Healthcare reform’s focus on outcome and how that affects doctors

With the signing of national healthcare reform into law, the U.S. healthcare system faces almost immediate — and substantial — transformation. I spent a recent Sunday reading all that I could find in order to get my arms around this massive piece of legislation and to understand its health policy implications.

Here is my view from 50,000 feet.

I needn’t list all of the aspects relating to expanded coverage and insurance reform measures because the news media has already done a great job of reporting on these.

For instance, most of us have heard or read that:

* 32 million citizens will gain access to coverage by 2019, increasing the proportion of the population with coverage to 94 percent.

* Medicaid will be expanded and reimbursement for primary care services will increase.

* Insurance marketplaces, or “exchanges”, will be created. These will be similar in form to the Federal Employee Health Benefit Plan, multi-state insurance plans, or consumer operated and oriented plans that foster nonprofit member-run cooperatives.

* Regulations will prohibit insurers from capping annual and lifetime benefits.

* A phased-in process will prevent insurers from excluding coverage for pre-existing conditions.

The issues that interest me are those that you won’t read about in the Wall Street Journal or hear discussed by the pundits on the Sunday morning news programs — the reforms that impact hospitals, physicians, and health plans.

For these important stakeholders, the writing is on the wall: “No outcome, no income.”

As I see it, there are several substantial policy issues for hospitals.

The first is the obvious drift toward bundled payments. Beginning in 2013, there will be a national, voluntary, 5-year pilot project on bundled payments to providers for 10 conditions. For most hospitals, bundled payments will necessitate major financial reorganization.

Next, financial penalties will be imposed on hospitals for excess readmissions beginning in 2013, and a 1% penalty will be exacted on facilities in the top quartile in hospital-acquired conditions (e.g., Methicillin resistant staphylococcus aureus) beginning in 2015.

Finally, the law establishes a Value-Based Purchasing program based on measures contained in the hospital’s quality review program.

The new law also raises a number of other policy issues for providers.

For instance, in 2012, hospitals and physicians are invited to provide leadership in voluntary Accountable Care Organizations (ACOs) with the opportunity to share in cost savings from improved patient care management. While this is good in concept, how will such organizations be staffed?

The law also calls for the creation of a “Center for Medicare and Medicaid Innovation” to begin testing different payment and service models and it calls for national summits on geographic variations in cost, access, and value in health care. Such initiatives are likely to affect all providers down the road.

For health insurance plans, the new law is akin to the National Committee on Quality Assurance “on steroids”.

The law requires health plans to ensure quality of care and improve patient outcomes by means of quality reporting, effective case management, care coordination, chronic disease management, patient-centered education, medical error reduction, and implementation of wellness and health promotion activities.

At first blush, the requirements may seem overwhelming, but the upside for large health plans (e.g., Humana, Aetna) is that, by pushing the quality agenda, they may earn 5% to 10% bonus payments. By the same token, there may be a downside for smaller plans with fewer resources.

Although there are more policy issues than I can possibly address in this column, I will mention a few:

* A call for a national strategy and an interagency working group to improve healthcare quality

* Creation of a national council and appropriation of funds to increase emphasis on prevention, wellness, and health promotion — including Medicare coverage for well visits and personalized prevention plans

* Chronic disease prevention and public health initiatives aimed at improving wellness of the pre-Medicare population

* Creation of “Transparency and Program Integrity”, a freestanding, nonprofit, patient-centered outcomes research institute.

So, what does all of this mean for those of us in the healthcare industry?

Moving forward, the major themes seem pretty clear: transparency, accountability, and “no outcome, no income”.

What this means for clinicians is that, like it or not, we have no choice but to change the culture of medicine.

We can start by practicing medicine that is based on the evidence. In doing so, we will begin to reduce unexplained clinical variation.

Next, we can relinquish our slavish adherence to the notion of professional autonomy. Instead, we can begin to continuously measure and evaluate what we do, making sure to close the feedback loops.

Most importantly, we can begin to engage with our patients across the full continuum of care.

David B. Nash is Founding Dean of the Jefferson School of Population Health at Thomas Jefferson University and blogs at Nash on Health Policy.

Originally published in MedPage Today. Visit for more health policy news.

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    I will translate for the hopeful and meek minded.

    Like it or not, you will be required to do more and get paid less and still be subjected to the rath and greed of an angrier public and their unrestricted trial lawyers…don’t take it personally.

    • twicker

      Quick note that, at least in most states, the trial lawyers are far from unrestricted, whatever their wrath might be. For example, here in NC, we have caps on punitive damages, a requirement that the case pass through mediation before trial, and a requirement that a medical professional in the same specialty as that of the defendant testify that the defendant violated the standard of care (so you can’t rent a pediatrician to claim that a radiation oncologist was negligent). Not sure where you’re getting your “unrestricted” information from, but very few places have those.

