Welcome to the beginning of summer and the June issue of the Indidge Advantage newsletter. For most people there is a link between summer and good times.
Our first article explores the link between high cost care and high quality care. The next article exposes a growing threat in healthcare facilities and the last article is about healthcare overhaul.
Don't forget Father's Day on Sunday, June 21st.
The Indidge Advantage is produced by Indidge Systems, a healthcare software solutions company specializing in Compliance and Risk Management solutions.
Philip Betbeze
A recent study analyzed spending and quality measures at the individual hospital level, and found that there's no link between high-cost care and high-quality care.
The results, published in the journal Health Affairs by Laura Yasaitis, Elliott Fisher, and Jonathan Skinner of Dartmouth and Amitabh Chandra of Harvard, are not particularly surprising, because previous studies have shown no link between spending and quality at the regional level. What is somewhat surprising is that the study confirmed that in some cases, patients at the household-name hospitals received worse care than they might have at their local community hospital.
Anyone who's recently bought a BMW or Land Rover lately can relate.
Despite the fact that those brand names carry a lot of cachet, initial quality rankings from J.D. Power & Associates show that you'd have been much better off in initial quality by purchasing a much cheaper Toyota, Honda, or even a Mercury. You just wouldn't have as much brag factor doing it. Similarly, the fact that you were treated with the latest technological gee-gaws at the hospital where you received your coronary artery bypass or that you received the most expensive ceramic hip doesn't mean your outcome will be any better.
To make sure their results were not skewed by the severity of patients' illnesses, the authors examined end-of-life spending among the 2,172 U.S. hospitals with complete data on utilization, spending, and quality. Adjusted for the age, race, sex, and disease mix of each hospital's patients, average EOL spending was $16,059 for the lowest-spending fifth of hospitals. Average spending for hospitals in the highest-spending fifth was $34,742.
According to the study, hospitals that spent more actually performed worse on overall quality measures than lower-spending hospitals. That doesn't look good in the era of frugality that we're living in now. It also doesn't look good to a government that seems intent on cutting unsustainable healthcare costs somehow, some way.
It also doesn't look good to the consumer. Ask BMW or Land Rover. When your high-priced model isn't as reliable as the pedestrian competition, look out market share.
So what's a hospital leader to do with this information? Well, like the J.D. Power rankings for vehicles, it's another tool in the box to determine how well your hospital is doing on quality. You might be making money hand over fist now, but is it fool's gold? What will happen when cost and quality are more closely analyzed, as they are in this study? What happens when that analysis means lower reimbursement?
This study could also be considered a referendum on complexity. The best tests and the highest-cost diagnostic devices don't work as well when basic procedures like giving aspirin on admission for chest pain aren't followed. The same way the most sophisticated GPS system can't make up for the failings of a defective car battery, for example.
This latest study should be welcomed as a reminder to senior leaders that in a new, dynamic healthcare marketplace, if you're going to cost more, you'd better have the quality outcomes data to justify that extra cost.
Living on past glories or reputational excellence embedded in a fancy brand name just won't cut it anymore.
Study: Clostridium Difficile Infections on the Rise
By Anne Zieger
FierceHealthcare
May 11, 2009
As we've reported here before, Clostridium difficile infections are a growing threat in healthcare facilities. Now, a study published in this month's American Journal of Infection Control, suggests that the problem may be even worse than previously thought.
The study, which involved a survey conducted by the Association for Professionals in Infection Control and Epidemiology (APIC), concluded that 13 of 1,000 inpatients were either infected or colonized with the C. difficile bug. That rate is 6.5 to 20 times greater than had been previously estimated, APIC reported.
Given this rate, there are at least 7,178 inpatients with C. difficile in American facilities, with an associated cost of $17.7 to $51.5 million, APIC estimates. And the problem is stubborn: 82 percent of APIC respondents said that the rate of C. difficile infections hadn't decreased over the past three years.
For more information:
- read this APIC press release
Antitrust Laws a Hurdle to Health Care Overhaul
By Robert Pear
WASHINGTON - President Obama's campaign to cut health costs by $2 trillion over the next decade, announced with fanfare two weeks ago, may have hit another snag: the nation's antitrust laws.
