David P. Lind Benchmark Archives | Heartland Health Research Institute

Another Study Regarding Hospital Mergers – Not Good for Patients

Posted on: 02.11.20 By: David P. Lind

This past September, I wrote an Op-Ed piece for the Des Moines Register and a blog discussing the important drawbacks of the proposed merger between Sanford Health and UnityPoint Health. In early November, this merger was abruptly called off, with the Sanford Health CEO indicating that the UnityPoint board “failed to embrace the vision of a new health system of national prominence.”

For more than three decades, many hospitals around the country have been on one huge shopping spree, buying-up their competitors – both big and small. The common rationale cited by hospital executives (and their powerful associations) are that hospitals will become better health systems, patients will benefit with better quality-of-care, and that costs will go down. In short, they pitch that this buying behavior is a win-win for everyone.

Bottom line – this behavior usually favors the merging hospitals and NOT the payers and patients. It’s quite simple: Hospitals don’t consolidate to cut their prices, they do it to gain market dominance when negotiating with insurance companies. Numerous national studies validate this fact.

New Research on Mergers Refutes Hospital Mergers

A newly-released study, “Changes in Quality of Care after Hospital Mergers and Acquisitions,” published in The New England Journal of Medicine, refutes the too-often-argued pitch that mergers will improve patient outcomes. In fact, this new report suggests four dimensions that run contrary to the hyped-claims offered up by the hospital industry:

“Acquired hospitals experienced a progressive decline in patient experience measures after the ownership change.”
Acquiring hospitals with a lower ‘baseline’ of patient experience performance will subsequently spread this lower performance to the newly-acquired hospitals. Additionally, there was no evidence that higher-performing acquiring hospitals will boost the patient experience ratings for the acquired hospitals.
Insignificant impact on 30-day readmission or mortality rates for the acquired hospitals.
Any improvement that acquired hospitals had in their clinical process measurement performance happened BEFORE the ownership change, suggesting the acquisition was not a causal reason for the improvement.

The study basically suggests that, relative to hospitals that were not acquired, acquired hospitals did not improve quality of care in the following ways:

Patient Experience WORSENED.
Patient Outcomes showed NO IMPROVEMENT.
Clinical Processes for improved performance are INCONCLUSIVE.

The National Institute for Health Care Management (NIHCM) provides a helpful slide show on the implications of hospital mergers that do not support the arguments made by the hospital community. Additionally, a very helpful podcast about hospital mergers, Tradeoffs, discusses the implications that mergers are actually harmful to the public, and any proposed mergers in the future should be highly scrutinized by local authorities and the general public. Tradeoffs, by the way, is supported by the Robert Wood Johnson Foundation and the California Health Care Foundation.

Regardless of the rationale they used, the board of directors at UnityPoint should be commended on nixing the proposed merger with Sanford Health. Having a ‘new health system of national prominence’ sounds like a verse from the P.T. Barnum hymnal of marketing slogans. Without question, healthcare requires less hyperbole-sounding slogans and more patient (and payer) centric action.

If hospitals really desire to lower their prices, they will find ways to eliminate clinical redundancies and increase productivity. This does not require the pursuit of mergers, but rather, demonstrate the willingness to embrace Economics 101 of keeping overhead affordable.

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Healthcare Waste – Time to Remove the Blindfold

Posted on: 10.29.19 By: David P. Lind

A recent blog published on my David P. Lind Benchmark website broached the major components of healthcare waste in the U.S. and how it is estimated to impact Iowa employer health insurance premiums that we all pay. A quick summary from that blog provided the following:

According to the 2019 Iowa Employer Benefits Study^©, annual premiums paid by Iowa employers and their employees in 2019 are $7,017 for single coverage and $19,335 for family coverage. Of this amount, an estimated 34 percent may be considered wasted, unnecessary money spent with little to no value. That means in 2019, Iowans are paying an estimated wasted amount of $2,400 for those with single coverage and $6,600 for family coverage – EACH YEAR!

Healthcare waste is endemic of the inefficiencies and the misguided incentives laden within our healthcare ‘system.’ Of course, the ‘waste’ that each of us pay is broadly known as ‘revenue’ and ‘income’ to others. It will be difficult for the healthcare infrastructure to change its way when there is about $1 trillion annually found at the feeding trough of entitlement.

