Thomas H. Lee, MD, MSc.Network President, Partners HealthCare SystemProfessor of Medicine, Harvard Medical SchoolProfessor of Health Policy and Management, Harvard School of Public HealthAssociate Editor, The New England Journal of MedicineJuly 23, 2009The Nash Equilibrium Breaks Down

The Good News in Massachusetts Enrollment Since April 2006MA now has lowest uninsured rate in U.S. (2.6%) But MA didnt make healthcare a right; we made it a responsibility. And that has unmasked a major problem

Health Care Affordability Is Now a Middle Class ProblemCumulative increase 2000-2007Employer Health Benefits 2007 Annual Survey (#7672), The Henry J. Kaiser Family Foundation & HRET, September 2007This information was reprinted with permission from the Henry J. Kaiser Family Foundation. The Kaiser Family Foundation, based in Menlo Park, California, is a nonprofit, private operating foundation focusing on the major health care issues facing the nation and is not associated with Kaiser Permanente or Kaiser Industries.

Why We May Be Hitting Generositys Brick Wall

Willingness of Healthier and Wealthier to Subsidize Care for Sicker and Poorer is WeakeningHarris Survey question: Do you agree or disagree?The higher someones income is, the more he or she should expect to pay in taxes to cover the cost of people who are less well off and are heavy users of medical services.http://www.harrisinteractive.com/news/allnewsbydate.asp?NewsID=1076Implication: We shouldnt expect help from taxpayers.

The Bad News: Progress Raises Costs and Generates ChaosFlood of progress and knowledge imposed on fragmented delivery system leads to:Individual clinicians feel less knowledgeableSuper-specialization, which means:More MDs involved in carePhysicians knowing more and more about less and less until they know everything about nothing orless and less about more and more until they know nothing about everythingPhysicians approaching patient with question of Is this what I do?Too many people, too much to do, no one with all the responsibility or all the information

No Bad Guys to Blame for Our IssuesWhy are healthcare costs rising?Surprisingly small contributions from:Profits of drug/device companiesAdministrative costsMalpracticeAging of the populationLife-style choicesPersonnelThe dominant factor progress (60-70%) is main driver of rising costsSafety and reliability issues are attributable to turbulence in the wake of progress as well.

Reason for Optimism

John Nash

John Nashs Nobel Prize WorkNobel Prize for Economics in 1994 for describing an equilibrium concept for non-cooperative games in which binding agreements cannot be written.Nash Equilibrium -- Multiple parties frozen in current relationships because no party can change its strategies while the other parties keep their strategies unchanged.Nash Equilibriums break down when pain of status quo for multiple parties exceeds fear of unknown.

An Optimistic Long-term PerspectiveUniversal hospital & MD performance transparencyFaster uptake & discovery of better, faster, leaner care delivery innovationsEfficiency of Health Benefits Spending (Health Gain / $)Evolutionary PathHighLow20052015Large annual gains in quality and affordability Act I TransparencyAct II Performance SensitivityAct III Clinical ReengineeringFinale BreakthroughPerformance-sensitive health plan design and/or provider payments Slide used with permission of Arnold Milstein, MD, of Mercer

Working to Achieve the Vision: EMR AdoptionPercent of PCPs Using EMRPercent of Specialists Using EMRSuccess in adoption has allowed focus to shift to effective use:Rate of Computer Generated Prescriptions among PCPs is 85%-88%.Rate among community specialists has exceeded 70%.

Prospect Theory Explains Why Relatively Small Incentives Can Produce Major ChangeProspect Theory, Kahneman and Tversky, Econometria 1979

Evolving Reimbursement and Care ModelsFee-for-ServiceP4P (Lite)P4P (Robust)Case RatesSub-CapitationFull CapitationPAYMENT METHODOLODYSTAGE OF EVOLUTIONSolo MD PracticesMulti-Specialty Group PracticesIntegrated Delivery SystemClinic Model Group PracticesNon-MD CliniciansRegistriesEMR*Disease Management*Team-Based CareClosed SystemEvolution of Supporting Systems

Disease Management Averts a CHF AdmissionMD notified of weight gain. Patient called, and MD learned she had stopped taking furosemide twice daily. Regular regimen restored

The Real Agenda: Two RevolutionsIndustrial Revolution in which clinicians adopt systems that reduce errors of over-use, under-use, and mis-use.Cultural revolutionTeamwork instead of MD as the lone cowboyFocus on care of populations over timeChronic diseases like diabetes, heart failureComplex, high risk patients with multi-system disease

Medicines Cultural RevolutionNew types of responsibilitiesResponsibility for non-visit care of patient Responsibility for population of patientsEvolving concepts of professionalismNot just highest possible individual standards of excellence Ability and willingness to work with teams that can assume new responsibilities. Examples:Use of EMRComputerized prescribingMedication reconciliation at dischargeOpt out approach to team careExploration of variation in practice patterns

Variation: A Challenge and OpportunityIssues for which there is a clear right and wrong (.e.g, ASA for AMI) constitute minority of medical decisions.Most decisions are gray zone issues for which there is no clear right thing to do.But if there is a bell-shaped distribution of what rational professionals (e.g., your colleagues) are doing in that gray zone, wouldnt you want to know if you are at one end or the other?

