Dalai's PACS Blog

November-5-2014

15:36
Dalai's note:  My rather vocal presentation of my views on medical IT have earned me an international speaking career. It is sad to see that nothing much has changed over all the time I've been blogging and speaking on this issue. In fact, even though it is more ubiquitous, medical software remains as useless and confounding as ever. It is gratifying, however, to see others take up the cause of improving this potentially deadly deficit. As cross-published on KevinMD.com, this piece from Dr.  James Salwitz, an oncologist who blogs on SunriseRounds.com, takes a similar approach to lambast those who dump their (soft)wares on an unsuspecting medical community.

A 57-year-old doctor I know is retiring to teach at a local junior college. He is respected, enjoys practicing medicine and is beloved by his patients; therefore, I was surprised. While he is frustrated by the complexity of health insurance, tired by the long hours and angered by defensive medicine, the final straw is that he can not stand the world of the EMR.

As an Electronic Medical Record junkie, I would quit if I had to practice without a computerized information system. These programs are a dramatic improvement over the paper and pen way of keeping records. Still, I understand the onerous problems. Data entry is clumsy, painful and takes hours. Information is stored in a nearly random manner, not much better than papers tossed into a cardboard box. Every EMR program is different and none share vital patient data. Training is lousy, access is non-intuitive, support is spotty, costs are high and any gains seem to be countered by poorly timed system crashes.

Unhappy to lose a physician from our medical community, I find myself musing about what has gone wrong with a critical technology that has such shining potential. Computer systems fly giant aircraft around the world without incident, handle trillions of dollars of financial trade without a penny lost and allow hundreds of millions to tweet, Facebook or blog. Why is medical IT so bad?

The major problem with EMRs, as they are conceived and as they presently exist, is that they are round pegs in square holes. They are designed to gather and store information; shiny electronic file cabinets, and they are built around the primary function of billing; grinding out ICD-9 and CPT codes. That would be fine if that was what doctors actually do with their time and if making money was the primary goal of practicing medicine. However, surprise, surprise, what doctors really do is treat patients. EMRs often hinder, not assist, the giving of medical care.

A physician’s normal function is to interface between objective biology and the complexity of each human life. Often called “the art” of medicine, it is the act of bridging science to individual reality. Ask questions; test; collect information. Attempt to organize by creating of a list of possibilities, a differential diagnosis. Assimilate, screen and sift that data until you reach a final diagnosis. Then, implement therapy using science and the results of research, with compassion, patience and the skill of a teacher.

A functional electronic health delivery system would assist in this systematic decision process, actively participating in the query and analysis, adding scientific knowledge and observations based on state-of-the art recommendations. Help the doctor build the differential. Recommend testing or therapeutic alternatives. The EMR should be aligned with the doctor’s goals, which are the patient’s health.

The GPS in my car is first rate. Data input is verbal and flawless. It tells speed, direction, and continuously adjusts recommendations based on my progress and traffic impediments. It even throws in alerts about the weather. In other words, the GPS not only stores data, it tells me what to do with it, and is constantly updated by events far beyond my windshield, which I have not yet considered. Someday soon, that GPS will actually drive my car.

A health computational system should have, at a minimum, the functionality of that GPS. Easy data entry and access. Flawless expanding storage. Clear output. Actionable recommendations and observations, based not only on the patient, but on the science of medicine. An EMR should be updated continuously by clinical information such as labs, vital signs and tests, as well as the most recent scientific discoveries, even if they are made halfway around the world, delivering at the bedside the vast resources of Big Data. Help me care for the patient by complementing my work.

As the practice of medicine becomes logarithmically more complex with the expanding potential of genomic or “Personalized Medicine,” advanced information technology will be vital. No doctor will be able to assimilate an individual patient’s genome and thousands of actionable variables into a differential diagnosis or comprehensive treatment. The key will be real-time EMR support.

To date no one has taken the potential or complexity of EMRs seriously. The assumption is that these systems can be built by cottage industries, with the result that there are hundreds of rudimentary programs, all grossly inadequate. The average GPS is far more functional.

