For An Industry With Good Intentions, Complexity Is The Killer

 

The America’s Health Insurance Plans conference, which ran through June 11 in Las Vegas, was equal parts fascinating, frightening and frustrating. This health care system we as a nation have constructed is so weighted with complexity, from payment to reporting to politics, that we’re facing seemingly insurmountable obstacles that no amount of information technology, however smart and well-designed we make it, can overcome. That’s the unvarnished truth.

There were two mantras to this conference. First, physicians, chiefly primary care physicians, have to get paid more, and they need to be paid for quality. Second, any discussions about the future financial prospects of this country begin and end with health care, namely Medicare and Medicaid. If we can’t “bend the curve” of rising health care costs and government health commitments, then quite simply we will lose control of our economy. This nation, long the world’s largest creditor, is now breaking new ground as the largest debtor in recorded times. Numerous PowerPoint slides pulled from not-for-profit research and federal fiscal projections attest that if the health care cost curve isn’t bent, there is no way out.

David Cutler, a long-time health care player who served as senior health care advisor to President Obama during the presidential campaign, summed it up when he said that health care reform “lives or dies on its ability to cut costs.” From everything I heard at AHIP, get ready for a funeral.

It’s not necessarily for lack of effort by payers and providers to straighten out this mess. I wrote from the show about companies trying to move the chains forward. OptumHealth Financial Services, a unit of UnitedHealth Group, has electronic connections to more than 550,000 U.S. providers and has developed a slew of electronic transactions services for plans, employers, patients and brokers.  It operates its own bank of Utah that handled $36 billion worth of claims transactions and manages $1 billion worth of health savings and other medical savings accounts for UnitedHealth Group members.

But Ann Brisk, vice president of health care transaction services, noted ruefully that UHG is only part of any provider’s business. Taking the complexity out of transactions doesn’t straighten out the other transactions a provider has with the numerous other payers it does business with. A takeaway from this and other conversations I had is that I.T. is being used more effectively for transactions processing, comparative research studies and business/clinical analytics. But we’re living in a universe of partial solutions and half-measures. And despite all these efforts and years of industrywide transaction standards development, payers still do a pretty dismal job of claims processing. A recent study by the American Medical Association (click here) found that even large payers with sophisticated I.T. infrastructures still process physician claims inaccurately 20 percent of the time, among other findings.

What also was apparent during AHIP is that there is a serious lack of political leadership for reform and building the necessary clinical, business and technology infrastructure, and it’s hard to find any reason for hope on that front. Donna Shalala, the former HHS secretary during the Clinton administration, urged the private sector to take the lead in developing the technology and business innovations to “bend the curve.” An interesting idea that ignores the fact that the industry, now more than ever due to health reform, is under the thumb of a federal political and regulatory junta that makes it nearly impossible for any payers or health providers, or collaborative private sector groups, to deliver truly revolutionary solutions to the marketplace. Shalala stressed the importance of using health information correctly and contended that we need new data sets to analyze costs, quality, etc. This industry is not lacking for data sets or information. What it lacks is a clear directive from its political controllers about how any of this data will be used in a meaningful way to enable payers and providers to certify the quality of care and be paid a living wage for superior quality and efficiency.   

I think Bill Frist, M.D., former majority leader of the U.S. Senate, pretty much summed up the utter futility of the political class for dealing with the situation. While lauding some elements of health care reform, he pounded home the point that President Obama made a “terrible mistake” by pushing the bill through using procedural maneuvers that insured it only needed a majority vote in the Senate. He went on to say that anger over the president’s legislative move was the reason that the nomination of Donald Berwick, M.D. to head CMS was being held up in committee, as are other appointments for key CMS leadership roles. Only Frist and his political ilk can see the logic, and not question the appropriateness, of holding up the appointment of an eminently qualified, by all accounts brilliant leader like Dr. Berwin at the health care industry’s most critical juncture in modern times.

Listening to Washington heavyweights like Frist was simply depressing. If you put a Democrat and Republican in a room and ask them to get something done, they’ll both come out rubbing their heads and say they were willing to work together, but got pole-axed by that mysterious third person in the room, Partisanship, who simply came at them out of nowhere. Partisanship, as they would tell it, is a corporeal, sinister force beyond the control of our leaders, who shows up unannounced and uninvited and lays waste to everyone’s best intentions. So don’t expect any help from the political class. No one else, including politicians, seems to expect it.

Keynote presenters repeatedly challenged the private sector to come up with solutions, while at the same time putting great faith in the government task forces, committees, countless associations, etc. and etc,  that are focusing on shaping our health care future. But after meeting with a number of I.T. vendors and listening to private insurance executives giving presentations, it was apparent to me that the smartest people were in the audience, not on the stage.

I went to presentation after presentation that showcased real innovation, and walked away with a sense of foreboding. Vinod Sahney, a former exec at BCBS of Massachusetts and a Harvard professor, discussed the technological and operational successes of the state’s health insurance exchange, CONNECTOR, which serves as a model for the reform bill’s plans for state-level, online insurance exchanges. While it’s quite an accomplishment, and has helped get 98 percent of state residents insured, Sahney noted that insurance costs in Massachusetts have continued to rise by 10 percent annually, there’s been no noticeable reduction in ED visits, and costs to  operate the exchange were 40 percent higher than estimates.

During another presentation, Andrew Baskin, M.D., medical director at Aetna Inc., dug into the ugly details of trying to develop bundled payments, a reform initiative that many hope will create significant cost/care efficiencies. Baskin also spent time pointing out the Kafkaesque effects of the industry’s care and cost structure: patient stays have shortened (more patients= more money for hospitals) but readmissions rise; patients benefit from care quality, but physicians suffer. Aetna might create a financially enticing bundled payment for knee replacements, but it might only cover 20 percent of all replacements done by a hospital, minimizing the incentives for that hospital to make investments in improving their efficiencies. To pull bundled payments off requires multi-payer and commercial/CMS collaboratives, the thought of which made everyone in the audience wince. Baskin used a couple slides from www.despair.com that neatly summed up the direction your thoughts travel when contemplating these hurdles.

I didn’t leave Las Vegas with much in the way of optimism, even after hitting a slot machine for $160 before I caught a cab. The industry has the brainpower and technology; many providers and payers are working furiously to lower their costs and deliver better services to patients. But the paralytic change facing the industry over the next few years cannot be met without political leadership willing to move fast, recognize and act on private industry innovations and cut out the unmanageable complexity of the health care ecosystem. I just don’t see it happening. But I’d love to be surprised.