  • pacificpsych

    “Next, we can relinquish our slavish adherence to the notion of professional autonomy”.

    That was funny. I suspect unintentionally so.

    Loss of autonomy IMO is the single biggest factor in physician burnout. Good medicine can only come from happy phsyicians, who feel they are in control, are respected and appreciated. This country is doing its very best to make doctors miserable.

    Yes, let’s do not what we know how to do as physicians, but what the MBA admin/Joint bureaucrats tell us to do. They know better.

    Yes, let’s rely on Pharma sponsored ‘truth’ rather than on our clinical experience and our brains. EBM? Here’s a study about the effectiveness of long term psychodynamic psychotherapy, for those who have an interest in the matter. Let’s see if these conclusions are implemented. Bet ya a million bucks they won’t be. Quote for the paper: “For many people, psychodynamic therapy may foster inner resources and capacities that allow richer, freer, and more fulfilling lives”.

  • paul

    unexpected bad outcomes in spite of strict adherence to these practice protocols need to be exempted from lawsuits

    • twicker

      In most places, they would be. Personally, I would like to see the US adopt the guidelines for pre-trial medical review boards who would examine precisely this: if a practitioner followed customary standard of care, then the case would be dismissed. If the practitioner went outside the standard of care in an apparently negligent manner (as determined by the members of the board, who are remunerated equally no matter the result), then a lawsuit can proceed. In the end, it both provides for legitimate cases to proceed, and for high-sympathy/low-evidence cases to be thrown out summarily (e.g., cases where an OB/GYN did everything he could, and practiced well, but the young mother still lost her child).

      • Alice

        I am trying to get a perspective here. I am just a patient. Not a doctor, or bureaucrat……so my seat in the arena is very different from your personal experiences. Who would be on the medical review board? Doctors have a real reluctance to declare another doctor negligent because they could be setting up their own web of precedence of a colleague’s error.

        Would this be similar to an Ombudsman experience?

        I can understand the weeding out of patients, but I worry about the relativity and outcome of this type of thinking. We know that a doctor who dislikes their patient will not treat them well, so a patient should run for the hills if they aren’t compatible. Maybe more patient education is in order, or more direct communication about a doctor’s expectations to at least help the patient understand the grassroots of what you expect out of the relationship. The patient is paying, so they feel empowered and look at you as a type of consultant/employee. So, a doctor taking charge is going to be met with skepticism.

        Just thinking aloud really. These posts are thought-provoking for a patient who is sitting there wondering what the doctor is thinking.

  • igloodoc

    The message? Go through your records and start sorting patients into desirable and undesirable piles. Undesirable patients will be the relatively non-compliant (don’t take their BP or cholesterol meds regularly, overweight patients, etc) or blatantly non-compliant. Jettison these patients ASAP. Why, a whole new industry of identifying the “no outcome, no income” patient will spring forth.
    What to do with the “no outcome, no income” patients? Why send them to the ER, where the “no outcome, no income” criteria will be different. As long as we don’t give them C Diff or MRSA, comply with EMTALA and HIPPA and the myriad of other legislative fiats, and put our trash in the proper colored bag and get high satisfaction scores all will be ok until we get sued.

    This article just reinforces the disconnect between the guys in the trenches and academia.

    • twicker

      igloodoc: so, the question becomes: how would you change the perverse incentives from fee-for-service, where more procedures/orders = more money, even if these are only marginally useful orders/procedures? You’re raising an important point, but I see that as meaning more that we need to make sure we structure the system so that it accounts for this issue, say, by providing higher reimbursements for patients with more-severe conditions (e.g., severe dyslipidemia *and* morbid obesity), and by including allowances for non-compliance. Those are certainly serious issues; however, they don’t negate the problems of MRSA, HAP, crappy procedures for handoffs that allow for critical patient information to be missed, etc.

      Our current system is far from perfect, and this is an attempt at making it more rational. How would you address the problems of the current system and the valid potential pitfalls of the new system? What criteria would you use to determine whether the new system would work better, or be demonstrably worse?

      • igloodoc

        I do not claim to have all the answers, but there are certain behaviors that can be reliably predicted. First, you get what you pay for. If you incentivize “no outcome, no income” you will get it. Just look at the data coming from hospitals in Pennsylvania after the government through the Joint Commission declared central line infections a “never” event. There are no more central line caused blood infections in several hospitals in Pennsylvania. There are still blood infections, at the same or higher rate as before, just not from central lines.
        If you want skinny people taking their meds, (aka primary care), incentivize it. Don’t cut it 21%. Do you really think the government should be in charge of this? Think of the worst president in history, and put him in charge of healthcare. That is government healthcare.

