8 September 2017

Dear Interested Reader,


What’s Inside Interlaced with Few Digressions on Making Bipartisan Progress Toward A Better System of Care for All Americans


I hope that you have been with me through the last three weeks as I have tried to answer the question, “Are consolidation, competition, and innovation the answer?” If you missed last week’s discussion of consolidation, it is waiting for you at Strategy Healthcare, illustrated by a picture of my local hospital’s sign that proudly demonstrates its affiliation with Dartmouth Hitchcock, our regional academic medical center. As the main topic for this week we will finish the series with one of my favorite subjects, competition.


Along the way I have realized that the question needed a little clarification. If your initial response was, “The answer to what question?”, perhaps now you realize that I meant the answer to the the cost, quality, and access issues that we seek to improve as we try to move toward the Triple Aim:

...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…

Recently, I noticed while reading an article from the Commonwealth Fund that they have enhanced the Triple Aim by emphasizing the need to focus on the needs of the most vulnerable members of our society. I bolded the core of their statement that speaks to me. It is a Triple Aim “plus” statement that reminds us that if we improve the healthcare of vulnerable populations that work will be like a “rising tide that floats everybody’s boat.”

The mission of The Commonwealth Fund is to promote a high-performing health care system that achieves better access, improved quality, and greater efficiency, particularly for society's most vulnerable, including low-income people, the uninsured, minority Americans, young children, and elderly adults.

Taking the risk of alienating some of my readers I would add that with the events of this last week in mind I would include the “undocumented” or “illegals” to the Commonwealth Fund’s mission statement. A recent study published by the Commonwealth Fund does include “illegal” immigrants to an in depth analysis of the uninsured. The conversation about DACA has painfully reminded us of our failure to universally apply the minimum benefits of our society to everyone among us. Listening to DACA recipients speak out reminds me that they participate in our economy, they are our neighbors, and they are part of the larger population of undocumented Americans who are our brothers and sisters in the family of mankind. I was amazed to hear from many of the DACA speakers that a major advantage of being able to be a legitimate worker was their access to employer funded healthcare.

For your reading ease here are the short term and long term recommendations of the Commonwealth Fund’s paper, “Following the ACA Repeal-and-Replace Effort, Where Does the U.S. Stand on Insurance Coverage?” The entire document is well worth your time. It is the best discussion of the many that I have read that try to address the question of where do we go from here. When you are trying to decide what to do next, it is important to measure how far you have come before you plot the strategy for the next steps. Once again I have added emphasis by bolding certain phrases.

Conclusion and Policy Implications

But I digress. What I explained before and will now explain again, is that I think the question about the efficacy of consolidation, competition and innovation is particularly important as we attempt to foster a bipartisan approach to the cost leg of the Triple Aim. None of the three three legs, or four if you include “in settings that promote caregiver wellness” and call it the Quadruple Aim, is without problems. The answers to the cost, access or quality questions that we hope to find with bipartisan legislation are not as simple as consolidation, compete and innovate. The simple suggestion that we just let the market and innovation lower the cost of care, which is the core of all Republican attempts to address the complexities of healthcare, will never do the job, as I have tried to explain so far in the three previous segments. All three, consolidation, competition and innovation, can contribute if the circumstances are right. As with so many complex issues, the ultimate answers are context dependant and the details reveal an enormous number of complicating and conflicting problems.

I will digress yet again on the important subject of motivation. This series began with an attempt to apply some historical perspectives that would reveal that politicians and healthcare policy wonks have frequently engaged in “if...then” magical thinking. “Motivation” in healthcare is a big factor in the implementation of solutions to the complexity of our problems. It occurs to me that the motivation to change usually occurs through aspiration, loss avoidance, curiosity, or unavoidable regulatory demand. It is imperative that we understand motivation in the context of self interest if we are ever going to make progress toward a better system of care for all Americans.

Curiosity motivates children and earnest academics. They are a minority. Rarely do people in the midst of surviving a storm have the time or energy to move beyond their immediate self interest to indulge their curiosity. Indeed, as we see in the climate change debate, self interest can totally cancel unbiased curiosity effectively enough to replace curiosity with denial.

We all testify that we are motivated by the “better angels” of aspiration. I am old enough and have had enough experience in the real world to say that often our good intentions get forgotten or tabled when we are bombarded with external forces beyond our control or resources. The pressure of today’s work, or the limitation of today’s resources, will form very rational reasons to delay our aspirations to another day.

