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Patient Safety Awareness Week – Embracing the Right ‘Culture of Safety’

By: David P. Lind

Patient Safety Awareness Week began on Sunday. Therefore, it is only appropriate to commemorate this week (and all following weeks) with awareness about safe patient care among healthcare professionals and the public. 

Much too often, patient safety is overshadowed by other healthcare-related issues (and agendas), such as expanding insurance coverage in state and local markets, medical and insurance mergers and acquisitions, and the opioid crisis – to name just a few. Some issues can’t be appropriately addressed soon enough (e.g. opioid epidemic), while other agendas are more about obtaining growth through acquisitions, often in the guise that more ‘value’ will be created to benefit the patient and the public. In healthcare, it appears optics is an extremely important and powerful tool. 

So why is it so hard to make healthcare safer? There are many reasons, but four primary culprits stand out above all others:  

  1. Complexity of healthcare delivery system 
  2. Flawed systems are not designed to optimize patient safety 
  3. Ineffective communication contributes to patient harm
  4. Weak incentives to push improvement processes 
We all know that healthcare is complex. Much of it is due to flawed systems that are laden with unclear and distorted regulations often resulting in unintentional consequences which adversely impact patient care. Additionally, poor organizational safety cultures and communication practices compound the previous two reasons for unsafe care.  

Much of the patient safety problem stems from not having a ‘business case’ to do the right thing at the right time. Business models are dependent on incentives – strong incentives – that will steer behaviors to the desired goal(s). When it gets down to it, inadequate financial incentives stunt the necessary initiatives required to spark safer patient care. Come to think of it, this is also part of human nature. 

Unfortunately, in healthcare, it appears to be less about ‘doing the right thing’ and more about having appropriate incentives that will create the ‘business case’ of providing safe care to patients. This mentality must change. 

After publishing ‘Iowans’ Views on Medical Errors,’ I created a number of Fact Sheets that address some takeaway thoughts for patients, employers and healthcare providers. These printable documents are found in the right sidebar on this HHRI webpage. Given the importance of this week, I would like to briefly address one particular Fact Sheet, ‘8 Strategies for Hospitals and Clinics to Prevent Medical Errors.’ 

I clearly realize that healthcare administrators will likely scoff at my ‘attempt’ to help them reform themselves, after all, they have been doing this reformation work for years, if not decades. But it seems to me – and many national medical experts included – patient safety begins with having a legitimate culture of safety at each medical establishment. And, it begins in the boardroom on down to each department in the organization. From this embedded culture, all other safety strategies can successfully follow. 

My strategies, in no particular order – follow ‘culture of safety:’ 

  1. Embrace a culture of safety
  2. Treat staff burnout as an organizational priority
  3. Adopt a structure to improve patient handoffs
  4. Develop and nurture a patient and family-led advisory council 
  5. Be vigilant about reducing infections
  6. Work to avoid diagnostic errors
  7. To avoid medication errors, find opportunities to include pharmacists
  8. Electronic health records systems must be interoperable
In 2017, the American College of Healthcare Executives and the Institute for Healthcare Improvement/National Patient Safety Foundation published an excellent resource to address this critical strategy for delivering safe care: “Leading a Culture of Safety: A Blueprint for Success.”

Patients experience medical errors not because doctors and hospitals wish to do them harm. Rather, unsafe care occurs because the systems and cultures of medicine influence medical providers to make decisions that don’t produce the best clinical results. It’s really quite simple. What patients want and need – coordinated and compassionate care that is affordable and safe – must align with the ‘business case’ of those who are paid to deliver it.

A ‘culture of safety’ should not just be a slogan in advertisements, but rather, THE reason healthcare organizations exist.

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Making Sense of the ‘Iowa Patient Safety Study©’

By: David P. Lind

Making Sense of the ‘Iowa Patient Safety Study©’Confronting problems we have in healthcare today and fulfilling our vision for the future begins with having the courage and willingness to do the ‘right thing.’ Too often, however, doing the ‘right thing’ runs contrary to how we are incentivized to perform. As we know, incentives drive behaviors – both good and bad.

In his book, “Mistreated: Why We Think We’re Getting Good Healthcare and Why We’re Usually Wrong,” Dr. Robert Pearl appropriately wrote: “The design of our healthcare system – how it’s structured, reimbursed, technologically supported, and led – determines how the people in it will behave.” This sentence clearly articulates the inherent problems found in a haphazardly-designed system that now comprises almost one-fifth of the U.S. economy.

I have learned a great deal from our recent “Iowans’ Views on Medical Errors – Iowa Patient Safety Study©.” Five large takeaways from this study include:

  1. Nearly one-in-five Iowa adult patients experienced medical errors in the past five years, either for themselves or for someone close to them.
  2. When a medical error occurs, six-in-10 Iowa patients are not notified of the error by the responsible healthcare provider.
  3. Most Iowans who experienced medical errors desire to report the error because they want to prevent the same error from happening to someone else. This runs contrary to conventional belief that patients desire to report medical errors primarily to receive compensation for the harm they received.
  4. Iowans strongly feel that medical errors must not be hidden from the public and should be reported, both to the patient and to an appropriate regulatory agency.
  5. Iowans believe medical errors are mostly caused by overworked staff, lack-of-care coordination and poor communication.
Reading between the lines on many of the survey findings, here are some of my general thoughts on what we can learn from this report:

  • Medical errors are a national public health crisis, and Iowa is certainly not immune from this persistent epidemic.
  • Making healthcare safer is difficult largely because healthcare organizations operate in a very complex healthcare system. They use a myriad of inoperable electronic health-record systems that are not fundamentally equipped to allow for effective communication between providers. Most importantly, strong incentives to push appropriate patient care in the right direction is sorely lacking. Because of this, delivering efficient and safe healthcare appears to be more problematic than putting a man or woman on the moon.
  • Surveyed Iowans are not necessarily blaming individual workers who devote their worklife to the medical profession, but rather, they tend to believe that well-meaning medical professionals are trapped in a subpar delivery system.
  • The patient ‘perspective’ must be actively pursued to measure the outcomes of the care they receive, and this experience can help reveal the prevalence of medical errors. The future of healthcare will be determined as much or more by patients as by physicians.
  • Zero-tolerance of preventable medical errors should be the norm, rather than exception – Most everyone knows that this problem is happening, but little has been done to determine the extent of this problem and how to make it unacceptable in the future. When errors occur, provider care systems are largely silent on this topic, often failing to share prompt, open disclosure and a full apology to harmed patients. This primarily happens because providers wish to avoid the possibility of malpractice lawsuits and maintain a pristine public reputation. Patients, on the other hand, have reasonable expectations that are woefully unmet after an error occurs. They likely feel thrust into a confrontational situation while still being in a fragile state of health. In short, if we don’t demand safe care, they don’t supply it. In 2017, commercial passenger airlines had zero deaths due to accidents…because that industry has a zero-tolerance approach to preventable errors. The medical industry can learn greatly from other industries.
  • Organizational culture is critical to the success of delivering safe care. The environment in which medical staff work – such as hospitals and clinics – can provide the necessary organizational culture to ensure the healthcare delivered is as error-free as humanly possible. Medical staff should not be afraid to report medical errors when they do occur. Safety improvement initiatives will only succeed when leadership, safety culture programs, fundamental communication practices, commitment to transparency and patient engagement are fully-aligned with the objective of greater patient safety.
Thought leader and author Frank Sonnenberg describes trust quite succinctly, “Trust is like blood pressure. It’s silent, vital to good health, and if abused it can be deadly.” To have an efficient and effective healthcare delivery system, trust will be required at all levels and by all participants. This means that, at their most vulnerable time, patients should not be taken advantage of by those who are given this trust – especially when medical errors occur.

If we can put a man on the moon in 1969 using technology dated 50 years ago, why can’t preventable medical errors be tracked and mostly eliminated today? We must first have the moral will to succeed, and then design and install correct incentives to ensure the desired behaviors and outcomes.

The re-design of our healthcare system requires the grit we used when launching a rocket to the moon. In healthcare, however, its more about human (and organizational) behavior than rocket science.

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New Survey: Nearly One-in-Five Iowa Patients Experience Medical Errors

By: David P. Lind

Iowa Patient Safety Study – Iowans’ Views on Medical Errors©Clive, Iowa – January 8, 2018 – Although a vast majority of Iowans have positive experiences with the healthcare system in Iowa, nearly one-in-five Iowa adults (18.8 percent) report having experienced a medical error either personally or with someone close to them where they were very familiar with the care that person received, during the past five years.

This finding comes from a new Iowa survey released today by Heartland Health Research Institute of Clive, Iowa. The first of its kind in Iowa, this statewide survey was conducted from May 11 to June 6, 2017. A total of 1,010 Iowa adults age 18 and over took part.

To download a FREE copy of the Study, click here…


 
 
 

Of the 18.8% of Iowans who experienced an error, 60 percent were not told by the responsible healthcare provider that an error had occurred. The survey finds that hospitals are the most frequent site of medical errors (59 percent), while 30 percent of errors occurred in the doctor’s office or clinic, four percent in nursing homes and seven percent at some other location.

Iowans' Experiences with medical errors - Location of errors

Other notable survey findings regarding Iowans who reported an experience with medical errors in the past five years include:

  • The most common type of medical error cited by Iowans were mistakes made during a test, surgery or treatment (60 percent), while over half (55 percent) said the error was due to a misdiagnosis.

 

Iowans' Experiences with medical errors - Top five most common type of medical errors

  • Ninety percent of those experiencing a medical error, either personally or with someone close to them, believe the medical error was preventable.
  • When experiencing a medical error, six-in-10 Iowans believe a serious health consequence resulted and nearly one-third reported that serious financial consequences had resulted from the medical mishap.
  • Sixty-two percent of those who experienced a medical error reported the error, while one-third did not report the error. Almost two-thirds of those who did not report said they simply didn’t think reporting the error would do any good.
  • Almost nine-in-10 Iowans who reported the medical error did so because they wanted to prevent the same error from happening to someone else. Only 25 percent reported the error because they desired to receive compensation for the harm.

 

Other key highlights for all Iowans surveyed, whether they experienced a medical error or not, include:

  • When asked if medical errors were a problem in Iowa, 26 percent of all Iowans surveyed believe medical errors are a “Very serious” or “Somewhat serious” problem, and 11 percent perceive medical errors to be “Not too serious.” Almost half believe that medical errors are not a problem.

 

How serious of a problem are medical errors in Iowa?