Variation is Greatest When Right Thing to Do Is Less ClearVariation in rates of care across 306 Medicare regions (2000-01)*.Implications Hip FractureBack SurgeryProcedure Rates of 306 Regions* [Adapted from The Dartmouth Atlas of Health Care; Jack Wennberg presentation 2005.]

Variation in clinical practiceStandard of care exists

No standard of care exists

The approach to managing variation differs depending on the existence of a standard of care?Gather and feed back data

Set guidelines, standards or protocols

Consider explicit financial/non-financial incentives

Provide analytic services and peer supportSuccess requires mindset that variation is undesirable even without a willingness to define a group normDescribe variation and agree to internal standardsCan form basis for research to define standard of careSuccess requires very high will from clinicians to reduce variation (bottom-up nature of project is even more crucial)

Data on Variation Are Reaching Individual MDs

Why Does Variation Exist Within Small Groups?Clinicians are overwhelmed with information, and have gaps in knowledgeExperts tend to get to answers in fewer iterative cyclesClinicians vary in tolerance of risk/uncertainty Experts can often live with greater level of uncertaintyClinicians are isolated, and do not have way to develop group consensusClinicians are influenced by local norms from where they trained and their current environmentBut ironically, clinicians often dont know how they compare with local norms

Variation in physician risk thresholds drive individual propensity to act regardless of patient risk* [Pearson et al., Triage Decisions for Emergency Department Patients with Chest Pain. J Gen Intern Med. 1995; 10:557-564.]

Chart2

0.52517985610.43583535110.3106060606

0.28048780490.21138211380.1460674157

0.93333333330.8159203980.724137931

10.96969696970.8333333333

(p < 0.001)

(p < 0.03)

(p < 0.04)

(p < 0.10)

Risk-avoiding physicians

Middle-scoring physicians

Risk-seeking physicians

Patient categories

Percent patients admitted

Physician Risk Attitude Scores vs Hospital Admission Rates for Acute Chest Pain Patients Evaluated in ED

73 /139

23 /82

28 /30

19 /19

360 /826

104 /492

164 /201

64 /66

41 /132

13 /89

21 /29

5 /6

Sheet1

All patientsLow-riskMedium-riskHigh-risk

Risk-avoiding physicians53%28%93%100%

Middle-scoring physicians44%21%82%97%

Risk-seeking physicians31%15%72%83%

Sheet1

(p < 0.001)

(p < 0.03)

(p < 0.04)

(p < 0.10)

Risk-avoiding physicians

Middle-scoring physicians

Risk-seeking physicians

Patient categories

Percent patients admitted

Physician Risk Attitude Scores vs Hospital Admission Rates for Acute Chest Pain Patients Evaluated in ED

19 /19

28 /30

23 /82

73 /139

64 /66

164 /201

104 /492

360 /826

5 /6

21 /29

13 /89

41 /132

Sheet2

Sheet3

Taking on Variation: PHS StrategiesDevelop guidelines, and disseminate themAttack the gray zone where specific guidelines cannot be described yet:Increase group-ness and increase conversations Show dataIdeally, in unblinded, ranked formats for practiceAlso provide data proximate to time to ordering of tests/drugsFollow-up on data with chart reviewsCultivate individual accountability through 1-1 meetings and pairing of clinicians for chart reviews

Can We Address Right Side of Curve?Rogers EM. Diffusion of Innovations, 1983

ConclusionsAn important root cause of our challenges in healthcare is tremendous progress imposed on a fragmented delivery systemResult is chaos leading to inefficiency and disappointing reliability and safetyRegardless of how healthcare is financed, important strategy is for healthcare providers to become organized and adopt systems that improve quality and efficiency -- over episodes of care that matter to patientsOrganization as a goal poses challenges and opportunities for medicines leadership

Aggregate US health care spending totaled just under $2 trillion in 2005, and has grown rapidly for many years nearly tripling from 1980 to 1990 and then nearly tripling again by 2005.

Yearly growth in national health expenditures averaged 7.1% between 1990 and 2005.

Under current projections, national health spending will double by 2016, exceeding $4 trillion.

This is the graphic representation of Prospect Theory.

Note that the horizontal axis shows actual gains or losses (so that a $50 gain would be as far from the origin as a $100 gain.) A $50 loss would be equidistant from the origin as a $50 gain.

The vertical axis shows the perception of gain (above the horizontal axis) or loss (below the horizontal axis).

Note that each curve becomes flatter as it travels away from the vertical axis. Note also that the loss curve is steeper than the gain curve.

Great. Be prepared to give example of each as you explain this.Great. Be prepared to give example of each as you explain this.Great. Be prepared to give example of each as you explain this.