David Leonhardt, a columnist at the New York Times, writes about the economic consequences of medical malpractice and waste in his latest column, The Economic Scene.

Leonhardt brings to surface many poignant points regarding what we physicians and payers call best practices of medicine. If we were to follow an overwhelmingly established and strictly adhered to set of protocols for cases, we might be able to elimintate excess waste and reduce costs in the overinflated cost of healthcare in the United States.

Leonhardt makes his argument based off of facts, rather than off of passionate political arguments. For example, he cites both the AMA and the lawyer's trial association which both state that about $60 billion a year is wasted within the healthcare industry.

That $60 billion is roughly three percent of the total sum of medical spending. Interestingly enough, only three percent of all medical cases are sought after as malpractice damages.

Does that mean we're making ado about mere pennies when it comes to covering up for malpractice fears?

To read the full article about malpractice and spending, click here: http://www.nytimes.com/2009/09/23/business/economy/23leonhardt.html?_r=1&scp=6&sq=September+23+2009&st=nyt

New York-Presbyterian Hospital, whose centers and clinics account for 20 percent of all health care provided in New York, is the first large institution to move beyond the pilot stages of online digital records, a New York Times article reports.

New York-Presbyterian is beginning to offer consumer-controlled health records for patients this week.

Although online medical records have been available for years, a nearly non-existent percentage of Americans have them today, mainly because getting useful patient and medical information into personal health records into an online form is time-consuming, mind-numbing and error prone, the article stated.  However, Microsoft and Google have announced partnerships within the past few months with large health care providers, including Cleveland Clinic, Mayo Clinic and Kaiser Permanente to overcome these barriers.  

Dr. Mehmet Oz, a heart surgeon at New York-Presbyterian said in the New York Times that “one significant benefit [of online personal health records] is the mobility of information and ease of access to an online personal health record.

Moving from papers-in-files to a digitized office is just one of the many scores of changes transforming our society. AllMed, an independent review organization, is online, too. AllMed’s Web site offers an array of resources that, much like online personal health records, eases the painstaking task of research and discovery; we compile all the information you need to keep it at the ease of your fingertips…literally.  

To read the full article, click here: http://www.nytimes.com/2009/04/06/technology/companies/06health.html?ref=health

My goal: share my view of broad principles of how to transform our system, in a way that fits the American values

What can be done to overhaul the US Healthcare system?

This is an urgent problem that can no longer wait

• Long overdue, politicians have tried, failed -  but mostly stalled for time
• We spend double the GDP of other countries but we’re #30 in quality and value and on the way to triple
• Our broken system is bankrupting countless families
• An issue of national economic security
• This is not just a healthcare crisis, but a health crisis – lots of Americans making poor lifestyle choices with no consequences

This is not a political or partisan issue, it’s a human issue

• This is not a fight between capitalism and socialism or liberals & conservatives
• This is a fight for economic prosperity, global competitiveness, social and economic justice, and most of all – dignity

We’re all paying for the broken system that we’ve got now, like it or not

• We pay individually, as business owners, as tax payers
• We pay for the 46 million uninsured, which could grow to over 60 million or more with the current recession
• We pay for the underinsured – which account for at least 30% of all insured, as companies and individuals accept higher co-pays, deductibles and catastrophic coverage become the norm

We need to come to agreement on the fact that affordable healthcare for everyone is a societal necessity and a national security issue, if not a universal right

Let me layout some guiding principles that form the foundation for transforming US healthcare:

• Multi-payer system
• Private/public insurance with open competition based on measurable value
• Government regulation and tax policy that creates incentives & sensible regulation to steer private sector in right direction & provide a safety net

So here are the 8 key components that I believe must be part of any new healthcare system:

1.   Study other health systems around the world to learn what works best and decide what we want.

• That’s what Taiwan did several years ago, and they have universal coverage at very low costs and high degrees of efficiency

2. Universal coverage & access with mandatory participation by all

• Many people bristle at the notion of mandates – I understand
• Just like auto insurance – everyone pays therefore we all bear our own costs, preserve the integrity of the system
• Move to a system where everyone is part of the same risk pool and everyone pays into it
• End the vicious cycle of cost shifting and the downward spiral we’re currently in:

• Uninsured go to emergency rooms, obtain most expensive care
• Hospitals provide required service and charge the insurance companies, who in turn raise premiums for those of us who are covered.

