unemployment rate during most of the thirties was between 15 and 22%. That meant that about 80% of the country was employed, were concerned about their personal finances and not that sure that they wanted to fund a program like Social Security. Republicans aggressively fought “the New Deal” including Social Security.
I most like the detail of the version of the story about why FDR omitted Medicare from the original Social Security legislation that is provided by David Blumenthal and James Morone in their 2008 book, The Heart of Power: Health and Politics in The Oval Office. In the book they point out that Harvey Cushing, the much respected icon of Neurosurgery from the Peter Bent Brigham Hospital, and a key political force within the AMA, had a strong family and personal relationship with FDR. They say he was one of the few people who was allowed by the President to address him as “Franklin”. Cushing’s daughter was married to Roosevelt’s son! They met frequently at family events and social gatherings and FDR valued Cushing’s opinion. In my minds eye I can see them sipping a cocktail in the White House residency, looking at pictures of the grandchildren they shared, and discussing politics, the economy and healthcare. Blumenthal and Morone point out that Roosevelt put Cushing and his private physician, an ENT specialist, Dr. Ross McIntyre on the MAC, the Medical Advisory Committee to the Committee on Economic Security that designed the Social Security bill.
McIntyre was Roosevelt’s liaison to the MAC and together with Cushing kept FDR straight about where the AMA stood on the issues. The authors quote a letter that Cushing wrote to Frances Perkins, FDR’s Secretary of Labor, when he was appointed to the MAC.
“I am glad that the Committee has thought of establishing such an advisory group, particularly since most of the agitation regarding the high cost of medical care has been voiced by public health officials and members of foundations most of whom do not have a medical degree, much less any first-hand experience with what the practice of medicine and the relation of doctor to patient means.”
Harvey Cushing, MD
October 8, 1934
It did not take Roosevelt long to change his mind and regret leaving Medicare out of Social Security but besides the Great Depression and the Republican pushback on his attempts to stabilize the economy, he soon had World War II to manage. His administration did begin to revisit the concept of coverage for the elderly in 1943. Again Blumenthal and Morone point out that Roosevelt’s campaign for a fourth term in 1944 included an economic “bill of rights” that also espoused the right to “adequate medical care” as well as the “right to adequate protection from fears of old age, sickness, accident, and unemployment”. When Truman assumed the Presidency on the death of Roosevelt, he also picked up the responsibility for the enormous effort to discover a way to achieve coverage for the elderly and the economically disadvantaged, if not for everyone.
Truman tried and he failed. Again Blumenthal and Morone provide us detailed insight into events and offer analysis as to why Truman failed. Let’s just say when a government official like a President is “selling” something that will result in a new economic cost for some even though it is a huge benefit for others and is arguably in the long run a benefit for everyone, the road to success is steep and dangerous. Truman also had a post war recovery project in Europe and Japan to manage as well as the conversion of the country from a wartime economy to a peacetime economy. Our authors quote Truman saying at the end of his Presidency,
“I have had some bitter disappointments…, but the one that has troubled me the most, in a personal way, has been the failure to defeat the organized opposition to a national, compulsory, health insurance program.”
Following Truman, Eisenhower realized the need for coverage for the elderly but he preferred that healthcare coverage be provided with the indirect support of the federal government using tax breaks and managed through local and state programs. This “small government”, local responsibility approach was more consistent with his own personal philosophy about the role of government which Blumenthal and Morone lift from one of his letters to a friend.
“I believe fanatically in the American form of democracy, a system that recognizes and respects the right of the individual and ascribes to the individual a dignity accruing to him because of his creation in the image of a supreme being, and which rests upon the conviction that only through a system of free enterprise can this type of democracy be preserved.”
Blumenthal and Morone comment that Eisenhower did “green light” one significant piece of healthcare legislation, the Federal Employees Health Benefits Program, which has been in place since the late fifties and has been the template for many subsequent market based proposals including much of the ACA. When you hear about the great coverage that Congress has they are talking about this program. [I am happy this program passed because my wife is a retired NP who worked long enough in the VA system to qualify us for this coverage.]
It is my observation that the views of what healthcare should be ideally still vacillate between the points of view of FDR and Truman on the one hand and Eisenhower on the other hand as we continue to think about what could be better. All of our politics seems to have a social agenda on one side and an individual agenda on the other side in one dimension, entitlement and personal responsibility opposing each other in another dimension and finally in the third dimension there are market mechanisms opposed to the government management. A fourth dimension is the time it takes to work through to a consensus, since any solution must not violate certain preconditions of self interest.
The final push to Medicare and Medicaid began with Kennedy and required the legislative and political genius of LBJ for completion. Even after Johnson’s overwhelming victory in the 1964 election and with the apparent control of both houses of congress it was not an easy job getting healthcare programs of any sort passed. The Democratic Party had a shaky majority. It was not united practically or philosophically. Southern Democrats had not yet crossed the aisle to make today’s red state southern Republican reality but southern Democrats functioned almost like a third party and since they tend to return the same people to the Senate and House for years and years then by seniority they controlled a disproportionate number of key committees. The civil rights issues strained all the relationships between Democrats from northern states and the Democrats that composed the “Solid South”. The history books are full of the stories of LBJ’s management of southern Democrats like Wilbur Mills of Arkansas, the Chairman of the House Ways and Means Committee, and Harry Byrd a senator from Virginia, the Chair of the Senate Finance Committee.
