Why The US Healthcare Care System Costs So Much – Part Two – Care Coordination

Why The US Healthcare Care System Costs So Much – Part Two – Care Coordination

The second waste category in Berwick and Hackbarth’s JAMA article is “Failures of Care Coordination”. Berwick and Hackbarth define this as “the waste that comes when patients fall through the slats in fragmented care.” Berwick and Hackbarth state further, “The results are complications, hospital readmissions, declines in functional status, and increased dependency, especially for the chronically ill, for whom care coordination is essential for health and function. We estimate that this category represented between $25 billion and $45 billion in wasteful spending in 2011.”

$25 billion and $45 billion sounds like a big number, but, compare that to between $102 billion and $154 billion for Care Delivery Failures, $158 billion and $226 billion for Overtreatment, $107 billion and $389 billion for Administrative Complexity, and $84 billion and $178 billion for Pricing Failures. Obviously, it is much less. Note that Berwick and Hackbarth don’t mention the cost offset in administrative costs to “care coordinate”. Their estimated savings can easily be wiped out with the added administrative costs to “care coordinate.”

Now, if you haven’t read my post on the fragmentation of the US health care system, you should do that before reading this post any further. It’s under the “General” category called “The Fractured US Health Care System”.

The bottom line for fragmented care is, the priorities of practitioners (MD’s, DO’s, APC’s) have caused the largest component of fracturing/fragmenting. There have always been “silos” in health care (referring to monolithic structures inherent in the health care system: Physicians, Hospitals, Ancillary services, Pharma, Device Manufacturers, etc.) since its inception but the true fracturing of the system is the result of practitioners. This fracturing has led to a huge hand-off and communications gap. Like, Grand Canyon huge. Care Coordinators/Case managers are supposed to bridge these gaps.

Here’s one of many examples of the hand-off/communication gap.

PCP’s often don’t know their patients are admitted to a hospital. Unless the PCP sends the patient from his/her office, they don’t know the patient was sick enough to be admitted. This is because the PCP either sends the patients to the ER or Urgent care when they call with a problem or the patient just shows up there. Then, they get admitted. The hospital has Hospitalists so they don’t need to call the PCP. Remember that PCP’s don’t go to the hospital so they aren’t on the hospital medical staff. If a physician is not on the medical staff they have no access to the hospital electronic medical record (EMR or its notification system).

If a hospital system has a medical group, they can message the PCP in their medical group that the patient is in the hospital using internal messaging systems or through a unified EMR. If the PCP is not “owned” by the hospital, they are, 99% of the time, either on a different electronic medical record or still using paper. Some EMR’s that the hospitals use have the ability to connect the non-owned PCP with a “Physician Portal” which is usually a read-only version of the medical record; however, unless a PCP signs on and looks to see if any of their patients are admitted, they don’t know about it. The PCPs we talked to wanted hospital information integrated into their own EMR as they felt it was too much extra time to be signing on to a hospital physician portal (which timed out frequently).

I was leading a readmission reduction effort at a hospital system. They had a large Medical Group and the hospital system tended to focus on their Medical Group to the exclusion of the non-Medical Group PCPs. Our analysis showed that 50% of the hospitals’ discharges were to non-Medical Group PCPs. We ranked the non-hospital owned PCP practices by percent readmissions and targeted the top 20 practices. We then visited the practices, showed them their data to the patient level and asked them if they had any ideas as to why their practice had such a high readmission rate. Some of the patients had four readmissions in a 3-4 month time period.

The PCP’s unanimously said they didn’t know the patients were even admitted to the hospital, they didn’t get a notification from the hospital that the patient was discharged, and they had no idea whether the patient went home or to a skilled nursing facility or nursing home. One doctor said (exact words), “ I only know what happens to these patients if they eventually make it to an appointment with me or I read their obituary in the newspaper.” In addition, most of the practices said, “You know, if we knew when our patients were discharged, we could have one of our nurses contact them and make sure everything is going OK and give us a status update so we could make sure we see the patient in a timely fashion. It’s part of our nurse’s job.” These PCP offices had “transition of care” nurses! Who knew the patients! And weren’t being utilized! How wasteful is that?

The other thing that is problematic is, when the patient gets admitted to the hospital, there is no verbal hand-off between the PCP and the Hospitalist. And when the patient is discharged, there is no verbal hand-off between the Hospitalist and the PCP. The Hospitalists actually say they won’t call a PCP, and since the PCP doesn’t know the patient is admitted, the verbal hand-off at the time of admission can’t happen. When we “old docs” were doing both office and hospital work, this wasn’t a problem. And, back then, if another physician admitted the patient (e.g., the patient was admitted from the ER with appendicitis to a surgeon’s service) the ward clerk always called your office to notify you that the patient was admitted. Repeat… CALLED YOU! Now everyone wants an IT solution. It’s like millenials want to text instead of talk with a smart phone.

So, nationally, because of Medicare and the Readmission Reduction program, which has penalties for higher than expected readmission rates, hospitals and health plans are hiring nurses and ancillary staff to “care coordinate” discharges from the hospital. Isn’t this more expensive than a phone call and accessing resources already present in the PCP office? Duplication of resources is a process waste category.

OK, now that you have seen but one out of the hundreds of hand-off gaps, back to Care Coordination.

Before we really get into this subject, we need some definitions, because people throw around the words “case management”, “care coordination”, etc. with ambiguity and impunity. So, let’s look at definitions supported by some degree of credibility:

Integrated Care Management: The management and delivery of health services so that patients receive a continuum of preventive, behavioral health, curative and long term care services according to their needs over time and across different levels of the health system. (WHO; modified) This requires a combination of Case Management and Care Coordination.

Case management: A collaborative process of assessment, planning, facilitation, care coordination, evaluation, and advocacy for options and services to meet an individual’s and family’s comprehensive health needs through communication and available resources to promote quality, cost-effective outcomes. (Case Management Society of America) This requires a level of health care licensure, like, a Registered Nurse or “higher”. Case management has been around since about 1900, and historically was applied to a small number of patients with serious illnesses and complex care needs.

Care Coordination: Care coordination is the deliberate organization of patient care activities between two or more participants (including the patient) involved in a patient’s care to facilitate the appropriate delivery of health care services. (Closing the Quality Gap: A Critical Analysis of Quality Improvement Strategies (Vol. 7: Care Coordination)). Unlicensed staff can do this. It is essentially project management. Licensed professionals design a series of steps or activities and a care coordinator tries to make sure they all happen. Care coordinators don’t necessarily give medical advice or apply medical judgment. At the same time an RN or practitioner can be a care coordinator; it’s part of their job description.

Care Management: A set of individualized, goal-oriented, culturally relevant and logical steps to assure that a patient receives needed services in a Safe, Timely, Effective, Efficient, Equitable, Patient-Centered and cost-effective way. (Accenture; modified) This is like a “project plan”, which someone acting as a care coordinator can facilitate.

“Care Coordination” nowadays is a health care industry “fad” that dominates the thinking of health care systems and has spawned numerous vendors selling care coordination services and supporting IT systems. It is extremely reminiscent of the Disease Management programs that dominated the health care industry in the mid 1990’s and first ten years of the 21st century.

Interestingly, there are no significant Disease Management (DM) companies peddling their services or supporting IT systems anymore. Why? They couldn’t reliably show cost savings. Remember, it’s all about the money. If a health care program can’t show some dollars falling to the bottom line, it will eventually be discontinued. If you want to know why Disease Management couldn’t show sustainable results, read Why Nobody Believes the Numbers by Al Lewis. The same thing is happening with Care Coordination. DM companies would come to your offices and show examples where they said they got large health care cost savings. Millions and millions of dollars. So health plans would hire them, run the program and find little or no cost savings. This is because the DM programs measured incorrectly. That’s what Al Lewis’ book is all about.

Well, the same thing is happening with Care Coordination results. If you see an article or a vendor offering Care Coordination and they are saying the results are eye-popping, like $84 million savings in two years, you can pretty much bet they aren’t measuring it correctly, because, as you will see below, the real hard data doesn’t support this contention.

So, I’m here to tell you that Care Coordination is very similar to the now defunct Disease Management companies. Care Coordination and Case Management (combined called Care Management) programs are major pillars in Population Health programs, are touted as the saviors of the cost and utilization problems of the health care system. Health systems and Health Insurance Plans have hired thousands of, usually, RN’s out of the face-to-face patient care venues to sit at computers and, mostly, telephonically “care coordinate” selected patients (or members/beneficiaries if it’s a health plan).

Problem #1: This mass hiring of nurses has exacerbated the nursing shortage in hospitals and outpatient caregiver arenas.

Problem #2: The cost savings are paltry compared to other interventions to reduce costs. And the activity adds dollars to the administrative costs, which are already too high.

Problem #3: Case management and care coordination have shown very limited impact on utilization and quality improvements.

But don’t take my word for it. The Agency for Healthcare Research and Quality (AHRQ) is a federally funded, industry unbiased agency whose role is “to produce evidence to make health care safer, higher quality, more accessible, equitable, and affordable, and to work within the U.S. Department of Health and Human Services and with other partners to make sure that the evidence is understood and used.”

The AHRQ released a 542-page analysis of 153 articles representing 109 studies of case management/care coordination programs. Here’s their conclusion:

“Recognizing the heterogeneity of study populations, interventions, and outcomes, we sought to elucidate the conditions under which CM was effective. We found that CM had limited impact on patient-centered outcomes, quality of care, and resource utilization among patients with chronic medical illness.”

Not convinced?

Read “Cost Containment and the Tale of Care Coordination” by J. Michael McWilliams, M.D., Ph.D. in New England Journal of Medicine 375;23 December 8, 2016. Here’s his two cents:

“Though attractive, this notion is not evidence-based. Studies of programs or practice models designed to enhance coordination and management of care for patients with multiple conditions and multiple providers have shown minimal, if any, consistent savings.