This slowly expanding area of IT research is called translational bioinformatics, but there have been relatively few dollars invested by the NIH in the basic science. Data input remains primitive. We have no backbone on which to create a national network to maintain and track individual records. There is no integration with decision making software or connection to research troves. Medicine relies on the doctor to connect the myriad dots, even as he or she is up at midnight, typing elementary progress notes into elementary office systems.

Doctors need and desire help in taking care of their patients, but instead they have a tool designed for secretaries and insurance auditors. We must re-address the goals of clinical IT to improve, empower and give medical care. The future of our patients and the future of health, depend on it. No amount of frustration and burned out physicians will force patient lives into slots built for dollars.

October-12-2014

22:23



The Ebola Virus...Image courtesy of scienceblogs.com

It's bad enough that a fellow from Liberia by the name of Thomas Eric Duncan through hubris, stupidity, or simply bad luck brought Ebola to our shores. He did ultimately seek medical attention in the Emergency Room of Texas Health Presbyterian Hospital in Dallas when he became symptomatic with the characteristic fever and pain of an Ebola infection. In fact, he presented twice to the Dallas ER. In between his two visits, Mr. Duncan was set loose on a city of well over a million souls while his disease was at its most infectious level. (He has since died of the disease, and sadly, one of the nurses who cared for him now has it. Let us pray for her speedy recovery.) How could this breach of public health have happened? It seems to have something to do with IT, specifically, the configuration of the hospital's EHR.

CNBC quotes Jonathan Bush (as it turns out, Jonathan is the nephew and cousin of the former Presidents...hat tip to Ranjan), head of Athenahealth:
The failure of a Dallas hospital's electronic medical record system to flag a man who turned out to be infected with the Ebola virus underscores how clunky, outdated and inefficient health information systems typically are in the U.S., a medical IT CEO charged Friday.

"The worst supply chain in our society is the health information supply chain," said Bush. . . "It's just a wonderfully poignant example, reminder of how disconnected our health-care system is."

"It's just a very Stone-Age sector, because it's very conservative," Bush said. "Hospital health care is still in the era of pre-Internet software."

"The hyperbole should not be directed at Epic or those guys at Health Texas," Bush said. "The hyperbole has to be directed at the fact that health care is islands of information trying to separately manage a massively complex network . . . People trying to recreate their own micro-Internet inside their own little biosphere . . . that'll never, never, never be excellent," Bush said. "There's no 'network effect' in health care today."
How does this apply to Mr. Duncan unleashing Ebola in the heart of Texas?
The hospital Thursday night said when Duncan was first examined Sept. 25 by a nurse, he was asked a series of questions, including whether he had traveled outside of the U.S. in the prior month.

"He said that he had been in Africa," the hospital said in a statement. "The nurse entered that information in the nursing portion of the electronic medical record."

But it turns out that answer—which could have alerted doctors of the possibility Duncan had Ebola—was not relayed electronically to them because of "a flaw" in the way doctors' workflow portions of the electronic health records interacts with the nursing portions of the EHR.

"In our electronic health records, there are separate physician and nursing workflows," the hospital said. "The documentation of the travel history was located in the nursing workflow portion of the EHR, and was designed to provide a high reliability nursing process to allow for the administration of influenza vaccine under a physician-delegated standing order. As designed, the travel history would not automatically appear in the physician's standard workflow."
Of course, that particular problem at that particular hospital is now fixed. But . . .
"We have made this change to increase the visibility and documentation of the travel question in order to alert all providers," Texas Health said. " We feel that this change will improve the early identification of patients who may be at risk for communicable diseases, including Ebola."

Bush noted that typically when problems like the flaw in Texas Health's EHR system are fixed, "they're fixed only at the place where they appeared."

"Those mistakes are happening constantly," Bush said.

