WELCOME

MEDICAL COLLEGE OF WISCONSIN46th Annual Clinical Conference

March 2, 2012

“Healthcare Crisis: The Cure”

Roger H. Strube, MD (retired)Author – Managed Care Consultant

The Health Care Crisis

The health care crisis is a two headed dragon:

COST CRISIS – QUALITY CRISIS

The Goal

Stimulate Critical Thinking about Healthcare, the Root Causes of our Crisis and the Fix

American health care is in a dual crisis

The crises are both financial & care quality

Quality and Cost are inversely related but directly connected

High cost of medical care:

– 70% medical goods and services

– 30% administration (insurance)

– Retards our economic recovery

– Makes American business less competitive

THE COST OF HEALTH CARE

The Cost = 18% of GDP

$2.49 Trillion per Year(2011)

Health Care Financing

All American health care is financed by the worker/taxpayer.

The taxpayer finances over half the medical goods and services (Medicare/Medicaid, military, Veterans Administration, prisons, government employees,

elected officials, Indian Health Service, etc.)

In addition, the worker (not the employer) pays for private (insurance) health benefits.

There is no Free Lunch.

Health Care Financing

The public sector (tax payer) finances over half American health care.

Private sector financing is administered by risk-managing for-profit indemnity insurance corporations.

– This methodology costs up to 30% of the health care dollar ($747 billion)

– The cost includes shareholder profit and egregious salaries & bonuses for executives

Alternatives:

– Medicare/Medicaid for everyone (Universal Health Care – the German methodology) – administrative cost about 3% to 5%

– Give the budget to the AMA and let the doctors figure it out (the Canadian methodology) – “Trust me, I'm a doctor.”

Is it moral, ethical or even reasonable to give health care dollars to private for-profit corporation investors and support inflated salaries and egregious bonuses to executives? Is there a better way? Can Americans become “self-funded” and become the largest “risk group” in the world?

Health Care Financing

America must reform the health care financing methodology if we want to save our health care delivery system and the economy. The cost savings could be 20% of the $2.49 trillion ($498 billion per year).

If America becomes self-insured and claims processing becomes a not-for-profit commodity, where do the savings go?

– Reduced labor cost for employers?

– Increased wages for workers?

– Larger fees for physician services?

Health Care Financing – End Game

All Americans will be “pooled” into the largest risk group in the world. This is the definition of Universal “coverage.”

Taxpayer dollars, rather than excessive for-profit insurance company premium dollars shall finance the system.

Private not-for-profit Third Party Administrators (TPAs) or Administrative Services Only (ASOs) shall process claims.

I have essentially described “Medicare & Medicaid for Everyone”

- But -

For this to happen, our health care quality crisis must be resolved. Health care delivery must be reformed and re-engineered.

The American Health Care System

Reform of the American

Medical-Industrial Complex

American Health Care Compare

The World Health Organization ranked the American health care system 37th in 2000.

In 2010 the N.Y. Commonwealth Fund found that American health care ranks highest in cost and last in performance among seven industrialized nations.

(Australia, Canada, Germany, the Netherlands,

New Zealand, the United Kingdom and the USA)

The Dartmouth Atlas http://www.dartmouthatlas.org/

Studies published in the Dartmouth Atlas establish:

- 40% of medical goods and services are unnecessary or harmful

– My impression is that the number is closer to 50%

- Health care costs and unnecessary care increases with increased supply of providers

– Competition does not work to reduce medical cost

The reaction of our legislators

at the state and federal level is predictable.

The Cause/Blame – It's Complicated

The drivers of our run-away cost and quality crises:- A complex, expensive financing methodology (Up to 30% or $747 billion)

- FFS provider reimbursement (Major driver)

- High cost of advanced technology (Over rated)

- Excessive cost of pharmaceuticals (Major driver)

- Advertizing to create demand for goods and services (Inconvenient)

- Patient insatiable demand for unnecessary medical care (Annoying)

- Medical malpractice (Minor element)

However, nothing of significance happens in our health care system without direction or participation of a provider. Our

health care crises are, “Just what the doctor ordered.”

The American Quality Crisis

Definition of Quality Care:

Quality care is:

Appropriate, Effective, Efficient and Accessible.

Compared to all other large industrialized democracies, the American Medical-Industrial Complex fails on all four counts:

– 2000 WHO Health Care System Ranking #37

– 2010 Commonwealth Fund concluded the American health care system the worst of 7 largest economies

Doing the Right Thing and the Thing Right

The American Medical-Industrial Complex cost and quality crises are predominantly the result of physicians failure to do the “Right Thing” at a rate about 40% to 50% (e.g, 9 of 10 MRIs unnecessary).

This failure delivers, at the direction of our physicians, about $1 trillion in unnecessary medical goods and services per year.

Failure to do the “Thing Right” (malpractice) is a small portion of the crises (< 1%).

Blame vs. Fault

The flawed decisions made by physicians are clearly to blame for our health care crises.

To manage our crises, we must understand why physicians provide unnecessary goods and services 40% to 50% of the time.

The providers and their decisions are to Blame –

But the Fault is with our decision-making process.

The DysfunctionalDecision Making Process

Physicians use global subjective memory-based decision-making – or – intuition.(shoot from the hip – or - draw, shoot, aim)

Although most physicians have huge memory banks of medical information, it is impossible for the human mind to recall the small subset of relevant data that

apply to a unique patient in real time.

Physicians are on Mission Impossible.

(This is why pilots use check lists – read “Criteria.”)

Playing the Blame Game

I didn't say the crisis is your fault...

I said I was blaming you.

American Health Care Mythology

Failure to recognize our flawed decision-making process as the foundation of both the cost and quality

crises has resulted in false assumptions about the causes and misguided proposals regarding reforms.