• If everyone is the system, we’ll be able to bring the costs down for everyone

3.  Design a single national healthcare system where we can leverage cost reduction efforts

• Get rid of 50 individual state insurance jurisdictions & medical licensure
• create a single national market with a more competitive landscape
• If done right, this can lead to enormous cost reduction that we need:

• Doctors
• provider organizations
• Drug companies & equipment suppliers
• Insurance carriers

4.   Creat a national insurance exchange with annual payer/provider negotiations, based on standardized coverage definitions, premiums & reimbursement rate structures

• This works very well in both Germany and Japan
• Harness the enormous market power that represents 305 million buyers and millions of sellers to drive down costs through competition
• Fierce competition with clear, easy to understand representations of value
• Coverage standards that make it easy for purchasers to know what they’re getting

5.  Move back to primary care model and medical home concepts

• We’re all old enough to remember the family doctor, who actually knew us and cared about out health, as opposed to the current reality
• Primary care has been in a free fall for over a generation
• Current system - poor access/continuity
• Primary care physicians overworked and underpaid
• Medical students have been taught to pass up family practice and go straight into high paid specialties
• There’s no continuity of care that optimizes value/cost

6.   Leverage new technology & advances, but reign in overutilization, unnecessary treatments

• 30% of all treatments/procedures are unnecessary
• Providers & doctor owned facilities overprescribe –  conflicts of interest
• Use evidence-based standards
• EHR and smart cards – two technologies to bring down administrative costs

7.  Get rid of entitlements and overhaul Medicare & Medicaid

• Start by revamping Part D drug benefits and renegotiating with drug companies
• Overhaul the reimbursement structure through the national exchange
• Bring Medicaid benefits into line with the rest of the population’s benefits
• Use Medicare administrative structure, which is quite efficient

8.  Incentivize and educate people to live healthier lives

• Smoking, obesity, alcohol drive 80% of chronic diseases – avoidable
• Preventative screening & education

These are the key things I think we need to do.  Most of all we need create a shared vision and national political will to do this together, for the benefit of all Americans, recognizing that everyone is going to give up something in order to solve the problem as a whole.

• We’re already seeing the insurance industry accept this
• Doctors, drug companies and tax payers are going to accept this too
• Our political leaders are going to have to put aside their partisan behavior and come together to get this done, despite the divisiveness that is already emerging in Washington between the ideologues
• Fortunately, most of them on both the right and the left readily acknowledge that we can’t fix the economy without fixing healthcare. As leaders, we need to educate ourselves on the topic, engage in the debate, and advocate strongly for a bipartisan, lasting solution as a top priority on our current economic recovery agenda.  If we act now, we’ll go down in history as the generation of leaders who solved an enormous problem and put country back on the road to prosperity.    Our future depends on it.

The federal government has finally jumped on the IRO bandwagon with the approved $787 billion economic stimulus bill that provides substantial amounts of money for the federeal government to compare the effectiveness of different treatments for the same illness.

According to a recent New York Times article, "under the legislation, researchers will receive $1.1 billion to compare drugs, medical devices, surgery and other ways of treating specific conditions." These comparisons will likely become the touchstone for independent review organizations, payers and hospitals alike to use to establish standards of care that are based off of empirical evidence. The article states that the program is a response to a "growing concern that doctors have little or solid evidence of the value of many treatments."

Researchers also hope that the program will eventually save money by discouraging the use of costly, ineffective treatments; a vital improvement for the soaring cost of health care nationwide.

The Health and Human Services Department will have immediate access to the money, which can be spent over several years. The article reported that "some money will be used for systematic reviews of published scientific studies, and some will be used for clinical trials making head-to-head comparisons of different treatments."

In essence, the health care problem could very well be on the mend for hospitals, doctors, payers and consumers alike.

To read about political reactions, click here to view the full article: http://www.nytimes.com/2009/02/16/health/policy/16health.html?ref=health

Usually paying a premium for services and goods means you’re getting a product of higher quality in return. For example, organic produce costs more than conventionally-grown produce and octane 92 gas costs more than octane 89 but you get what you pay for: better fruits and cleaner gasoline.

According to a study conducted by Commonwealth Fund, a nonprofit research group in New York, this get-what-you-pay-for formula is not the case for the American healthcare system. The report shows that the United States spends more than twice as much on each person for health care as most other industrialized countries but has fallen to last place among those countries in preventing deaths through use of timely and effective medical care.

In summary: Americans are paying way too much for very little. The study also examines costs and inefficiencies within the American healthcare system. The administrative costs of the medical insurance systems consume much more of the current healthcare dollar, about 7.5 percent, than in other countries.

One avenue that healthcare payors can take to reduce costs is to outsource review cases to independent review organizations (IRO). IROs are efficient, cost-effective and knowledgeable, providing peer specialists who are actively practicing and up-to-date with today’s medical standards. By ensuring that reviews are done according to current medical standards, IROs reduce extraneous administrative costs of rework and re-reviewing.

Read the full article.