But, "philosophically I think hospitals should get out of the business of trying to program computer systems, and expand in the business of treating patients. But that's a standard thing that goes wrong with millions of configurations" of EHRs, he said.
Mr. Bush was quite tactful, but the implication of his statement is truly astounding. He is saying, perhaps not quite in so many words, that the IT department of the Texas Health hospital in Dallas, by poorly implementing (my opinion, not necessarily his) poorly designed (again, my opinion, not necessarily his) software, could be responsible for a disaster. This glitch has potentially allowed Ebola to spread further than it would have had Mr. Duncan been put immediately into confinement upon his first presentation. To be fair, the patient had been in contact with others before his first ER trip; still, we can assume he had more interaction with more people than he might have otherwise. We can only wait and see how many of his family members and acquaintences come down with the often-fatal disease. I should also mention that the ER physician should probably have thought to ask about foreign travel when presented with a feverish African national presumably speaking with an accent.

There is much online about Epic, Presby's EHR provider. Google will supply link after link after link if you so desire. There are several take-away messages: Epic has severe interconnectivity / interoperability problems, and it is a HUGE political player, with its founder Judith Faulkner being quite the Obama supporter. Faulkner, and Epic employees, have given millions to Mr. Obama and other Democratic causes. Epic has received significant federal subsidy money, and it is up for an $11 Billion government contract. Michelle Malkin also reports that:
Faulkner, an influential Obama campaign finance bundler, served as an adviser to David Blumenthal. He’s the White House health information technology guru in charge of dispensing the federal electronic medical records subsidies that Faulkner pushed President Obama to adopt. Faulkner also served on the same committee Blumenthal chaired.

Cozy arrangement, that.
I'm straying a little off-topic here, but I think it is unlikely in the extreme that Epic will shoulder even the slightest blame for Mr. Duncan's Dallas destruction. After all, as we say in the trade, PBKAC, Problem (was) Between Keyboard and Chair. In other words, it wasn't Epic's fault that whatever IT employee or committee failed to connect the dots and the map the critical foreign travel field from the  nurses' intake screen to the doctors' review screen. Oops. So sorry.

Personally, for what little it's worth, I do NOT let Epic, or any other software company, off the hook quite so easily, nor do I bow to the IT departments which often control such software but don't grasp the criticality of the workflow they are now governing, let alone the workflow itself.

I've ranted for pages and pages about image sharing, and how it is malpractice for patient images to be essentially held hostage by the IT and other administrative types who are adamant that the competing hospital across town (or across the street) will NEVER EVER be allowed to touch their precious data. And I've yowled and whined about PACS software that was clearly NOT written for use by any practicing radiologist I've ever met.

Please indulge me while I add to these rants.

I had the occasion to accompany Mrs. Dalai to her annual (8 years postponed) internist visit. Her doc showed me how much fun it is NOT to order something as simple as a PA and Lateral CXR in our illustrious EMR's bilious CPOE (Computerized Physician Order Entry) system. It is a complete miracle that any order at all is entered correctly in this absolute abortion of an interface, and I'm not at all surprised when the wrong order comes through for the wrong indication. The electronic chart function isn't any better. Finding a particular lab value can be an exercise in agony (akin to using some PACS I can name) and it just goes downhill from there. When I asked around to find out who OK'd this particular piece of garbage, I was met with shrugs and silence.

Do you sense a familiar refrain? (Lawyers please note...THIS IS ALL MY VERY OWN HUMBLE OPINION, as is every other word that I have ever written or ever will write, unless quoted from someone else, and worth every cent my dear readers paid for it.) Once again, here in the Health Care Field of Dreams, we have badly written, badly designed software, created with minimal input from those who have to use it, selected and then implemented by IT types who also don't have to use it and don't understand enough about those who do to get it done right. This has to stop. Right. Bloody. Now. Hit CNTL-ALT-Delete and start over.

With Epic and the government having their hands deep inside each others' panties, we may well be stuck with these unusable systems for the foreseeable future. (And as an aside, if you deconstruct the Meaningful Use rewards and penalties, doctors are being bribed to buy EHR's that have the certified and confirmed ability to transmit data to Washington, D.C., so again, we won't expect the government to do anything about anything.) But, the demise of Mr. Duncan, and no doubt dozens if not hundreds more that he inadvertently infected between his two ER visits may level the playing field.