  • To assess perceived progress in eliminating medical errors during the past five years, about a quarter of Iowans (24 percent) believe there are fewer errors today than five years ago, whereas 18 percent believe there are more errors now. About one-third of Iowans (32 percent) felt the frequency of errors has not changed in five years.
  • Many Iowans generally believe that a high percentage of medical errors can be prevented, and are primarily caused by overworked medical staff, lack of care coordination and poor communication.
  • Ninety-three percent of Iowans at least somewhat agree the public should have access to medical error information for each hospital and doctor.

 

Should providers report errors?

  • Eighty percent of Iowans “Strongly agree” that Iowa hospitals should be required to report all medical errors to a state agency, and 74 percent “Strongly agree” that Iowa doctors should be required to report all medical errors to a state agency.
  • Nearly nine-of-10 Iowans “Strongly agree” that providers should be required to tell patients of any medical error.

 

Should providers report errors?

  • Sixty-one percent of Iowans who have not experienced a medical error are likely to believe their personal doctor would tell them if a medical error occurred, yet only 41 percent of Iowans with a medical error history believe this is true.

 

“The prevalence of medical errors in our country remains a public health crisis, and the findings of this study clearly demonstrate that Iowa is not immune from this serious problem. Iowans strongly feel that medical errors must not be hidden from the public and should be reported, both to the harmed patient and to an appropriate regulatory agency,” says David P. Lind, President of Heartland Health Research Institute. “Quality of healthcare will only improve when leadership, organizational culture and patient engagement are fully aligned. When seeking healthcare, patients deserve truthful, timely, and transparent information about medical errors.”

About the Survey

The Iowa Patient Safety Study – Iowans’ Views on Medical Errors© was conducted from May 11 to June 6, 2017.  Results are based on a representative sample of 1,010 Iowa adults age 18+. Interviews were completed using telephone-based data collection, with 451 completed interviews on numbers called using random digit dialing of landlines with Iowa’s area codes. In addition, 559 interviews were completed using cell phones. For the overall sample, the results are accurate to within plus or minus 3.1 percent, at a 95 percent confidence level.  The study methods used permit the results to provide estimates of all Iowa adults. Data Point Research, Inc. (DPR) provided the interviewing, statistical analysis and mathematical basis for the study. Funding for this study came from David P. Lind, as President of Heartland Health Research Institute and was undertaken as a public service, with no financial, political, professional, personal or other bias inherent therein. A full report is available at HHRI.net.

About Heartland Health Research Institute

Heartland Health Research Institute (HHRI) is an independent, nonpartisan and nonprofit research organization based in Clive, Iowa. HHRI is organized as a public benefit 501(c)(3) corporation that conducts research and analysis on a broad spectrum of healthcare issues. Topics specifically focus on the patient’s perspective – measuring their confidence and trust in the healthcare system today and into the future. To learn more about HHRI, visit HHRI.net.

About Data Point Research, Inc.

Data Point Research (DPR) is an independent full-service research organization dedicated to improving the lives of others.  DPR provides precise, neutral, detailed, and easy-to-read analysis for clients.  Founded in 1997, DPR collects, analyzes, and provides clients with the information needed to make solid, well-informed decisions in the areas of social policy, health, and employee benefits.

 

Many Iowans have suffered medical errors, and most weren’t told, poll finds (Des Moines Register, January 8, 2018)

To download a FREE copy of the Study, click here…

 

 

New Iowa Study on Medical Errors to be Released

By: David P. Lind

Medical Errors DefinitionHeartland Health Research Institute (HHRI) will soon be releasing the first-of-its-kind study in Iowa about the prevalence of medical errors reported by Iowans. Prior to this survey, there was little information specific to Iowa regarding the experience of medical errors and how Iowans view this problem.

Here are some common questions concerning the purpose of this study and what we can learn from it.

What is the intent of this Survey?

Medical errors represent a serious public health problem and pose a threat to patient safety. This survey of Iowa adults, ages 18+, is designed to assess awareness, attitudes and behaviors related to patient safety in Iowa.

What type of information will be collected from this Survey?

A wealth of information will be gleaned from this scientific survey. Generally, the survey focuses on seven important areas/questions:

  1. Iowans’ real-life experiences with patient safety/medical error issues.
  2. Were Iowans who experienced a medical error informed of the error?
  3. Did Iowans who experienced a medical error report the error?
  4. Does the Iowa public seek information about patient safety before receiving care?
  5. How Iowans choose hospitals for care.
  6. Public attitudes about patient safety/medical error problems in Iowa.
  7. Do Iowans support greater reporting requirements on patient safety?

Why is this Survey important?

If the Centers for Disease Control (CDC) were to include preventable medical errors in hospitals as a category, it would be the third-leading cause of death in the United States, behind heart disease and cancer.[1] In 2016, HHRI estimated the range of lives lost in Iowa hospitals due to preventable medical errors was 960 to 4,300 – with 2,440 being the mid-range estimate.[2] Additionally, HHRI estimated between 64,500 to 112,200 patients are seriously harmed in Iowa hospitals due to preventable medical errors.[3]

The public’s view on preventable medical error issues is critical to garner support for healthcare delivery improvements and public policy changes in Iowa. To our knowledge, no similar survey has ever been performed in Iowa. Consequently, the results will serve as a vital baseline from which to share any future progress on reducing medical mistakes.

Quite obviously, a patient’s voice is both necessary and relevant. When combining a large number of patient voices together, their collective voice will forcefully magnify this alarming issue.