The result of the lessons learned in time was a mixed program. Medicare Part A is publically funded for coverage for hospitalizations and has provided many hospitals with more than 50% of their revenue. Part B covers outpatient and physician expenses and is funded in part by contributions from the consumer. Both parts have deductibles and both are built on “full choice”. In essence they are a federally funded PPO. Medicaid provided care to the very poor, mostly women and children, and later to the disabled. It is a partnership between state and federal government with great variation from state to state in how the program is managed. The fight over the Medicaid extension in the ACA is just a continuation of the same conversation that began in 1965 when many of the states refused to sign on. In 1982 Arizona was the last state to accept Medicaid.
Medicare and Medicaid have both evolved over the last fifty years. Expansions and related programs like Part D in Medicare and SCHIP, the low-cost health insurance program designed for children of families whose income level was too high to qualify for Medicaid, have brought more and more people of low income under Medicaid. The Supreme Court did away with the mandatory expansion of Medicaid that the ACA forced on to states but little by little states that refused to make the expansion because of their fears or anger are making special arrangements to expand the number of citizens in their state who are eligible under altered terms.
I like the story of Medicare and Medicaid because it is one of debate and slow but steady evolution toward an outcome that was always seen as a loss or a compromise by some, but in reality they moved us closer to the goal of universal healthcare. The Medicare / Medicaid story has other dimensions along which there is and has always been great tension. How is it financed? Does it cost everybody the same? Is it another process that transfers wealth from a struggling middle class to “less deserving” members of society? These are hard question to answer when there is no consensus about who is a member of our society. Likewise no consensus exists about what society owes the individual or what the individual owes society. We continue to muddle along and debate these same recurrent issues but in the passage of Medicare and Medicaid all the pieces fell into place long enough to create something that did not exist before. An idea was debated and issues were settled. It took fifty years to create and it has lasted fifty years.
There are many opinions about the next fifty years or for that matter the next five years. The answers about the future are even more important when you realize the size and the influence of the combined programs. They cover 111 million individuals currently, about a third of the population. They cost a trillion dollars and have a major impact on both federal and state budgets and taxes. A recent JAMA article reports that the money is 43% of hospital revenue and 39% of the nation’s health bill. For these reasons alone the issues of finance will continue to place the discussion of Medicare and Medicaid front and center. What is equally true is that the infrastructure of physician work effort and compensation is derivative of the payments that Medicare makes and that the chronic concern of physicians is that Medicaid never pays the true cost of the services that it uses.
These programs still primarily serve the poorer levels of society. The JAMA article reports that median income for Medicare beneficiaries is $23,500 and the median income for Medicaid beneficiaries is $15,000. The article in JAMA also predicts that Medicare and Medicaid are continuing discussions with the outcome unclear. Should they be privatized? I would insert that it has always been finance and the recurrent issues of entitlement that have created the perpetual lack of certainty or vulnerability for these program. Their cost remains for me one of the most import reasons that we should focus on what is efficient and effective and take advantages of tools like Lean to reduce waste.
The authors of the JAMA article sum up their view of the health of Medicare and Medicaid as the twin programs turn fifty:
As the number of beneficiaries and the amount of spending for both Medicare and Medicaid increase, these programs will remain a focus of national attention and policy debate. Beneficiaries, health care professionals, health care organizations, and policy makers often have different interests in Medicare and Medicaid, complicating efforts to make changes to these large programs.
I would prefer to end my celebratory review by reprinting the quote from Hubert Humphrey that is on the wall of the lobby at 200 Independence Avenue SW, just a few blocks down the street from the capitol building in Washington which is the home of Health and Human Services and the main offices of Medicare and Medicaid. It is one of those government buildings that makes a confused architectural statement that has been further blurred by post 911 defenses. I went there a few times on business while I was the CEO of Atrius Health. It is where Don Berwick’s office was located while he was the Administrator of CMS. When you go to the building it is all business. The lobby is huge and the front half is consumed by the security process. Visitors wait in designated places for someone to come and greet them to take them into the bowels of the building. Once you clear the lobby the building becomes darker and has a feel that is a cross between a police station and what one would imagine that the inside of the DMV looks like. Because of the long security process one has a lot of time to look around at the inner walls of the lobby. There are the usual pictures of the President and the Secretary of Health and Human Services but the dominant adornment is the quote from Hubert Humphrey that Don Berwick is fond of quoting:
“The moral test of government is how that government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; and those who are in shadows of life, the sick, the needy, and the handicapped.”
Hubert H. Humphrey
Fifty years ago we barely passed that test. It took us fifty years to figure out how to pass the test and over the next fifty years the test will be given again and again. It is self interest that made passing the test hard. Self interest in the form of individual concern about personal welfare has always been in some conflict with working together for the collective good even though good game theory would suggest that the best strategy for being secure yourself is to make sure that everyone is protected.
