Efficiency in Health Care – The Moral Healthcare Blog

Medicine’s Top Earners Are Not the M.D.s – NYTimes.com

THOUGH the recent release of Medicare’s physician payments cast a spotlight on the millions of dollars paid to some specialists, there is a startling secret behind America’s health care hierarchy: Physicians, the most highly trained members in the industry’s work force, are on average right in the middle of the compensation pack.
That is because the biggest bucks are currently earned not through the delivery of care, but from overseeing the business of medicine.
The base pay of insurance executives, hospital executives and even hospital administrators often far outstrips doctors’ salaries, according to an analysis performed for The New York Times by Compdata Surveys: $584,000 on average for an insurance chief executive officer, $386,000 for a hospital C.E.O. and $237,000 for a hospital administrator, compared with $306,000 for a surgeon and $185,000 for a general doctor.

And those numbers almost certainly understate the payment gap, since top executives frequently earn the bulk of their income in nonsalary compensation. In a deal that is not unusual in the industry, Mark T. Bertolini, the chief executive of Aetna, earned a salary of about $977,000 in 2012 but a total compensation package of over $36 million, the bulk of it from stocks vested and options he exercised that year. Likewise, Ronald J. Del Mauro, a former president of Barnabas Health, a midsize health system in New Jersey, earned a salary of just $28,000 in 2012, the year he retired, but total compensation of $21.7 million.
The proliferation of high earners in the medical business and administration ranks adds to the United States’ $2.7 trillion health care bill and stands in stark contrast with other developed countries, where top-ranked hospitals have only skeleton administrative staffs and where health care workers are generally paid less. And many experts say it’s bad value for health care dollars.

Medicine’s Top Earners Are Not the M.D.s – NYTimes.com

JAMA Network | JAMA Internal Medicine | Medicare Payment for Cognitive vs Procedural Care: Minding the Gap

Importance Health care costs in the United States are rising rapidly, and consensus exists that we are not achieving sufficient value for this investment. Historically, US physicians have been paid more for performing costly procedures that drive up spending and less for cognitive services that may conserve costs and promote population health.

Objective To quantify the Medicare payment gap between representative cognitive and procedural services, each requiring similar amounts of physician time.

…

Results The revenue for physician time spent on 2 common procedures (colonoscopy and cataract extraction) was 368% and 486%, respectively, of the revenue for a similar amount of physician time spent on cognitive care.

Conclusions and Relevance Our analysis indicates that Medicare reimburses physicians 3 to 5 times more for common procedural care than for cognitive care and illustrates the financial pressures that may contribute to the US health care system’s emphasis on procedural care. We demonstrate that 2 common specialty procedures can generate more revenue in 1 to 2 hours of total time than a primary care physician receives for an entire day’s work.

JAMA Network | JAMA Internal Medicine | Medicare Payment for Cognitive vs Procedural Care: Minding the Gap

In Conservative Arizona, Government-Run Health Care That Works – Kaiser Health News

APACHE JUNCTION, Ariz. – In a low-slung building in the vast desert expanse east of Phoenix, a small school of tropical fish peer out, improbably, from a circular tank into the waiting lounge of the Apache Junction Health Center. The hallways of the nursing home are still. Only half of the rooms are filled, and the men and women who live here seem surely in life’s final season. “These are folks that have chronic cognitive and physical disabilities that are not going to improve,” said George Jacobson, administrator of the nursing home.

That this nursing home is sparsely filled with residents too disabled in mind or body to return home is a stunning achievement for Arizona’s public health insurance agency. A decade ago, 60 percent of Arizonans covered by Medicare and Medicaid, and deemed sick, frail or disabled enough to live in a nursing home, resided in a skilled nursing facility. Today, only 27 percent of them do, and the rest – nearly three out of four– live in assisted living facilities or at home with the help of nurses, attendants and case managers provided by government-paid health plans.

As Congress debates an ambitious and far-reaching effort by the Obama administration to streamline medical care and rein in spending for the nation’s sickest and most expensive patients, Arizona – with its finger-wagging Republican governor and Tea Party enthusiasts – is occupying an unusual place in the national landscape: as a model for how a generously-funded, tightly regulated government program can aid vulnerable, low-income patients.

In Conservative Arizona, Government-Run Health Care That Works – Kaiser Health News

Stunning Healthcare Overture from Bipartisan Group of US Senators – 2007

Healthcare Legislation in This Congress? – Michael Barone (usnews.com)

I followed Ezra Klein’s link to this letter from 10 Senators, 5 Republicans and 5 Democrats, written just two years before President Obama took office! Read it, as it is stunning how far the Republican Choo Choo has gone around the bend. [Courtesy USNews.com and Michael Barone.]

Now Wyden and nine other senators, five Democrats and five Republicans, have sent the following letter to Bush. Very interesting.

In addition to Wyden, the letter was signed by Republicans Jim DeMint of South Carolina, Robert Bennett of Utah, Trent Lott of Mississippi, Mike Crapo of Idaho, and John Thune of South Dakota, and Democrats Kent Conrad of North Dakota, Ken Salazar of Colorado, Maria Cantwell of Washington, and Herb Kohl of Wisconsin.