Without question, we are all personally impacted by the medical care we receive today, tomorrow or sometime in the future – whether the care is for ourselves, a loved one or a friend. As an employer, the safety of your employees and their dependents greatly impacts your organization, both in productivity and in cost. Medical care must be delivered consistently, appropriately and transparently by using the best practices known at the time it is delivered. Above all, care must be delivered safely.

What are ‘medical errors?’

A medical error is a preventable adverse effect of care – whether or not it is evident or harmful to the patient. This can include an inaccurate or incomplete diagnosis or treatment of a disease, injury, syndrome, behavior, infection or other ailment.

The Iowa Study defined “medical errors” to poll respondents as follows: “Sometimes when people receive medical care, mistakes are made. These mistakes sometimes result in no harm. Sometimes, they may result in additional or prolonged treatment, disability or death. These types of mistakes are called medical errors.”

Don’t we already know about medical errors in Iowa?

Yes and no. We do know that preventable medical errors occur with alarming frequency in our country, and certainly exist within the Iowa healthcare delivery system. However, we have little evidence on the extent errors occur and whether these mistakes are consistently and fully reported to the public. Some hospital systems and clinics maintain records on medical mistakes that occur within their facilities. But, unfortunately, when seeking appropriate care and assessing provider outcomes, this crucial information is silently withheld from the public.

Medical mistakes are not rare incidents, in fact, they continue to occur in alarming frequency. According to Rosemary Gibson’s book, ‘Wall of Silence,’ “…the (healthcare) system is designed more to cover up these errors than prevent them.”

Are there federal and state requirements to report medical errors?

Currently, each state decides whether to develop mandated reporting requirements on medical errors. Iowa does not have such a requirement.  In fact, there are limited federal mandatory reporting requirements on medical errors by hospitals and clinics. In addition, there is no nationwide reporting system to publicly report medical mistakes. According to a USA Today article in August 2014, the federal government has quietly discontinued public disclosure of many serious hospital errors.[4]

Results from the Iowa Patient Safety Study: Iowans’ Views on Medical Errors is expected to be released soon.

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[1] Allen, Marshall. ProPublica. How Many Die from Medical Mistakes in U.S. Hospitals? Sept. 19, 2013

[2] Lind, David. Heartland Health Research Institute. Silently Harmed – Hospital Medical Errors in Iowa, Feb. 2016

[3] Ibid.

[4] USA Today, August 6, 2014, “Feds stop public disclosure of many serious hospital errors.”

 

Potential Health Myth Three: Current Repeal, Replace or Repair Obamacare will Fix Healthcare System

By: David P. Lind

Potential Health Myth Three: Current Repeal, Replace or Repair Obamacare will Fix Healthcare SystemNote: This is the third blog from my ThinkPiece article in the Des Moines Business Record. Here are blogs one and two.

Attacking healthcare’s true cost-drivers – such as unhealthy lifestyles, chronic diseases, misaligned payment incentives to health providers, ineffective and unsafe care, uncoordinated care, and powerful lobbying activities that protect many of these cost-drivers – continue to percolate below the surface and remain mostly hidden from public scrutiny.  In some cases, badly-needed policy action is required. One major cost-driver is waste, estimated by the Institute of Medicine to be about 30 percent of health spending on unnecessary services, excessive administrative costs, fraud and many other issues. We are far from resolving these problems.

Employer-sponsored insurance covers about 56 percent of the U.S. population, roughly 147 million people. This number dwarfs the individual markets around the country, with the ACA covering about 20 million Americans. Additionally, employers cover more people than Medicare and Medicaid combined. Because of this, employers have a great deal of power and influence over healthcare reform efforts. For progress to be made, employers will need to coalesce diffused whispers into one loud voice when pushing for similar priorities to control costs and enhance quality. Waiting for the healthcare industry to reform from within will never happen, as it will take purchasers and outside players to disrupt a highly dysfunctional non-system.

The goal of any healthcare reform effort should include the central focus of improving efficiencies over the entire system, not just with insurance markets. To be fair, the ACA does provide experimentation within Medicare to leverage payment incentives to encourage coordinated care, but much more disruption is needed.

The Skinny: Insurance costs are nothing more than a derivative of healthcare costs. Focusing on the symptoms and ignoring the root cause(s) will not reform nearly one-fifth of our economy. Real, meaningful reform begins with establishing broader coalitions to address the key cost-drivers that make healthcare delivery so fragmented and costly. The result of this reform will eventually make insurance options more affordable for all payers.

To read the entire ThinkPiece article from the Des Moines Business Record, you can find it here.

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Potential Health Myth Two: Wellness Programs Save Money

By: David P. Lind

Note: This is the second blog from my ThinkPiece article in the Des Moines Business Record. Here is the previous blog.

Workplace wellness has become over a $6 billion industry in the U.S. Employers offer these programs with the intent to improve the health and well-being of their employees, which may increase their productivity and also reduce and control costly chronic diseases. Most programs use financial incentives to motivate employees to monitor and improve their health, often through lifestyle-modification programs, such as lowering blood pressure and cholesterol. Common incentives can include discounts on health insurance to employees who complete health risk assessments, or perhaps charging employees more for smoking or having a high body-mass index. There are many different incentivized approaches employers take with wellness programs. But, to avoid discriminatory practices, they must be careful when complying with various federal regulations.