(Treating the symptom without understanding the disease)

If we don't understand and address the fundamental financing and decision-making problems, the

unintended consequences of misguided remedies will overwhelm our system and economy.

Ockham's razor – The simplest solution is the most likely.

American Health Care Myths - #1

We're Number One !False

Actually we are number 37 according to

the World Health Organization in 2000

- and -

The Commonwealth Fund study in 2010 indicates we have done nothing to improve our standing among the seven industrialized nations evaluated (still 7th).

American Health Care Myths - #2

Competition will reduce cost!False

Between Providers – The Dartmouth Atlas study demonstrated increased cost with greater numbers of physicians.

Between Insurers – The price of the premium is determined by medical costs, administrative costs and profit. Providers generate medical costs. Insurers process the claims and tack on 3% to 5% profit.

American Health Care Myths - #3

Universal Health Care is like

European Socialism !False

Actually, it is more like good old-fashioned American Socialism. Universal Health Care (single purchaser

system) is the methodology used to finance services for: Medicare; Medicaid; military; V.A.; Indian Health Service;

public safety; Post Office; government workers; politicians; etc. Health care for over half the population is

financed using taxpayer dollars.

American Health Care Myths - #4

“Socialized” health care systemshave excessive waiting times

and delays in treatment !

True (but not valid)

To understand that this claim is True but not valid, you need to answer the following question:

What is the appropriate waiting time for unnecessary medical goods and services?

American Health Care Myths - #5

Employers pay for employee benefits!

False

The cost of labor is the sum of wages, taxes and benefits. Benefit dollars come out of the

worker's pocket. Wealth is transferred from the worker to the provider using dollars collected by the employer and managed by for-profit

insurance corporations.Universal Health care brakes the golden handcuffs the employer has on the worker.

American Health Care Myth #6

Malpractice settlements and fear of malpractice drive up health care costs !

False

Malpractice claims cost our system < 1%

In spite of excessive use of unnecessary diagnostic studies, failure to diagnose remains a top cause for malpractice actions.

We practice “shotgun” medicine when we do not “know” what is necessary. How could we know? We use a dysfunctional memory-based process.

The Cure

The Stone Age didn't end for the lack of stones.*

New tools change the way we work and play.– What are the new tools?

– How should they be designed?

– How should they be applied?

Advances in Medical Technology will come,

- however -

Just because you can doesn't mean you should.

*Remember, we still have stone cutters and buggy whip manufacturers.

Electronic Health Records

Are today's E H R s designed to maximize

the potential of available hardware and

software technology to improve the quality of care?- OR -

Are available E H R s programed

to emulate paper charts and facilitate billing?

Have we gone from the “Paper Storm”

to “Chaos at Light Speed?”

Electronic Health Records(Questions to ask about an EHR)

How is the patient data organized?– Is the vendor's E H R an electronic representation of a “source oriented”

- “billing oriented” paper chart? (Chaos at Light Speed)

- or -

– Is the data “patient problem oriented” to bundle information to follow and communicate care management for specific patient problems?

Does the E H R have integrated decision support tools (standards, criteria, pathways, etc.)?

The individual patient “owns” his/her chart. Who “owns” the information you generate as you create your global practice database? It's your art and documentation of your decision-making process – do you own it?

The Golden Rule

“He who has the gold makes the rules.”

- Strube Corollary -

“He who has the data holds the gold.”

A look at the Future ofthe American Health Care System

IBM / Watson* famously competed with the best the TV show “Jeopardy” had to offer and easily won.

The medical division of IBM / Watson is piloting a system combining medical artificial intelligence with the Wellpoint data base of 1.5 million patients.

How will these new tools effect the Medical-Industrial Complex?

How will the new tools effect how you practice medicine?

* Thomas J. “Watson” - The man who made IBM

A Vision of the Future

Physicians must leap the chasm between our present dysfunctional global subjective memory-based decision-making process (intuition)

- to -

Exercising Judgment in decision-making using new electronic tools founded on objective evidence-based medical science, standards

and criteria integrated with patient data using medical AI in real time .

Medical artificial intelligence (AI) applied to electronic patient data will not replace physicians. Our value to society and our conception of self-worth shall be based on our Art and the Judgment exercised

during the application of these new tools, rather than the size of our dysfunctional memory banks or the scores we achieve on specialty

certification exams.

The Future of Health CareMy Vision

Financing – Taxpayer supported Universal Health Care administered by private non-profit TPAs & ASOs.

– Claims processing becomes a commodity at 3% to 5% saving $498 billion

Health Care managed and delivered by private providers using state of the art problem-oriented E H Rs with fully integrated medical artificial intelligence decision support tools interfaced with the TPA/ASO for direct submission of claims and direct deposit of payments.

– Elimination of taxpayer financing of unnecessary care saving $996 billion

– Elimination of micro-management by fiscal intermediaries

– Malpractice limitations for providers using the system

Democracy and Capitalism

American Democracy is the best system of governance in the world.

American Capitalism is the best economic system ever developed regarding the Pursuit of Happiness.

For Life & Liberty, not so much.

American Socialism is what supports Life and preserves Liberty so we may Pursue Happiness.

America has socialized: the military; public safety; education; infrastructure, and health care for over half the population.

America needs “Socialized” Universal Health Care (Medicare/Medicaid)

for the rest of our population.

American Health Care Has Overwhelming Cost & Quality Problems

We have not succeeded in solving

all our problems, indeed we feel

we have not entirely succeeded

in solving any of our problems.

Are the Questions as important as Answers?

The answers we have considered

have served to raise

a whole new set of questions.

In many ways we remain

as confused as ever.

However, we now feel

that we are confused

on a higher level

and about more important things.

Critical Thinking and Managing Ambiguity