        Second, people who do not pay for something treat that something like it is free and abundant. Patients need to have a direct financial stake in this game. In our practice, we are seeing a drop off in the emergency of the non-government insured patients. When you have to pay a $250 deductible for an ER visit vs $20 for a primary care, people wait. Medicare, medicaid… no copay means the ER is the fast food joint of medicine with free food. At 10 times the cost to you, the taxpayer.

        And finally, the entire legal system needs to be torn down and rebuilt, not just the tort system. If anyone thinks that evidence based medicine will make a dent in the amount of tests ordered and procedures done, they are sadly mistaken. Yes, there are insurance company protections such as capping of awards, but this only translates to malpractice insurance rates, not the actual practice of medicine. If you are an OB-GYN, the is a 100% chance you will be sued in your career. So, an OB-GYN will take measures that they perceive will lessen the chance of a suit (rightly or wrongly… but remember the OB-GYN must impress an expert witness for the plaintiff, and both defense and plaintiff can shop until they find someone to say what they want).
        The tort system is just too slow, too cumbersome and too random. It is a chainsaw where a scalpel should be used. And really, the only winners are the lawyers, receiving 50% of the prize (yes, I know there are costs). If malpractice occurs, the victim should be compensated quickly and fairly. The system of justice does neither.

        Ask the troops in the field, and this is what they will tell you. Ask the academics, and you get an almost 3000 page health care bill laced with unintended consequences.

  • Primary Care Internist

    i thought NPs, electronic records, and “wellness” programs were gonna save us all!

    hallelujah! say oprah and obama in unison

  • Frank

    Sir, wherever you got your MBA, you have left out something, very important.

    How does the USA — thanks to OWE-bama (D) — avoid bankruptcy?

    Where are the financial calculations in your post?

    IMHO — this BUMBLING piece of work is already a financial mess — will only get worse.

    Repeal (Nov. 2), repair, reform.

  • Marc Gorayeb, MD

    David Nash is a well-entrenched bureaucrat. Here’s the tell: “…we can relinquish our slavish adherence to the notion of professional autonomy.”
    I don’t know about anyone else, but the word “slavish” does not come to mind when I think about my freedom as a professional. I would rather accept the lower payments than be continually harrassed by the federal government, by state agencies, and any number of other actors that attempt to place ever more administrative burdens on my life.
    Evidence-based medicine? How about evidence-based public policy?

  • IVF-MD

    Malcolm Gladwell, in “Outliers” pointed out (and I generally agree) that job satisfaction comes from autonomy, complexity and the presence of a direct link between effort and reward. I love being a doctor, because of all three of these. Take any of them away and I’ll eventually start looking for something else to do instead.

  • madhusree singh

    All of the ” talking points” miss an essential point- in Medicine and especially in Primary Care value is created with the patient and physician together. As a physician, I can counsel my patient to take his/her medications, improve lifestyle etc. but the heavy lifting has to be done by them. Pay for performance programs miss that improved outcomes are a two way street and an overworked primary care doc can only do so much to effect better health. Ultimately, it hurts the patients- most physicians want to focus on their compliant patients. Some health care reforms have unintended result of entrenching the two tiered health care system. We have to focus on equality and access in health care.

  • Elizabeth Jena

    Individual Responsibility – a key factor in health care reform

    There is critical factor not discussed in the health care reform – individual and Big Food responsibility. Americans have the right eat anything they want and Big Food has the right to grow, process, and market all the products they want using pesticides, changing the genes, and adding amounts and combinations of sugar, salt and bad fats known to be addictive to humans. Are there not responsibilities that go with these rights?

    It is common knowledge that the American eating culture accounts for the majority of chronic preventable disease. Who profits the most – Big Pharma, Big Medical Equipment and Big Food. Who always loses – taxpayers. Add to this physicians and hospitals if penalized for poor outcomes because individuals won’t take responsibility for their health. So, jettison them from your practice – or become involved with real prevention. Show all the facts possible – not just with failure to take meds – to patients who are irresponsible and to the auditors. Electronic medical records would help.

    The model of cigarette smoking should be used for our pervasive addiction to sugar, salt and bad fats. A tax is a tax but the acronym R.I.S.K (Reduction in Sickness Kitty) is fitting to what relates to health. It would be part of the preventive message as well as revenue for health care NOT a general tax fund.

    It can be done but shouldn’t be done piecemeal but rather built on what already exists on food labels. A conservative estimate is that $100 billion/annum could be collected. The major impediment will be lawyers of THE BIGS. Tort reform sounds like a piece of cake – oops! a piece of sweet fruit – by comparison.

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