During my years as an employee benefits consultant, I often observed that wellness programs were being ‘sold’ to employers with a great deal of positive hype, usually establishing an unrealistic expectation that by merely implementing wellness basics within the workplace setting, rising health costs would soon abate and save employers money.

Do wellness programs save employers more than the cost of implementing them in the workplace? It depends. Contrary to the hefty claims made by wellness vendor studies (which are typically non-peer reviewed and often unable to produce valid causal savings estimates), many national studies that are peer-reviewed generally suggest wellness programs have little, if any, immediate effects on the amount employers spend on healthcare.

One important study that resulted from the PepsiCo Healthy Living program suggests that evidence-based wellness programs that target specific diseases, such as asthma, coronary artery disease, stroke, hypertension and low back pain, may possibly provide savings, but only after several years following implementation. Another example, the Rand Wellness Program Study in 2014 concluded that “employers who are seeking a healthy return-on-investment (ROI) on their programs should target employees who already have chronic diseases.” Rand found the ROI for disease management programs were $3.80 for every dollar invested.

When wellness programs are implemented more broadly and focused only on lifestyle management (e.g. smoking, obesity and fitness), which are typical wellness components, savings do not materialize, at least in the short term. Rand found the ROI to be $0.50 for every dollar invested. Evidence-based lifestyle programs, however, may reduce absenteeism and improve productivity, but the ROI may be marginal at best. Given the lack of financial return for lifestyle programs, employers might opt to avoid the cost of screening all employees for health risks, but instead, offer healthy food choices and initiate educational campaigns to use the stairs, bike to work, etc.

The Skinny: A great body of evidence suggests that implementing just any wellness program by employers will not reduce overall health care spending. However, if a program is designed with specific targeted diseases, some savings may happen in the long run, but not by focusing merely on lifestyle changes. Employers must have realistic expectations and demonstrate a strong organizational commitment for any long-term savings to materialize.

NOTE:  As an exercise enthusiast who is insured with a $10,000 family-medical deductible accompanied by a health savings account, my comments may possibly suggest that I am an opponent of wellness initiatives and high deductible health plans. I am not. But I do believe employers must have realistic expectations about the shortcomings of wellness and cost-sharing plans.

Next week’s blog will review the third myth, ‘reforming’ Obamacare.

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Potential Health Myth One: ‘Skin in the Game’

By: David P. Lind

Potential Health Myth One: 'Skin in the Game'NOTE: For the next three weeks, my blogs will share three assumptions that many employers mistakenly accept as facts:

1. ‘Skin in the Game’ will keep costs down.
2. Workplace wellness programs save money.
3. Repeal, replace or repair Obamacare measures will fix our ailing healthcare system.

This ‘ThinkPiece’ article was originally published last month in the Des Moines Business Record. Today’s blog addresses whether having ‘skin in the game’ will make healthcare users better ‘consumers.’

For at least the last eight years, healthcare and health insurance have been caught in the political crosshairs of conflicting ideologies. Nearly one-fifth of the economy has become the perennial punching bag for both political parties. A demarcation line exists between enhanced-federal control versus private-market forces at local levels.

In the meantime, employers and their employees must navigate through uncertain waters on how to pay escalating healthcare costs. To date, employers continue to rely on ‘cost-cutting’ assumptions that appear to be both intuitive and rational: forcing employees to have more ‘skin in the game;’ initiating wellness programs to curtail health costs; and waiting for policy makers to “repeal, replace or repair” Obamacare. This last implied assumption suggests that by fixing the individual insurance markets, the entire healthcare system in the U.S. will be miraculously resuscitated.

On the surface, all three assumptions appear to have merit. But, when assessing the facts, employers should be cautious about these ‘solutions.’ At the bare minimum, these assumptions – or possible myths – deserve more scrutiny.

“SKIN IN THE GAME”
Employer-sponsored health plan deductibles in the U.S. have been dramatically increasing for a number of years. Since 2004, in Iowa alone, employer deductibles have increased by 185 percent. Iowa workers now pay single and family averages of $1,627 and $3,400, respectively. Nearly a quarter of Iowa employers offer high-deductible health plans (HDHP) which usually include qualified spending accounts, such as health savings accounts or health reimbursement arrangements. A general belief of offering high-deductible plans is that employee cost-sharing obligations (e.g. having “skin in the game”) will encourage employees and family members to scrutinize the cost and quality of care from various health providers.

It is true that high-deductible, consumer-driven health enrollment is associated with lower healthcare spending, particularly in outpatient care and prescription drugs. But, data from health insurance claims indicate that this lower spending is primarily derived from decreased use of care, not because enrollees are switching to lower-cost alternatives. In some cases, this decreased care might be for unnecessary services – which is a good thing. However, if necessary care is being skipped because patients are paying more out-of-pocket, there is a great risk that delaying care may actually cause health costs to rise sometime later, when the medical condition has become more acute.

A few years back, when researchers surveyed 2,000 18-to-64-year-olds covered by insurance, they compared those with HDHPs to those with more traditional (lower deductible) plans to determine healthcare shopping frequency rates. The findings revealed that HDHP enrollees, although having more out-of-pocket exposure, showed little evidence of making higher-value purchase decisions compared to those with less financial risk. Additionally, given the scarcity of information on specific health costs and provider outcomes, patients obtaining care are not truly informed decision makers.