It is clear that Epic's epic Dallas fail (which might not really be totally attributable to Epic per se, but rather to the way the product was set up in the field, not passing that one lil' bitty critical entry to where it should go), contributed to Mr. Duncan's being released when he should have been locked up in the local version of Wildfire. It is possible, just barely possible, that this tragic episode will awaken the public to the dangers inherent in the IT-controlled medical software industry and its acronymbysmal spawn, EHR's, CPOE's, and the occasional unruly PACS. Get enough people upset about this, and they will call their congressmen, and more importantly their lawyers. (I would submit that more gets done by class-action suit in this country than by Congress.)

I realize that replacing these huge legacy systems which were outdated before they were even conceived would cost somewhere in the trillions of dollars, and so I'm not holding my breath that this will ever happen. But maybe a few million and billion dollar suits and fines would get the attention of the Epics, the Cerners, McKessons, and all the others who create these nightmares. Or maybe, just maybe, the execs will read this, and the other rebellious propaganda we are starting to see online, and realize that they are causing damage rather than progress, and be inspired to turn it all around. I'm a staunch believer in the electronic record, PACS, computers, iPhones, Apple Watches, and anything else technical. This is the future, without question. But it has to be done right, and so far that hasn't happened.

We can hope that the late Mr. Duncan can accomplish in death what no one has yet been able to manage while alive.  We can hope, anyway...

October-11-2014

22:04
What may seem obvious to some can be mysterious to others. Case in point: the introduction of Western-style toilets to parts of China. It was necessary to provide pictographic instructions to be sure the new equipment was utilized properly:


Assuming you have flown on a commercial airliner ever in your life, you've had to sit through what some would consider an equally-foolish instruction set: the safety briefing. This is how you buckle your seat belt, if the plane goes down somewhere it shouldn't, find the closest exit unless said exit is under water, in which case you should go elsewhere. And of course, if the oxygen masks should drop, grab them all for yourself and don't let anyone else have one unless they pay you a lot of money before they pass out.

In years past, we passengers have had no other entertainment during the safety spiel except for the airline magazine, and SkyMall catalog, and those get old fast. But about a year ago, the FAA allowed us to have our small personal electronic devices on during take-off and landing. And so, many of us have our phones or tablets running at all times, in Airplane Mode of course, playing Candy Crush while the frustrated flight attendants drone on about the unlikely possibility of a water landing on a trans-oceanic flight.

The flight attendants are not pleased about this. From the Wall Street Journal:
Lawyers for the nation’s largest flight-attendant union argued in federal court Friday to effectively reinstate a government ban on the use of electronic devices during takeoffs and landings.

The Association of Flight Attendants-CWA is suing the Federal Aviation Administration, saying the agency notice last year that paved the way for fliers to use their devices throughout flights violated federal regulations that require passengers to stow all items during takeoffs and landings.

Justice Department lawyers representing the FAA say the agency’s guidance, which permitted fliers to keep smaller devices in their hands during all phases of flight, doesn’t violate the stowage rule because small devices aren’t governed by it. The two sides argued the case Friday to a three-judge panel with the U.S. Court of Appeals for the D.C. Circuit. . .

Attorney Amanda Duré, who is representing the attendants union, said that since the policy change, many fliers have stopped listening to attendants’ emergency announcements and, in at least one incident, a tablet became a projectile during turbulence. The union also is concerned the devices could impede passengers’ exit from an aircraft during an emergency.
ONE tablet flew, and we have to take everyone's away. How do we know it wasn't thrown?

I have great respect for flight attendants. They don't have an easy job, and they have to deal with throngs of humanity, some of whom are more accustomed to the joys of Greyhound than The Friendly Skies. I remember the days when stewardesses (can I still use that term?) were all female, 22 years old and coiffed to the nines. This is no longer the case, for better or worse. But with the demise of "coffee, tea, or me," an element of customer service has gone by the wayside. There is at least a faint edge to the attitude of many attendants today, and downward spirals ala Alec Baldwin are not unheard of. I personally think the suit against the FAA is mostly a temper-tantrum, lashing out at the passengers who are now even more contemptuously ignoring the boring lecture that in a panic situation they would all forget anyway.