There are several reasons for this lack of savings. First, efforts to coordinate care and improve patient outcomes appropriately involve interventions to correct underuse and ensure timely access to care. In isolation, these efforts tend to increase the use of care, at least partially negating any reductions in preventable or unnecessary care resulting from coordination. Second, the “number needed to treat” is greater than one. And third, coordinating care is costly.”

So, according to these two experts (who have plenty of supporting evidence), the health care world is spending a lot of money to get, well, not much. All the other waste categories have, like 10 times the savings opportunity!

Here’s a graph from the Berwick and Hackbarth article showing this. Notice how thin the Care Coordination stripe is.

I suspect you would get more bang for the buck if you re-deployed these nurses to do more face-to-face caring for patients integrated with PCP and Specialty practices. This is just my suspicion. No one’s doing it so I don’t know of any credible data.

And then there is the persistent focus on care coordinating high cost cases. This is a sacred cow promoted by the health care finance departments that should be slaughtered and made into steaks and hamburgers. Yes, the CFO’s of the health care industry are telling health care professionals what to do. They have been so forceful, persistent and vociferous that the rest of the industry has been totally brainwashed into thinking, as in the words of gangster Willie Sutton, “that’s where the money is.” [Just an FYI, the finance departments, supported by the MBA-type health care industry administrators, are the real authoritarians in health care institutions. What they want, they generally get. They ignore the medical professionals telling them they are wrong. They don’t really care about anything but the bottom line being black. No, that’s not right. They want to meet their profit margin projections. I’ll be doing a post totally dedicated to this phenomenon. They generally view the medical professionals as a necessary evil they have to manage.].

Here’s why this high cost case management myth exits.

As claims (A claim is a bill sent by a health care provider to an insurance company. When it enters an insurance company it is re-named a claim.) come into the insurance company, it gets “credited” to the beneficiary. When the dollar amount of the claims reaches a pre-determined amount, it is placed on a high cost case list. Usually, the amount is between $50,000-75,000. This list is generated often, usually weekly if not daily. The finance department wants this list “worked” and wants the Medical Management staff to do something to limit any further claims coming in. They think there is definitely something that can “stop the hemorrhage” of dollars. You can’t imagine the panic, shock and anger the finance people display if you can’t, as medical professionals, stop the claims from coming in. And, the finance people have absolutely no understanding of what clinical courses the patients are going through nor do they have any evidence that something material can be done about the costs of these cases. They just want what they want….fewer claims. They want you to deny care, for example. A denial means no cash out. Instant savings.

The high cost cases are usually catastrophic cases. Major trauma. Neonates (premature births) with major complications. Conditions like sepsis, cardiogenic shock, respiratory failure, which include multiple organ failures. These people are in ICU’s and are usually not in any condition to be transported. Their costs can run up to a million dollars. Finance folks literally freak out over these cases.

You’ll hear and read statistics like 10% of the populations spends 50% of the health care costs. Yes, that’s true. But, I’ll show you why that statistic can’t be changed much. Because THERE WILL ALWAYS BE A TOP 10%!!! Just because the top 10% cost cases spend 50% of the health care dollars doesn’t automatically translate that you can save anything by focusing on these cases.

It turns out, there is little you can do for these folks. They are incredibly sick. Your best option is to broker a better case rate with the hospital and deploy a case manager to urge (not make) the medical staff to move the patient along the care course as quickly as the patient’s condition will permit and create an excellent discharge plan.

In the early 1990’s a really smart physician named Richard L. Doyle, MD analyzed hospital data and noticed significant variation in hospital utilization rates for the same conditions among several hospitals where he was working. He developed guidelines for inpatient conditions that supported the treatment of patients according to their physiologic status. These were originally called Milliman and Robertson Care Guidelines and are now called MCG guidelines. You can Google this. One thing Dr. Doyle stressed was, don’t spend a lot of time on the exceptionally sick patients. Do what you can to facilitate their care, but, you won’t see significant cost savings from that activity. What he stressed was making the care of the routine, high volume cases as efficient and appropriate as possible; that’s where the money is. Shave a few hundred dollars off of hundreds of cases and you saved hundreds of thousands of dollars.

I’ve actually done analyses on populations of people and shown this to finance people, but they never listened. The savings basically look like a bell curve with the seriousness of the illnesses on the X-axis and the savings on the Y-axis. The low-serious cases have low savings because these people aren’t very sick, spend little money and get better quickly. The upper end of the curve is low savings because they are relatively small numbers (remember only 10% of the population) and there isn’t much you can do to affect their clinical course. It’s the middle 40% or so where the volume is high and you can actually alter their clinical course by mitigating overtreatment and reversing under-treatment where you get savings. I actually have real data in bubble graphs that prove this. It supports Dr. Doyle’s contention. No finance person would acknowledge this data. I was in one health plan where the VP of Medical Affairs wanted to stop working the high cost case list because the administrative cost for working the list was at or slightly more than the savings. Alas, the Finance folks got their way and she was ordered to keep working the list. Stopping was heresy.

The other thing I saw in the data was, most of the people in the top 10% cost strata one year were not in that strata in the next year AND THERE IS STILL A TOP 10% SPENDING 50% OF THE HEALTH CARE COSTS!! Here are the reasons: 1. The person died, 2. The person had a self-limited catastrophic event (a health attack, a car accident, a severely premature infant who is now home, etc.), 3. There is a residual (minority) of really sick people who are still in the top 10% and spending money because they need the care (like cancer patients). The next year has 10% spending 50% because there are new cases of self-limited catastrophic events or people so sick that they are dying. The real trick is to work on that 40% to limit the catastrophic cases with pre-emptive activities instead of “beating a dead horse” who has already left the barn.

You have no idea how many times and in how many companies I showed the finance people this information. But they were still persistent and vocal and perennially complained to the “Administration” about the lack of effectiveness of the Medical Management departments in reducing the cost of top 10% cases through “managing” them. They still don’t understand that this is like playing “Whack-a Mole”.

But, again, don’t just take my work for it.

Read an article titled For Many Patients Who Use Large Amounts Of Health Care Services, The Need Is Intense Yet Temporary by Tracy L. Johnson, et al from Health Affairs, August 2015. Here is their finding:

“Our analysis found that consistently 3 percent of adult patients met super-utilizer criteria and accounted for 30 percent of adult charges. Fewer than half of super-utilizers identified as such on May 1, 2011, remained in the category seven months later, and only 28 percent remained at the end of a year.”

Here’s the graph about this. It is similar to what I had seen for years. Notice the really small red section at the bottom of the bars. Those are the ones who are year over year in the top 10%. Most of the rest of them disappear from the list.


Here’s another validating article: “Focusing on High-Cost Patients — The Key to Addressing High Costs? by J. Michael McWilliams, M.D., Ph.D., and Aaron L. Schwartz, Ph.D., New England Journal of Medicine, March 2, 2017.

“Targeting patients with high spending may not effectively target the spending that should be reduced. Longitudinal patient specific investments that are important for coordinating care and improving quality may be less important for curbing wasteful spending.

Thus, a focus on high-cost patients may not only fail to contain health care spending, it may help to entrench the status quo, since targeting specific patients suits existing provider structures developed under fee-for-service incentives”

Here’s a third article validating my assertions about high cost cases. I actually had a consultant tell me I didn’t know what I was talking about, that I didn’t “get it”. He specifically emphasized managing End of Life Care patients in the top 10%. Google this article and read it, it’s an exhaustive data-based study saying virtually the same thing as above. The article is: The Myth Regarding the High Cost of End-of-Life Care by Melissa D. Aldridge, PhD, MBA, and Amy S. Kelley, MD, MSHS, American Journal of Public Health, December 2015, Vol 105, No. 12, p. 2411.

Again, with high cost cases you do what you can to get the best price and urge or assist the caregivers to be efficient, but the cost savings are minimal for high cost cases. And this finance proposed activity just increases administrative costs.

Maybe soon, health care administrators and finance folks will realize that care coordination and the high cost case focus aren’t the cost savers they think they are, will reduce the number of care coordinators and case managers, let the nurses get back to directly caring for patients (maybe in ways that are not traditional), focus on that middle 40% of chronically ill patients who need their care optimized at the primary care/specialty care level, re-design wasteful care process structures and work on optimizing the other five waste categories.

Right now, that’s a hard sell.

Now, there are some benefits to care coordination. They are its direct impact on the patient. It may improve their quality of life. It may simplify their condition management regimen. It might reduce a patient’s out of pocket costs. It might improve their feeling of well-being. But it doesn’t significantly bend the medical cost curve, if it bends it at all.

And, as you will see, improving four of the other five waste categories actually improves the health status of the “middle 40%” cost patients. (Fraud and Abuse being the outlier)


Care coordination does little to improve patient outcomes, quality measures, utilization and costs.

Current Care Coordination activities divert the nurse and practitioner work force from direct caring of patients to working on an activity with limited impact, exacerbating nurse and practitioner shortages.

Focusing on high cost cases does not save a lot of money and distracts caregivers from optimizing the care of patients with chronic illnesses and poor health status.

Care coordination may have a positive impact on individual patients felling of well-being. There is no good data I know of that proves this.

Why The US Healthcare Care System Costs So Much – Part Three – Overtreatment

Why The US Healthcare Care System Costs So Much – Part Three – Overtreatment

This post is about overtreatment, one of the waste factors driving health care costs in the U.S. (Eliminating Waste in US Health Care, Berwick and Hackbarth, JAMA, 2012).

