Building on what I said yesterday that hospital productivity is a Big Biden Deal, there are some smart ways that the US is attempting to increase productivity. One of the more interesting one is the proliferation of centers of excellence for large employer sponsored insurers.
Walmart has been a leader in the trend of finding regional centers of excellence to treat their employees and dependents who have complex and expensive conditions. Some of these conditions are non-emergent such as back pain, while others are life critical such as transplant of core organs.
This makes sense for a couple of reasons. The first is basic learning by doing. Hospitals and medical teams that do a lot of something tend to get very good at doing something. That is why there are two or three Tommy John specialists for all of Major League Baseball, they are the docs who have done hundreds of them and know how to maximize the odds of getting a player’s hammer curve back. Secondly, and somewhat more subtly, a few centers that are performing the same set of treatments can standardize treatment while also getting volume discount on supplies. If a surgical center is the regional knee replacement center, they are ordering one or two types of knees instead of the thirty seven orthopedic surgeons in the network ordering fifteen types of knees. They’ll also have the specialized equipment to handle odd situations.
Furthermore, most hospitals are generalist hospitals where their teams are don’t see a high volume of a few procedures so they develop general competence but not excellence. US News and World Report recently reported that common procedures such as hip and knee replacements are far riskier at low volume hospitals than high volume hospitals.
Many urban centers routinely do hundreds a year. At Sterling, the three-year total for Medicare inpatients from 2010 through 2012 was 29 hips and 52 knees. And while the death rate for these operations is about 1 in 1,000 nationally, Medicare data in the U.S. News analysis show that the relative risk of death for the hospital’s elective knee replacement patients was 24 times the national average and three times the national average for hip replacement patients
There is a chance for lower costs due to standarization, easier compliance with best practices as the providers are heavily focused on only a few procedures so they have time to get in depth with current best practice for ten things instead of one thousand things, and it is safer with better patient outcomes at the end. That is a win.
Insurers will also attempt to use centers of best practice to tier and steer surgery. Going back to a personal example, I received my vascetomy at a major academic medical center; that was inefficient. If the insurer had a snip and clip center of excellence at one of the local community hospitals, they would have saved money by shifting me from a high cost medical cente to a lower cost suburban hospital. Changing the deductible or co-pays to get me to seriously think about going to the community hospital would be well within the realm of plan design.
Basic elective or at least not immeditely life threatening treatments can be set up this way. Hospitals would still need the capacity to perform an emergency appendectomy, but the typical variance of services offered at non-rural/non critical access hospitals would decrease. The insurers’ goal is to improve patient health while steering people to providers that can facilitate high quality outcomes at lower average net costs.
A more extreme version of this argument is the international medical tourism angle where people with non-urgent care needs fly to a medical center in India or Thailand to get high quality care at a fraction of the US price.
KLS
Very good article by Atul Gawande on unnecessary care: http://www.newyorker.com/magazine/2015/05/11/overkill-atul-gawande
richard mayhew
@KLS: Yep, I’ve used his most recent New Yorker piece as a launch point for a couple of posts already :)
rikyrah
I learn so much about the medical system from you. Thanks.
rikyrah
of course the lawsuit is crazy, put forth by evil people who are just fine in taking away healthcare from MILLIONS of Americans.
…………………………………….
Former Senate Republicans Admit Obamacare Lawsuit Is Crazy
By Jonathan Chait
In the New York Times today, Robert Pear brings the latest report reassuring those of us who followed the health-care debate when it happened that we are not completely insane. This seemingly mundane task is necessary because the Supreme Court is due to rule on a lawsuit designed to cripple Obamacare, the premise of which is that everybody involved in the passage of health-care reform is misremembering or lying about the intent of the law.
It is difficult to convey to people who don’t follow health care for a living just how preposterous the lawsuit against Obamacare has become. The original theory behind the lawsuit seized upon a tiny drafting error. The law allows states to run their own exchanges, but if they don’t, the federal government steps in to run exchanges for them. The glitch is that the portion of the Affordable Care Act authorizing tax credits only refers to health-care exchanges “established by the state.” The right-wing activists behind the lawsuit tried to use this drafting error to unravel large chunks of the law.
The problem is that the law is not on their side. As law professors like Abbe Gluck and Nicholas Bagley have pointed out, the text of the law has many other provisions that make it utterly clear that it is intended to provide tax credits to exchanges run by the federal government as well as those run by the state. What’s more, if there is any ambiguity in the text at all, the agency carrying it out has a right to interpret it in the way it deems fit. So the textualist argument behind the lawsuit leads straight to dismissing it.