This adversarial situation does not have to continue. A little thinking outside the box, or at least inside a different box, could provide a very easy fix. It's time for the airlines to take a page from Disney's book. The Disney people know crowd control and safety better than most any other operation out there. I'm sure most of you have been to Disney World, or Disneyland, and thus you've been a passenger on Star Tours and the old Body Wars. While waiting the better part of a day for your 5 minutes on the ride, Disney entertains with various props and videos. In fact, just before boarding your StarFarter 2000, you will be shown this video:



As with comedy, it's all in the timing. . . We are all captive in the gate area while waiting to board the plane, and also while standing in line on the jetway while waiting on Ma and Pa Kettle to jam their entire life's possessions into the overhead bin. THIS is the time to show the safety video on strategically placed monitors! Make them funny, as Delta has started to do lately, and the message will get across far better than it does under the present system. Trust me and Disney, this will work!!!!

Here's one of the new Delta safety videos for your viewing pleasure:



If you think this might work, let the FAA and the airlines know your opinion. But please don't mention my name. I have some traveling to do, and I don't want to be the target of angry flight attendants. It seems they have some secret approaches to revenge:

1. Coded hand gestures
Flight attendants "employ all sorts of unofficial methods and codes" to deal with difficult fliers, reports Emma Messenger at the Daily Mail. A "subtle wag of a finger" behind someone's head means that he's lecherous and may get handsy (or worse) with the staff. To alert colleagues that a passenger is drunk, attendants cross their fingers over the hospitality cart.

2. High winds
At the end of a demanding flight, writes David Sedaris in The New Yorker, some attendants indulge in the peevish practice of "cropdusting" — silently passing wind as they walk down the aisle making their final checks. "Reclined in their seats, heads lolling to the side ... airplane passengers are prime fart targets," comments Maureen O'Connor at Gawker.

3. Dirty drinks
Ellen Simonette — author of Diary of a Dysfunctional Flight Attendant: The Queen of Sky Blog — reminisces in The New York Times about the time a colleague took revenge on a loudmouthed passenger by making him "a very special drink" in the privacy of the galley, rubbing the rim of his glass on the plane's "filthy floor" before serving it up with a "devious smile."

4. Abusing their powers
We've all seen the seat-belt sign light up in midflight, though there isn't a hint of turbulence. Blame your attendants, says the Daily Mail's Messenger, who often switch it on so they can "have a nice cup of tea and gossip in peace."

5. Starting a blog
Countless flight attendants vent about passengers by blogging anonymously. Dubai-based blogger Tampax Towers recently railed against fliers who hold up security lines by wearing metal-studded jeans, while, over at These Wings Talk, a catty account of an experience with a "One-Eyed Cyclops Passenger" makes for surprising reading.
Coffee, Tea, or Dalai?

September-26-2014

11:32
Dalai's note:  A piece by Dr. Richard Gunderman posted on TheHealthcareBlog.com.  It is unclear whether or not Dr. Gunderman's "discovery" is a real document or not. Still, it would seem to explain a lot of what we are seeing in healthcare today...

How To Discourage a Doctor

Not accustomed to visiting hospital executive suites, I took my seat in the waiting room somewhat warily.

Seated across from me was a handsome man in a well-tailored three-piece suit, whose thoroughly professional appearance made me – in my rumpled white coat, sheaves of dog-eared paper bulging from both pockets – feel out of place.

Within a minute, an administrative secretary came out and escorted him into one of the offices. Exhausted from a long call shift and lulled by the quiet, I started to doze off. Soon roused by the sound of my own snoring, I started and looked about.

That was when I spotted the document on an adjacent chair. Its title immediately caught my eye: “How to Discourage a Doctor.”