After writing this particular blog, a new survey was released by Kaiser Family Foundation regarding the U.S. Public’s perspective on prescription drug costs. The infographic found within this study is of great interest to me, particularly as it relates to what the public sees as the top contributors to high healthcare costs. It is no surprise that drug companies are considered to be the largest reason why people’s healthcare costs have risen (78 percent), yet, fraud and waste is tied in second place (along with hospitals charging too much) at 71 percent – narrowly nudging out insurance companies profiteering (70 percent).

For our healthcare system to evolve into what the public hopes and demands, engaged discussion must ensue about the waste that is baked into our system. Without this discussion (and outrage), little will change. Removing the public blindfold to begin making these demands is imperative for change to occur.

I was very happy this recent study revealed that the public is now beginning to acknowledge the inherent problems of a poorly-managed healthcare infrastructure that requires a major reboot to keep costs more affordable and tied with better care outcomes.

Although difficult and problematic, reducing and eliminating healthcare waste is the low hanging fruit that we must immediately address.

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Hospital Patient Safety Culture Does Matter

Posted on: 11.20.18 By: David P. Lind

A few years back, I walked into an Iowa healthcare executive’s office to discuss an idea that I thought carried a great deal of merit regarding patient safety. The executive politely listened to me. The idea was both simple and very intuitive. Because the mission of this particular healthcare organization is to promote quality and safe care, I was assuming it would be open to potentially embracing this approach in Iowa.

This idea was generated from the Hospital Survey on Patient Safety Culture, which is a staff survey designed by the Agency for Healthcare Research and Quality (AHRQ) to help hospitals assess safety culture within their own walls. When you think about it, who better to ask about quality of service within a hospital than the frontline workers themselves – staff, nurses, technicians, etc.? In fact, a 2017 report in BMC Health Services reported that hospitals with “higher staff perceptions of safety culture were associated with better overall safety, as measured by a composite of reported harms and patient satisfaction.” Additionally, when noted physician, Marty Makary and his staff performed a joint study with risk management firm, Pascal Metrics, they found “hospitals that scored well on the staff survey had lower rates of surgical complications and other important patient outcomes.”

The simple idea? Have ALL Iowa hospitals undertake this survey every other year with the results becoming public. After all, this approach would tie nicely with the mission of the organization I visited that day. Including outpatient surgery centers would be ideal.

The response I received from the medical executive was not what I had expected. To paraphrase his feedback: “These surveys usually occur in larger eastern (U.S.) hospitals, but not in small rural hospitals, like Iowa. The data findings from Iowa hospitals would not be statistically relevant…” I was absolutely floored when I heard this half-baked argument. What this executive failed to understand – or more likely, refused to understand – was that such surveys can be used within hospitals REGARDLESS of employee size. To be effective, the two critical cautions for this survey are:

Mandatory participation of all staff within each department
Assure staff that honest responses are extremely important and any retributions for this honesty will not be tolerated.

Frankly, if a hospital is large enough to care for patients, then it should be large enough to be surveyed on how it reports its organization’s patient safety culture. Clearly, the executive did not want this to become public knowledge, as the results could undermine the trust the public places within each of the state’s 118 community facilities. For those hospitals that do utilize the culture of safety survey, their identity is hidden from the general public. In fact, AHRQ shared with me that “Hospital-identifiable data from the Hospital Survey on Patient Safety Culture Comparative Database are not available for public reporting purposes per the data use agreement AHRQ has with each hospital that voluntarily submits data to the database…reporting at state level can also put hospital confidentiality at risk especially in smaller states.” This means that we don’t even know how many hospitals participate in any given state. How’s that for transparency?

Safety of care, I have learned, can be more about the optics (carefully spoon-fed to the public) than actual substance. For example, developing safety awards for hospitals who report few errors can dangerously promote behaviors to withhold adverse event reporting, a solemn fact that I have learned from trusted, first-hand sources (in Iowa). Although well-intentioned, poorly-constructed safety awards can manipulate the system for a desired outcome – giving the public a false sense of security on receiving safe care. Manipulating sacred patient trust is a gross violation of professional ethical codes.

