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Senator: I.T., Payment Reforms Urgent
HDM Breaking News, February 7, 2008
Sen. Sheldon Whitehouse (D-R.I.) on Feb. 7 gave an impassioned speech on the Senate floor imploring his colleagues to act quickly to enact health care information technology legislation and other industry reforms.
Whitehouse spoke of “a tsunami of health care cost” sweeping down on the nation and explained to colleagues why more active federal support for I.T. adoption, quality improvement measures and supportive reimbursement policies are imperative. Health I.T., Whitehouse said, “is a baseline platform necessary to even try to respond humanely to the looming crisis.” Following is the full text of his speech:
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"Mr. President, today I want to speak for some moments on health care, and recognize the extraordinary work that four members of this body have done to promote an integrated, interoperable health information technology infrastructure in this country. Senators Kennedy and Enzi on the HELP Committee, Senators Hillary Clinton, Senator Hatch, along with their talented staffs, have balanced a tremendous number of interests to put forward a very promising first step in our long journey toward reforming our ailing health care system. I commend their tremendous effort in drafting the Wired Act. I look forward to working to see strong health information technology legislation passed in the Senate, in the House, and signed into law by the President.
"Adoption of health information technology is a vital part of saving lives and lowering costs in our health care system. The RAND Corporation estimates – in its most conservative estimation – that a national, interoperable HIT system could save $81 billion per year. And as Senators Kennedy, Enzi, Clinton, and Hatch are so aware, America’s health care information infrastructure is decades behind where it should be. We are losing billions and billions of dollars – I sound like Carl Sagan: ‘billions and billions of stars’ – billions and billions of dollars to waste, inefficiency and poor-quality care as a result of that failure. Ultimately, and most tragically, lives are lost to preventable medical errors because health care providers do not have adequate decision support for their determinations on medical treatment, medication, and so forth.
"I am an enthusiastic supporter of health I.T. as one mechanism for fixing our broken health care system. In fact, one of the first bills I introduced as a U.S. Senator was the National Health Information Technology and Privacy Advancement Act (S. 1455), in which I proposed a national not-for-profit entity with presidential appointment subject to advice and consent of the Senate, possessing rulemaking power to set national standards under the Administrative Procedures Act, and with the ability to set licensing and access fees to raise capital for necessary investments, outside the federal budget process. I still believe that is the best and most effective kind of authority. But I also recognize that there are many good ideas out there. But time is short. We cannot just snap our fingers and be in an I.T.-enabled health care environment. Development, testing, build-out, and adoption will all take time. And we don’t have much time.
"A tsunami of health care cost is sweeping down on us, inevitably, as baby boomers age and costs increase. The Comptroller General of the United States has warned us of what he called ‘unprecedented stormy seas ahead that threaten to swamp the ship of state,’ and he testified ‘we’ve never seen anything like what we’re headed into.’ Never in our history. Our present federal health care liability, if nothing changes, is $34 trillion dollars. That’s a 34 with twelve zeros behind it, and it comprises the bulk of the $53 trillion in federal liabilities we are presently obliged to pay in coming years. Now, now, is the time to get started in humane ways to avert this fiscal crisis. And health I.T. is a baseline platform necessary to even try to respond humanely to the looming crisis.
"Unfortunately, in moving toward our ultimate objective, we must realize that health I.T. adoption alone will not stop the tidal wave of health care costs. As I think we all know, our health care system is broken in more ways than one. Just look at the signs of its failure. The number of uninsured Americans is climbing and will soon hit 50 million. Despite the best doctors, the best nurses, the best equipment and procedures, and the best medical education in the world, as many as 100,000 Americans are killed every year by unnecessary and avoidable medical errors. Life expectancy, obesity rates, and infant mortality rates are a cause for national embarrassment by most international measures. The annual cost of the system exceeds $2 trillion and is expected soon to double. We spend more of our country’s GDP on health care than any other industrialized country – 16 percent – double the average of the European Union. More American families are bankrupted by health care costs than any other cause. There is more health care than steel in Ford cars, and more health care than coffee beans in Starbucks coffee. Hospitals are broke, doctors are furious, and paperwork is choking the system. This thing is crying out for reform.
"I believe that comprehensive restructuring of our health care system must rapidly address three critical issues. As I have already said today, the first is the development of a national, interoperable, secure health information technology infrastructure. But there are two other equally important issues: one, the American health care system must invest properly in quality and prevention, promising areas where better care actually lowers cost. And two, the way we pay for all this, the way we pay for health care sends perverse price signals that drive market behavior away from the public interest. That drive behavior away from what we want. So, these are three critical issues at the core of the health care crisis in this country: Inadequate health information technology; inadequate attention to quality and prevention; and a perverse price signal system.
