med cow present feb2012

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Presentation made at the Medical College of Wisconsin Annual Alumni Clinical Conference


  • 1. WELCOMEMEDICAL COLLEGE OF WISCONSIN46th Annual Clinical ConferenceMarch 2, 2012Healthcare Crisis: The Cure Roger H. Strube, MD (retired)Author Managed Care Consultant

2. The Health Care CrisisThe health care crisis is a two headed dragon:COST CRISIS QUALITY CRISIS 3. The GoalStimulate 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 4. THE COST OF HEALTH CARE The Cost = 18% of GDP$2.49 Trillion per Year (2011) 5. 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, VeteransAdministration, prisons, government employees,elected officials, Indian Health Service, etc.)In addition, the worker (not the employer) pays forprivate (insurance) health benefits. There is no Free Lunch. 6. Health Care FinancingThe public sector (tax payer) finances over half American health care.Private sector financing is administered by risk-managing for-profit indemnityinsurance corporations. This methodology costs up to 30% of the health care dollar ($747 billion) The cost includes shareholder profit and egregious salaries & bonusesfor executivesAlternatives: Medicare/Medicaid for everyone (Universal Health Care the Germanmethodology) administrative cost about 3% to 5% Give the budget to the AMA and let the doctors figure it out (theCanadian methodology) Trust me, Im a doctor.Is it moral, ethical or even reasonable to give health care dollars to private for-profitcorporation investors and support inflated salaries and egregious bonuses toexecutives? Is there a better way? Can Americans become self-funded andbecome the largest risk group in the world? 7. Health Care FinancingAmerica 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? 8. Health Care Financing End GameAll 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 insurancecompany premium dollars shall finance the system.Private not-for-profit Third Party Administrators (TPAs) orAdministrative 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 caredelivery must be reformed and re-engineered. 9. The American Health Care SystemReform of the American Medical-Industrial Complex 10. American Health Care CompareThe World Health Organization ranked the Americanhealth care system 37th in 2000.In 2010 the N.Y. Commonwealth Fund found thatAmerican health care ranks highest in cost and last inperformance among seven industrialized nations. (Australia, Canada, Germany, the Netherlands, New Zealand, the United Kingdom and the USA) 11. The Dartmouth Atlas 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 costThe reaction of our legislators at the state and federal level is predictable. 12. The Cause/Blame Its ComplicatedThe 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. 13. The American Quality CrisisDefinition 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 #372010 Commonwealth Fund concluded the American health care system the worst of 7 largest economies 14. Doing the Right Thing and the Thing RightThe American Medical-Industrial Complex cost andquality crises are predominantly the result ofphysicians failure to do the Right Thing at a rateabout 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 andservices per year.Failure to do the Thing Right (malpractice) is a smallportion of the crises (< 1%). 15. Blame vs. FaultThe flawed decisions made by physicians are clearly to blame for our health care crises.To manage our crises, we must understand whyphysicians provide unnecessary goods andservices 40% to 50% of the time.The providers and their decisions are to Blame But the Fault is with our decision-making process. 16. The DysfunctionalDecision Making ProcessPhysicians use global subjective memory-based decision-making or intuition. (shoot from the hip or - draw, shoot, aim)Although most physicians have huge memory banks ofmedical information, it is impossible for the human mind to recall the small subset of relevant data thatapply to a unique patient in real time.Physicians are on Mission Impossible. (This is why pilots use check lists read Criteria.) 17. Playing the Blame GameI didnt say the crisis is your fault...I said I was blaming you. 18. American Health Care MythologyFailure to recognize our flawed decision-makingprocess as the foundation of both the cost and qualitycrises has resulted in false assumptions about the causes and misguided proposals regarding reforms. (Treating the symptom without understanding the disease)If we dont understand and address the fundamental financing and decision-making problems, the unintended consequences of misguided remedies will overwhelm our system and economy. Ockhams razor The simplest solution is the most likely. 19. American Health Care Myths - #1Were Number One !FalseActually we are number 37 according to the World Health Organization in 2000- and -The Commonwealth Fund study in 2010 indicates wehave done nothing to improve our standing amongthe seven industrialized nations evaluated (still 7th). 20. American Health Care Myths - #2 Competition will reduce cost!FalseBetween Providers The Dartmouth Atlas studydemonstrated increased cost with greater numbers ofphysicians.Between Insurers The price of the premium isdetermined by medical costs, administrative costsand profit. Providers generate medical costs. Insurersprocess the claims and tack on 3% to 5% profit. 21. American Health Care Myths - #3Universal Health Care is like European Socialism ! False Actually, it is more like good old-fashioned American Socialism. Universal Health Care (single purchasersystem) 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. 22. American Health Care Myths - #4 Socialized health care systems have 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 forunnecessary medical goods and services? 23. American Health Care Myths - #5 Employers pay for employee benefits! FalseThe cost of labor is the sum of wages, taxes and benefits. Benefit dollars come out of the workers pocket. Wealth is transferred from theworker to the provider using dollars collected by the employer and managed by for-profitinsurance corporations.Universal Health care brakes the golden handcuffs the employer has on the worker. 24. American Health Care Myth #6 Malpractice settlements and fear of malpracticedrive up health care costs !FalseMalpractice claims cost our system < 1%In spite of excessive use of unnecessarydiagnostic studies, failure to diagnose remainsa 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. 25. The CureThe Stone Age didnt 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 doesnt mean you should. *Remember, we still have stone cutters and buggy whip manufacturers. 26. Electronic Health RecordsAre todays E H R s designed to maximizethe potential of available hardware andsoftware 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 Stormto Chaos at Light Speed? 27. Electronic Health Records(Questions to ask about an EHR)How is the patient data organized?Is the vendors 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