The November issue of Health Affairs dedicated the entire publication to the latest findings on patient safety-related matter. One article by Aiken, Et al., “Nurses’ And Patients’ Appraisals Show Patient Safety In Hospitals Remains A Concern,” summarizes the process of surveying hospital nurses from 535 hospitals in four states (California, Florida, New Jersey and Pennsylvania). The survey took place in 2005 and then again in 2016. In addition, patients from those hospitals were surveyed during that same time period. The bottom line is this: “Clinical work environments in most hospitals did not improve between 2005 and 2016.” The concluding summary of this article was to the point: “Our findings confirm that patient safety remains a serious concern. Failure to substantially improve clinical work environments in most hospitals, as recommended by the Institute of Medicine, may be hampering progress toward improving patient safety.”

As stated in our ‘Silently Harmed’ white papers, preventable harm in healthcare is a public health crisis, and much of this problem stems from organizational systems tolerating (or hiding) poor safety cultures. I received a very descriptive comment from Donna Helen Crisp, who spent eight years writing a book about what happens in hospitals when things go wrong. In North Carolina, Ms. Crisp served as a nurse, nursing professor medical ethicist, dying patient, and author (Anatomy of Medical Errors: the Patient in Room 2). As an advocate, Crisp helps raise awareness about preventable medical errors and adverse events so that they can be eliminated – or at least mitigated.

Her extensive background provides a wealth of perspective that lends great credence to this topic. As she indicated, “All the time and energy spent arguing about how many medical errors occur, or how patients abuse the legal system to make money, or why doctors and surgeons deny and delay the truth, or how dying patients should not be counted in medical error statistics – all this time and energy would be better spent by pursuing the following:”

Changing the medical paradigm by putting patients and families first.
Learning to see and accept the problems inherent in hospital care.
Developing core values to address and decrease medical errors.
Improving patient safety through transparent care.
Supporting clinicians who want to be truthful but fear retribution.
Training clinicians how to ethically support patients.
Training clinicians how to identify and ameliorate suffering.
Making safe care a higher priority than training doctors or corporate profit.

Because most medical errors go unreported, it is necessary to establish baselines, however they are determined, to track future progress on eliminating these errors. But we can learn a great deal by heeding Ms. Crisp’s words.

I only hope this same courage allows others who serve in crucial roles throughout our healthcare delivery system (including those we elect) to proactively do the right thing and provide the transparency in care that we so desperately need.

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Secret Contracts Between Insurers and Providers – Who Benefits?

Posted on: 11.13.18 By: David P. Lind

Most of us have insurance coverage – whether it be through an employer, purchased individually, or accessed through Medicaid or Medicare. This coverage is commonly administered by a third-party organization, such as an insurance company, or a private administrator contracted by Medicaid and Medicare.

Insurers serve as a proxy for their policyholders by being given cryptic authority to act on their behalf in the purchase of healthcare. As the surrogate for those who pay insurance premiums, insurers negotiate the prices and terms of access with doctors and hospitals who then provide healthcare services to their insureds.

Do policyholders know the specific terms that insurers negotiate on their behalf? Most often, they do not.

Opaque Contract Terms

Agreements between insurers and their contracted in-network providers are kept under lock and key, leaving out those that actually foot the bill – the REAL payers. Similar to most other industries, healthcare is a profit-driven sector. The terms of provider agreements become THE economic advantage that insurers and their contracted providers have within the local marketplace they operate. Opaqueness of these terms cement any competitive advantage for their own interests.

A fundamental question to ask: Should the REAL payers of healthcare, e.g. the policyholders, have access to the specific terms of these agreements? This is a valid question, especially given the latest Federal Trade Commission investigation of hospital contracts.

By far, the U.S. spends more per capita on healthcare – almost 20 percent of its gross domestic product – compared to other developed countries in the world. This mammoth spending is not because Americans consume more healthcare per capita than their foreign counterparts, but rather, the prices Americans pay are often grossly higher than elsewhere. Part of this has to do with opaque prices and terms REAL payers must accept through their hired surrogates, the insurers.