Berwick and Hackbarth define overtreatment as: “the waste that comes from subjecting patients to care that, according to sound science and the patients’ own preferences, cannot possibly help them—care rooted in outmoded habits, supply-driven behaviors, and ignoring science. Examples include excessive use of antibiotics, use of surgery when watchful waiting is better, and unwanted intensive care at the end of life for patients who prefer hospice and home care. We estimate that this category represented between $158 billion and $226 billion in wasteful spending in 2011.”

While this statement on the surface is true, the actual subject is way more complicated and complex than this. And, this is not just a USA issue; this is a global problem. You have no idea how many articles I’ve read about this from countries in Europe, China, Australia, India, etc. Just select one subject, like overuse/prescribing of antibiotics. Every country is reporting the same thing and every country is dismayed by the results of efforts to reduce inappropriate antibiotic prescribing. Folks like Berwick and Hackbarth make this seem like a simple thing, that there is science that is so specific that once told to a practitioner, they will stop prescribing inappropriate antibiotics. If that were true, the global reports I just mentioned would have produced fantastic results. That ain’t happened yet!! The administrators, who don’t understand health care, simply say things like, “Those stupid, stubborn practitioners! Why can’t they just get in line with this! They are ignoring the science!!”

Yeah, those stupid people who had to go to college, get excellent grades, pass a stiff entrance exam, learn a ton of stuff, graduate from a post-graduate school like a Medical School, obtain a doctorate level degree and spend 3-5 years in on the job training before going out in the world to practice! Why can’t they just get in line!! This, is spoken by guys with Bachelor’s degrees or maybe a Masters degree that has no clinical content and they have no clinical experience. Especially those Finance guys who have all the power and who are never and have never been in an exam room with a patient!

But, I’m not bitter about it….

In the land of truthsabouthealthcare.com, here are some of the major categories driving overtreatment.

  1. Practitioners are taught their utilization behaviors while in training. There has been literature out there for about 20 years showing where a physician trained creates long lasting impact on what they order and how they take care of patients. Even when a physician moves away from where they were trained, their academic center’s utilization pattern persists.
  2. Practitioners are influenced by their peers and the specialists in their region. Jack Wennberg, MD from Dartmouth (the originator of the Dartmouth Atlas) saw this with his first small area analyses in the 1970’s where the rate of procedures in one state were drastically different from another state without a difference in burden of illness in the population. Sometimes only one county in a state drove the over treatment statistics for the entire state.

I can personally attest to these first two factors. These first two can actually drive underutilization as well, so I am going to include stories about both over and under-treatment. Here are the stories.

I trained at a very prestigious Medical School and Training center in the last half of the 1970’s/first half 1980’s. There were two things that were “banged into our heads” related to two chronic conditions that, we were taught, were best practices: 1. Following a diabetic person’s A1c level 4 times a year, especially if their disease wasn’t controlled, and 2. Any asthmatic person who used more than one rescue inhaler (albuterol) a month must be prescribed a controller inhaler (at the time only corticosteroid inhalers were available).

So, for every diabetic in my practice, they got A1c’s on a regular basis and I would only prescribe a new or “problem” asthmatic one month’s supply of a rescue inhaler (until I knew them to be trustworthy) so I could keep track of how often they needed a refill. If it was less than a month, I put them on a steroid inhaler.

I graduated training in 1982.

In 1993, I became the Medical Director of a Physician Group Practice in New York. I was at a monthly Internal Medicine meeting and had some data showing that their diabetic population’s blood sugars were not well controlled and they had a paucity of orders or completed blood tests for A1c’s for these patients. To the one, they said that an A1c was a useless test to the point that one Internist actually pounded his fist on the table saying he wouldn’t order a useless test. I had to recruit an endocrinologist and collect a pile of medical literature articles to convince them to start ordering the test.

In 1996, I took over a practice in the same area in New York that had only consisted of two physicians assistants (PA) who were supervised by a hospital’s emergency department physicians who never went to the PA’s offices to see patients or even talk to the PAs except over the phone. Their diabetics were not well controlled. They had never ordered an A1c. When I asked them why, they said the ER physicians told them it was a useless test. Same region, same perception.

Getting A1c’s is a standard of care for diabetic patients…look it up.

So, here, the regional perception resulted in underutilization that resulted in undertreated patients resulting in increased complications and, likely, higher medical costs.

Here’s the asthma story. I told you above how I managed asthmatic patients. I hardly, if ever, had one of my asthma patients present to the emergency room with a bad asthma attack. I had the moderate to severe patients on steroid inhalers, I had nebulizers in my office, I had IV steroids in my office. I saw them in my office if they had an exacerbation, and treated them there, which wasn’t often. This was how I was taught to treat asthma in the late 1970’s, early 1980’s.

In the mid-1990’s, asthma care began to emerge as a problem, the most notable issue being patients weren’t being put on controller meds (i.e., steroid inhalers) when they should be. They were being managed with rescue inhalers only, i.e., overusing rescue inhalers. This sparked a nation-wide effort to improve the use of controller meds in asthmatics. Health Plans adopted Asthma Programs, hired Disease Management companies, etc. Lots of dollars spent on this. This surprised me because of the intensity of the messaging we got in training (where I trained) about putting people on controller meds.

It’s 1996. I’m in that practice with the two PA’s. I was on “service call” (you know, when we old docs were still admitting our patients to hospitals and had to “pay back” the hospital by taking patients whose doctors didn’t admit to that hospital or were unavailable, like they were on vacation and didn’t have a call group to cover for them or they were ambulatory only physicians). I got called to the ER for a patient who was having a serious asthma attack. And, boy, was she! She was a 20 year old, really bad blood gases (O2, CO2 in her blood), had a fever, elevated white blood cell count. She was so sick I had to admit her to the ICU (which had no Intensivists, you had to take care of your own ICU patients). She tested positive for Legionnaires disease.

As part of my admission history and physical exam, I did as detailed an asthma history as possible. Her story was terrible. She, for several years, had been home bound because of severe shortness of breath. She had never been on a controller medication, only a rescue inhaler (albuterol). She had never had oral steroids prescribed for her. Basically, she was a severe asthmatic on minimal medical treatment but over using albuterol, multiple inhalers a month.

I managed her for almost a week in the hospital and discharged her on a pulse of oral steroids, then a steroid inhaler and her rescue inhaler. I saw her in follow-up frequently at first, then spaced out her appointments because she was doing well. At her six-month visit, she and her mother came in in together. They were astonished by the fact that this young woman was now leading a normal life, going out doing whatever she wanted, never short of breath. They thought it was a miracle. It wasn’t, it was maintaining the proper treatment.

This was 14 years after I graduated training. Again, a net under-treatment (she was being over-treated with albuterol), but the phenomenon is the same for over-treatment. This was a national problem that should have been solved in 1980. Weren’t any other medical training centers banging this treatment protocol into physicians’ heads? Was my academic center an outlier? It seemed odd to me.

Here’s an example of regional overtreatment.

Between 1990 and 1993, I was in a Medical Group in Minnesota. They were capitated (paid a lump sum per patients per month instead of a fee for each service). Anytime I wanted one of my patients to have a cardiac stress test, I had to fill out a requisition that included why I thought the patient needed a stress test. If the cardiologist couldn’t align my thinking with the cardiology guidelines for the test I ordered, he would call me for clarification. If we agreed with the indication, the patient got the test. If not, we agreed on the right course of action according to guidelines and the specifics of the case. This was especially true for Thallium (radionuclide) stress tests where a patient got an injection of a radioactive material that would be imaged with a scanner. We did very few Thallium stress tests in Minnesota, as getting a Thallium stress test had more specific indications that a “standard” stress test (the exercise part only).

I moved to New York. The cardiologists in the region where I practiced were advising that every stress test candidate should get a radionuclide stress test, a standard stress test wasn’t good enough. They used sestamibi (Technetium-99), a similar radioactive material to Thallium. Additionally, they wouldn’t do the test unless the patient came to their office for a pre-stress test cardiology evaluation and the patient had to also have a post-stress test visit to go over the results (which were already reported in a paper report, like an X-ray report, with the cardiologists interpretation). It would be like a radiologist wanting a pre-chest X-ray or pre-CT-scan visit and a post-chest-X-ray or post-CT-scan visit for every Chest X-ray and CT-scan they did. Imagine the costs for this. And totally unnecessary.

Well, these patients were being dramatically over-treated! And the costs were incredibly high for stress tests in that region, because they convinced all the PCPs that this was the best treatment for their patients. Did I mention that the cardiologists owned the sestamibi scanner? And PCPs are often unwilling to challenge a specialist. I actually had a PCP tell me he did whatever a specialist told him to do with patients because he could never challenge a specialist since the specialist knew more about their specialty than he would ever know. My philosophy was, it was my job as a PCP to make sure specialists were following their own specialty’s guidelines. You have no idea how many times I cought a specialist not following his/her own specialties guidelines. More on this later.

The science isn’t as scientific as it looks. There are lots of reasons why I’m saying this and I’ll have to defer a real deep dive into this in later posts. Here are a couple of quick hits about it:

About every 10 years, some PhD-type does an analysis of the medical literature for validity. Generally speaking, their conclusion is about 70% of articles don’t prove (or disprove) what they say they are proving. First you have to sift out any article that is sponsored by a drug or device company. This is because a drug or device company sponsored article never shows a neutral or negative result. They suppress those articles and only publish articles with positive results, even if the research is terrible, which it often is. They will actually stop the research if the preliminary results are negative. Secondly, most studies are flawed. When researchers do what is called a “meta-analysis” (this is where a researcher gathers all of the articles on a subject and tries to see if they can statistically prove whether something works or not) a common conclusion is, there is no valid result or recommendation because the research on the subject is so bad, even combining their data doesn’t actually prove whatever it is studying does anything. Either the statistics are bad, the study design is flawed, or the study didn’t have enough “power” (e.g., not enough patients in the study to reach statistical significance), etc.

