The good news also comes despite a Commonwealth Fund report documenting a growing deterioration in Americans’ access to healthcare, which should (but given the policy primacy of individual over social responsibility won’t) galvanize America to action. One reason it won’t is that there is no framework, no model, no system through which galvanic action could work. One writer suggests that the US will end up with either a market-based model of healthcare or a nationalized one, and says it is more important for healthcare leaders to figure out which will win rather than which is best . He does not consider the possibility of a compromise between the two extremes, one of which would be to extend (through inaction) the current healthcare non-system, if political paralysis persists after the next elections.

If the trend to consumer-directed health plans becomes mainstream, whether as part of a market-based or a compromise model, providers will have some serious preparations to make, and should probably get started on them right away. Patient self-care or care self-management is happening anyway, and will likely grow under any system (or non-system). Google is reported to be about to cash in on the consumerist health trend by adding a health-specific search engine to its service.

Other disparate but interesting policy- or practice-related items:

• Home medical monitoringis gaining in proponents, deployment, reimbursement, and technological improvement. But it is slow going, perhaps in part because the more conservative or less well-informed doctors are not ready for it.
• Once again the US administration has shown its disregard for science and disrespect for scientists, this time by denying the finding of its own Institute of Medicine that marijuanacan have medicinal benefit.
• The Hospital of the University of Pennsylvania deserves an award for taking an ethical stance against what may be perceived as drug company bribery— providing gifts to doctors and in return having their drugs prescribed. The pharmas’ response that doctors won’t trouble to learn about new drugs unless they are given gifts must offend every decent doctor.
• The University of Pittsburgh Medical Center has advanced its position as perhaps the most aggressively entrepreneurial academic health system in the US by establishing a formal joint venture with its main health IT supplier, Cerner, to co-develop and commercialize health IT. The danger is that UPMC may become locked in to inferior HIT if other HIT developers produce significantly better solutions; the opportunity is to lower the cost of its own HIT and even produce a surplus to spend in other areas.

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Preliminary figures released by the US National Center for Health Statistics in April 2006 show that despite the trends in aging, population growth, and obesity, the annual number of deaths in the US fell 2 percent — almost 50,000 people — in 2004.

Drops in the death rates for heart disease, cancer, and stroke accounted for most of the decline, suggesting that improvements in medical care at least partly explain it.

Society and Health

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With higher rates of diabetes, hypertension, heart disease, heart attack, stroke, lung disease, and cancer, Americans aged 55 and over are much sicker than their British counterparts, even though the United States spends more than twice as much per person on health care as Britain. Even rich Americans, with essentially universal access to healthcare, have health outcomes “often worse than those of their English counterparts.” In both countries, rich people were much healthier than poor people, but rich Americans had rates of diabetes and heart disease similar to poor Britons.

The British researchers reporting these findings in the Journal of the American Medical Association speculate that neither access to healthcare nor differences between the US and British healthcare systems are the issue. Rather, the issue is “differences in the circumstances in which people live. Work, job insecurity, the nature of communities, residential communities, et cetera ….”

US Uninsured Crisis Worsens

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A report release in April by the Commonwealth Fund, a New York-based health care policy foundation, should (but won’t) galvanize America to action:

• The percentage of working-age Americans with moderate to middle incomes who lacked health insurance for at least part of the year rose to 41 percent (45.8 million people) in 2005, up from the 28 percent in 2001.
• More than half of the uninsured adults said they were having problems paying their medical bills or had incurred debt to cover their expenses.
• People without insurance were more likely to forgo recommended health screenings such as mammograms than those with coverage, and were less likely to have a regular doctor than their insured counterparts.
• More employers are dropping coverage or are offering plans that are too expensive for employees.
• The percentage of individuals earning less than US$20,000 a year without insurance rose to 53 percent, up from 49 percent in 2001.
• Overall, the percentage of people without insurance rose to 28 percent in 2005 from 24 percent in 2001.
• 59 percent of uninsured with chronic conditions such as asthma or diabetes either skipped a dose of their medicine or went without it because it was too expensive. One-third of them visited an emergency room or stayed in a hospital overnight or did both, compared to 15 percent of their insured counterparts.
• Cost prevented 41.1 percent of uninsured adults from seeing a doctor, compared to 9.2 percent of individuals with coverage.
• 51 percent of women without health insurance haven’t had a mammogram in two years, compared to 22.8 percent of women with insurance.
• 76.3 percent of uninsured men between the ages of 40 to 64 haven’t had the PSA test, which detects prostate cancer, in two years. That compares to 52.2 percent of their insured counterparts.

US Healthcare Models

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Preston Gee writes in HealthLeaders that two fundamentally divergent directions for managing healthcare in the United States are at seemingly irreconcilable odds. Since one of them will win, the key thing to focus on is the plan that will then emerge.

