23
Common Themes and Next Steps

INTRODUCTION

Although the findings, observations, and perspectives offered throughout these chapters reflect only the presentations, discussions, and suggestions that coursed throughout the workshops—and should not be construed as consensus or recommendations on specific numbers or actions—they provide informative insights into the opportunities within the current healthcare delivery system to lower costs and improve outcomes, and represent areas needing further consideration. Oft-repeated common themes are listed in Box 23-1 and discussed below.

COMMON THEMES

The Challenges
Health Cost Excesses with Personal, Institutional, and National Consequences

Discussions underscored the expense of our country’s healthcare spending both quantitatively and qualitatively (Box 23-1). Peter R. Orszag, in his keynote address in Understanding the Targets, explained that federal spending on just Medicare and Medicaid would grow to unprecedented levels over the coming decades if cost growth continued at uncontrolled levels. He highlighted that Medicare spending per capita by hospital referral region varied more than threefold—from $5,000 to over $16,000—and



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23 Common Themes and Next Steps INTRODUCTION Although the findings, observations, and perspectives offered through- out these chapters reflect only the presentations, discussions, and sugges- tions that coursed throughout the workshops—and should not be construed as consensus or recommendations on specific numbers or actions—they provide informative insights into the opportunities within the current healthcare delivery system to lower costs and improve outcomes, and rep- resent areas needing further consideration. Oft-repeated common themes are listed in Box 23-1 and discussed below. COMMON THEMES The Challenges Health Cost Excesses with Personal, Institutional, and National Consequences Discussions underscored the expense of our country’s healthcare spend- ing both quantitatively and qualitatively (Box 23-1). Peter R. Orszag, in his keynote address in Understanding the Targets, explained that federal spending on just Medicare and Medicaid would grow to unprecedented levels over the coming decades if cost growth continued at uncontrolled levels. He highlighted that Medicare spending per capita by hospital refer- ral region varied more than threefold—from $5,000 to over $16,000—and 9

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20 THE HEALTHCARE IMPERATIVE BOX 23-1 Common Themes Cost and outcome challenges • Health cost excesses with personal, institutional, and national consequences • Health outcomes far short of expectations • Fragmented decision points, inconsistent principles, political distortions Drivers of the shortfalls • Scientific uncertainty • Perverse economic and practice incentives • System fragmentation • Opacity as to cost, quality, outcomes • Changes in the population’s health status • Lack of patient engagement in decisions • Underinvestment in population health Levers to address the drivers • Streamlined and harmonized health insurance regulation • Administrative simplification and consistency • Payment redesign to focus incentives on results and value • Quality and consistency in treatment, with a focus on the medically complex • Evidence that is timely, independent, and understandable • Transparency requirements as to cost, quality, and outcomes • Clinical records that are reliable, sharable, and secure • Data that are protected but accessible for continuous learning • Culture and activities framed by patient perspective • Medical liability reform • Prevention at the personal and population levels that this very substantial variation in cost per beneficiary in Medicare is not correlated with overall health outcomes—and, in fact, that the opposite may be the case. Describing the relationship between growing healthcare costs and other sectors of the economy, he also discussed how increasing demands placed on states by Medicaid costs have crowded out other state priorities and limited growth in state appropriations for public education, putting, for example, public universities at risk and at clear competitive disadvantage with their private counterparts in faculty recruitment. Health Outcomes Far Short of Expectations Several participants also identified and underscored that not only do our high expenditure levels have a negative impact on families’ household