Perhaps the most potentent internal motivator is a fear of failure. The problem with the fear of failure or loss avoidance as a source of motivation is that they are often associated with a paralyzing individual or organizational anxiety that makes doing anything new or different very difficult. The most effective way to employ fear of failure as a motivation is to use the experience of failure or near failure to proactively change while everything is stable. If something bad has happened once, then it may occur again. Anticipatory actions driven by previous loss or failure requires focus and energy sufficient to overcome the inertia of the status quo. Defenses can be constructed and pathways changed, but those anticipatory actions take energy and if we are still fatigued from fighting the last battle, then it is easy to delay doing what we should be motivated to do because we are not failing again, yet.

Finally, change can occur because we are commanded or compelled to change by outside decrees or events that force compliance. Such attempts to force change invariably elicit resistance. I fear that it was the “mandate” to comply with all of the new regulations, attached to a leader that many would not accept, that made the path of the ACA so difficult. Most social legislation meets resistance because someone is forced to pay or give up some previous advantage for the greater good. It is especially difficult if the beneficiaries of the greater good are deemed to be unworthy of help.

Patient and employer mandates to purchase or provide insurance that set rigid standards of efficacy met with resistance that was understandable. No one likes to be told what to do. Likewise many states resisted participation in the Medicaid expansion because it was a requirement that they felt was a violation of their “rights.” If we are going to use “compulsion” to force a change then there better be bipartisan support for it, whether the legislation calls for a military draft, a tax, or an expensive piece of social legislation like Social Security, Medicare, Medicaid, or the ACA. Ultimately, bipartisan acceptance occurs when partisans on both sides experience events that discount their previous resistance. My old hero, Garrison Keillor, a self proclaimed liberal, reviewed shifts of position as a function of changing self interest just this week in a humorous piece, “When a red state get the blues.” It is great when enlightened self interest on both sides of the aisle produces a collective “aspiration.”

The work that gives rise to new hopes for bipartisan healthcare solutions coming from the Senate is now underway. A bipartisan group of governors, led by John Kasich of Ohio and John Hickenlooper of Colorado, have published their suggestions. The Senate HELP committee is holding hearings. Hope is not the same as optimism, but there is at least some apparent consensus on what to do in the short term as expressed by Senator Patty Murray of Washington in an op ed piece in the Washington Post.

The biggest threats to action on healthcare may be the congestion on the legislative schedule and the president who is unpredictable and may not sign what Congress might create. September is going to be an interesting month as Lamar Alexander and Murray listen to governors and others while trying to get a short term “fix” written in the next ten days. The final deadline for insurance company participation in the exchanges for 2018 is September 27. It seems likely that they will try to pass guaranteed payment for the CSR (cost sharing reduction), provide funds for a reinsurance pool, and try to provide the states with a more efficient process of obtaining waivers to test more effective delivery choices without compromising benefits.

Alexander’s deadlines are not the only near term concerns looming for the Senate. There is not much time to waste since renewal of the CHIP program that insures nine million low income children needs attention since the current law expires before October.

After the section on “competition” that is the core of this letter, the last section is sort of a general reflection on what comes next as the seasons change. It is amazing how despite all of the president’s adventures and the general confusion in the swamp that he said he was going to drain in Washington, life out here in the hinterland goes on.

For many it is a difficult life, and for all of us there are fears that even a functional Congress can not resolve. I sit on pins and needles helplessly watching the track of Hurricane Irma which is taking dead aim at the house in which my son, his wife, and daughter live in Miami. I pray it takes a course out to sea far away from any more people than it has already hurt. Like our prehistoric ancestors who had to roll with a lot of nature’s punches, we shrug our shoulders, wave goodbye to the summer comforts and pleasures and hope that over the next couple of months there will be a few days of Indian Summer that delay the time when the cold sets for months and months. Fall is like a gentle detox from summer and I will review its coming virtues.


Are Consolidation, Competition, and Innovation the Answer? Part 4: A Closer Look at Competition

There is nothing more fundamental to our American culture than our belief in the benefits of competition. Competition enters many of our lives in preschool and everybody has had a taste by the elementary grades, even as parents try to soften the downside with “participation awards” that give everybody a chance to feel good about their efforts. The jury is still out about how best to teach our children the benefit of competition. Most of us believe that early competitive activities do seem to help us improve the focus and strategies necessary to achieve business and professional goals.

