UNIVERSITY OF WISCONSINHEALTH POLICY SYMPOSIUM

T. A. BrennanHarvard Medical School

Harvard School of Public Health

Physician Accountability in Health Care Reform

November 17, 2005

2

Outline

A. Diagnosis of next 15 years of health policy developments

B. Discussion of medical professionalism and medical ethics

C. Accountable Physician: Three examples

3

Health Policy 2005-2020

1. Cost is the overriding issue

2. Quality will continue to be discussed and discussed…

3. Access will suffer

4

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000 10000 15000 20000 25000 30000 35000

Hungary

Spain

Sweden

France

Japan

Germany

Norway

Switzerland

USA

GDP per Capita, $

Hea

lth E

xpen

ditu

res p

er C

apita

, $GPD and Health Care Spending

5

14

15

16

17

18

19

20

21

22

23

24

1979 1982 1986 1989 1992 1995 1998 2001

Uninsured Workers and Health Care Spending

Percent uninsured among workers

Per capita health spending divided by median income

Sources: Authors’ analysis of Current Population Survey (CPS), March supplements, Annual Demographics Files, 1980-2003, except 1981; and Centers for Medicare and Medicaid Services, National Health Accounts, 1979-2002.Notes: Percentage uninsured (solid line) is scaled on the left axis, and per capita health spending divided by median income (dashed line) is scaled on the right axis. Results for 1979-1999 have been adjusted to make them consistent with the insurance verification question that was added to the CPS in 2001. The series for workers is restricted to those not covered as a dependent or by a public program

0.110

0.102

0.094

0.086

0.078

0.070

0.062

0.054

0.046

0.038

0.030

Percent Uninsured

6

30

35

40

45

50

1990 2000 2010

3%

2%

1%

Uninsured increase from premium growth

Uninsured increase from other factors

10- Year projected uninsured for different rates of premium growth (% points):

Millions Uninsured

Projection of Number of Uninsured

7

MEDICARE SPENDING AND QUALITY

Overall quality ranking

1

11

21

31

41

51 3,000 4,000 5,000 6,000 7,000 8,000

Annual Medicare spending per beneficiary (dollars)Baicker and Chandra, “Medicare Spending, The Physician Workforce, And Beneficiaries’ Quality of Care,” Health Affairs Web Exclusive, April 7, 2004

NH

HI

VTMEUT IA

ND

WI

LATX

CANU

ORMN

MT

COCT

VAWA

SD

MARI

NEDE

ID NC WY NYMDMIMOPA

INAZ KS

SC AKWV NVNM

OH TNKY AL

OKILGAAR MS

FL

8

The Difficult Facts• The population will age, driving costs• The working population will be unable to subsidize

the system• Doctors and hospitals will continue to import

technology to increase income, increasing costs• Many entrepreneurs will attempt to disaggregate the

hospital• Hospitals will struggle to maintain positive margins• The will in turn negatively impact quality and access

9

U.S. Population of Persons age 65 and Older: 1990 - 2050

0

10

20

30

40

50

60

70

80

90

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Age 85 and older Age 65 to 85

SOURCE: US Census Bureau, Statistical Abstract of the United States, 1996.

Mill

ions

Mill

ions

10

The Shrinking Financial Base for MedicareRatio of working age to elderly Americans

2.8

4.9

0

1

2

3

4

5

2000 2010 2020 2030

Source: U.S. Bureau of the Census

RATIORATIO

YEARYEAR

11

Inpatient Demand Rising As Population Ages

190 323575

1412

2473

3687

<15 years 15-44 years 45-64 years 65-74 years 75-84 years +85 years 2% 50% 50% 53% 105% 245%

Pop. CohortGrowth1970-2002

Sources: CDC, National Center for Health Studies

Inpatient Days/1,000 population (2002)(By age cohort)

12

Projected Medicare Spending under Bush Administration Budget, FY 2001-2011

$216 $226 $239 $252 $279 $292 $314 $336 $358 $384$419

$13$13$8

$16$17

$20$24

$0

$250

$500

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Baseline Spending Additional Spending for MedicareModernization/Prescription Drugs

Note: Numbers for proposed reform do not add to $110 billion due to rounding.