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2 COMMON THEMES AND NEXT STEPS budgets and personal health, but the significant variation in care intensity (and expenditures) occurring across the country does not yield notably dif- ferent outcomes. Indeed, some of the facilities with the best outcomes have lower costs. Often noted was that despite our spending patterns, clinical outcomes, such as life expectancy at birth and care for chronic disease, fall behind in comparison to other countries. Racial disparities in access lead to poorer outcomes, lost productivity, and lower quality of life, which, when compared to groups with the best health outcomes, cost the United States an estimated $229 billion between 2003 and 2006 in direct and indirect medical costs and in the costs of premature death (Laveist et al., 2009). While portions of the population are able to navigate and obtain care almost on demand, others need to rely on the safety net of emergency rooms for the entirety of their care. Even for the insured, the costs of care, geographical impracticalities, and cultural barriers hinder access to care (Devoe et al., 2007; Ngo-Metzger et al., 2003). Fragmented Decision Points, Inconsistent Principles, Political Distortions Clear from the discussions was the multifaceted nature of the problem, ranging from poor care coordination, lack of consistent evidence-based guidelines, and medical errors resulting from multiple handoffs, to incon- sistencies in the policies of health insurance regulators, payment systems that encourage volume over value, and political influences that sometimes overturn scientific determinations. The clearest common denominator is the level of fragmentation in key system decision points, which challenges both the timely marshalling of evidence for decisions and consistency of its application. While almost two-thirds of consumers believe that their care is already evidence-based (Brownlee, 2009), many participants identified the lack of consistency which with evidence-based medicine is truly prac- ticed. Individual attendees cited inconsistent guideline application as lead- ing to variations in clinical decisions and practice patterns. To address the interests of the various stakeholders in health care, who frequently fail to harmonize in the best interests of patients, attendees asserted the need for multipronged solutions. Suggestions to effectively address the root causes of spending growth in the nation ranged from regulatory policy reform to provider and consumer-based initiatives. The Drivers Discussions identified a number of factors driving the growth of expen- ditures, noting several in particular.

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22 THE HEALTHCARE IMPERATIVE Scientific Uncertainty Many participants remarked that the development of clinical evidence needed significant investments, given the continuous emergence of new therapies, pharmaceuticals, and technologies. Despite the work of vari- ous medical and scientific organizations, the gap between practice needs and available guidance was described as growing. An additional level of near-term complexity was introduced by emerging insights from the field of genomics (Farnham, 2009; U.S. Department of Energy Biological and Environmental Research Program, 2009). Discoveries about genetic varia- tion clearly increase the amount of information needed to properly target diagnostic and therapeutic interventions. When tools are available to ap- propriately triage insights from research into application for targeting, care should eventually become much more specific and effective (Pollack, 2008). Perverse Economic and Practice Incentives Various attendees cited the current, predominantly fee-for-service re- imbursement system as providing perverse incentives, rewarding volume of services over the delivery of high-value services. Citing the variable rates of back surgeries, invasive cardiac interventions, and rates of specialist consultations between hospitals, states, and regions that yielded no dis- cernible quality differences (Delaune and Everett, 2008), many participants discussed the need to shift the focus to patient-centered value. Compound- ing the problem of economic incentives promoting volume over value, the implicit pressures of the medical liability environment and defensive medi- cine were noted as contributing substantially to the delivery of unnecessary services. Much higher reimbursement levels for specialty over primary care further distort the incentives for certain services. System Fragmentation Discussions highlighted the pervasive fragmentation of the healthcare system on virtually every dimension—providers, payers, regulators, con- sumers—as a fundamental challenge to efficient and effective care. With fragmented communication between providers, duplicate testing and the absence of vital information compromise both outcomes and economic prospects—discontinuities that pose costs to both patients and society (Valenstein and Schifman, 1996). While patients were described as having to complete paperwork requesting the same information again and again, providers were also identified as suffering from a lack of harmonization around administrative policies and reporting requirements from payers

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2 COMMON THEMES AND NEXT STEPS and quality monitors. Information needed for provider credentialing was requested repeatedly by differing institutions, consuming time and resources that could otherwise be spent on patient care (Healthcare Administration Simplification Coalition, 2009). Opacity as to Cost, Quality, and Outcomes Without meaningful and trustworthy sources of information on health- care costs, quality, outcomes, and value, patients were described as becom- ing disempowered in the decision-making process. One participant likened being a patient in the healthcare system to being a tourist in a foreign coun- try without knowledge of the language, geography, or customs (Rein, 2007). Similarly, without reliable, publicly available information on resource use and quality, providers were identified in several discussions as lacking either an understanding of their performance relative to their peers or an impetus to improve the value of the care they deliver. Many proposed that current approaches to improving health care in the United States are grounded in market forces, but those forces cannot work properly until consumers have better information about the nature and value of the elements. Changes in the Population’s Health Status Since 48 percent of Medicare beneficiaries have at least three chronic conditions and 21 percent have five or more conditions, it has been esti- mated that approximately 60 million Americans have multiple morbidities, a number that is expected to increase to 81 million by 2020 (Anderson and Horvath, 2002). Additionally, projections place levels of obesity at 41 per- cent by 2015 (Wang and Beydoun, 2007), with consequences for diabetes, heart disease, hypertension, cancer, and osteoarthritis. In conjunction with an aging population, several attendees suggested that the changing demog- raphy of the nation’s health precipitated the need to increase prevention ef- forts, lower the prevalence of obesity, and facilitate management of multiple co-occurring and increasingly complex chronic conditions. Lack of Patient Engagement in Decisions Several conversations identified patient engagement as a critical ele- ment of treatment success but emphasized that consumers may be the least informed on issues related to costs, outcomes, or value. Almost 40 percent of Americans possess only “basic” or “below-basic” health literacy skills (Kutner et al., 2006). With patients’ already limited understanding of health information, their ability to engage in informed decision making becomes increasingly insufficient as the volume and complexity of data available to