For example here’s an except from a recently published meta-analysis on reducing opioid use:

Limitation: Heterogeneous interventions and outcome measures; poor-quality studies with uncontrolled designs.
Conclusion: Very low quality evidence suggests that several types of interventions may be effective to reduce or discontinue LTOT and that pain, function, and quality of life may improve with opioid dose reduction.”

Unfortunately, the media, not knowing anything about study design or biostatistics, reports to the public the results of these flawed articles that actually prove nothing and people panic over them.

What is “proven” today, gets “disproven” several years later. Often, it’s a 180 degree turnaround. Here are two examples:

Estrogen/progesterone therapy for post-menopausal women (HRT; Hormone Replacement Therapy). In the 1990’s “the studies” showed that every post-menopausal women should be on estrogen (and progesterone if they had a uterus) because it prevented breast cancer, heart disease and strokes. Some folks considered it malpractice to not prescribe HRT. In 2002, a large study came to the exact opposite conclusion (and all studies since). HRT caused heart attacks, strokes, blood clots and breast cancer. Suddenly, it was considered to be malpractice to prescribe HRT!!

I can’t tell you how many women to whom I prescribed HRT in the 1990’s. I’m always wondering if that act killed any of them. Statistically, it must have. It is horrifying for a physician to think he or she has killed someone!

Here’s another one.

High dose chemotherapy with bone marrow transplantation for metastatic breast cancer (HDC/BMT). The first studies, around 1990, were accepted by the oncology specialists and they started promoting the procedure. Health plans looking at the research on this concluded that the research wasn’t strong enough to consider the treatment to be not experimental, and began denying the treatment (I was a Medical Director in a health plan that really looked at these studies and concluded the evidence wasn’t strong enough to say the treatment should be mainstreamed). The estate of a woman who died of metastatic breast cancer after HDC/BMT, whose insurance coverage for the treatment was denied by her health plan, sued the health plan and won. Massachusetts, New Hampshire, Virginia, and Minnesota mandated insurance coverage for HDC/BMT based on the court cases (not the clinical research). In 1999, a series of research studies showed that women were dying more from the HDC/BMT than “conventional therapy” and the outcomes were no better. So, the four states mandating coverage were actually party to killing women unnecessarily. Interestingly, no one sued them. The new research prompted review of the initial studies and the conclusion was some of the data was fabricated. Yes, fraudulent! And laws were passed forcing insurers to approve them!! And all of those oncologists just went along with it, not fully looking into the validity of the articles to be sure they were proving the treatment was beneficial. It was like everyone was mass hypnotized! Except the health plans…

To show you how some specialists never give up on a treatment they became invested in, in 1999 I was a Medical Director for an HMO in Michigan. Two months after the new research discrediting the HDC/BMT treatment, I got a request from the University of Michigan to approve a “tandem” HDC/BMT for a woman with metastatic breast cancer. A tandem HDC/BMT is when you do two in a row. Given the recent revelations about HDC/BMT, I denied the request. The U of M requested an expedited appeal to the state HMO review board using the argument that just because one HDC/BMT killed women more than usual care without better outcomes, you couldn’t say doing two in a row wouldn’t be better (really, this was their argument!). In Michigan, when an appeal is expedited, the board chooses several physicians from the specialty within which the procedure resides, in this case oncologists, to determine if the denial should be overturned or not. The expedited appeals panel of oncologists overturned my denial and we had to cover this highly experimental and likely dangerous procedure!!

No one does HDC/BMT for breast cancer anymore! Are you still wondering why physicians are wary of the “science”? Oncologists killed dozens of women based on poor science.

Here’s a link to a recent Perspective article in JAMA Internal Medicine about the same thing related to PSA testing (“No Wonder No One Trusts Us”; JAMA Internal Medicine, July 24, 2017). The physician author describes trying to explain to his 20 year patient that the guidelines for PSA testing have changed…again!


“Science” equals “Guidelines”. Specialty societies publish guidelines, which are interpreted by folks like Berwick and Hackbarth to be “the science”. The truth is, only about 20% of guidelines have any basis in science (because of the reasons above). The remaining 80% is tantamount to “expert opinion”, which is based on a physician’s experience and personal interpretation of the available literature. It is inherently biased. Plus, a significant (up to 80% depending on the specialty) of the physicians on the specialty committees promulgating the guidelines have financial ties to drug and device companies. Another huge bias.

I actually had a physician who was on a specialty guideline committee tell me that one of the major elements of the guideline was passed (even though the majority of the committee said there was no evidence supporting it) because one physician on the committee badgered each committee member so much (including at meals, on breaks, etc.) that they included it just to get him off their backs!!

So, physicians will say they know as much as “those guys on the committees” and they have their own “expert opinion” which is just as good. When I was in Ann Arbor Michigan, I had specialists tell me the recently released guidelines by their own specialty were wrong, that they knew better than their own Specialty’s guideline committee and would be treating patients differently from the guidelines. To my face!

Patients’ cases aren’t cut and dried. The pundits, administrators and finance folks think dealing with patients is like dealing with spreadsheets. They also don’t see the variation in patient presentation that deviates from the cleaner presentations in guidelines and research articles.

For example, one of the first things in a clinical research article is the “patient exclusions”. They exclude so many patients they end up with a very narrow stripe of the population. It’s like a “pure” population that only exists in research studies.The expectation is, you then apply the recommendations (based on this pure narrow stripe) to all patients. Doesn’t that seem odd to you? Check out this article to see what I mean; “Injurious Falls and Syncope in Older Community-DwellingAdults Meeting Inclusion Criteria for SPRINT”, JAMA Internal Medicine Published online July 17, 2017. The community dwelling population had five times the falls and syncope than the SPRINT study population. In addition, the results are based on the average outcome when even this pure population has a bell curve distribution of outcomes.

Here’s how this plays out. Imagine a study trying to prove that a drug reduces blood pressure. On the right side of the bell curve people have no reduction in their blood pressure and they have adverse effects (meaning a non-blood pressure related adverse effect like nausea or a rash). On the left side of the bell curve people have big reductions in their blood pressure and little adverse effects. At the middle of the bell curve (the average) there is a modest reduction in blood pressure and a modest number of adverse effects. The drug gets approved. A physician will give the drug to three patients. One has no blood pressure reduction despite dose escalation and has a bad adverse effect, one has what the research reported, modest blood pressure reduction and a minor adverse effect, one will have a terrible drop in blood pressure causing fainting and no adverse effect (you would consider a dose reduction in this patient).

Physicians see the bell curve, not the average, and the end of the bell curve that impacts their memory and behavior the most is the one within which the patients they’ve treated had the failures where patients get hurt, have a bad outcome (even if this happens only once in their practice). So, then, they “err” on the side of mitigating the bad outcome side of the bell curve, i.e., they treat patients assuming they are likely to be on the bad side. They don’t see the adverse effects of their actions, as those are either delayed or require looking at the outcomes of thousands of patients (they only have 1500-2000 people in their panels of which only a fraction have the illness in question).

For example, this is what happens with antibiotic prescribing. All the practitioners know you shouldn’t prescribe antibiotics for a cold, but they do when the presentation isn’t completely classic for a cold (the average presentation). Any additional symptoms signal a potential for a non-viral component to the illness (the bad side of the bell curve) where the patient’s status could worsen and result in a serious infection. And the non-viral components are rarely detectable with a test on the spot, so they can’t prove they were right. So, thinking they are acting in the best interest of the patient with the information at hand, they prescribe an antibiotic (i.e., they are avoiding a serious infection).

It’s easier and faster to do something than persuade a patient they don’t need something. Two things drive this: 1. Practitioners think patients want things even if they don’t ask and, 2. Patients specifically ask for things.

If a physician feels pressured for time, they are tired (or both), or they want to please their patient and not lose patients, they will prescribe things they know they have no good data to support prescribing. I’ve had physicians in medical groups tell me they give the patient what they want because the administrators are yelling at them about their patient satisfaction. One of the largest volume of patient complaints is the doctor didn’t give the patient what they thought they should get. I led a project to reduce antibiotic prescribing for viral illnesses in a medical group and the volume of patient complaints about not getting an antibiotic spiked.

There is actually literature that shows that practitioners prescribe more antibiotics for colds later in their clinic sessions than at the beginning. They “get behind” and they are getting tired and just want the session to end. There is also literature related to the power of patient requests on the behavior of practitioners. This is why drug companies are paying billions for Direct-To-Consumer advertising. The patient comes in asking for the drug. It’s been proven to be an effective strategy.

It is financially beneficial to the practitioner to over-treat. This phenomenon is so well known and prevalent that there are laws about it, the Stark Laws. But the Stark Laws only cover a minority of this problem.

Remember, in the end, it’s all about the money.

There’s a saying in the medical world: Send your patient to a surgeon and you can just about guarantee they will get a surgery, whether they need it or not. Surgeons hate to say you don’t need a surgery. There was actually an opinion article in a prestigious surgery journal appealing to surgeons to NOT do surgery, that saying someone doesn’t need surgery is just as important as doing a surgery. However, this is still really hard for surgeons to do. I’ve talked to dozens of surgeons about this. Their desire is to be in the OR and avoid office hours as much as possible.

It’s not just surgeons. Remember the cardiology example from above? They were generating high cost office visits and they owned the sestamibi machine. It’s not a leap to understand why they wanted all patients to get sestamibi stress tests.

Even PCPs are doing this. I can give you examples of PCPs who buy machines (X-ray, lab, etc.), even including CT scanners, which they over-utilize to make a profit. Or they have incorporated services like Physical Therapy into their office environment and refer their patients to these services.

This is all over-treatment. And about the money.

The bottom line is, the pundits like Berwick and Hackbarth, the administrators and the Finance folks make mitigating overtreatment seem simple when it isn’t. And I’m only scratching the surface with the above reasons. It is really complex.