Competition is fun. My parents were not interested in sports. My mother wanted me to learn how to play the piano or the violin, but competition never was a part of her process although she was a “ruthless” Scrabble player. She did try to bribe me to practice piano and violin by offering little rewards like ice cream cones. She never had a chance because I was always preferred being outside competing with the other boys in the neighborhood, playing endless games of sandlot baseball, and cutthroat games of of “tackle the man with the ball” on the school yard, or just wrestling in the grass to try to establish dominance. These days I am a sports spectator and get my “hands on” competitive fixes playing Scrabble, Words With Friends, and Mexican Train Dominoes!

Shamefully we have never passed the Equal Rights Amendment of the Constitution but we did pass Title IX which has enabled girls like my granddaughter to have an equal opportunity to have the advantages that sports may offer young women in preparation for a competitive future. Competition is as much a part of our culture as is capitalism. The two go hand in hand. It is easy to understand why we expect competition to be a major part of our effort to lower the cost of care. Competition has improved the quality of most consumer products and has lowered the cost of the many electronic gadgets that we use every day. It is easy to understand why we expected competition to be a major part of our effort to lower the cost of care. Why were we wrong?

The president’s flash of wisdom, “Nobody knew healthcare was so complicated,” may shed some light on why “competition” has not been an effective tool so far in the effort to lower the cost of care. The recent book, An American Sickness: How Healthcare Became Big Business and How You Can Take It Back, by Elisabeth Rosenthal, MD provides us several angles on the problem. Ironically the political process, regulatory agencies, the work of lobbyists, the influence of the AMA, and the unwillingness of the public to accept any change that might have unintended consequences when they need care, all have worked together to undermine the ability of competition to lower healthcare costs. As Jacob Hacker’s New York Times review of Rosenthal’s book notes:

...in every other rich country, the government not only provides coverage to all citizens; it also provides strong counterpressure to those who seek to use their inherent market power to raise prices or deliver lucrative but unnecessary services — typically in the form of hard limits on how much health care providers can charge.

In the United States, such counterpressure has been headed off again and again. The industry and its elected allies have happily supported giveaways to the medical sector. But anything more, they insist, will kill the market. Although this claim is in conflict with the evidence, it is consistent with the goal of maximum rewards to (and donations from) the industry.

The authors of the ACA recognized that effective competition requires price transparency that had not been present. How can a provider who wants to provide lower cost, higher quality imaging studies with no waiting times compete with a “branded” provider like a famous academic medical center unless consumers have the data necessary to judge whether or not the lower cost provider can adequately meet their needs. Martha Hostetter and Sarah Klein summed it up nicely in a Commonwealth Fund article they wrote several years ago.

It's no secret that the U.S. health care market is unlike any other market: patients rarely know what they'll pay for services until they've received them; health care providers bill different payers different prices for the same services; and privately insured patients pay more to subsidize the shortfalls left by uninsured patients. What's more, prices for health services vary significantly among providers, even for common procedures such as laboratory tests or mammograms, although there's no consistent evidence showing that higher prices are linked to higher quality.

For these reasons, consumer advocates as well as some employers and health plans are pushing for greater price transparency. They argue that if consumers realized that they could receive high-quality services from lower-cost providers, they would seek them out. This, in turn, could encourage competition among providers based on the value of care—not just on reputation and market share.

Competition is part of our culture, but so is the pursuit of advantage by dominating markets by leveraging government relationships and academic reputations to preserve institutional advantages. How often have health systems sought regulatory approval of consolidations, mergers, and acquisitions by implying that the new union will allow them to expand services and lower costs through more effective competition? As often as not a cynical observer would view those claims as cover for a strategy to ensure their ability to demand higher reimbursement for their services through their new market controlling advantage.

In most industries where there is real competition the managers are are focused on production costs with an intensity that few healthcare organizations ever demonstrate. The goal is to set a competitive price that is a function of the cost of production because they know that price, plus their reputation for quality will draw consumers to them, and their sales will rise. That dynamic between production costs and price rarely exists in healthcare institutions despite the inroads into better understanding the cost of production and eliminating waste to lower the cost care that some practices have gained from Lean. It just seems easier to ask for more money from payors or increase the volume of services provided to the point that despite indifference to costs there is an acceptable margin that sustains the enterprise while the cost of care rises to the detriment of patients, their employers, and the economics of the community.

I have always been surprised by the lack of interest in the cost of care that seems apparent in the conversations and behavior of many clinicians. A charitable explanation is that they feel that their role is to provide excellent care, and the cost of that care is the concern of some other professional. Perhaps thinking about the business side of healthcare seems intrusive to their need to focus on practice, or a little shady or less professional than just focusing on the activities of practice. Ironically, in all my years as a healthcare leader, I could always count on a full house when I called a meeting to discuss physician compensation. A meeting for making the case for the links between cost, quality, service, and patient engagement as manifestations of our professionalism did not draw as large a crowd. It was amazing to me that so many “A” students who started so many conversations with reassurance about quality care being their most important professional concern were not able to understand that being concerned about the cost of the care we were providing was an equally important issue because cost at any level was important to our patients and our community.