Even when plan participants have access to healthcare prices, this information does not assure that patients will spend less, especially in monopolized markets. A 2016 study published in The Journal of the American Medical Association investigated the Truven Treatment Cost Calculator, a website that provides users with costs on over 300 services. It found that the cost calculator was not popular with participants and that price transparency did not reduce outpatient spending – even for those patients with HDHPs.

As Austin Frakt reported in 2016, some health plans now provide price transparency tools to their enrollees. Unfortunately, as with the Truven study, a very small percentage of enrollees actually utilize them. Aetna, for example, offers a price transparency tool to 94 percent of its commercial market customers, but only 3.5 percent use it. Part of the reason could be that health care choices are driven by physician referrals, and options provided throughout the care process may be deemed too complex and overwhelming. According to at least one analysis, only 40 percent of healthcare spending is amenable to shopping. If out-of-pocket costs are the same at both a high-cost and low-cost provider, there is little incentive to pay the cheaper cost if insurance will pay the difference.

The Skinny: Merely providing employees with HDHPs to have more “skin in the game” will not make them more informed consumers. It may actually make them more frustrated. Transitioning healthcare ‘users’ to ‘consumers’ will continue to evolve over time, whether by educating them on how insurance works, or by targeting them to find higher-quality providers and services. One promising approach is reference-based benefits, which are preset dollar limits an insurer places on certain medical services or procedures. Under this approach, employees will pay the difference if they select a service or procedure above the reference price. The key to this approach is full transparency of the reference prices.

Next week’s blog will review the second myth, the effectiveness of wellness programs.

To stay abreast of healthcare-related issues, we invite you to subscribe to this blog.

Drug Prices – ‘A Riddle Wrapped Inside an Enigma’

By: David P. Lind

Drug Prices – ‘A Riddle Wrapped Inside an Enigma’“I cannot forecast to you the action of Russia. It is a riddle, wrapped in a mystery, inside an enigma, but perhaps there is a key…”

This quote eerily reflects the current events happening in Washington, D.C. these days. But, it was actually a radio broadcast by Winston Churchill in October 1939 regarding Russia’s involvement with Germany, a precursor to World War II.

Another riddle, mystery and enigma is occurring in front of us. Escalating prescription drug costs are increasingly (and deservedly) under public and political scrutiny. The real culprit to this problem? The complex shell game being played designed to hide the insatiable appetite of greed. This complexity is hidden behind optics that appear to be driven by altruism.  Each drug supply chain member claims to be performing ‘selfless’ work for the public’s well-being. But looks can be deceiving.

Greed is not just limited to drug manufacturers and its trade group – the Pharmaceutical Research and Manufacturers of America (PhRMA). It’s also found with other key players involved in the supply and payment of drug products. PhRMA has been beaten up, quite deservedly, by other supply-chain players as the main reason for high drug costs within the U.S. market. But these same players are not without their own accountabilities. The other players? Pharmacy Benefit Managers (PBMs), health plans and others.

When it comes to drug pricing, fingers of blame point to ‘other’ players without acknowledgment of culpability – similar behavior to a circular firing squad. The blame game is relatively easy to play when there is little transparency to provide proof of guilt or innocence. To maintain this charade of social responsibility, profiteering off those who ultimately pay the bills is the mainstay of any lobbying efforts and marketing optics. Interestingly, PhRMA came out with their own report in January, “The Pharmaceutical Supply Chain: Gross Drug Expenditures Realized by Stakeholders.” After being attacked by PBMs and other stakeholders as being the sole villain of rising drug costs, PhRMA shot back with their own tell-all study about what other supply-chain vendors are doing behind closed doors.

Drug pricing, so it seems, continues to be the riddle wrapped up in an enigma.

There are a considerable number of games being played by drug manufacturers, PBMs, and yes, even insurance vendors working on behalf of employers and consumers. What follows are just brief examples of worrisome behaviors found within the prescription drug pricing structure.

Drug Manufacturers

Since 1998, PhRMA has spent nearly $3.6 billion lobbying Congress to ‘educate’ our elected officials. According to the website, Opensecrets.org, PhRMA spent $245 million in 2016 alone – almost $100 million more than the next largest sector – insurance. Despite this enormous financial ‘investment,’ the efforts have obviously paid off over the years. Drug manufacturers have been immune from negotiating with Centers for Medicare and Medicaid Services to manage their prices to a more reasonable level. They also make it difficult for Americans to purchase drugs from other countries that have more favorable pricing with U.S. drug manufacturers.

Drug prices are expected to increase another 12 percent this year. Americans already spend an average of $858 annually on prescription drugs, more than twice the $400 average spent in 19 other industrial nations. To deter competition, drug manufacturers have found ways to delay generic-equivalent drugs from entering the market. A practice known as ‘pay-for-delay’ allows drug manufacturers to pay-off generic drug makers – thereby delaying the introduction of their generic brands into the market. Thankfully, this practice is declining as the Supreme Court and Federal Trade Commission push this behavior to fall under federal antitrust law. Nonetheless, drug companies are finding more ways to be creative (and profitable).

Pharmacy Benefit Manufacturers (PBMs)

PBMs exist to serve the public by aggregating drug purchasing power from payers, such as insurance companies, large and small employers and consumers. PBMs claim to negotiate the lowest price from drug manufacturers and the lowest dispensing fee from pharmacies. In return, PBMs receive their revenue primarily through rebates paid by drug manufacturers, who gladly pay to have their drugs listed as ‘covered’ under PBM’s list of approved drugs.