There’s a new reliance on the Electronic Medical Record. They put in “alerts” that pop up to ask practitioners if the test or treatment is really necessary, sometimes even summarizing the literature. But there is this phenomenon called “alert fatigue” where practitioners ignore them after a while. So there hasn’t been a major improvement through the use of the EMR.

There is one article where a medical group placed alerts in the EMR and they gave practitioners a monthly report on their antibiotic use for colds. They saw a 30% reduction in antibiotic use for patients with a diagnosis of a cold (now, you have to be a little careful with data like this because all a practitioner has to do is change the diagnosis code from “cold” to something bacterial sounding to get a reduction in inappropriate antibiotic use but the actual reality remains the same) for three years. They decided that was long enough to instill a permanent change in thinking in the practitioners’ minds so they stopped the reporting. Eighteen months later, the inappropriate antibiotic prescribing rates were back to before the interventions (alerts and reports) started. This suggests getting a permanent change is complex.

The latest effort by the physician community is a program called Choosing Wisely. In truth, the recommendations make sense to the extent the “science” seems to support them. At the same time, at least 80% of the recommendations, which are listed out as recommendations by specialty, do not affect the practices of those specialties who suggested the list. For example, a procedural society recommends not doing tests or x-rays related to procedures they do, but, with some exceptions, they don’t tell their colleagues to not do their own procedures. In other words, the reduction in utilization affects another specialty or ancillary service, not their own pocketbook. Skeptical about this assessment? Here’s just a few examples pulled directly out of the Choosing Wisely list:

American Association of Neurological Surgeons

Don’t administer steroids after severe traumatic brain injury.

Don’t obtain imaging (plain radiographs, magnetic resonance imaging, computed tomography [CT], or other advanced imaging) of the spine in patients with non-specific acute low back pain and without red flags.

Don’t routinely obtain CT scanning of children with mild head injuries.

Don’t routinely screen for brain aneurysms in asymptomatic patients without a family or personal history of brain aneurysms, subarachnoid hemorrhage (SAH) or genetic disorders that may predispose to aneurysm formation.

Don’t routinely use seizure prophylaxis in patients following ischemic stroke.

None of the above affects a neurosurgeon’s revenue.

American Academy of Ophthalmology


Don’t perform preoperative medical tests for eye surgery unless there are specific medical indications.

Don’t routinely order imaging tests for patients without symptoms or signs of significant eye disease.

Don’t order antibiotics for adenoviral conjunctivitis (pink eye).

Don’t routinely provide antibiotics before or after intravitreal injections.

Don’t place punctal plugs for mild dry eye before trying other medical treatments. (This is the only one that affects an Ophthalmologists revenue)

American Academy of Otolaryngology —Head and Neck Surgery Foundation

Don’t order computed tomography (CT) scan of the head/brain for sudden hearing loss.

Don’t prescribe oral antibiotics for uncomplicated acute tympanostomy tube otorrhea.

Don’t prescribe oral antibiotics for uncomplicated acute external otitis.

Don’t routinely obtain radiographic imaging for patients who meet diagnostic criteria for uncomplicated acute rhinosinusitis.

Don’t obtain computed tomography (CT) or magnetic resonance imaging (MRI) in patients with a primary complaint of hoarseness prior to examining the larynx.

None of the above affects a Otolaryngologist’s revenue.

American College of Chest Physicians/American Thoracic Society

Don’t perform computed tomography (CT) surveillance for evaluation of indeterminate pulmonary nodules at more frequent intervals or for a longer period of time than recommended by established guidelines.

Don’t routinely offer pharmacologic treatment with advanced vasoactive agents approved only for the management of pulmonary arterial hypertension to patients with pulmonary hypertension resulting from left heart disease or hypoxemic lung diseases (Groups II or III pulmonary hypertension).

For patients recently discharged on supplemental home oxygen following hospitalization for an acute illness, don’t renew the prescription without assessing the patient for ongoing hypoxemia.

For patients recently discharged on supplemental home oxygen following hospitalization for an acute illness, don’t renew the prescription without assessing the patient for ongoing hypoxemia.

Don’t perform CT screening for lung cancer among patients at low risk for lung cancer.

None of the above affects a Chest Physician’s revenue.

American College of Surgeons

Don’t perform axillary lymph node dissection for clinical stages I and II breast cancer with clinically negative lymph nodes without attempting sentinel node biopsy. (This is the only one that affects a surgeon’s revenue)

Avoid the routine use of “whole-body” diagnostic computed tomography (CT) scanning in patients with minor or single system trauma.

Avoid colorectal cancer screening tests on asymptomatic patients with a life expectancy of less than 10 years and no family or personal history of colorectal neoplasia.

Avoid admission or preoperative chest X rays for ambulatory patients with unremarkable history and physical exam.

Don’t do computed tomography (CT) for the evaluation of suspected appendicitis in children until after ultrasound has been considered as an option.

So, only 2/25 recommendations above actually affects the specialists’ revenue, or 8% of recommendations for these five specialties.

Get the point? You don’t see these guys telling themselves to reduce or stop doing procedures they do. It’s usually someone else’s services.

But, then again, it’s all about the money.

OK, enough for now, this is getting way too long. See you in the next post!

Why The United States Health Care System Costs So Much – Part Four – Overtreatment – Technology

Why The United States Health Care System Costs So Much – Part Four – Overtreatment – Technology

Here’s the post about one of the two main drivers of US health care costs. The use of technology. More than most other countries. The main offenders are:

  1. CT Scans
  2. MRI Scans
  3. The Da Vinci Robot

Before we get into the specific pieces of technology, here’s some background information.

Back in “the day” (before 1990) Medical Students and Interns and Residents in training were trained differently. CT scanners started to be installed in hospitals in the mid-1970’s but were very rudimentary (for example, until the early 1980’s you could only do a CT scan of the head because the speed of the CT scanners were so slow that any movement, like breathing, would blur the image). It wasn’t until about 1985 that most parts of the body could be scanned. The first MRI machine came out in March of 1980 and its dissemination took about ten years. So, before 1990, a doctor had to rely on looking at the patient (history and physical exam), analog x-rays, and blood/fluid tests. After 1990, Med Students and residents began to rely on the emerging technologies to “examine” the patient. Kind of like Dr. Leonard McCoy (Bones) on Star Trek who used a tricorder (hand held diagnosis device) and the electronic headboard in the Starship Enterprise. Touching patients, feeling for abnormalities, observing patients and talking with patients started to take a back seat to CT scans, MRI scans, and more diverse and available blood tests. Admixed with this was the advent of the Electronic Medical Record (EMR), which recent studies show, has reduced the time practitioners spend with patients. The most recent article showed a practitioner spends 50% of their time actually seeing patients and the other 50% of the time “on the EMR” either reviewing information or messaging patients and other practitioners, while spending the same amount of time in their offices. Main result, much less patient contact time.

This phenomenon has caused concern. In a recent JAMA Internal Medicine issue there is an article describing this (Hiding in Plain Sight—Resurrecting the Power of Inspecting the Patient by Shlok Gupta et al, June 2017). Here’s an excerpt from that article:

“An unintended consequence of deriving information from the electronic medical record instead of the patient, however, has been an atrophy of the powers of clinical observation. Inspection is a diagnostic, prognostic, and humanistic tool, as we have learned from our patients and teachers over the last 4 decades.”

 Here’s a real/true example of the atrophy of observational skills, of being aware of what looks normal and what looks abnormal:

There was a patient in the hospital who had several conditions. One was an infection, so the hospitalist team started the patient on antibiotics. The patients’ white cell count came down but he continued to run a fever on the fourth day in the hospital. The hospitalist team did another fever workup and added another antibiotic. After three more days, the patient still had a fever. Stymied, the hospitalist team requested an infectious disease (ID) specialist consult.

The ID specialist, who was my age (that is, an “older guy”), reviewed the record (which showed a sustained linear fever without much fluctuation), talked to the Hospitalist, and then did a history and physical (which was unremarkable for findings of an active infection). But the key observation was, the patient was sitting up, smiling, looking perfectly normal, not complaining of anything. To the ID Specialist, this was a dichotomy. But, he had seen this many times before, because he had spent so much time with patients. His diagnosis was a drug fever, most likely from the antibiotics. The patient was taken off of his antibiotics and his temperature was normal within 36 hours. He blamed the hospitalist team’s “atrophy of observation” as the cause of this patient’s extended stay and the cost of the ID consult. They were stuck in the EMR temperature chart and not looking at the patient and processing what he looked like.

So, because of the combination of the “I can get a test to figure that out” thinking instead of “touching, listening, feeling”, and the reliance of the EMR, practitioners are now “addicted to the test” and not paying attention to YOU!

This has resulted in increasing usage of CT and MRI scans. Why take the time to examine someone? I can get an image! The problem is, not all things can be seen with a scan. You can’t see bacteria circulating through a patient’s system. You can’t see something that is “functional”, only “anatomic”. I can’t tell you how many times I’ve seen the younger generation doing a test when there was an obvious physical finding. I had one patient in Urgent Care who had been to two ER’s, got scanned at both and was told they couldn’t find anything. I examined him and within 5 minutes had the correct diagnosis. He was stunned and said no one had examined him that way, why was that? I told him I didn’t have the scans when I was trained so I rely more on the history and physical. His problem was functional. He recovered.

Here’s another one. This one is really scary, so fasten your seatbelt!

It’s Thursday afternoon. I’m seeing same day patients in a primary care clinic. A man in his 60’s come in with a complaint of right arm pain and numbness. He had been to the ER three days earlier. They did an MRI, which showed a bright lesion in the cervical spine, the brain was normal. They told him he had a Transient Ischemic Attack (TIA) (a “mini-stroke” that resolves).