Market Power vs. Patient’s Best Interest

Through a ‘keyhole,’ a September article in the Wall Street Journal (WSJ) attempted to peek inside the terms some insurers have with their contracted healthcare providers. What they found was actually not too surprising. Hospital systems attempt to exercise their market power with insurance companies by demanding contract agreements that prevent having competitively-priced networks within the insurance marketplace. Depending on how limited a network of providers will be, the cost savings can range from three to ten percent – possibly more.

Largely known as anti-steering clauses, these restrictive hospital-insurer agreements secretly limit insurers from steering their policyholders to other providers that improve the quality of care and keep costs lower. Even large purchasers that should have market clout, such as Walmart Inc. and Home Depot Inc., are kept in the dark from such agreements when trying to incentivize their employees to use high-quality/low-cost providers.

Other provider contracts may be constructed to not allow insurers to lower copayments to incentivize patients to use less-expensive or higher-quality providers. Additionally, hospital contracts might stipulate that the insurer will always keep that hospital system within the preferred network – even though their prices may be considerably higher than other competing hospital systems. Do we have such contracts in Iowa? Hard to know.

For their part, insurers will concede to these demands because they desire to attract more policyholders to enroll in their health plans. Having more policyholders can provide added leverage for insurers to negotiate more favorable contracts in the future, while hospital systems continue to grow by purchasing other types of providers. A recent Journal of Health Economics study found that the price of physician services increase an average of 14.1 percent after being purchased by hospital systems. The ‘dueling leverage’ escalation seldom benefit the REAL payers, who will eventually pay the inflated cost through higher premiums. This perverse incentive happens without the REAL payers having this knowledge.

To justify this behavior, hospitals say patients should be able to choose their healthcare provider without having financial pressure from their insurers or employers.

Secret Agreements Now Challenged

Lawsuits are occurring around the country regarding these restrictive contracts. The Justice Department is suing a large North Carolina hospital network, Atrium Health, because it “uses its market power to impede insurers from negotiating lower prices with its competitors…”. Sutter Health, a large hospital system in northern California is being sued by the California attorney general for anticompetitive practices.

On October 10, Iowa Senator Charles Grassley, Senate Judiciary Committee Chairman, sent a letter to the Federal Trade Commission to investigate whether contracts between insurers and hospital systems are limiting competition and pushing up healthcare costs. This letter was prompted by the WSJ article mentioned earlier.

Pending review by the FTC and the various lawsuit outcomes, what recourse do the REAL payers of healthcare around the country have to keep costs more affordable?

Solutions?

According to a November 4 WSJ article, watching the state of North Carolina might be a good start. North Carolina’s employee health plan covers about 727,000 people, which includes teachers, university workers and state police. North Carolina’s state treasurer announced in October that it wants to pay hospitals’ and doctors’ rates that are pegged to Medicare’s reimbursement schedule. The state treasurer said the new rates – beginning in 2020 – would average around 177 percent of Medicare’s fees, which is lower than the current reimbursement average of 213 percent – projecting an annual savings of $300 million. The N.C. hospital community is predictably pushing back to keep this from happening.

According to an article in ProPublica, the state of Montana pursued a similar approach a few years ago, and has found the program is now saving healthcare costs for its employees (and taxpayers).

Employees and their employers must be resolute and insist that all insurance contracts are in the best interest of those who are the REAL payers of healthcare. As suggested in a recent Harvard Business Review article, employers may consider banding together to establish purchasing alliances. This is not a new concept, but the above circumstances may warrant a rebirth of this approach.

REAL payers do have legitimate leverage in the healthcare marketplace – they just need to act. Otherwise, we can only speculate what is hidden behind the keyhole.

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Potential Health Myth One: ‘Skin in the Game’

Posted on: 07.05.17 By: David P. Lind

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.

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Why Health ‘Autonomist?’

Posted on: 05.30.17 By: David P. Lind

Words 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:

Knowledgeable
Trustworthy
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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Malpractice Caps Won’t Protect Harmed Patients

Posted on: 04.04.17 By: David P. Lind

Medical-malpractice reform bills currently moving forward in both the Iowa House and Senate (SF 465) attempt to place a $250,000 cap on non-economic damages, such as “pain, suffering, inconvenience, physical impairment or mental anguish.” The push to limit non-economic damages comes from the provider community, which includes doctors and hospitals.