No one else was about, so I reached over, picked it up, and began to leaf through its pages. It became apparent immediately that it was one of the most remarkable things I had ever read, clearly not meant for my eyes. It seemed to be the product of a healthcare consulting company, presumably the well-dressed man’s employer. Fearing that he would return any moment to retrieve it, I perused it as quickly as possible. My recollection of its contents is naturally somewhat imperfect, but I can reproduce the gist of what it said.

“The stresses on today’s hospital executive are enormous. They include a rapidly shifting regulatory environment, downward pressures on reimbursement rates, and seismic shifts in payment mechanisms. Many leaders naturally feel as though they are building a hospital in the midst of an earthquake. With prospects for revenue enhancement highly uncertain, the best strategy for ensuring a favorable bottom line is to reduce costs. And for the foreseeable future, the most important driver of costs in virtually every hospital will be its medical staff.

“Though physician compensation accounts for only about 8% of healthcare spending, decisions that physicians strongly influence or make directly – such as what medication to prescribe, whether to perform surgery, and when to admit and discharge a patient from the hospital – have been estimated to account for as much as 80% of the nation’s healthcare budget. To maintain a favorable balance sheet, hospital executives need to gain control of their physicians. Most hospitals have already taken an important step in this direction by employing a growing proportion of their medical staff.

“Transforming previously independent physicians into employees has increased hospital influence over their decision making, an effect that has been successfully augmented in many centers by tying physician compensation directly to the execution of hospital strategic initiatives. But physicians have invested many years in learning their craft, they hold their professional autonomy in high esteem, and they take seriously the considerable respect and trust with which many patients still regard them. As a result, the challenge of managing a hospital medical staff continues to resemble herding cats.

“Merely controlling the purse strings is not enough. To truly seize the reins of medicine, it is necessary to do more, to get into the heads and hearts of physicians. And the way to do this is to show physicians that they are not nearly so important as they think they are. Physicians have long seen the patient-physician relationship as the very center of the healthcare solar system. As we go forward, they must be made to feel that this relationship is not the sun around which everything else orbits, but rather one of the dimmer peripheral planets, a Neptune or perhaps Uranus.

“How can this goal be achieved? A complete list of proven tactics and strategies is available to our clients, but some of the more notable include the following:

“Make healthcare incomprehensible to physicians. It is no easy task to baffle the most intelligent people in the organization, but it can be done. For example, make physicians increasingly dependent on complex systems outside their domain of expertise, such as information technology and coding and billing software. Ensure that such systems are very costly, so that solo practitioners and small groups, who naturally cannot afford them, must turn to the hospital. And augment their sense of incompetence by making such systems user-unfriendly and unreliable. Where possible, change vendors frequently.

“Promote a sense of insecurity among the medical staff. A comfortable physician is a confident physician, and a confident physician usually proves difficult to control. To undermine confidence, let it be known that physicians’ jobs are in jeopardy and their compensation is likely to decline. Fire one or more physicians, ensuring that the entire medical staff knows about it. Hire replacements with a minimum of fanfare. Place a significant percentage of compensation “at risk,” so that physicians begin to feel beholden to hospital administration for what they manage to eke out.

“Transform physicians from decision makers to decision implementers. Convince them that their professional judgment regarding particular patients no longer constitutes a reliable compass. Refer to such decisions as anecdotal, idiosyncratic, or simply insufficiently evidence based. Make them feel that their mission is not to balance benefits and risks against their knowledge of particular patients, but instead to apply broad practice guidelines to the care of all patients. Hiring, firing, promotion, and all rewards should be based on conformity to hospital-mandated policies and procedures.

“Subject physicians to escalating productivity expectations. Borrow terminology and methods from the manufacturing industry to make them think of themselves as production-line workers, then convince them that they are not working sufficiently hard and fast. Show them industry standards and benchmarks in comparison to which their output is subpar. On the off chance that their productivity compares favorably, cite numerous reasons that such benchmarks are biased and move the bar progressively higher, from the 75th “Increase physicians’ responsibility while decreasing their authority. For example, hold physicians responsible for patient satisfaction scores, but ensure that such scores are influenced by a variety of factors over which physicians have little or no control, such as information technology, hospitality of staff members, and parking. The goal of such measures is to induce a state that psychologists refer to as “learned helplessness,” a growing sense among physicians that whatever they do, they cannot meaningfully influence healthcare, which is to say the operations of the hospital.