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2 THE HEALTHCARE IMPERATIVE them increases (Greene et al., 2008). In addition, the amount of information available to patients on the Internet holds the prospect of equipping pa- tients to be active partners with clinicians in their care, but it was suggested by some that professional culture lags behind the potential in this respect. Underinvestment in Population Health Given the significant dependence of health status on the dynamics of physical, behavioral, and social determinants (WHO, 2009), full attainment of each individual’s health potential requires strong commitments, invest- ment, and progress in population-wide health programs (e.g., public health and health promotion-related activities), suggested many discussants. Esti- mates suggest that the potential to improve the health of a group is far less a matter of the health care received than of members’ experience in these other domains of health determinants. Yet the dialogue called attention to the fact that only about 6 percent of national health expenditures is spent on public and population health (CMS, 2009). Several participants identi- fied the critical role that prevention and population health—which broadly encompasses health outcomes and their biomedical and social determinants (Kindig and Stoddart, 2003)—could play in lowering the burden of chronic illness and improving productivity and quality of life. The Levers Attendees spoke broadly of the key levers for catalyzing transformation of the delivery system, including the following: Streamlined and Harmonized Health Insurance Regulation Many participants posited that addressing system fragmentation re- quired effective streamlining of the diverse protocols and requirements aris- ing from interactions between insurance companies, myriad employers and provider organizations, 51 state insurance commissions, and public payers. Streamlining approaches intended to foster simplification through regional approaches and national guidelines and standards have had burgeoning suc- cess with public–private partnerships but still have underrealized potential (Healthcare Administration Simplification Coalition, 2009; IBM Global Business Services, 2009). Administrative Simplification and Consistency Physicians spend a reported 43 minutes per day on average—the equiv- alent of 3 hours per week and nearly 3 weeks per year—on administrative

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2 COMMON THEMES AND NEXT STEPS interactions with health plans and not on patient care (Casalino et al., 2009). It was also noted that one assessment found surgical nurses spending about a third of their time on documentation needs rather than clinical care (Smith, 2009). Many participants characterized efforts to streamline and harmonize payment and reporting requirements as basic, straightforward, and practical prerequisites to eliminating substantial systemic administra- tive costs. Payment Redesign to Focus Incentives on Results and Value Based on encouraging signs from demonstrations and theoretical mod- els, many attendees suggested that much may be gained (lower costs, better outcomes) from broad changes to focus payments on episodes, outcomes, and value and to better target resources to those patients at highest risk of poor outcomes. Consideration of a proposed Independent Medicare Advi- sory Council to issue recommendations for Medicare payment updates and broader reforms that would not increase the aggregate level of net Medicare expenditures (Orszag, 2009) was discussed as a possibility, as were incen- tives for team care, provider integration, and patient involvement. Quality and Consistency in Treatment, with a Focus on the Medically Complex With more than 3,000 guidelines from more than 280 organizations registered with the National Guideline Clearinghouse (National Guideline Clearinghouse, 2009), consistency in guideline recommendations was raised as a concern. Also discussed was the need for a trusted means to broker differences in recommendations and channel them into effective use. It was also noted by many that with a dedicated commitment to comparative effectiveness studies embedded in the notion of a learning health system and additional measures that allowed capture of effectiveness data directly from the care process, significant insights could emerge to provide greater consistency in guideline development. Evidence That Is Timely, Independent, and Understandable To improve and reinforce evidence on effective care, several exchanges highlighted the need for a dedicated, unified program to fill the substantial gaps in reliable guidance, keep up with innovation and the changing science, and improve practice reliability, consistency, and impact. Mandated by the American Recovery and Reinvestment Act (ARRA) of 2009, the Institute of Medicine (IOM) recently recommended a priority list of the 100 top investigative topics for comparative effectiveness research (CER). Simulta-