So, do PBMs actually lower our costs? Not as much as they would like us to believe. The rebate arrangement creates a perverse incentive for PBMs to dispense more expensive drugs. The largest PBMs – such as Express Scripts, CVS Caremark and Optum Rx – are incentivized to inflate drug prices because they receive higher rebates in return. Higher prices equate to higher rebates – and ultimately, higher revenues for PBMs.

Local pharmacies, a trusted health provider to consumers, see their margins squeezed by PBMs, whose profits are considerably higher. Keep in mind that PBMs generally claim 40 to 50 percent of a medicine’s list price using obscure and complex mandatory rebates – money that is not typically passed on to consumers. The value they provide to the payers is increasingly considered questionable to those who understand the entire drug pricing scheme. PBMs make more money, usually at the expense of pharmacies and consumers.

Some years ago, while I was consulting with employers on the prescription benefit programs they offered, we would often require insurance vendors and PBMs to complete bid specifications on the rebates they received and the amount of ‘savings’ they were sharing with payers and consumers. It eventually became a running joke that such a process would actually reveal honest responses, as the PBMs and carriers were under no obligation to disclose rebate practices. Insurance carriers would arrange their own special ‘deal’ with PBMs on rebate cost-sharing, and would not share their PBM contract when we pushed for proof of pass-through savings to consumers. Again, the drug pricing riddle performs famously in secret and is confusing to patients.

Moving Forward

In May 2017, Dr. Scott Gottlieb assumed his new role as commissioner of the Food & Drug Administration (FDA). He hopes to leverage his agency’s power by promoting more price competition for generic drugs. Where there are fewer than three competing generic manufacturers, applications would be pushed to the front of the line. A prime example of this is Turing Pharmaceuticals AG, which was led by Martin Shkreli, who bought the rights to sell a long-used anti-infection drug called Daraprim, raising the price to $750 a pill from $13.50. In another case, Valeant Pharmaceuticals International Inc. purchased two drugs to treat the rare Wilson’s Disease, only to raise the price by 30-fold. The idea by both organizations was to profit from having no competition.

In the final analysis, much work is needed to fix a broken system. Complete transparency and curtailing conflicting interests must be addressed to solve the drug-pricing crisis that continues to haunt our country. When the truth eventually becomes apparent, PhRMA and the middlemen will reluctantly realize they are part of the problem, and subsequently determine if they can become part of a larger solution.

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Patient Experience: Can it Directly Determine Provider Pay?

By: David P. Lind

Patient Experience - Determine Provider PayThe Institute for Healthcare Improvement (IHI), a not-for-profit organization with the mission to “improve health and health care worldwide,” developed the IHI Triple Aim framework to optimize healthcare performance. The three dimensions of Triple Aim are quite intuitive:

  1. Improve the patient experience of care
    (including quality and satisfaction).
  2. Improve the health of populations.
  3. Reduce the per capita cost of healthcare.

 
Americans are (justifiably) concerned about all three components of the Triple Aim. Yet, most of the oxygen in the room, at least in Washington, D.C., is being spent on the insurance component, which seems to ignore each of the three Triple Aim tenets. Just look at the ping-pong match happening in Congress these days regarding the repeal, replace or repair of Obamacare. Make no mistake, having health insurance allows people to seek the care they need when stricken by serious illness or injury. Without insurance, people often live sicker lives and die sooner than those with insurance.

However, the insurance card that each of us (hopefully) carries merely serves as the ticket to gaining access to the movie theatre show we know as the healthcare delivery system. Without this card, it becomes progressively more difficult to navigate through this ‘system’ and receive the best possible care. Even by having this laminated card, we may unknowingly believe that we will receive the best care available at all times – a soberly mistaken myth. The quality of care that is delivered in the U.S. is uneven and, too often, inadequate.

The three primary ‘Ps’ in healthcare relate to:

  • Payers (government, employers and insurance companies)
  • Providers (hospitals, physicians, etc)
  • Patients (you and me)

Currently, the payers and providers work with one another to determine the best way to incentivize quality care, leaving the patient on the sidelines as a confused bystander. Whether the payment approach is fee-for-service, bundled payment, capitation or some hybrid of these, the patient is not directly included in the value proposition of the care provided.

Yet, it is the patient who actually receives the care, but their experiences (Triple Aim #1) are primarily presumed to be taken into account in the payment models currently used. In short, the patient’s voice is mysteriously (or purposely) missing at the reimbursement level. As a result, the deck of cards is currently stacked against the patient when determining ‘appropriate’ and ‘quality’ care. Their specific experience is rarely used, and if it is considered, it’s by aggregating the experiences of all patients for each given provider.

How then, can individual patient experience determine the price a provider is paid? A new approach is to allow each patient to have input on at least a portion of the provider reimbursement. Theory from this suggests the provider will be held more accountable for the care they give to EACH patient, and possibly learn more about how to make the patient experience a more positive encounter. Here’s a simple idea that may possibly hold some water.

Patient-Centered Value Movement

What do patients REALLY want from the healthcare providers they hire? Quality outcomes? Crystal clear communication and instructions? Clean hospital room and/or convenient parking? Delicious hospital food? Excellent bedside manners from nurses and doctors? Providers being considerate of the time it takes for patients to receive care? The short answer is ‘yes’ to all of the above. But each patient, given the circumstances of care they receive, will make their own unique analysis of what constitutes having a positive experience with any given provider.