Both sides of malpractice reform offer persuasive arguments on the merits of these reforms. Injured individuals and their lawyers argue against malpractice reform, saying patients won’t be protected against negligent providers. Because of errors, healthcare costs are higher. Botched care requiring fixes often happens without patient knowledge and involves additional patient and insurance payments. The social and economic costs of medical errors are also enormous.

Doctors and hospitals, on the other hand, usually push for reform, saying it will protect patients from having to pay the high costs of malpractice insurance and help curtail defensive medicine practices – presumably through lower health insurance premiums – and perhaps increase accessibility to some healthcare services.

Interestingly, a recent report from personal finance website, WalletHub, indicated that Iowa is the best state for doctors to practice medicine, when comparing 14 different relevant metrics, and Iowa is the fifth least-expensive state for annual malpractice liability insurance.

But here’s the fundamental question that gets lost: Will capping non-economic damages provide the necessary incentives for providers to alter their practices enough to eliminate avoidable medical errors? This should be the most critical question regarding malpractice reform being debated in Iowa and elsewhere. Unfortunately, the Iowa bills fail to address this issue.

Patients expect to be safe when they receive healthcare from the providers they trust. Yet, solid evidence suggests this trust is routinely violated. We’ve made relatively little progress in reducing preventable medical errors since 1999, the year the Institute of Medicine released their book, ‘To Err is Human.’ In the last year, using national estimates on preventable medical errors, my organization extrapolated that a mid-range estimate that 85,000 patients are harmed in Iowa hospitals yearly due to preventable medical errors. This number does not include harm occurring in physician clinics, outpatient surgery centers, nursing homes and other care locations.

I don’t represent trial lawyers nor healthcare providers and I have become rather apostate regarding political parties. In my opinion, tort reform should be about reducing medical errors – the root cause of why we have malpractice issues in the first place. By working toward the elimination of the root cause – medical errors – malpractice and its negative side effects will also disappear. This more logical approach will benefit patients, providers and our overall healthcare system. Adopting safe care practices would substantially reduce the costs of botched-care fixes and defensive medicine – in addition to enhancing the quality of life for patients and their caregivers.

As the Iowa bills demonstrate, we continue to seek ‘quick fixes’ that gnaw at the edges of the problem. But these laws seldom address the core reasons of why many medical errors happen. Medical errors are, unfortunately, a fact of life. But many are avoidable. In our healthcare world, we have well-meaning and very capable caregivers. Too often, however, we also have broken organizational cultures that inadequately address patient safety protocols and burned-out physicians and staff who are required to “produce” at unsustainable levels. Any meaningful reform must begin at the healthcare organization level, ensuring we all receive appropriate and safe care. Organizations providing impactful interventions to help promote safe cultures of care can greatly improve safe care practices.

Misguided malpractice reform can actually exacerbate rather than eliminate medical errors. Placing caps on damages, economic or otherwise, insulates the medical community from high monetary awards, yet offers little, if any, incentives for healthcare organizations to establish clear and genuine protocols to ensure a culture of safety. The right incentives matter, especially when it comes to the safe care we trust we’ll receive.

Isn’t it time for provider organizations to adopt a culture of safety, rather than seek malpractice caps that do nothing to protect us as patients?

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Time to Move Upstream and ‘Invest’ in our Health

Posted on: 11.21.16 By: David P. Lind

Authors: David P. Lind and Yogesh Shah, MD, MPH

Employer-sponsored health premiums in Iowa have increased 215 percent since 1999. This growth, however, appears tame when compared to health insurance plans sold in the individual market. We’ve grown so accustomed to rising health costs that it has become the ‘new normal’ with no apparent silver bullet in sight to remedy the core problems. Healthcare costs continue to outpace general inflation, typically by two-to-three fold. We live with constant anxiety about paying more for our healthcare – whether through taxes, premiums, deductibles and/or other out-of-pocket expenditures.

With the advent of a new Trump administration geared to repeal many Obamacare components, all sorts of health insurance “solutions” will be debated. Ideas to make coverage more competitive include selling policies across state lines, pushing for health savings accounts, and relying on other tax incentives to perform magic. However well-intentioned, belief that the insurance component will somehow fix our cost problem is wishful thinking.