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2 THE HEALTHCARE IMPERATIVE neously, the newly formed Federal Coordinating Council for Comparative Effectiveness Research provided recommendations on infrastructure and organizational expenditures for CER within the federal government. In concert with the $1.1 billion appropriated to the Department of Health and Human Services for CER, various attendees voiced hope that action on these recommendations and the resulting CER research findings would guide future treatment decisions, reimbursement structures, and benefits designs by placing greater emphasis on value. Transparency Requirement as to Cost, Quality, and Outcomes With price and quality transparency viewed as critical elements of a consumerism strategy (Tynan et al., 2008), many participants identified pairing the development of information in accessible formats regarding cost, outcomes, and value with governance and administrative streamlining as having the potential to accelerate focus on value’s key ingredients. In- creasing access to practical, usable transparency information could marshal patient and consumer involvement in improving the value of care. Some participants noted a 38 percent increase in information-seeking behaviors related to health in 6 years. In 2007, for example, 56 percent of Ameri- can adults—more than 122 million people—sought information about a personal health concern, with particularly notable increases in use of the Internet as a source of health information (Hu and Cohen, 2008). Clinical Records That Are Reliable, Sharable, and Secure Use of electronic health records was noted throughout the discussions, not as a panacea, but as a tool to enhance the effectiveness and efficiency of medical care, facilitate patient handoffs, provide decision prompts at the point of choice, and strengthen patient involvement in the care process. The attention and resources dedicated to health information technology in re- cent legislation reflect the significant potential for electronic health records (EHRs) to facilitate care coordination and minimize medical errors (CBO, 2008). Discussions underscored the need to facilitate the technical aspects of adoption and utilization while simultaneously expanding the research capacity of EHRs. Data That Are Protected but Accessible for Continuous Learning With more than 30 billion healthcare transactions occurring verbally, on paper, and electronically each year (Menduno, 1999), participants dis- cussed the concept of harnessing the power of information generated from current clinical care. Many suggested that not only might electronic records

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2 COMMON THEMES AND NEXT STEPS improve clinical decision making and handoffs, but clinical data should be considered a knowledge utility. As a resource for real-time monitoring of the results of treatment and ongoing generation of new evidence for effective care, several individuals suggested that electronic health records have the ability to facilitate continuous improvement in the quality of care delivered. Culture and Activities Framed by Patient Perspective With 25 percent of Medicare expenditures attributed to unwanted variation in preference-sensitive care (Wennberg, 2008), it was noted by many participants that much of healthcare delivery has been shaped over the past generation with the primary convenience and interests of the clini- cian, not of the patient, in mind. Yet, not only for patient satisfaction, but for better patient outcomes, the lens has to focus on patient perspectives and needs. Several participants suggested that shared decision making uti- lizes patient-centric decision aids that have been demonstrated not only to facilitate patient engagement and understanding in an informed decision- making process, but additionally to ensure that the personal preferences of patients are reflected in the ultimate treatment choice. Medical Liability Reform While the number of medical malpractice payments reached almost 16,000 in 2006 with mean payments to plaintiffs of approximately $312,000 (National Practitioner Data Bank, 2006), malpractice premiums have continued to increase relentlessly, in some states by up to 73 per- cent in 2002 (Thorpe, 2004). Because defensive medicine appears to be a significant driver of unnecessary services, many participants referenced reforms—such as the notion of a “safe harbor” for best evidence practices, caps on noneconomic damages, and specialized tribunals—as important to reducing costs. Prevention at the Personal and Population Levels Many discussants often referred to the cost, now and in the future, of obesity among Americans, which if unchecked might lead to Medicare expenditures that are a third higher for obese patients than for those of normal weight (Lakdawalla et al., 2005). They also spoke of the bur- dens of chronic conditions, whose treatment consumes 96 cents per dollar for Medicare and 83 cents per dollar for Medicaid (Partnership to Fight Chronic Disease, 2009). While discussing possible solutions ranging from clinical preventive services to community health, several participants sug-