SOURCE: OMB, April 2001.

(Projected annualincrease of 6.6%) (~$110 billion, 2005-2011)

Billions ofDollars

13

$298

$129

$0

$100

$200

$300

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Federal Medicaid Spending is Expected to Increase Over Next 10 Years

SOURCE: OMB, April 2001

Billions of DollarsBillions of Dollars

14

Annual Change in U.S. Per Capita Health Spending by Service: 2001-2004

0%2%4%6%8%

10%12%14%16%

AllServices

HospitalInpatient

HospitalOutpatient

Physician Drugs

2001200220032004

+32%+45%

+60%

+31%

+50%

Source: Center for Studying Health System Change, June 2005, Data Bulletin No. 29

15

Change in Premium Costs and Earnings, 2000 to 2005

$4,442

$1,094

$4,389

$0

$1,000

$2,000

$3,000

$4,000

$5,000

Average Growth in FamilyPremium

Average Growth in WorkerContribution to Family

Premium

Average Growth in Earningsfor Non-supervisory

Workers

Source: KFF/HRET Survey of Employer-Sponsored Health Benefits, 2000 and 2005; earnings growth from Kaiser Family Foundation calculations based on Bureau of Labor Statistics data assuming 2080 hours worked per year

16

2005 Annual Premiums for Individual Health Insurance as Percent of Median Family Income

in Massachusetts

17%

25%21%

27%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Family in 30s Couple in 60s

BCBSHPHC

Source: Division of Insurance and US Census Bureau. 2004 median income =$68,700

17

The percentage of US firms offering health coverage has fallen significantly over the

last five years.

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 2000-2005

18

19

How Will We Control Costs?

1. Manage care: Doctor-based rationing

2. Restrict technology: System-based rationing

3. Under-insure: Patient-based rationing

4. Pay for performance: Weak doctor-based rationing

20

Managed Care

• Market incentives in the doctor/patient relationship

• It appears to have worked in the mid 1990s

• But consumer backlash/tort litigation led to a historic retreat

21

0 20 40 60 80 100

1988

1993

1996

1998

1999

2000

2001

2002

2003

2004

2005 ConventionalHMO

PPOPOS

Percent

Change in Health Plan Type

22

Increases in Health Insurance Premiums Compared to Other Indicators, 1988-2002

12.0

18.0

14.0

8.5

0.8

4.8

8.3

11.012.7

02468

1012141618

1988 1989 1990 1993 1996 1999 2000 2001 2002

Health InsurancePremiumsMedical Inflation

O verall Inflation

SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 1999, 2000, 2001, 2002 …

* Estimate is statistically different from the previous year shown: 1996-2000, 2000-2001, 2001-2002.

Note: Data on premium increases reflect the cost of health insurance premiums for a family of four.

**

**

****

23

Backlash Against Insurers Intense

-45%

-30%

-15%

0%

15%

30%

45%

60%

75%

1997 1998 2000 2001 2002 2003 2004 2005

Positive Rating

Negative Rating

Good Job Minus Bad Job, 1997-2005 by Industry

Source: Harris Interactive, Vol. 5 Issue 4, May 11, 2005

24

All Care Became Managed

446413

307 294 287 295 304358

282247 240 249 256 268

1993 1995 1997 1999 2001 2003 2004

“Unmanaged”

“Tightly Managed”

Used to fund richer outpatient benefits

Souree: Milliman, Inc.