“Above all, introduce barriers between physicians and their patients. The more directly physicians and patients feel connected to one another, the greater the threat to the hospital’s control. When physicians think about the work they do, the first image that comes to mind should be the hospital, and when patients realize they need care, they should turn first to the hospital, not a particular physician. One effective technique is to ensure that patient-physician relationships are frequently disrupted, so that the hospital remains the one constant. Another is. . . .”

The sound of a door roused me again. The man in the three-piece suit emerged from the office, he and the hospital executive to whom he had been speaking shaking hands and smiling. As he turned, I looked about. Where was “How to Discourage a Doctor?” It was not on the table, nor was it on the chair where I had first found it. “Will he think I took it?” I wondered. But instead of stopping to look for it, he simply walked out of the office. As I watched him go, one thing became clear: having read that document, I suddenly felt a lot less discouraged.

September-25-2014

12:01
Dalai's note:  Here is another piece cross published from KevinMD.com. I have a huge level of antipathy toward "Value-Based" reimbursement. From the beginning, I smelled a rat. How could we in radiology in particular prove the "value" of what we do in a manner that would convince those who hold the purse strings that we should actually be paid for our efforts? If, for example, we tell the ER doc that his order for a CT is inappropriate, we save the system money, and risk a lawsuit. If we let it go through, and it is negative as expected, we are dinged for charging the system for something that didn't produce "value". In other words, we are screwed either way.  What follows is a much better analysis of a sorry situation...
Value-based health care is antithetic to patient-centered care. Value-based health care is also diametrically opposed to excellence, transparency and competitive markets. And value-based health care is a shrewdly selected and disingenuously applied misnomer. Value-based pricing is not a health-care innovation. Value-based pricing is why a plastic cup filled with tepid beer costs $8 at the ballpark, why a pack of gum costs $2.50 at the airport and why an Under Armour pair of socks costs $15. Value-based pricing is based on manipulating customer perceptions and emotions, lack of sophistication, imposed shortages and limitations. Finally, value-based prices are always higher than the alternative cost-based prices, and profitability can be improved in spite of lower sales volumes.
Health care pricing is currently a smoldering mixture of ill-conceived cost-based pricing with twisted value-based pricing components. For simplicity purposes, let’s examine the pricing of physician services. As for all health care, the pricing of physician services is driven by Medicare. The methodology is neither cost-based nor value-based and simultaneously it is both. How so? Medicare fees are based on relative value units, which are basically coefficients for calculating the cost of providing various services in various practices, of various types and specialties. The price, which is also the cost since it includes physician take home compensation, is calculated by plugging in a dollar value, called conversion factor. The conversion factor, which is supposed to represent costs, is not in any way related to actual production costs, but instead it is calculated so the total cost of physician services will not exceed the Medicare budget for these services. Buried in this complex pricing exercise is a value-based component. A committee of physicians gets to decide the requisite amount of physician effort, skills and education, for each service. Whereas in other markets the value decision hinges on buyer perceptions, in health care it is masquerading as cost.
The commercial insurance market adds a more familiar layer of complexity to the already convoluted Medicare fee schedule baseline. Unlike Medicare fees, which are nonnegotiable, private payers will engage in value-based negotiations with larger physician groups and health systems that employ them. Monopolistic health systems in a given geographical area can pretty much charge whatever the market can bear, just like the beer vendor at your favorite ballpark does, and brand name institutions get to flex their medical market muscles no differently than Under Armour does for socks. This is value-based pricing at its best. Small practices have of course no negotiation power in the insurer market, but as shortages of physician time and availability begin to emerge, a direct to consumer concierge market is being created, providing a new venue for independent physicians, primary care in particular, to move to a more profitable value-based pricing model.
Unsurprisingly this entire scheme is not working very well for any of the parties involved, except private insurers who thrive on complexity and the associated waste of resources. Upon what must have been a very careful examination of the payment system, Medicare concluded that it does not wish to pay physicians for services that fail to lower Medicare expenditures, and Medicare named this new payment strategy value-based health care, not because it has anything in common with value-based pricing, but because it sounds good. Another frequently used term in health care is value-based purchasing, which is attempting to inject the notion of quality as the limiting factor for cost containment. However, since Medicare is de facto setting the prices for its purchases, there is really no material difference between these two terms.