First, pain is not a typical symptom of a stroke. Second, if it was a TIA presenting with pain, a TIA “resolves” so the pain should be gone. A stroke should be farther down the list. He described the pain as excruciating, kept him up at night despite pain medicine. He thought his right arm was weaker than the left and somewhat numb.

On physical exam he had a mild upper extremity only weakness, pinprick exam seemed to aggravate his pain. But the key exam finding was: he had a positive Lhermitte’s sign. This is caused by a lesion in the neck (cervical) spine or the brain stem. It is common in Multiple Sclerosis and Transverse Myelitis, which are irritative lesions. Strokes are “ablative” usually, meaning a piece of your nervous system dies. And TIAs don’t typically occur in the cervical spine. I think the ER practitioner was looking more at the brain and not at the cervical spine and seeing nothing in the brain, called it a TIA (just my assumption). The “sign” itself occurs when you bend the patient’s neck. They get the feeling of an electrical shock going down their back, often into the legs. Interestingly, when I relayed this case to the younger doctors who worked in the medical group, none of them had heard of a Lhermitte’s sign. I wasn’t surprised.

Well, he had this Lhermitte’s sign. That coupled with the bright lesion in the cervical spinal cord on the MRI, had me strongly suspecting transverse myelitis. I didn’t have admitting privileges and wasn’t sure he would do well with a blast of outpatient steroids, so I called our medical group’s neurologist. It was 4:30 PM on a Thursday. (Remember what happens nowadays at 4:30 PM in doctors’ offices? Remember the story about the post-surgical patient who was sent to Urgent Care when he called his surgeon at 4:00? Yup, they’re GONE for the day). I got the neurologist’s nurse, told her the story, told her my concerns and that I wanted to speak to the neurologist as soon as possible. The nurse said the soonest she could give the neurologist the message was the next morning. I told her I wanted to hear from her before noon, please.

I sent the patient home, telling him we would be calling him about seeing a neurologist ASAP. The next day (Friday), I didn’t hear from the neurologist by noon so I called again. The neurologist was out at lunch and couldn’t be contacted. The nurse told me the neurologist asked her to schedule the patient for a Nerve Conduction Study the next Tuesday WITHOUT EVER SEEING THE PATIENT! And, I’m guessing, she didn’t look at the MRI. Yes, she was relying on a test. I said that was unacceptable. I had to speak to her. Please have her call me today.

I was really busy that afternoon and I didn’t get around to calling the neurologist back (because she never called me!) until 4:30 again. Unfortunately, same result, neurologist was gone and still wanted the Nerve Conduction Study, not a call to me or an appointment with the patient.

At this point, it is Friday at, now, 4:45 PM. I got more assertive with the nurse, telling her I feared for the patient and really needed to speak to a neurologist. I didn’t want to send him back to the ER where they misdiagnosed him; I figured he’d get the same diagnosis. The nurse said, “Well, there is a locum tenens (“rent-a doc”) neurologist hospitalist. Would you like to speak to him? I have his pager number. He’s about to go off duty at 5:00 PM (meaning there would be NO neurologist to talk to after 5:00!).

I got his pager number and immediately called him. Thankfully, he called me back in five minutes. I got about halfway through my story and he interrupted me and said, “This guy needs admission and high dose IV steroids for at least a week! Get him to the ER now and I will take care of it! Hopefully his lesion isn’t progressing because if it does, it’s at a level where he could become quadriplegic and stop his respirations!” (Just like Christopher Reeve!!!)

OK, now I have a plan, but no patient! I was not at the clinic where I saw the patient. It was now 4:55PM. We didn’t have an EMR at the time. I had no contact info for the patient. I called the clinic where I saw the patient. The pod clerk was still there. I told her what was happening, we had to get in touch with this patient.

It took us until 6:30 PM to finally track him down. (I stayed at work by my phone, calling the pod clerk every 15 minutes for an update.) His wife was away, he was alone (not good given the possibility cited above) and he was out walking his dog during the 90 minutes we were trying to find him. The pod clerk was AWESOME; she never gave up! (Remember on my front page when I listed who really cares about the patient!?)

The patient made it to the ER, got admitted and was on high dose IV steroids for 7 days then discharged on high dose oral steroids. Eventually the transverse myelitis resolved. Whew!!

The next week, when I went to the clinic, I hugged the pod clerk and thanked her profusely. She said, “I want you to be my doctor. I don’t know anyone else who would have done what you did.”

Well, I don’t know if that’s true, but, the neurologist was doing the “I can just do a test to figure this out” routine, wasn’t she?

OK, now back to the analytics of CT scans and MRI’s. Here are some graphs explaining the problem. Remember in the USA, these tests are often many times the cost in other countries. The below is all OECD (The Organisation for Economic Co-operation and Development) data:

Review of health care spending by country


Use of CT scanners and MRI


Here are the unit cost numbers:


OK, so do the math. Near the top or at the top for utilization and over the top for prices = way over spending.

Of course, the last graph speaks to prices, which I’ll get to in the next post.

The Da Vinci Robot

My final target in this post is…Robotic Surgery. This is the penultimate waste of money, and the story is like something out of a movie.

The only robot being successfully marketed is the Da Vinci Robot. The Da Vinci robot is made and sold by Intuitive Surgical. Originally, there were a couple of companies developing surgical robots, but, Intuitive Surgical bought them out, leaving themselves as the only company making and selling them. Why wasn’t this considered anti-trust? A monopoly?

For those of you who don’t know what this thing is, here’s a picture of it. Notice the surgeon isn’t anywhere near you.


The robot costs about $2,000,000. For approximately 90% of the surgeries done using the robot, there is no clear benefit to doing the surgery with the robot. There may be some very special micro-type surgeries (like inside a chamber of the heart) where the robot is better, but, for the rest of the surgeries, there isn’t a benefit and sometimes, the non-robot surgery has a better outcome. I’m not going to quote all of the references for these statements, you can easily Google for this info yourself.

Here are some quotes from the literature about the Da Vinci Robot:


Take-Home Points

  • Robotic surgery is a rapidly expanding technology that has found a niche in multiple different surgical specialties worldwide.
  • Although robotic-assisted surgery shows some short-term benefits surrounding the direct perioperative period, it has fairly equivalent long-term outcomes when compared to open surgery.
  • Robotic surgery is generally safe with low overall complication rates, but adding the robot to the surgical equation inserts another potential entry point for error into an already complex and risk-fraught arena.
  • In general, surgical outcomes are ultimately a direct manifestation of the skill and experience of the surgeon, not the technology or approach used.

They are basically saying you aren’t getting much for the cost of the robot and it adds complexity. FYI, Robot surgeries are longer than laparoscopic or open surgeries, and, ask any anesthesiologist or surgeon, the longer you are knocked out, the more likely you are to have a complication, including death.

The Lancet Study; 2016

“In the USA, 80-85% of prostatectomies are done robotically, and although the proportion is lower in the UK and Europe, it is increasing. Robotic surgery is more expensive than open surgery (the initial cost of the robot is approximately £1.5 million) and to date, there have been no randomised controlled trials comparing robotic with open surgery.”

“Surgery has long been the dominant approach for the treatment of localised prostate cancer, with many clinicians now recommending the robotic method to patients. Many clinicians claim the benefits of robotic technology lead to improved quality of life and oncological outcomes. Our randomised trial, the first of its kind, found no statistical difference in quality of life outcomes between the two groups at 12 weeks follow-up.”

I have a ton of articles stating similar to the above. To this date, there is no convincing evidence that the robot adds anything.

And then there are adverse events attributed to the robot itself that wouldn’t be in existence if it weren’t for the robot:

From: Adverse Events in Robotic Surgery: A Retrospective Study of 14 Years of FDA Data By Homa Alemzadeh1, et al, PLOS One, April 20, 2016

“During the study period, 144 deaths (1.4% of the 10,624 reports), 1,391 patient injuries (13.1%), and 8,061 device malfunctions (75.9%) were reported. The numbers of injury and death events per procedure have stayed relatively constant (mean = 83.4, 95% confidence interval (CI), 74.2–92.7 per 100,000 procedures) over the years.”

“Device and instrument malfunctions, such as falling of burnt/broken pieces of instruments into the patient (14.7%), electrical arcing of instruments (10.5%), unintended operation of instruments (8.6%), system errors (5%), and video/imaging problems (2.6%), constituted a major part of the reports. Device malfunctions impacted patients in terms of injuries or procedure interruptions. In 1,104 (10.4%) of all the events, the procedure was interrupted to restart the system (3.1%), to convert the procedure to non-robotic techniques (7.3%), or to reschedule it (2.5%).”

Here’s some cost and utilization stats:

Notice the US has most of the robots and is doing most of the robotic surgery. There are several reasons for this.

  1. Intuitive Surgery is great at marketing and showing this bright shiny object to surgeons while having no good data to back up their marketing claims. It is amazing to see the faces of surgeons when the Da Vinci guys come to make their pitch. I’ve actually been at one of these. The surgeons act like kids in a candy shop. They are about ready to whip out their own credit cards to buy one. Then the Intuitive Surgery salespeople just have to step back and watch the surgeons tell the hospital administration that they will go to the hospital down the street, who has already bought a robot, to do their surgeries if this hospital doesn’t buy one. The administrators turn white thinking of how much surgery volume they could lose and immediately sign on the bottom line. This happens all the time, by the way, surgeons threatening hospitals to get things they want whether the things have been vetted in the literature or not.
  2. The current practicing surgeons grew up in the video game generation. And using the robot is just like playing a video game. Why do a surgery looking through a monocular laparoscopic tube when you can do one with a device that mimics playing a video game? Who knows, maybe pretty soon there will be global robot surgery competition like the video gamers are having now! Who can do the prostatectomy the fastest without a complication! I can see it now!
  3. This is the real crux of the robot issue. And the academic training centers in the USA are mostly to blame. They are supposed to be data-driven cultures who advocate doing things as proven in the peer reviewed literature. Well, in the case of the Da Vinci Robot, that couldn’t be farther from the truth. You see, most academic training centers have more than one Da Vinci robot. They are ignoring the peer reviewed literature. And the interns and residents use the robots pretty much exclusively. Which means, none of them are trained to do the laparoscopic or open procedures.