Inpatient utilization, 1,000 lives/year

25

Restrict Technology

• Very difficult in United States

• Industry influence is deep

• Tide has been in the direction of weaker CON laws

• Rhetoric of market competition is high: need technology to compete

26

0

2

4

6

8

10

12

14

16Lowest quintile Middle quintile

Highest quintile

Lowest quintiles Middle quintiles Highest quintiles

Quintiles of per capita hospital bed supply

1.00

1.001.00

1.07

1.18

1.10

1.301.09

1.34

Quintile of medical specialist supplyDollars per enrollee (thousands)

Costs Related to Hospital Capacity and Medical Specialists

28

Under Insure: Patient-Based Rationing

• Occurs under the guise of consumerism claims

• But presumes that patient/consumer has real choice and that costs of health care are within reach of average family income

• Nonetheless, represents an easy choice

29

Employer Interest in Cost Reduction Measures(5=Very Interested, 1=Not Interested At All)

4.54.2

3.4 3.3 3.2

2.32

0.0

1.0

2.0

3.0

4.0

5.0

Cost Sharing ForRx

Cost Sharing ForMedical

EducateConsumers

Raise OOPLimits

Higher FamilyPremium

DefinedContribution

Plans

ReduceMD/Hospital

Choices

Sources: Milliman USA 2002 HMO Intercompany Rate Survey

30

“Consumer-Driven Health Plans” A Smokescreen

• Shifting costs, not influencing demand, is the real motive• Current copayments already have consumer’s attention

—additional elasticity of demand diminishing• Real quality measures too complex for typical

consumer…rational choice an unrealistic expectation• Actuaries credit consumer plans with very little utilization

saving• Contributions to HSAs now under employer’s control• Risk for inflation shifts to consumer• Moves market away from unsustainable entitlement view• Softens consumers for further benefit retrenchment

31

0

20

40

60

80

100

Large firms (200 or more workers)

All firms

Smallest firms (3-9 workers)

Percentage of Workers with Health Insurance

(by firm size)

32

New Arrival: “Underinsurance Plans”

Increasingly common benefit plans that look normal on the surface, but have extraordinarily low internal limits that

expose covered individuals to catastrophic losses

From Florida:

• $100 deductible• 80% of “covered services” in

excess of deductible• Maximum out-of-pocket for

“covered services” = $2,000/year

“Covered Services” Limits Patient is uninsured for• $600/day inpatient R&B hospital costs in excess• $1,200/day ICU R&B of R & B per diem plus• $2,000/year everything else $2,000/year for all other

charges

Nominal Benefit Provisions (on the surface)

Internal Limits(the fine print)

33

Americans Are Living On The Edge

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

'80 '04

$8,822

$29,372

0%

2%

4%

6%

8%

10%

12%

Personal income is up…

…but savings are down

Source: U.S. Bureau of Economic Analysis

10.0%

1.2%

34

Community Response: Cherry Picking

17%

24%

Non-MedicareTransfers

Medicare Transfers

41%

Soutce: UHC Clinical Data Base

Percent Change in Transfer PatientsMedicare vs. Non-Medicare, 2001-2003(52 UHC Members)

35

Source: Forrester Research, 2003

CDHC Market Share

0%

25%

50%

75%

100%

POSPPOHMOConventionalConsumer-directed health plans

2004 2006 2008 2010

Consumer-driven products are poised for growth

36

Pay for Performance

• At present, it is characterized primarily as a quality issue

• But in the future, will likely be combined with price tiering to reward cost-effective doctors and hospitals

• Yet, who exactly will do this management

37

Lee, T. H. et al. N Engl J Med 2005;353:1202-1204

Are Consumers Sensitive to Quality Information?

Awareness and Use of Quality Ratings among the General Public

38

Proportion of Members of High-Deductible Health Plans and Other Privately Insured Patients Who Did Not Fill a Prescription Because of Cost.