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2 THE HEALTHCARE IMPERATIVE gested that the distinctions between wellness, prevention, and treatment of chronic diseases were artificial because all were essential and required strong community initiative. Next Steps for the Roundtable Many of the ideas coursing through the conversations from the work- shops fall within the scope of the Roundtable’s mission and were suggested as initial possibilities for further Roundtable and field consideration, includ- ing the following: • Developing a strategic roadmap. To apply the impressive and extensive information gathered throughout the workshop series, many discussed the need for a national strategic roadmap that identified the areas most likely to yield significant savings, the highest-priority strategies to realize those savings, and the specific steps needed to translate the potential into actionable recommenda- tions that will result in true lowered costs. • Improving the analytics. While the estimates presented during the workshops represent initial steps in providing a sense of the rela- tive amounts of inefficiency in the delivery system and the potential impact of key strategies, participants suggested that additional work will be required to refine and strengthen the accuracy of the numbers and their cross-cutting nature. Several additional facets suggested for consideration included specific delineation of esti- mates across the public and private sectors as well as the unin- sured; consideration of areas of overlap between estimates, and of implementation and maintenance costs; and identification of the barriers to effective “spread” of successful strategies. In addition, the workshop presenters focused on the direct costs of health care, but the indirect costs of health care—ranging, for example, from those of absenteeism for unnecessary services to decreased invest- ments in education—also warranted consideration. • Engaging multiple stakeholders. Given the reality of abundant challenges and resistance to change, attendees suggested that ef- forts to successfully control cost growth and lower spending while preserving innovation and outcomes could be achieved only with the cooperative efforts of the myriad stakeholders in health care— including patients, providers, manufacturers, payers, regulators, researchers, and policy makers, in both the private and the public sectors—aligning to improve insights, accelerate progress, and cre- ate a system grounded in delivering value to its constituents. • Informing health reform initiatives. As efforts to reform the deliv-

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29 COMMON THEMES AND NEXT STEPS ery system continue on both the federal and the local levels, specific attention was drawn to identifying inefficiencies in the healthcare system and the politically actionable policies to minimize them, because they carry paramount weight and clearly intersect with the goals of creating a value-based learning health system. • Enhancing transparency. Building on the observations expressed by many about the lack of information as to the costs, outcomes, and value from health care, additional exploration was urged as a means to enhance the transparency of system performance. • Focusing on strategies for more direct public engagement. As heard throughout the workshops, the desire for information and en- gagement among health consumers has grown over the past few decades, yet the range of information exchange between the public and policy makers needs further development. Effective and ef- ficient tools for translating technical language and information into accessible information for consumer use are required, as are methods of incorporating patient concerns and feedback into the policy decision-making process. Participants spoke of the role of education in clarifying the relationship between out-of-pocket costs and total medical spending, illustrating the impact of costs on all levels of society, and further motivating partnerships between con- sumers, providers, payers, and policy makers. As these conversations about value, cost, quality, and outcomes continue, additional observations and suggestions are welcomed and encouraged while the Roundtable continues to consider and explore these challenges and possibilities. REFERENCES Brownlee, S. 2009. Perception vs. reality: Evidence-based medicine, California voters and the implications for health care reform. http://www.effectivepatientcare.org/images/ 0909%20CEPC%20Brownlee%20Report%20on%20EBM.pdf (accessed October 2, 2009). Casalino, L., S. Nicholson, D. Gans, T. Hammons, D. Morra, T. Karrison, and W. Levinson. 2009. What does it cost physician practices to interact with health insurance plans? Health Affairs (Millwood) 28(4):w533-w543. CBO (Congressional Budget Office). 2008. Evidence on the costs and benefits of health information technology. http://www.cbo.gov/ftpdocs/91xx/doc9168/05-20-HealthIT.pdf (accessed September 10, 2009). CMS (Centers for Medicare & Medicaid Services). 2009. National Health Expenditure Data Overview. http://www.cms.hhs.gov/nationalhealthexpenddata/01_overview.asp (accessed June 1, 2009).

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