Here’s how this plays out.

As is usual in healthcare institutions, annually, there is a “budget crisis”. A couple of years ago, after a “budget crisis” call to find ways to reduce costs, I amassed a ton of data showing the robot didn’t add anything except adverse events and costs. I had a very compelling case. It was so good, the COO said he believed the robot wasn’t worth it BUT, a. the surgeons would defect if he shut it down and, b. he wouldn’t be able to recruit surgeons, especially Urologists and OB/GYNs because THEY COULD ONLY DO ROBOTIC SURGERY NOWADAYS. So, Intuitive Surgery has created it own self-fulfilling prophesy! This has to be the most arrogantly successful marketing strategy in the history of medicine! And the academic medical centers just went along with it!! Unbelievable!!

When you mention the extra costs (not human costs, just financial costs) for robotic surgery, some people say, “Well, it doesn’t matter because the hospital gets the same reimbursement whether they do a robotic or non-robotic surgery. It’s the same charge impact on the patient and insurance company.” What a naïve statement! Having watched how hospitals manipulate their charges and insurance company contracts, I can tell you that they aren’t simply going to take a $3000 hit on these surgeries. They figure out someplace else where they can increase reimbursement to, at the least, even it out and recoup that “loss”.

Addendum October 27, 2017: Two articles and an editorial in JAMA continue to confirm that the most Da Vinci Robots do is add to the cost of a surgery:

Association of Robotic-Assisted vs Laparoscopic Radical Nephrectomy With Perioperative Outcomes and Health Care Costs, 2003 to 2015; In Gab Jeong, MD, PhD; Yash S. Khandwala, BS; Jae Heon Kim, MD, PhD; Deok Hyun Han, MD, PhD; Shufeng Li, MS; YeWang, PhD; Steven L. Chang, MD; Benjamin I. Chung, MD; JAMA. 2017;318(16):1561-1568. doi:10.1001/jama.2017.14586

Effect of Robotic-Assisted vs Conventional Laparoscopic Surgery on Risk of Conversion to Open Laparotomy Among Patients Undergoing Resection for Rectal Cancer:The ROLARR Randomized Clinical Trial; David Jayne, MD; Alessio Pigazzi, PhD; Helen Marshall, MSc; Julie Croft, BSc; Neil Corrigan, MSc; Joanne Copeland, BSc; Phil Quirke, FMedSci; NickWest, PhD; Tero Rautio, PhD; Niels Thomassen, MD; Henry Tilney, MD; Mark Gudgeon, MS; Paolo Pietro Bianchi, MD; Richard Edlin, PhD; Claire Hulme, PhD; Julia Brown, MSc; JAMA. 2017;318(16):1569-1580. doi:10.1001/jama.2017.7219

Robotic-Assisted Surgery Balancing Evidence and Implementation; Jason D.Wright,MD; JAMA October 24/31, 2017 Volume 318, Number 16


  1. The USA utilizes high priced technology more than almost all other nations.
  2. Technology is preferred over actually seeing and examining patients by today’s practitioners.
  3. High Priced Technology utilization is “overtreatment” and is one of the two most prominent drivers of USA health care costs.
  4. The EMR exacerbates the technology reliance by today’s practitioners.
  5. The Da Vinci Robot adds cost and adverse events without evidence that the patient benefits from it.
  6. Intuitive Surgery has a “death grip” marketing strategy, adopted by academic medical centers, that guarantees it’s continued sales of a device that shouldn’t be used.
  7. It would take the medical community, led by the academic medical centers, being willing to “bite the bullet” and say “no more of this” to Intuitive Surgery and shut down the robots and train surgeons in the non-robotic surgeries to phase out the robots. But, since it’s all about the money, that is probably an unlikely scenario. And the medical community is relatively gutless anyway. Witness the Opioid epidemic…which never should have gotten to the point it did and wouldn’t have if the medical community stood up to The Joint Commission and the drug companies.



Why The United States Health Care System Costs So Much – Part Five – Prices

Why The United States Health Care System Costs So Much – Part Five – Prices

OK, folks, this is where the money is. Yes, this is the absolute crux of why our health care costs so much.

When I was working in physician groups who were capitated (paid a set amount of dollars per patient per month) instead of fee-for-service (paid a set amount for each service provided) the number one thing the physician groups did was negotiate the lowest prices or figured out a way to pay less for something. That’s because the physician groups had to pay the other “external to themselves” health care providers from that capitation payment. They combined being efficient within their offices and practicing evidence-based medicine (aligned with best practices) with getting the lowest prices.

When I was in hospital system based health care systems, this was not the case. During those times, I was the Chief Medical Officer of the hospital systems’ health insurance plans. Because a hospital system’s mentality is to make as much operating/profit margin as possible, trying to be the lowest cost service provider in the market wasn’t in their DNA. This was especially true for the Finance folks. They are laser focused on decreasing utilization…for all the other service providers, not necessarily their hospital-based system, not lowering their prices. I once convinced the administration to apply a lower fee schedule for a health plan account for the hospital system’s services to retain the account and the Finance guy looked like you had stabbed him in the heart, that’s how hard it is for them to lower prices.

I used to have quarterly reports showing utilization flat or decreasing in 90% of the service providers while prices were consistently increasing and the finance folks demanded further reductions in utilization rates to offset the price increases because they had no appetite to try to decrease prices.

Hospitals can be very creative in maintaining their prices. You’ve probably read news articles about hospital “chargemasters” which have absolutely no basis in any type of business logic except the hospital system is operating in the USA free market system. So, their chargemasters look a lot like the Drug Company way of pricing things, that is, charging whatever they think the market can bear. I’ve watched this in action, even in IDS’s that, to the public, voice that they want to be the most affordable health care system. But that is actually a huge lie.

But don’t take my word for it. Read this article: US Hospitals Are Still Using Chargemaster Markups To Maximize Revenues, by Ge Bai, and Gerard F. Anderson. Here’s an excerpt:

“Using 2013 nationally representative hospital data from Medicare, we found that a one-unit increase in the charge-to-cost ratio (chargemaster price divided by Medicare-allowable cost) was associated with $64 higher patient care revenue per adjusted discharge. Furthermore, hospitals appeared to systematically adjust their charge-to-cost ratios: The average ratio ranged between 1.8 and 28.5 across patient care departments, and for-profit hospitals were associated with a 2.30 and a 2.07 higher charge-to-cost ratio than government and nonprofit hospitals, respectively.”

“These findings suggest that hospitals still consider the chargemaster price to be an important way to enhance revenue.”

The statement “The average ratio ranged between 1.8 and 28.5 across patient care departments” means the hospital chargemaster is setting prices almost 30 times the Medicare allowable reimbursement for some services!!

If you don’t have insurance, the chargemaster prices are what the hospital will charge you. I usually told uninsured patients who really needed the hospital care to start negotiations with the hospital at 1/3 of whatever the hospital billing folks told them they owed the hospital.

In one state in which I worked, the reimbursement model was a DRG (Diagnosis Related Group, a payment type started by Medicare. It is a “lump sum” payment for an admission rather than a line by line item charged) model. But, when the charges (not network fee-for-service equivalents) for the line items for an admission reached a certain dollar amount (let’s say $30,000), the reimbursement to the hospital reverted to a percent (like 80%) of billed charges. Now that you know how perverse the hospital chargemaster system is. This makes no business sense for the person or entity having to pay the bill. Even though the Finance and administration folks knew this was creating excessive prices for admissions, they wouldn’t change their own DRG model to mimic Medicare (which doesn’t do this at all) for their own health plan because they wanted to maintain that perverse DRG model with the other health plans and health insurance companies, obviously, because it was more lucrative. Yes, maintain as high of prices as possible. Not surprising. And, since a hospital can raise the charges in a chargemaster anytime they want, if they need more cash, they just raise the chargemaster prices.

Yes, just like the Pharmaceutical companies raise drug process whenever they want. Since the hospitals are getting 80% of charges when they hit the DRG related “charges dollar amount”, the higher the charges, the more cash! And no one can stop them.

[Factoid: You should never negotiate a contract with a health care service provider based on a percent of their charges. You need to define a fee schedule. Otherwise you are at the mercy of the health care providers’ whimsical self-benefitting alterations in their charges.]

The main reason for this is, it helped the hospital system’s profit margin to maintain prices. As a matter of fact, it was common that the highest priced service providers in a hospital system owned health plan network were….wait for it….providers owned by the parent hospital system! Who would have thunk…NOT!! This shuttles money from the health plan to the “delivery system” to maximize the financial health of the hospital system. The health plan was supposed to make up for this loss to their bottom line by ratcheting down on utilization of services by non-hospital system service providers. This is why the Finance folks in Integrated Delivery System’s (this is when a hospital system owns a lot of the health care delivery and financing (insurance) businesses, including doctors) are stuck on utilization decreases of other health care providers vs. becoming more efficient or reducing the margin on their services to make health care more affordable. Greedy, greedy greedy.

And there seemed to be this phenomenon that the hospital system and all the other providers were in the same buddy-buddy situation, meaning, it was hard for them to drive down other service provider prices because they inherently didn’t want that done to themselves. It was sort of like doctors don’t like to say an averse outcome has any doctor culpability because of the “that could have been me” mentality (you have no idea how many times I heard that in Quality Case Review sessions).

Here’s another hospital price maximization tactic.

The Facility Fee.