The text of the letter follows:

February 13, 2007

The Honorable George W. Bush
1600 Pennsylvania Avenue
Washington, D.C. 20500
Dear Mr. President:

As U.S. Senators of both political parties we would like to work with you and your Administration to fix the American health care system.
Each of us believes our current health system needs to be fixed now. Further delay is unacceptable as costs continue to skyrocket, our population ages, and chronic illness increases. In addition, our businesses are at a severe disadvantage when their competitors in the global market get health care for “free.”
We would like to work with you and your Administration to pass legislation in this Congress that would:
1)Ensure that all Americans would have affordable, quality, private health coverage, while protecting current government programs. We believe the health care system cannot be fixed without providing solutions for everyone. Otherwise, the costs of those without insurance will continue to be shifted to those who do have coverage.
2)Modernize Federal tax rules for health coverage. Democratic and Republican economists have convinced us that the current rules disproportionately favor the most affluent, while promoting inefficiency.
3)Create more opportunities and incentives for states to design health solutions for their citizens. Many state officials are working in their state legislatures to develop fresh, creative strategies for improving health care, and we believe any legislation passed in this Congress should not stymie that innovation.
4)Take steps to create a culture of wellness through prevention strategies, rather than perpetuating our current emphasis on sick care. For example, Medicare Part A pays thousands of dollars in hospital expenses, while Medicare Part B provides no incentives for seniors to reduce blood pressure or cholesterol. Employers, families, and all our constituents want emphasis on prevention and wellness.
5)Encourage more cost-effective chronic and compassionate end-of-life care. Studies show that an increase in health care spending does not always mean an increase in quality of outcomes. All Americans should be empowered to make decisions about their end of life care, not be forced into hospice care without other options. We hope to work with you on policies that address these issues.
6)Improve access to information on price and quality of health services. Today, consumers have better accessto information about the price and quality of washing machines than on the price and quality of health services.
We disagree with those who say the Senate is too divided and too polarized to pass comprehensive health care legislation. We disagree with those who believe that this issue should not come up until after the next presidential election. We disagree with those who want to wait when the American people are saying, loud and clear, “We want to fix health care now.”
We look forward to working with you in a bipartisan manner in the days ahead.

Skyrocketing costs! Competetive disadvantage! Universal access to health care! Class warfare! Inefficient US health care! Wellness! Prevention! Cost effectiveness! Compassionate end of life care! Expanding palliative care services! Health care in the US is broken!

Who knew Jim DeMint was a socialist before he was a Tea-Partier?

An Insurance Maze for U.S. Doctors – NYTimes.com

An Insurance Maze for U.S. Doctors – NYTimes.com:

“Researchers asked hundreds of physicians and administrators in private practices across the United States and Canada how much time they spent each day with insurers and other third-party payers, tracking down information for claims that were denied or incorrectly paid, resolving questions about insurance coverage for prescription drugs or diagnostic tests, and filing the different forms required by each and every insurance company.

“Physicians in Canada, where health care is administered mainly by the government, did spend a good deal of time and money communicating with their payers. But American doctors in the study spent far more dealing with multiple health plans: more than $80,000 per year per physician, or roughly four times as much as their northern counterparts. And their offices spent as many as 21 hours per week with payers, nearly 10 times as much as the Canadian offices.

“The amount of time we spend on this is just crazy,” said Dr. Sara L. Star, a partner in a three-physician pediatrics practice in suburban Chicago. “But each insurance company has its own language, its own set of rules and specific contracts with certain laboratories, hospitals, physicians and pharmaceutical companies.”

The Health Affairs article is here.

Wendell Potter: Insurance Industry Flack Screws Up, Points Us to Report We Really Should Read

Wendell Potter: Insurance Industry Flack Screws Up, Points Us to Report We Really Should Read:

A major point of the Thomson Reuters paper is that up to $700 billion that we spend on health care in the U.S. is wasted and that a big reason for that waste is our multi-payer system of private health insurance companies.

‘Health care providers must deal with dozens of health benefit plans to bill successfully for services rendered,’ the report said. ‘Health plans must support systems for underwriting, claims administration, provider network contracting, and broker network management… Simplifying our health care system’s administration could reduce annual health care costs by almost $300 billion.’

Then there were these bullet points that surely will never appear in a health insurance industry presentation:

• The average U.S. hospital spends one quarter of its budget on billing and administration, nearly twice the average in Canada. American physicians spend nearly eight hours per week on paperwork and employ 1.66 clerical workers per doctor, far more than Canada.

• In 1999, health administration costs totaled at least $294.3 billion in the United States, or $1,059 per capita, as compared with $307 per capita in Canada. After exclusions, administration accounted for 31 percent of health care expenditures in the United States and 16.7 percent of health care expenditures in Canada.

The white paper is here.

Much Cheaper, Almost as Good: Decrementally Cost-Effective Medical Innovation — Ann Intern Med

Under conditions of constrained resources, cost-saving innovations may improve overall outcomes, even when they are slightly less effective than available options, by permitting more efficient reallocation of resources. The authors systematically reviewed all MEDLINE-cited cost–utility analyses written in English from 2002 to 2007 to identify and describe cost- and quality-decreasing medical innovations that might offer favorable “decrementally” cost-effective tradeoffs—defined as saving at least $100 000 per quality-adjusted life-year lost. Of 2128 cost-effectiveness ratios from 887 publications, only 9 comparisons (0.4% of total) described 8 innovations that were deemed to be decrementally cost-effective. Examples included percutaneous coronary intervention (instead of coronary artery bypass graft) for multivessel coronary disease, repetitive transcranial magnetic stimulation (instead of electroconvulsive therapy) for drug-resistant major depression, watchful waiting for inguinal hernias, and hemodialyzer sterilization and reuse. On a per-patient basis, these innovations yielded savings from $122 to almost $12 000 but losses of 0.001 to 0.021 quality-adjusted life-years (approximately 8 hours to 1 week). These findings demonstrate the rarity of decrementally cost-effective innovations in the medical literature.

From Drs. Nelson, Cohen, Greenburg and Kent in Annals of Internal Medicine.

Interesting article explicitly making the argument for more research to figure out where we reach diminshing marginal returns in specific treatments for specific conditions.