"Let us look first at how improved quality of care could lower cost. That intersection, improved quality of care that lowers cost, should be our national Holy Grail in health care. And the Keystone Project in Michigan shows how effective this can be. It went into a significant number of Michigan ICUs – not all of them, but a significant number – to improve quality and reduce things like line infections and respiratory complications. Between March 2004 and June 2005, the project saved 1,578 lives, in just that year and two months. It saved 81,000-plus patients days they otherwise would have spent in the hospital, and over $156 million. It’s a win-win.
"The Rhode Island Quality Institute in my state took this model statewide, with every hospital participating, and we’re already seeing the number of hospital-acquired infections declining and the costs declining as well. And the same principles can be applied to prevention as quality improvement.
"Local efforts around the country, like the Rhode Island Quality Institute, like Washington State’s Puget Sound Health Care Alliance, like Utah’s Health Information Network, are leading the way on this. We need as a nation to get behind these state and local efforts. As many members of this chamber will know, any good business needs to do research and development – R&D – and these local efforts are the R&D on which we can base reform of our broken health care system. All across America, in local communities, where people know and trust each other, the reforms of our system are being dreamed, negotiated, tested, and implemented. We need to nourish this effort, and I thank my 15 bipartisan sponsors for supporting a small grant program I proposed to do just that.
"Now, consider why this quality reform is not happening spontaneously all over the country if those big savings are there, waiting to be tapped. Think of Michigan: 15 months, in just one state, not even all the intensive care units – $156 million saved. A report out of Pennsylvania showed that they spent over $2 billion dollars a year on hospital-acquired infections. Why is quality reform not happening everywhere? Well, primarily because the economics of health care punish you if you try.
"For example, a group of hospitals in Utah began following the guidelines of the American Thoracic Society for treating community-acquired pneumonia. Significant complications fell from 15.3 to 11.6 percent, inpatient mortality – a nicer way of saying fewer people died – fell from 7.2 to 5.3 percent, and the resulting cost savings exceeded half a million bucks per year. Sounds like another success story. But the net operating income of participating facilities participating dropped by over $200,000 per year because the treatment that resulted in the healthier patients was reimbursed at $12,000 per case less.
"In Rhode Island, we saw the same thing. When we started the ICU reform, I talked to the Hospital Association, and they estimated a $400,000 cost per intensive care unit, but as much as $8 million in savings, a 20-to-1 payback. I said, ‘So why not go for this?’ They said, ‘You don’t understand. All the savings go to the insurers. For us, this is $400,000 cash out of our pockets and potentially $8 million out of our top line in revenues.’ Name a business that will sensibly invest $400,000 out of its cash to lose $8 million in its revenues. With reimbursement incentives like those, it is no wonder reform is such an uphill struggle.
"We are at such a primitive stage in developing cost-saving quality measures, and the economics work against us, so we have to tackle this now.
"An idea that will get us started, I have in my Improved Medical Incentive Act, where I propose that state medical societies and specialty groups be allowed to present “best practices” to their local state health departments. If they do, and a health department determines that this is a “best practices” that would save money and save lives, then two consequences follow. CMS would be obliged to create a pricing differential favoring the best practices, and private insurers would be forbidden to deny claims for services consistent with the approved best practices. And if people want to object, fine, go to the hearing to do this in a regular fashion. The determination about what gets paid for in the health care system right now is made in backrooms of claims denials shops of insurance companies in scattered fashions, largely without oversight or review and laboring over heavy conflict of interest. If we move that determination towards proper formal hearings –we can expand statewide best practice standards in a way the economics could support.
"Our health care problem is serious, and it is vast, and it is looming. Health care I.T. is a crucial instrument in the health reform toolbox, but its adoption is not an end in itself. To fully realize its benefits, it must be coupled with a focus on quality improvement and a realignment of payment incentives. These three elements must move forward together.
"Let me emphasize in conclusion as energetically as I can – the time is now. Time is wasting now. The need is urgent. It may not feel like it, but solving this problem with system reforms like this will take several years. If we don’t start now, when the fiscal tsunami hits we will be left with only fiscal solutions to the problem. Immediate ones, but unpleasant ones – massive tax hikes or massive benefit cuts. If we are standing here, if I am standing here, five or ten years from now having that tragic choice in front of me, well, shame on us if in our folly and our improvidence we were too intellectually lazy and too bereft of basic foresight, to have taken the steps now that could have averted that sickening choice.
"And, Mr. President, as you know, we are seeing the beginnings of this debate now. The Bush Administration has squandered its opportunities for meaningful health information technology reform, has squandered its opportunity for meaningful quality reform, has squandered its opportunity for meaningful reimbursement design reform. And now in the 2009 budget the President just submitted, proposing deep cuts to Medicare. We have to get ahead of this problem. This is a wake-up call. The time is now. And I look forward to working with my colleagues, on both sides of the aisle, to get this important work done."
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