Antitrust lawyers say doctors, hospitals, insurance companies and drug makers will be running huge legal risks if they get together and agree on a strategy to hold down prices and reduce the growth of health spending.
Robert F. Leibenluft, a former official at the Federal Trade Commission, said, "Any agreement among competitors with regard to prices or price increases - even if they set a maximum - would raise legal concerns."
Already, some leaders of the health care industry who appeared at the White House on May 11 say the president may have overstated their cost-control commitment. Three days after the gathering, hospital executives said that they had agreed to help save $2 trillion by gradually slowing the growth of health spending, but that they did not commit to cutting the growth rate by 1.5 percentage points each year for 10 years.
White House officials say even the more limited commitment is significant. Under current law, federal officials predict that health spending will grow an average of 6.2 percent a year, to $4.4 trillion in 2018.
Mr. Obama is asking the industry for detailed proposals to control costs. But so far the administration has not offered the industry any relief from antitrust laws and has, in fact, vowed to step up enforcement.
As a presidential candidate, Mr. Obama said consumers had suffered because of "lax enforcement" of antitrust laws in many health insurance markets.
In 1993, when President Bill Clinton made the last major effort to overhaul the health care system, the lobby for the drug industry, then known as the Pharmaceutical Manufacturers Association, devised a voluntary cost-control plan. Under it, each drug company offered to limit the annual increase in the average price of its prescription drug products to the increase in the Consumer Price Index.
The Justice Department rejected the proposal, saying it would violate antitrust laws. In blocking the proposal, the department said the Supreme Court had made clear that agreements setting maximum prices were just as illegal as agreements that set minimum ones.
"Such maximum price-fixing agreements create the risk that the maximum prices will become minimum or uniform prices," the department said in a business review letter signed Oct. 1, 1993, by Anne K. Bingaman, then the assistant attorney general in charge of the antitrust division.
In 1978, hospitals also asked the Justice Department for an assurance they would not be charged with antitrust violations when they undertook a "voluntary effort" to curb costs as an alternative to legislation proposed by President Jimmy Carter. The department would not provide such an assurance.
Many savings now envisioned by the health care industry would require much closer cooperation by independent doctors and hospitals, taking them into a gray area of the law where federal agencies have not provided clear guidance.
In a recent letter to the Senate Finance Committee, the American Hospital Association said uncertainty about enforcement of the antitrust laws "makes it difficult for a hospital and doctors to collaborate to improve care" and lower costs.
Doctors often want to collaborate and share information about prices without sharing financial risk or fully merging their office practices. The American Medical Association has asked Congress to revise antitrust laws so doctors can collectively negotiate with insurers over fees and other issues.
The Federal Trade Commission has repeatedly challenged such collective action as illegal price-fixing, even though doctors say they are at a severe disadvantage in trying to negotiate with giant insurance companies.
A new study by an economist at Northwestern University, Leemore S. Dafny, finds that a growing number of geographic markets are dominated by a handful of insurance companies, and that the decline in competition may contribute to higher prices.
Among the groups that say they have joined together to rein in health costs, besides the hospital and medical associations, are America?s Health Insurance Plans and the Pharmaceutical Research and Manufacturers of America.
Jamie Court, the president of Consumer Watchdog, an advocacy group, said he was wary of such joint efforts.
"When companies that control the health care system get together to change it, there is a serious risk that they are doing it to stifle competition at the expense of consumers," Mr. Court said.
The Federal Trade Commission says that while cooperation among health care providers can benefit consumers, it can also increase the bargaining power of hospitals and doctors, making it easier for them to set prices and eliminate competition.
An efficiency expert was delivering a seminar on time management for a company's junior executives. He concluded the session with a disclaimer: "Don't attempt these task-organizing tips at home," he said.
"Why not?" he was asked.
"Well, I did a study of my wife's routine of fixing breakfast," he replied, a little embarrassed. "I noticed she made a lot of trips between the refrigerator and the stove, the table, and the cabinets, each time carrying only one item. So I said to her, 'Honey, I notice that you make a lot of trips back and forth carrying one item at a time. If you would try carrying several things at once you would be much more efficient.'" He paused. "Did that save time?" one of the executives asked. "Actually, yes," the expert answered, "It used to take her 20 minutes to fix my breakfast. Now I get my own in 7 minutes."