The first direction, espoused by conservatives, is to turn healthcare over to the free market, despite its failure so far to curtail costs, increase access, or improve quality and value. The second direction, espoused by democrats, is to nationalize it along the lines of the Clinton plan.

The Bush Administration believes fundamentally that the ultimate resolution to most of the country’s dilemmas can be found in the free market, with health savings accounts serving to mitigate rising costs. But “misfires” by the Bush administration related to market-based solutions, including the move to privatize Social Security, the poor implementation of the Medicare prescription drug plan, and the failure of market mechanisms to reign in costs and markedly improve quality in the healthcare sector over the past six years, do not augur well for this conviction. In regard to the quality issue, Dr. Stephen Asch of the Rand Health Research Institute has observed: “It doesn’t matter whether you’re rich or poor, white or black, insured or uninsured. We all get equally mediocre care.”

In the push for consumer-driven healthcare, the resistance of the American public to the corollary “individual accountability programs” may be under-estimated. Urban Institute president Robert D. Reischauer contends that “the average American isn’t interested in having more of his or her skin in the game.” But they are being forced to, as unions buckle to corporate demands for health benefit reductions and as individuals and families face higher co-pays, higher deductibles, and higher percentage of premiums. “This mounting financial angst,” as Gee puts it, explains why voters seem willing to tolerate discussion of radical solutions, whether via the market or via the government.

Gee seems to suggest that it is not worth arguing over which is best, but it is vital for healthcare leaders to figure out which is going to win. The two scenarios would require very different strategic and operational responses and realistically, there are not enough resources to plan for both contingencies. If the market model wins, then healthcare executives must reorganize around more of a retail model, with “heightened transparency in pricing and quality reporting, . . . concerted patient and family orientation and distinctive service emphasis.” If the centralized model wins, then providers need to prepare for large-volume contracting in regional networks, where quality metrics, efficiency measures, and standard patient volume levels will be the focus.

To determine the winner, Gee suggests scenario planning, predictive modeling (in which various aspects of the scenarios are extended to calculate the impact on market dynamics and organizational performance), and “sophisticated planning exercises or computer-based simulation programs to evaluate how they would fare under a market environment that swings wildly from the present norm.”

Consumerism

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Where are the consumers in the alleged revolutionary trend to consumer-directed healthcare, asks HealthLeaders’ finance editor Philip Betbeze. He is talking about the paucity, so far, of takers for consumer-directed health insurance plans, beloved of employers because “their cost-inflation rates are so compelling compared to traditional health plans,” beloved of the Bush administration because of the link to health savings accounts, and beloved of entrepreneurs because of the profit potential.

“The actual consumers who use such plans,” writes Betbeze, “and their share of the insured market still resides in the low single digits” — less than 5 percent of the commercially insured marketplace. Deloitte Consulting LLP says a large majority of the people enrolled in such plans are either neutral or satisfied with them, but The Commonwealth Fund says that only 42 percent of consumer-directed plan enrollees are satisfied.

Proponents believe that despite the slow start, the trend is inexorable and the plans will eventually take off, aided by increasingly available consumer-friendly decision-support tools on the Web to help them craft their own coverage by creating a personal health profile, comparing provider quality, and making asset allocation and healthcare purchasing decisions accordingly. “That means,” says Betbeze, “patients must spend time building their health profiles and preferences. But the idea is that the health plan pays back that time spent by maneuvering through the clutter to provide ‘actionable’ recommendations that are relevant to patients” and by providing a consumer-friendly graphical alternative to the industry-standard inscrutable benefit statements, to help members truly understand what they are — and what they are not — getting.

If the plans do succeed, one potential problem is “adverse selection,” where healthy people will choose the cheap consumer plans and put off preventive health visits while less-healthy people will choose the expensive traditional plans in order to get care they are fairly sure they will need. In a misguided effort to save money (the theory goes), the healthy of today may find themselves burdened with much greater health expenses tomorrow when their neglect of preventive care comes home to roost. To counter adverse selection, some plans such as Humana don’t offer a choice: If an employer wants to offer its employees Humana’s consumer offering, it may not also offer them Humana’s traditional plans.

Another concern, should consumer-driven care take off, is that “very unique services will cost a fortune,” as hospitals that offer such procedures attempt to cross-subsidize to make up for low-margin and money-losing services, teaching and caring for the uninsured.