The major source of this problem is our unhealthy population. “Upstream” environmental factors greatly impact our “downstream” health. for all of us. Upstream factors are many – primarily poor nutrition, inadequate housing and education, and low incomes – all considered to be social determinants of our health.

To meaningfully address healthcare costs in Iowa and nationally, we must be willing to consider new approaches and develop a mindset that transcends party politics. This may sound counterintuitive, but to reign in ever-increasing healthcare costs and enhance better population health, we should explore new solutions ‘upstream’ to invest in our collective health and well-being. This is not about implementing ‘socialized medicine.’ It’s about using our limited resources more wisely on key determinants of overall health that can ultimately improve health and control healthcare costs.

Healthcare Spending

In 2014, we spent 17.5 percent of our economy on healthcare, reaching $3 trillion annually. By comparison, in 1960, we spent only five percent on healthcare. One disturbing estimate by the Institute of Medicine shows about one-third of our healthcare spending – or $1 trillion – is widely considered wasted spending, money that can be better invested elsewhere.

Should healthcare costs dominate such a large segment of our economy? If so, shouldn’t we be healthier than other nations based on what we spend? On a per capita basis, the U.S. performs poorly on many key health indicators. For example, our country has lower birth weight, higher maternal and infant mortality, as well as higher incidents of injuries, obesity, diabetes, heart disease, chronic lung disease, disability rates, mental illness and, surprisingly, shorter life expectancy. In addition, we have more drug-related deaths than other industrialized countries.

With these in mind, one would think that most comparable countries must be outspending the U.S. on healthcare services. The facts are quite the opposite. In 2009, our country spent 16.3 percent of its gross domestic product (GDP) on healthcare, about six percentage points higher than the average 10.3 percent spent by 10 other industrialized countries. Yet, our growing appetite for more healthcare spending results in poorer health outcomes. This is both puzzling and frustrating – for policymakers, taxpayers, employers and their employees.

Social Services (Community Health) Spending

Instead of focusing on how to pay for healthcare – a perpetually-growing segment of our economy – we should re-direct our limited resources to impact basic social determinants of health, such as targeting education, housing, nutrition and poverty. Unlike healthcare, U.S. public spending on social services falls far below other developed nations. In 2009, the U.S. spent 9.1 percent of its GDP for aggregate social services versus the average of 15.8 percent spent by all 10 other wealthy countries.

When combined, U.S. healthcare and social services spending ranks in the middle of the pack of peer countries, with a disproportionately higher amount spent on healthcare than on social services.

The U.S. is the only wealthy country where healthcare spending accounts for a greater share of GDP than social services spending – an “imbalance” our country has embraced. Over decades, we’ve allowed soaring healthcare costs to smother the necessary investments we must make to improve our community health. In other words, our country inefficiently relies on medical care and insurance to address problems that we fail to address upstream, at their source. An insightful reference on this subject comes from a book written by Elizabeth H. Bradley and Lauren A. Taylor – The American Health Care Paradox…Why Spending More is Getting Us Less.

What can we learn from this?

High healthcare spending in the U.S. has far-reaching economic consequences, such as wage stagnation, personal bankruptcy and budget deficits. Extensive evidence suggests that making the right investments in social well-being substantially improves population health outcomes downstream. For example, housing vouchers, home energy assistance and the availability of supermarkets in low-income areas are known to reduce obesity, diabetes and nutritional risk in children. In addition, availability of prenatal and infant nutritional assistance is associated with reduced infant mortality.

Realistically, the American culture has had little appetite for becoming more ‘socialized’ in tackling upstream problems, relying instead on the national ideology that spending more on healthcare will solve our health woes and improve health outcomes. But for meaningful change to occur, balancing healthcare with social determinant strategies must emerge both nationally and locally here in Iowa. The Iowa Healthiest State Initiative, a nonpartisan, nonprofit organization, is just one example of attempting to improve the physical, social and emotional well-being of our Iowa communities. This initiative is a good start, but other bold private and public initiatives need to be undertaken for real positive change to occur in healthcare outcomes.