We need to be very clear here that value-based health care is not the same as quality-based health care. The latter means that physicians provide the best care they know how for their patients, while the former means that physicians provide good health care for the buck. To illustrate this innovative way of thinking, let’s look at the newest carrots and sticks initiative, scheduled to take effect for very large medical groups (over 100 physicians) in 2015. Below is a table that summarizes the incentives and penalties that will be applied through the new Medicare Value-based Payment Modifier.
Value based care: Bad for doctors, bad for patients?
There are several things to note here. First, if your patients receive excellent care and have excellent outcomes, you will receive no perks if that excellence involves expensive specialty and inpatient services, whether those are the accepted standard of care or not. You would actually be better off financially if you took it down a notch and provided mediocre care on the cheap. The second thing to notice is that you will not get penalized for providing horrendously subpar care, if you do that without wasting Medicare’s money.
Another intriguing aspect of this new program is that you have no idea how big the incentives, if any, are going to be. The upside numbers in the table are not percentages. They are multipliers for the x factor. The x factor is calculated by first figuring out the total amount of penalties, and that amount is then divided among those who are due incentives. If there are few penalties, there will be meager incentives. Lastly, those asterisks next to the upside numbers, indicate that additional incentives (one more x factor) are available to those who care for Medicare patients with a risk score in the top 25% of all risk scores.
As with everything Medicare does, this too is a zero sum game. For there to be winners, there must be losers. One is compelled to wonder how pitting physician groups against one another advances collaboration, dissemination of best practices, or sharing of information, and how it benefits patients. Leaving philosophical questions aside, the optimal strategy for obtaining incentives seems to be transition to a Medicare Advantage type of thinking: get and keep the healthiest possible patients, and make sure you regularly code every remotely plausible disease in their chart. Stay away from those dually eligible for Medicare and Medicaid, the very frail, the lonely, the infirm, or the very old, and don’t be tempted to see a random person who is in a pinch, because there is always the chance that he or she will be attributed to your panel following some hospitalization or other misfortune.
The Value-based Payment Modifier is for beginners. It is just the training wheels for the full-fledged risk assumption that Medicare is seeking from physicians and health care delivery systems in general. The grand idea is not much different than providing an aggregated and risk adjusted defined contribution for a group of assigned members, and having the health care delivery system absorb budget overruns, or keep the change if they come in under budget. There is great value in such a system for Medicare and commercial payers certain to follow in its footsteps, and perhaps this is why they decided to call it value-based. Ironically, the equally savvy health care systems are fighting back precisely by building the capacity to create a true value-based pricing model for their services through consolidation, monopolies, corralled customers, artificial shortages, confusing marketing, and diminished physicians.
It is difficult to lay blame at the feet of health systems for these seemingly predatory practices, because transition to a perpetual volume-reducing health care system is by definition unsustainable. The infrastructure and resources needed to satisfy all the strategizing, optimizing, counting and measuring activities required for value-based health care, whether the modest payment modifier or the grown up accountable care organization (ACO), are fixed costs added to health system expenses year after year. However, the incentives or shared-savings are temporary at best, because at some point volumes cannot be reduced further without actually killing people. Either way, in the near future, and for already frugal systems, in the present, all incentives will dry up leaving only massive outlays for avoiding penalties coupled with increased risk for malpractice suits.
And as these titans are clashing high above our little heads, two outcomes are certain: Individual physicians will be paid less and individual patients will be paying more for fewer services. This is how we move from volume to value. Less volume for us, more value for them.
Margalit Gur-Arie is founder, BizMed. She blogs at On Healthcare Technology.
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