Condition for Which Medication Was Prescribed

Patients Enrolled in Non-

HighDeductible Plan

Patients Enrolledin High-

Deductible Planpercent

All 13 28Diabetes 15 24Depression 9 30Arthritis 9 16Chronic pain 9 23Heart disease or hypertension 8 18Allergies 8 23Asthma 9 23High cholesterol 2 16Other chronic condition 17 25

39

All primary care residents

1995-9643,760 total

2004-0544,668 total

5.6% decrease

64.3%

58.7%

U.S. MD

U.S. DOU.S. IMANo U.S. IMAOther

40

Family medicine residents1995-969,261 total

2004-05 9,373 total

Internal medicine residents1995-9621,071 total

2004-05 21,332 total

22.5% decrease74.2%

51.7%

0.3% decrease53.1%

52.8%

U.S. MD U.S. DO U.S. IMA No U.S. IMA

Other

41

Physician Pay

In 2004, median compensation for primary physicians grew at a faster rate than specialist pay for the first time in five years, according to a survey by the Medical Group Management Association

Physicians 2001 Change

2002 Change

2003 Change

2004 Change

Primary Care

$149,009 1.2%

$153,231 2.8%

$156,902 2.4%

$161,816 3.1%

Specialists $263,254 2.6%

$274,639 4.3%

$296,464 7.9%

$297,000 0.2%

42

Summary Diagnoses1. Costs continue to rise due to demographics

2. Managed Care (MD-based) rationing is out

3. Market rhetoric overwhelms technology regulation

4. Underinsurance simply decreases access

5. Hospital impoverishment negatively affects quality and access

6. Physicians who might socially progressively compete under P4P are disappearing

43

Presumptuous Medical Ethics

• Doctor patient relationship is different than more commercial relationship

• Doctor owes duty to patient that is not defined by rights on contract

• That duty is based in altruism• Physicians have to construct the institutions

for medical care that promote this dutiful relationship

44

Medical Morality, Ethics and Professionalism

• Moral theory provides the basis for the relationship of duty and trust

• Morality is translated into principles by ethical reasoning

• Ethical principles are institutionalized by professional codes

• So… professionalism should reflect a moral view

45

Traditional Conception of Professionalism (Brandeis)

• Control over recondite area of knowledge• Responsible for training of next generation

of profession• Responsible for promotion of growth of

knowledge• Accountable to society for use of

professional advantages• Therefore, a strong sense of social contract

46

The (Overlooked) Structural Aspect of Professionalism

• Knowledge cannot be increased, and students cannot be trained in the absence of institutions

• Nor can care of patients occur in an isolation from institutions

• Therefore, professional principles must imbue and be reflected in the structure of care

• And, justice as the morality of institutions plays a role

47

Market Imperatives vs. Professionalism

• Emphasis on efficiency• Competition tends to drown out other

values• Markets foment inequality• Professional virtues rendered

anachronistic

48

New View of Professionalism

• Must be tied to other-regarding values• Morality gives rise to ethics give rise to

professionalism• Emphasis on market in managed care has

largely evaporated professional qualities• Do something now or you risk losing any

value from professionalism

49

Traditional Professionalism

Stewardship of:KnowledgeEducationDoctor-Patient RelationshipRegulation

50

Civic ProfessionalismStewardship of:

KnowledgeEducationDoctor-Patient RelationshipOrganization of Health Care

Recognition of:Monopoly powerResponsibility for social contract

51

Physician Charter

• Efforts of ACP/ASIM; ABIM; EFIM• Initially largely undifferentiated effort;

Europeans hit on the idea of a Charter• Writing by committee required a year

of review

52

Fundamental Principles

1. Primacy of patient welfare

2. Patient autonomy

3. Social justice

53

Social Justice Parameter Critical

• Not part of traditional medical ethics• Have to be concerned not just about

this patient; but class of patient• We have responsibility for the

organization of, and class of outcomes for, the universe of patients

54

Ten Professional Responsibilities

1. Honesty with patients2. Patient confidentiality3. Appropriate relations with patients4. Improve quality of care5. Improve access to care

55

Ten Professional Responsibilities (continued)

6. Just distribution of finite resources7. Commitment to scientific knowledge8. Maintain trust by managing conflicts9. Commitment to professional competence10. Adhere to professional responsibilities