Investing in our health upstream makes a great deal of sense. Spending for the ‘right’ community measures that impact health will provide better health outcomes for Iowa and our country. Such expenditures will take time to translate into positive health outcomes but we need to start investing now. The result may be cost-shifting from inefficient healthcare spending to re-allocating funds for social determinants that matter most, such as nutrition, adequate housing and education. By doing so, we will make our communities and state both healthier and more productive.

Controlling health costs and improving population health – we cannot have one without the other.

Healthcare Costs and Wages in Iowa
the Faceless and Nameless Among Us

Posted on: 07.12.16 By: David P. Lind

Whether it is a morning jog or perhaps a bike ride, I find great pleasure in determining the measureable progress I have made both in distance and time.

The same can be said about reviewing data from our past studies that cover a longer period of time. Doing so helps gauge a better understanding of trends occurring within benefits, specifically as it relates to health insurance components. As we are keenly aware, what we pay for our health insurance and the healthcare we receive continues to nip at take-home pay and the ability to afford other necessities, such as food, clothing, housing, etc.

A recent study commissioned by 25 local Iowa United Way associations indicated that for almost a third of Iowans (31 percent), the income they receive does not allow them to cover the basic costs of living. In fact, two parents working full-time in this state would need to collectively earn $23.34 per hour over a 40-hour week to cover basic household costs. With cities, counties and states debating what specific minimum wage amount should be acceptable (and affordable), this topic will not go away anytime soon.

Knowing that components of health insurance plans, such as premiums, deductibles and out-of-pocket maximums continue to push northward, this also impacts family budgets and whether they have adequate health coverage. By ‘adequate,’ I am referring to cost-sharing responsibilities that may overwhelm lower-earning Iowans. According to the Kaiser Family Foundation, Iowa happens to have a lower-than-average rate of uninsured (six percent). Nonetheless, even those who do have coverage continue to experience higher cost-sharing arrangements that may cause people to seek less care – which is a plausible reason we see moderation in the growth of health cost spending.

With this in mind, I want to take a quick look ‘back’ on trends for a few health insurance cost components confronted by Iowans with employer coverage. Covering a six-year period (2009 – 2015) from our annual ‘Iowa Employer Benefits Study^©,’ we learn that the average weekly wage from the Iowa Workforce Development (IWD) rose annually by 2.6 percent, while premiums increased during that same period by 9.2 percent prior to any plan designs changes made to lower the increase. Altering plan designs typically result in higher cost-sharing for employees, something that employers are reluctant to do. After alterations, the average annual premium increase was 5.5 percent, still over twice the weekly wage increase.

In addition to premium inflation, Iowan’s with employee-only coverage have experienced increasing deductibles by eight percent annually, from $1,061 to $1,662. The total cost-sharing exposure Iowan’s pay for medical costs (e.g. out-of-pocket maximums) increased by 6.1 percent annually from $2,210 to $3,151. Finally, employees with single coverage have contributed 6.2 percent more annually through payroll deduction for their cost of the employer-sponsored coverage.

Here is a summary of the six-year history.

As payment responsibility for medical costs continues to shift from employers to employees, a new dynamic of patients becoming the ‘new payer’ profoundly impacts the receivables for the provider community, specifically hospitals. Though not new information, this fact can and will change how financing options may evolve from providers to help patients navigate their financial obligations and ensure that patients are well educated about the cost of their care. Insurance companies, for their part, may also explore innovative financial solutions to help their insureds assume payment responsibilities – possibly a foray into a new market of opportunities.

Trends found in this six-year period will most likely continue well into the future, and the evolution of how we pay for our healthcare will require off-the-beaten-path solutions to establish new funding mechanisms for an increasing number of patients.

Over time, the compounding of these trends will affect more Iowans, revealing that many will no longer be faceless and nameless, rather, they may become us.

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‘Silently Harmed’ Released
Medical Error Estimates in Iowa and Six Heartland States

Posted on: 02.15.16 By: David P. Lind

We kickoff our HHRI website by introducing a new family of white papers, Silently Harmed – Hospital Medical Errors in the Heartland.

Do you know how many patients are harmed in hospitals each year due to preventable medical errors? You would think these critical metrics would be painstakingly reported by hospitals on each given procedure, wouldn’t you?

Unfortunately, they are not. If accurate information is available, it has yet to be found.