Physician Engagement, the Concerns Continue
Two weeks ago I used the letter to explore some of the nuance of the issues related to “physician engagement”. I used the reasoning that if everybody is talking about it, it must be really important. The letter has generated several responses. Rob Jandl from the Southboro Medical Group that is now affiliated with Reliant Medical Group in Central Massachusetts is on vacation this week and had the time to write me with his thoughts. When Rob speaks, I always listen. Time and time again I have appreciated Rob’s ability to ask the questions that clarify an issue or make a statement that nails the point for everyone in the room.
From Rob Jandl
...my reason for writing is further thoughts on the engagement issue. One wonders whether for all the talk and effort at engaging providers whether there exists true commitment by board-level directors and others in the C-suite to restructure their leadership so that engagement is actually a primary deliverable. You would know better than I but it still feels too often that engagement is a cultural nicety sometimes manifesting in the appointment of a "champion" or an "innovation center." Engagement is one problem among many, something to be dealt with by middle management and site directors, a more acceptable way of talking about the recalcitrant physician problem. My heart went out to the interested reader whom you quoted and who was struggling so hard with engagement issues. It seems to be a universal challenge though I suspect some entities are doing better than others. All of this is to say, I have a hard time envisioning major progress within medical groups without board level and CEO commitment to actually lead and do the engagement work, to walk the walk, to be present and authentic, supportive but unwavering. In your frequent travels, how often do you see such leadership in action? Do you agree with my formulation? Lean of course is a great engagement tool and I have seen examples of how effective that can be, but honestly I don't believe in the physician world that Lean alone is sufficient. Additional approaches that touch the heart and the gut are also needed. I am just not sure I see commitment to really own and confront and move through the engagement issue at the highest organizational levels and worry that will make progress more difficult.
I welcome your thoughts.
My response to Rob:
To specifically answer your question about who I know who is doing it well, I would offer Guthrie Health which is the combination of Guthrie Clinic, the physician entity with more than 20 ambulatory sites in New York and Pennsylvania plus four hospitals, three in PA and one in NY. The system CEO is a physician who has been in the practice for many years and was once the clinic President. The physician board and the hospital boards report to the system board...The system board has physicians, community members, and outsiders [who have knowledge of the national healthcare picture and other markets]... [The Guthrie] board is trying to do the things that you suggest.
How often do I see something like Guthrie? Not that often but I think that there are other examples. The problems are hard because physicians do not speak with one voice. At best there are ambulatory and hospital based docs but there are really more factions than those two. Secondly, in most systems the hospital remains dominant because we conceptualize care as something that is grounded in the hospital. Training continues to reinforce that idea as does finance [the current downward pressure on revenue that hospitals are feeling or fearing] and institutional politics.
I see evolution toward a more rational structure with more effective physician engagement requiring several things. Boards and CEOs do need to move away from hospital centric concepts of care and physicians need to be willing to make their own individual and specialty based interests secondary to better functioning systems that are designed with patients and the goals of the Triple Aim "plus one" at the center of the strategic thinking. Will that happen? We will see.
Lean or continuous improvement systems design is a tool that is necessary but insufficient by itself to do the whole job. You are right that nothing works unless everybody gets on the same page. If everybody even gets close to the same page Lean can help but in the end Lean is dependent on leadership and a shared vision of the task and its goals. The lack of those items is the major obstruction to progress and it surprises me that the opinions of individual physicians can not be coalesced to the benefit of patients and ultimately the benefit of the profession.
Tom, Say It Ain’t So
After his playing days were over Shoeless Joe owned a liquor store near the textile mill where my grandfather worked and in the neighborhood where my father was raised. When we visited my grandparents I occasionally heard stories about Shoeless Joe. One of the stories that may or may not be true says during the trial that followed the scandal, Jackson was confronted by a little boy, who was obviously his fan, as he left the court one day. The little boy said “Say it ain’t so, Joe.”
Many fans of Brady and the Patriots feel at this moment the same way Shoeless Joe’s little fan felt. I am inconsistent. Sometimes I get frustrated by all the negativity of the NFL and even question the wisdom of anyone risking their health by playing football, but I must admit that I still look forward to the drama of the season and Brady’s past accomplishments are irrefutable and he is one of the best ever no matter what happened. It is a sad story.
I am tired of having the clay feet of favorite athletes exposed. I understand that earlier this week Bobby Bonds finally had his case dropped. Pete Rose got to the All Star game this year. We are still waiting to understand the fate of Roger Clemens. Lance Armstrong is a pariah. Being “one of the best” has created problems for individuals.
My hope is that your life is working in concert with your purpose and that you are not having too many adjustments to make as the days get shorter. This weekend my wife and I will enjoy the marriage of our younger son Jesse whose music and poetry I often include in these notes, and his lovely fiance, Rebecca Horton (a Yankees fan from Connecticut). An added benefit is the joy of the gathering of family and friends and the time I get to spend with my granddaughter and grandson. I hope the last month of your summer will begin as well as mine does!
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