56

Three Examples in Action

• Quality of Care - Medical Injury

• Luxury Primary Care

• Pharmaceutical Conflicts of Interest

57

HopkinsKerr White

John Williamson

Robert Brook

RAND

Joe Newhouse

Shewart/Deming

Mark ChassinShelly Greenfield

Jim Ware

DartmouthHarvard

Don Berwick

CQI

Wennberg

Medical Injury

Howard Hiatt

HSR

Short History of Quality Improvement

58

Professionalism and Quality

Charter Responsibilities:Professional competenceHonesty with patientsResponsibility for CQIAppropriate accessEquitable distribution

59

The Roles of Physicians in Improving Quality

1. Develop national and local leadership to emphasize the professional contract2. Educate providers on the professionalism/quality synergy3. Aggregate providers to design improvement strategies4. Measure frequently and openly5. Collaborate with payers and government6. Be role models

60

Challenge of Preventable Medical Injury

California 1976

New York1

1984 Utah/Colorado2

1992

Adverse Event Rate 4.65 3.7 3.3

Negligent Adverse Event Rate

0.79

1.0

1.1

1NEJM 19912Medical Care 2000

61

Hospitalized Patients

Claims

No Adverse Events 2,573,253 2,267

Adverse Events 71,433 783

Negligent Adverse Events 27,177 625

TOTAL 2,671,863 3,675

Preventing Medical Injury: The Malpractice Backdrop1

1NEJM 1993

62

The Result of Our Historical Approach

• Malpractice disconnected from quality care

• Almost no research on error prevention

• Secrecy still dominant

63

Deal with Medical Error

• Overcome the inertia of the profession• Be open and measure• Resist the pressure of malpractice

concerns to drive error prevention underground

• Spend resources to accomplish• Develop reporting mechanisms

64

Aspects of Luxury Primary Care

• Many fewer patients in practice

• Get large set of dues (fees) from willing

patients

• Continue to bill insurers

• Often add amenities

65

Attractive Features of Luxury Primary Care

1. More time for patients and doctors

2. Greater patient satisfaction

3. Great professional satisfaction

4. Fills a market niche

66

Luxury Primary Care: Business Plan

• Reduce practice size to 200 patients

• Charge $2,000 per head

• Bring in $80,000 in billing revenue

• Take home: $240,000 (50% overhead)

67

Unprofessional Aspects of Luxury Primary Care

1. Abandonment

2. Shifting of costs of care of poor to other

physicians—eliminate cross-subsidies

3. Lubricates slippery slope to two/three class care

4. Arguably bilks insurers

68

Professionalism and Symbolism

• Can we self-regulate luxury primary care?

• Are we not concerned about the symbolism of creating classes of care?

• Is there any cross-subsidy argument?

69

Pharmaceutical Conflicts of Interest• Recent Federal prosecution of physicians

based on Medicare fraud statute

• TAP Pharmaceutical use of free trips and educational grants is the most heavily cited precedent

• Led to settlement of $850 million and pending indictment of medical center leadership

70

Profession and PhRMA Have Reacted

• AMA has reissued conflicts of interest policy

• ACCME and ACP have developed new policy

• PhRMA has set forth guidelines

• Inspector General has issued guidance

71

Is More Stringent Regulation Needed?

• Recent psychological research reveals that small gifts do influence, and that disclosing conflicts is not effective

• Government enforcement through prosecution and fines suggests that professionalism has failed

72

A Charter-Based Proposal

RelationshipCurrent Recommendation

StringentAlternative

Small Gifts Allowed at certain site Prohibited

Speaker Bureaus Allowed Prohibited

Support for Travel Allowed Only as contribution to general fund

No Strings Contracts Allowed General contributions

Support for CME Allowed General contributions

Research Contracts Allowed Allowed with public disclosure

Consultant Rules Allowed Allowed with public disclosure

73

The New Professionalism

• Requires an understanding that medical work is a vocation not a job

• Requires that we understand that our system of care is just as much a responsibility as is our care for an individual patient

• Requires activity as a collective, which requires leadership