To most Americans, preventable medical errors¹ in our hospitals is largely an unknown problem. The United States does not have a bona fide national strategy to confront preventable adverse events (PAEs). Nor do we have an independent central coordination group, similar to the Federal Aviation Administration (FAA), to align all of the various organizations involved in patient safety for reporting and investigative purposes. There is a great deal of talk and frenetic activity generated around PAEs, but if progress is being made, it appears to be glacial. Voluntary reporting of patient harm caused by PAEs is not widely practiced and is, in large part, not shared with the public. When it comes to the number of patients seriously or fatally harmed, the best that our country can muster are estimates – national estimates.

But what about estimates for just Iowa and its six neighboring states?

Again, we know very little about the number of PAEs for each state. In fact, even the harmed patient is often unaware that a PAE happened while being hospitalized. This lack of knowledge is the purpose for Silently Harmed, a family of white papers released today by Heartland Health Research Institute (HHRI). In addition to estimating the number of patients seriously and fatally harmed in Iowa, Silently Harmed also provides estimates for the six other midwestern states that border Iowa: Illinois, Minnesota, Missouri, Nebraska, South Dakota and Wisconsin.

It is fair to say that national estimates on PAEs are imprecise. In fact, estimates vary widely from many sources, causing a great deal of consternation for health public officials, patient safety advocates, healthcare providers, and many other stakeholders. Below is a brief outline of national estimates that we used for each of the seven states. Future blogs will address the results found in each of them.

Estimated Patients SERIOUSLY Harmed in U.S. Due to PAEs

Silently Harmed offers a range of national estimates on patients seriously harmed in our hospitals due to PAEs. As described in Silently Harmed, the low-end estimate is that 6.6 million patients are harmed, with a high-end estimate of 11.5 million patients. Using the mid-range annual estimate of 8.7 million harmed patients, this number is equivalent to the population of New York City. As summarized below, every four seconds, one patient is harmed in the U.S. due to a preventable mistake, meaning the mistake could have been avoided. During the 25-minute average commute time to work in this country, 417 patients are harmed, or about one in every four hospital admissions.

Thankfully, we do know the annual number of hospital admissions for each state. Based on that metric, we have calculated estimates for hospital patients seriously harmed in each of the seven midwestern states. The estimates for the U.S. do not include outpatient settings, such as doctors’ offices, nursing homes, outpatient surgeries, etc. Because of this, one might correctly argue that this is a conservative estimate. Care-quality also varies wildly in different parts of our country, so using a national estimate will not include quality-adjusted care for Iowa or any other Heartland state. Without having accurate data on quality outcomes that can impact patient safety for each state, we avoided applying any quality metrics.

Estimated Patients FATALLY Harmed in U.S. Due to PAEs

What are the national estimates of patients who were fatally harmed by mistakes within U.S. hospitals? You guessed it, these estimates also vary widely. Silently Harmed uses the often-cited estimate of 98,000 lives from the Institute of Medicine’s ‘To Err is Human’ report from 1999. This number has now proven to be the low-end estimate, while 440,000 fatalities from the Journal of Patient Safety serves as the high-end estimate. Finally, assuming a mid-range estimate of 250,000 annual fatalities is true, the graphic below provides the following averages regarding preventable fatalities in the U.S. due to PAEs.

Social and Economic Costs of PAEs in U.S.

The costs resulting from preventable adverse medical outcomes are staggering. In addition to costs that are a result of medical errors (beyond the cost of care that would otherwise occurred), the social costs alone are about a third of the total U.S. healthcare spending. Social cost is determined by the “value of a statistical life,” a term used by economists. This value is typically used by federal regulatory agencies when making policy decisions about trade-offs people are willing to make regarding additional wages in riskier jobs. Depending on inpatient injuries and fatalities due to PAEs, social costs can range in the U.S. from $93 billion to $2.4 trillion annually. The social and economic implications to PAEs are, to put it mildly, massive.

Each ‘Silently Harmed’ white paper is available for download, at NO CHARGE. To learn more about estimations for a particular ‘Heartland’ state, you may start here.

¹ According to the Institute of Medicine, a medical error is a preventable adverse effect of care. Examples include an inaccurate or incomplete diagnosis or treatment of a disease, injury, infection, or any other ailment.

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