This forced the lawsuit’s advocates to change their argument. They’re no longer arguing that the court has to eliminate tax credits in the federal exchanges because, sorry, the card says “Moops.” Instead, they’ve turned to arguing that the card is not a misprint. The law actually intended to create federal exchanges without tax credits — in other words, exchanges with unaffordable insurance that would immediately melt down. Unbelievably, numerous members of the conservative movement have actually persuaded themselves, or claim to believe, that this theory is correct. And not just oddballs of the talk-radio circuit, either. The Wall Street Journal’s editorial page, which won a Pulitzer Prize for its health-care coverage, and Bloomberg columnist Megan McArdle count themselves among the luminaries of the right that claim Obamacare was deliberately written with a self-destruct mechanism. The theory is that this was intended as a threat to force the states to establish their own exchanges, and that the government never got around to communicating this threat even a single time.
http://nymag.com/daily/intelligencer/2015/05/senate-republicans-obamacare-lawsuit-is-crazy.html
Alex
I do have a couple of concerns about this, though. First, it asks people to travel far from home for surgery. Sure, you might get a more experienced surgeon, but these days they don’t let you recover in the hospital. So, is the discharge plan going to cover how you handle a plane trip and the TSA immediately post-surgery? Is that advisable? Do you have family and friends who can also afford to make the trip to help? What about if you do have complications, but your surgeon is hundreds or thousands of miles away?
Second, what if the designated center of excellence for, say, high-risk pregnancies, is a Catholic hospital? I avoid Catholic hospitals because they might not honor my end of life wishes or recognize my next of kin. If I were pregnant, there is no way I would choose a Catholic hospital if I had any other choice, because they might just let me die rather than treat a miscarriage. I really don’t want my employer or my insurer telling me I have no choice but to be treated in an institution that, as a matter of policy, places someone else’s religion ahead of my medical needs.
richard mayhew
@Alex: All valid concerns —
For Walmart, they’ll pay air fare, they’ll pay for car service/car rentals, they’ll pay for hotels for patient plus 1 if the center is out of area.
As for Catholic hospitals, I think pretty much by definition they can’t be OBGyn centers of excellence as they don’t offer full service.
texasdoc
@richard mayhew: Yes, I agree WalMart does all this for the patient, but the problem comes if the “expert” service is part of a longer continuum of care for the problem. I had a patient with advanced multiple myeloma, difficult to get into remission, who was forced to go from Texas to the Mayo in Florida for her bone marrow transplant–when we are less than 20 miles from MD Anderson. The patient unfortunately relapsed soon thereafter. Ideally, if she had gone to MD Anderson, you would communicate with the transplant team about preferred re-induction regimens, the possibility of repeat transplant, investigational therapies if necessary, etc. and the patient could follow up there easily as well. It’s really hard to do this long distance. I’m fine with centers of excellence, but patient convenience should be taken into account too.
Elie
One of the things that continually surprises me is that there are endless discussions about the best surgeons or doctors to do care on a given condition but little discussion of the actual nursing care before, during and after a procedure. This is key because the outcome is not just fully reliant on the skill and expertise of the docs and appropriate use of tests and technology, but also receiving the myriad of nursing interventions and coordinated care during the patient’s time in the hospital – however long or short. Though nursing care is not directly charged on the patient’s bill, (its part of the room charge – yikes!), it is central to how well a patient adapts to their condition and its treatment. Poor nursing care will lead to poor outcomes, even if you have a very experienced surgeon or medical doc and the very best of other technical interventions. Somebody better start thinking of getting under that hood to really understand what it takes and how variations in nursing care also impact costs and outcomes!
Mnemosyne (iPhone)
@texasdoc:
Good point. I wonder if one solution might be to require centers of excellence to be regional, so the patient never has to travel more than X miles, though that might get tough with more rural states. Or possibly have affiliated centers that specialize in follow-ups for that procedure/set of procedures, so the initial procedure is done in the main center but the follow-up appointments happen locally.
Mnemosyne (iPhone)
@Elie:
Shouldn’t this comment have a full disclosure notice that you’re a nurse? ;-) I kid, I kid.
Elie
@Mnemosyne (iPhone):
Why?
Does that make it less true?
Probably not a good topic to be “funny” about unless you think understanding what goes into complex care is entertaining.
Whether as a nurse or not, what I assert is correct: we do not have any basic understanding of how the details of nursing care impact outcomes or cost of care. Since one is usually an inpatient to receive nursing care as well as other medical treatment and tests, it would seem to be an important question, no?
A non mouse
Insurances could also recognize the docs who are objectively better. For example, I have a length of stay in my gyn post-ops below average – with a case mix listed as being slightly more difficult than average.My primary c-section rate last year was 11% (and 1Q this year was 6%!).
Yet I will get paid the same as a mediocre surgeon. Annoying.