In any event, “Smart providers,” of whom there appear to be very few, are assuming that consumer plans will take hold and are making preparations to win the business of consumers covered by them. Preparations may include going “back to the days of billed charges,” abandoning the practice of discounting, and installing retail machines to handle consumer payment mechanisms. The smartest, of whom there are currently none, will offer “package prices for episodes of care — analogous to all-inclusive vacation packages.” Such a shift in pricing could happen in a few years or never. It is not a trivial undertaking because the provider still needs to meet margins based on current health plan contracts while becoming cost-competitive for future consumer plan-bearing patients.

America Online founder Steve Case and co-investors (who include former Secretary of State Colin Powell) have hired pre-eminent Web business veterans to build and run Revolution Health Group, founded in July 2005, which offers a Web-based decision-making tool to self-insured employers to help them administer their consumer plans. They agree that “injecting the consumer into the inefficient slice of the economy that is healthcare is risky,” but believe “it can lead to a big payoff.” Revolution Health is focusing on branding itself in four areas: content (health information and decision-making tools), commerce (diet and wellness), coverage (defined contribution plans and individual insurance plans), and care (no-appointment retail-style health centers).

One correspondent told Betbeze: “Consumers are finally being equipped beyond the rhetoric with tools and information that will make the difference,” and that “consumers are getting more comfortable with the idea that they can be their own ‘healthcare ombudsman . . . . Over time, you will see incrementally that Americans will begin to demand this of their employers. Pretty soon, you’ll be able to do better financially in an individual plan than a subsidized group plan.”

Google Health

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Google is reported to be about to launch “Google Health,” a part of its search engine optimized for finding health-specific information.

Telemedicine Advancing

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“Facing growing cases of chronic illnesses amid continuing nursing shortages, the health-care industry is increasingly turning to home-based medical devices to keep tabs on patients,” wrote Elena Cherney in the Wall Street Journal. “The aim is to lower long-term costs by heading off serious medical problems that crop up between doctor’s-office visits.” Home medical monitoring systems may also allow healthcare providers to care for larger numbers of patients with chronic conditions.

More than half of the 8,000 home-care agencies in the US that provide services to Medicare patients now use some form of remote monitoring, the National Association for Home Care and Hospice told Cherney. Most patients get the equipment through a home-care agency, though a few insurers and hospitals also provide devices for their patients.

One doctor opined that “Taking care of people without having an established relationship with the patient is extremely risky,” but Cherney points out that “a number of studies and pilot projects have shown that by detecting ominous symptoms early, telemonitoring can reduce rates of hospitalization in certain patients,” heart-failure patients in particular,

Montefiore Medical Center in New York has 140 heart-failure patients on a “telescales” program, where the patients’ weights are monitored remotely. The hospital’s overall medical expenses for this group declined by 18 percent compared with a group of patients not being telemonitored. After the success of its US$4 million grant to home-care agencies for telemonitoring, New York State Department of Health is awarding $3 million for more such initiatives. The US Centers for Medicare and Medicaid Services is also testing telemonitoring at eight sites, to identify which patients benefit most from it.

Medical Marijuana and Science

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The Food and Drug Administration declared in April that “no sound scientific studies” support the medical use of smoked marijuana. That is simply not true: A 1999 review by the Institute of Medicine, a part of the National Academy of Sciences, the nation’s most prestigious scientific evaluative agency, found marijuana to be “moderately well suited for particular conditions, such as chemotherapy-induced nausea and vomiting and AIDS wasting.”

Dr. John Benson, co-chair of the Institute of Medicine committee that examined the research into marijuana’s effects, said in an interview with Gardner Harris of the New York Times that the FDA statement and the combined review by other agencies were wrong. The federal government “loves to ignore our report,” he said.

No More Free Lunch

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The Hospital of the University of Pennsylvania (HUP) announced in April that it would no longer allow its physicians and medical students to accept gifts, including free lunches and pens, from pharmaceutical company sales representatives, who must now conduct their business only at HUP’s Center for Evidence-Based Practice, which will schedule informational sessions between doctors and pharma reps about new drugs.

The pharmas will be allowed to give unrestricted grants to hospital department chairs or chiefs, to be spent largely on educational programming.

Drug industry executives responded that they are concerned that physicians will “not make time” to learn about new medications without being offered meals or other incentives.

Strategic Relationships

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In May this year, Cerner Corp. and the University of Pittsburgh Medical Center agreed to establish a three-year joint initiative to create and commercialize healthcare information technology. The partnership will leverage both parties’ research and development strengths. “Through collaborations like this one, we can help transform the delivery of health care industrywide while creating new revenue to support UPMC’s core clinical and research mission,” UPMC chief information officer Dan Drawbaugh said in a press release.

The joint initiative will have a board of directors with equal representation from UPMC and Cerner, to oversee the selection and development of projects in such areas as supply chain, e-medicine, and community health. Cerner was already a major supplier of health IT systems to UPMC.