I do believe that if we could restructure healthcare in ways that assured success for those organizations that were focused on maximizing access, quality, service, and cost by eliminating the 25% of what we do that adds no value, then competition could lower the cost of care in those markets where there are multiple competing organizations. Multiple competing medical organizations does not describe the state of practice in many places in America. Getting to a competitive market from places like the rural areas of Northern New England, large parts of “fly over America”, and many beautiful but thinly populated parts of the great northwest will require a long drive. Nevertheless, in these areas applying the same principles that will enable success in lowering the cost of care through effective competition where it exists can enable the control of the cost of care.

Don Berwick’s concept of the third Era of Medical practice, the “Moral Era,” is highly compatible with competition. I believe that organizations that try to follow these recommendations will eventually succeed in a well regulated competitive environment. 

Will it be possible for markets, as many members of Congress believe, to lower the cost of care and the expense that is imposed on individuals and society for care we need? That question is another way of asking “Are consolidation, competition, and innovation the answer?” Either way you ask, the answer is the same: “It depends.” Providing healthcare is a vast and complex process where the positive possibilities of the market, or consolidation, competition, and innovation, are dependent on making major changes to the overall structure and processes that are imbedded in the current dysfunctional system.

The Triple Aim is easy to quote but so far the will to lay the regulatory foundation necessary to make a real market solution possible has been consistently blocked by the loudest proponents of market solutions. We all find it easy to say that markets work differently in healthcare, but it has been impossible so far to find a bipartisan way to deliver on the concept that functioning markets and competition can lower the cost of healthcare.

The experience with the ACA underlines the fact that complex social legislation will encounter major resistance without bipartisan participation in its creation. Medicare and Medicaid were passed by a bipartisan process and the road to understanding and acceptance was still difficult. A single payer system where the role of government is to be the payer and regulator does not change the challenge. We still have miles to go on the road toward the Triple Aim. Competition is always more fun on a level playing field with a well described set of rules. Most games evolve over time. Those thoughts are reassuring because we have no other choice but to continue to try to play competitively.


Getting Into a Fall Frame of Mind and a Moral Dilemma

Yesterday I was wearing a sweater as I was sitting on my deck writing to you in the sunshine and light fall air. Last night Tom Brady and his buddies got off to a bad start on their quest for a sixth championship as the Red Sox took the night off from their quest for a World Series appearance. The Yankees were trying to catch them playing Baltimore after implying that the Sox were cheaters. The ethical dilemmas of our day find distorted expressions in sports. As I watched the Patriot’s game I reviewed once again whether I should abandon my lifelong love of football because of the growing body of data about chronic traumatic encephalopathy (CTE).

Fifty two years ago I had a serious concussion at the end of the second quarter in a game against the University of Virginia in Charlottesville. My amnesia encompassed a period of several minutes before the play when I was kicked in the head, and lasted until I woke up sitting next to the team doctor, an orthopedic surgeon, late in the fourth quarter. He said, “Nice to have you back!” I had my bell rung less dramatically on several occasions over a “career” that ran from the seventh grade through college. The mounting data on the prevalence of CTE in autopsies from NFL players, coupled with my own experience, makes me wonder if perhaps we should move on from football just as we have moved on from watching Roman Gladiators.

It’s a tough call. Football has meant a lot to me. It is a major fall event at every level of play. If it is to continue, there must be some significant changes of the rules and some innovations to better protect players. We are no longer ignorant of the consequences of denial.

The weather this week has alternated from wet and miserable to cool and glorious. The picture that my wife took with her Nikon that is the header for this letter shows the beauty in the transition. She joined me on the dock while I was hastily covering my fishing boat in the twilight and there was thunder in the distance to announce that we were in the transition period from cool and glorious to wet and miserable. Transitions heighten a sense of the beauty that is passing and an anticipation of the beauty that will soon arrive. With or without a Red Sox World Series or three days a week of NFL football, I am looking forward to my walks in the colors of fall and other fall adventures.

I hope that you will launch some of your own fall adventures this weekend, weather permitting, and be safe, if you are near Irma’s path.

Be well, take care of yourself, stay in touch, and don’t let anything keep you from making the choice to do the good that you can do every day,

Gene