A recent JAMA Forum article, “Payment Power to the Patients,” by Dr. Ashish K. Jha, a Harvard professor and practicing internist, provides a somewhat compelling case that the time has come for patients to jump into the reimbursement ‘game’ to determine at least a portion of pay for their caregivers. As Dr. Jha points out, assigning financial penalties or bonuses to providers based on a myriad of performance quality measures is difficult to achieve because consensus from providers and payers about how to define ‘high-value care’ is extremely difficult to determine.

His approach is actually quite simple. Thirty or 60 days following hospitalization, “every Medicare patient would be asked to evaluate the care they received and assign a payment to the hospital, which would determine up to 10 percent of the payment.” Jha uses the example of a pneumonia hospitalization that might have a standard CMS payment of $10,000, of which $9,000 would be guaranteed to the hospital, but 10 percent ($1,000) would be determined by the patient. Should a patient receive excellent care, based on his/her own personal experience, the full $1,000 would possibly be assigned to the hospital. Otherwise, if the patient perceived care to be below expectations, maybe only half would be assigned to the hospital.

From this process, hospitals and providers would need to become more astute about what is most important to their clientele – one patient at a time. Hospitals would, as Dr. Jha articulates, become “flexible and truly patient-centered, by meeting the varying needs and values of individual patients.”

Although Dr. Jha discusses this reimbursement program through Medicare, this approach, if successful, might also apply to the private payer markets, such as individual and employer-sponsored plans. Much work would be needed for this new payment incentive system to work, however.

To become more patient-centered, patients must be involved in deciding whether the care was of good quality for them, personally. The value movement must incorporate all three ‘Ps’, not just one or two. Immediate patient-experience feedback should also have direct consequences. From this, good behaviors by providers will be positively reinforced, while substandard behaviors would require modification when being identified soon after the delivery of care.

As with any reimbursement method, unintended consequences could emerge. But it may be worth the effort to at least try this approach.

What are your thoughts?

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Why Health ‘Autonomist?’

By: David P. Lind

Health AutonomistWords do matter.

A recent survey of 500 consumers located in six southwest states were asked about their sentiments regarding healthcare advertising and marketing. One big takeaway? The three most effective words that healthcare organizations should use when marketing their services to the public are:

  1. Knowledgeable
  2. Trustworthy
  3. Cost-Effective

 

Other similar words, such as “expert,” “helpful” and “innovative” ranked considerably lower. Researchers concluded, “Clearly, nuance [in messaging] matters.” Crafting advertising language in any type of business or industry is important for a few key reasons: Inform, promote and, most importantly, sell.

Unfortunately, in healthcare, when it comes to decision-making tools on pricing of procedures and having the best clinical outcomes on specific local providers, the public generally operates in a ‘black box.’ Instead, we are forced to rely on other factors that serve as guardrails when seeking effective and appropriate medical care, such as provider reputation (justified or not), word of mouth, provider participation in insurance networks, trust (again, justified or not), and the aforementioned, advertising.

The general public is bombarded with countless health-related topics and sources. How can Americans decide what ‘position’ to accept as gospel or reject as hogwash? The convergence between truth and fiction can become so difficult to decipher, especially when documented facts are baked in with half-truths. Former New York Senator, Daniel Patrick Moynihan, perhaps put it best when it came to sharing the truth: “Everyone is entitled to his own opinion, but not his own facts.”

Individuals, organizations and industries are entitled to share their views, but when these views are dangerously lauded to be factual, a fine-line is often crossed that is intended to mislead the public. One of the first things I do when reading an article, study or advertisement is to learn about the author (or source). Which organization(s) does he/she/they represent, and how might they be compensated? I know, it seems a bit anal-retentive, but it actually serves as a good, informal reality check to expose the fox guarding the hen house. As we all know, the fox may appear to have the chicken’s best interest in mind, but in reality, he is looking for his next supper – at the chicken’s expense.

Recently, I was asked by a media outlet to participate in a public discussion about healthcare issues facing Iowa and the U.S. Although unable to attend this event, I was reminded that my role was important because “I had no dog in the fight.”  This meant that I had no predisposition to protect a particular industry or take a sacred position on any given issue. Just tell it like it is. I took this to be a high compliment.

Because I write separate blog posts for two websites, David P. Lind Benchmark and Heartland Health Research Institute (HHRI), I have decided to assign a particular name to my HHRI blogpost – “The Health Autonomist.”

Autonomist: The independence to share one’s thoughts and to have the freedom from external control or influence.
Autonomist comes from ‘autonomy,’ a refreshing word having the independence to share one’s thoughts or actions without tilting the windmill. Autonomy is also about having freedom from external control or influence. When I write about various topics on health, healthcare and health insurance, I try very hard to look at different perspectives that may most likely challenge conventional wisdom. Readers need to understand that there are few simple, concrete answers to these complex, mosaic issues.

 

When writing a blog, my intent is to not influence the reader, but rather, provide a different perspective, using factual information based from credible sources. So, should you believe everything I write? Simply put, “No.” In fact, if you have feasible information that refutes my posts, I invite your comments. When it comes to discussing health, healthcare and health insurance, it is critical to have a community dialogue rather a one-person monologue. Please remember, I am merely trying to seek the truth, as it is buried somewhere under mainstream thought and practice.

The word ‘autonomist’ matters to me. I hope it also matters to you!

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