In 2000, Medicare created the facility fee. They set new billing standards for employed physicians. Some say it was meant for teaching hospitals (who always seem to need more money) who had their attending physician offices attached or integrated into the teaching hospitals on the same campus. However, this wasn’t specified in the new rule.

As with other billing standards, commercial health insurers simply adopted what Medicare does. So, non-teaching hospitals, reviewing the specifications of the new rules, realized that if they declared their hospital-owned physician group offices as a department of the hospital, they, too could charge the facility fee. Most of these offices are free-standing offices, just like an independent physician’s office. Of course, the hospitals say they need the facility fee to maintain these offices, but, that’s just how they justify charging the fee. It’s not true. The private physician doesn’t need this.

What a facility fee does is dramatically increase the cost for a physician office visit or any test that is done in a hospital-owned physician office.

Here’s a couple of examples:

In 2012 and 2014, the Medicare Payment Advisory Commission analyzed Medicare data. According to the 2014 report, Medicare, for echocardiograms (ultrasound of the heart) paid, on average, $453 at a hospital-owned facility and $189 at a privately-owned office. Keep in mind that providers are paid by a Medicare fee schedule, not based on a percent of charges. This means that the Medicare “payment standards” allowed a 2.4 times increase in payment for the same service! According to the 2012 report, they paid $124.40 for a 15 minute office visit at a hospital owned physician office and $68.97 at a privately-owned physician office, almost twice as much!

There is a facility fee for just about everything. This became a cash cow for hospitals. So, they started employing physicians to expand their ability to receive this extra cash. I’m here to tell you that running a physician office costs the same whether a hospital owns it or not. I actually had a hospital take over my practice in the 1980’s. Nothing in the office changes, same staff, same supplies, etc. So, if it were 2001 instead of 1989, the prices for my services would have doubled overnight with no increase in costs to run the practice. This happens all the time now.

What this means is WE ARE ALL PAYING FOR THIS! If you are in a high deductible health plan, are uninsured or on Original Medicare (where you pay 20% of what Medicare pays a doctor), your out of pocket costs are higher. For those on a copay plan, your insurance premium is higher and, no matter which plan you are in,  your taxes are higher (because YOU have to pay the taxes to pay for the 80% Medicare pays which includes this facility fee charge).

President Obama signed a bill that, going forward, only allows for facility fee payment if the physician office is on the same campus as the hospitals. But, it  “grandfathers” the physician offices or other service facilities already owned by hospitals that are not on the same campus starting 2018!. ALERT: Watch for your local hospital to start building facilities on their hospital campuses and move their employed physicians to the campus!

The 2014 report says Medicare would save about $500 million if they stopped paying facility fees for physician offices.

My personal opinion is, no physician office should be able to charge a facility fee. It’s perverse.

For hospitals, in addition to using every method possible to maximize their revenue, they are consolidating. Consolidation creates, at the least, a near monopoly within a region so that the hospitals can demand higher prices for the services they own.

But don’t take my word for it:

As Hospital Chains Grow, So Do Their Prices For Care, By Chad Terhune June 13, 2016 Kaiser Health News. Here’s an excerpt:

“As health care consolidation accelerates nationwide, a new study shows that hospital prices in two of California’s largest health systems were 25 percent higher than at other hospitals around the state.

Researchers said this gap of nearly $4,000 per patient admission was not due to regional wage differences or hospitals treating sicker patients. Rather, they said California’s two biggest hospital chains, Dignity Health and Sutter Health, had used their market power to win higher rates.”

Here’s the actual study: Hospital Prices Increase in California, Especially Among Hospitals in the Largest Multi-hospital Systems, Glenn A. Melnick, PhD and Katya Fonkych, PhD. Here’s an excerpt from the abstract:

“Our data show that hospital prices in California grew substantially (+76% per hospital admission) across all hospitals and all services between 2004 and 2013 and that prices at hospitals that are members of the largest, multi-hospital systems grew substantially more (113%) than prices paid to all other California hospitals (70%). Prices were similar in both groups at the start of the period (approximately $9200 per admission). By the end of the period, prices at hospitals in the largest systems exceeded prices at other California hospitals by almost $4000 per patient admission.”

Inflation has only been running between 1-2% a year, so you do the math as to how ridiculous these price increases are.

I’m here to tell you that this is going on all over the USA. And not just with hospitals. Here’s a doctor one. Variation in Emergency Department vs Internal Medicine Excess Charges in the United States, TimXu, MD, MPP, et al, JAMA Internal Medicine, 2017. Here’s an excerpt:

“Our analysis included 12,337 emergency medicine physicians from 2707 hospitals and 57,607 internal medicine physicians from 3669 hospitals in all 50 states. Services provided by emergency medicine physicians had an overall markup ratio of 4.4 (340% excess charges), which was greater than the markup ratio of 2.1 (110% excess charges) for all services performed by internal medicine physicians [for the same services]”

Of course, the ED physicians work…IN HOSPITALS!! It’s not a leap to figure out they ED docs’ finance guys are talking to the hospital finance guys, now is it?

And then there are the doctors who are in a monopoly or near monopoly position within a city or region. If they are in a market where the doctor group is the only group in that specialty, like Oncologic Surgery or In Vitro Fertilization, or, the doctors are the only PCPs in a rural area, they either won’t contract with a health plan (this means you pay whatever they charge (often 2-3 times what Medicare pays) as a health plan or patient) or they have a contract with the prices they demand (often as high as 3-5 times what Medicare pays). This also applies to any health care service provider (hospitals, Physical therapy, Durable Medical Equipment providers, etc.).

I’ve actually seen illegal activity on the part of doctors trying to get as much money as possible from health plans. In one city there were five solo practitioners in a certain specialty. According to federal law, these five solo practitioners couldn’t negotiate as a unit unless they shared business or clinical systems, which they didn’t. As we tried negotiating with one, that one solo practitioner would pass notes to the other four in the physicians lounge in the hospital so they all would be asking for the same thing or holding out signing contracts until they all maximized their fee schedule at the same price point. At one point another group of solo practitioners came forward as a group, even hiring a lawyer who thought this wasn’t illegal and tried to openly negotiate for them as a unit. They had absolutely no business or clinical integration! Because the health plan was owned by a hospital system, the hospital system told the health plan to capitulate to the doctors and the legal department wouldn’t report them to the Feds (See the above paragraph about the “buddy-buddy” mentality).

I could go one for pages about how all the other service providers I’ve negotiated contracts with are doing the same things, but it would be dozens of boring pages that you wouldn’t read.

The bottom line is, in the USA, health care providers are constantly trying everything they can to get the highest amount of money for their services. You’ve already read and heard about the Pharmaceutical Industry, which has gone totally hog wild with price raising! Now you’ve heard Hospital stories about them doing the same thing!

This is because the Health Care Industry is operating within the rules of a free market system. It’s supposed to be competition driven, but you can see how that competition part doesn’t seem to operate in the health care sector. But the “get as much money as you can get” is still very operative.

All of this results in the USA being the highest cost system in the world without having the best health care outcomes.

Sticking with the Pharmaceutical Industry, my personal favorite target, here are a couple of stories illustrating how this plays out:

Example #1, Getting a drug in another country. I won’t mention the country, but, I’ve done this in three and it was practically identical. There is a drug that treats cold sores called acyclovir. You can get it as a tablet. You can also get it as a cream or ointment. If you have the cream or ointment, you can carry that in your purse or briefcase or have it in a drawer in your office and thereby start it immediately, which hastens the resolution of the cold sore attack, and you don’t have to call your physician or go to Urgent Care to get pills.

Here are some screen shots:


Notice the approximate retail price, $464.99. For a GENERIC! I’m here to tell you that 5 years ago that was about $60.00. Now, the pharmaceutical companies will tell you no one pays the retail price; that this is sort of like the hospital chargemaster. Actually, it sort of is, but, if you don’t have insurance or have access to a coupon program, the retail price  is what you will pay.

So, let’s look at the coupon program. This is a screen shot for the same medicine from GoodRx, a popular coupon program:

Even with the coupon, this generic medicine is still pricey, and you can pay up to $326.00 for a 15 gram tube. I’m sure this is on everyone’s health plan fourth tier copay, which can be in the $100 range or, if you’re on a high deductible plan, you’re going to pay at the least a price at or above the above Walmart price.

So, here is the actual charge ticket from buying the medicine in another country (the price was within $1.00 among the three countries where I bought this):

Yes, you are reading that right, $14.58 USD for three 5g tubes (same amount as the one 15g tube in the USA examples)! Thirty-two times less expensive than the USA retail price and 7.4 times less expensive than the cheapest price on GoodRx!!

Here’s another. I’m a senior citizen, so I’m on Medicare and I chose a Medicare Advantage plan. It does have some advantages. At the same time, it has a fourth tier copay for “expensive” drugs. It’s a $95 copay. There is a topical steroid that has been generic for about 30 years, but, because of Pharma operating in a free market society, even the generic for this drug is expensive. Here’s a screen shot:

Two ounces of this drug is $180.00! $90 an ounce!

Here’s the GoodRx coupon prices:

Remember, I paid $95. Three of the stores charge less than $95. If you don’t have a coupon app like GoodRx, go to the app store, get it, and always check the coupon prices against your copay/coinsurance cost. The fact that three stores can offer the drug for less than my copay, I’m wondering if the health plan actually made money from me since my copay is higher than the potential actual cost to the health plan! At the same time, this generic drug is still pretty expensive!

OK, it’s those big bad hospital systems and the drug companies, right? Well, not so fast. It’s also everyone, me included, who work in the health care industry, because we all expect a certain amount of money to do what we do. From doctors to nurses to physical therapists to pharmacists (you name it, even chiropractors), we are accustomed to getting paid darn well. And actually, it’s a lot more than other countries. But, then again, we’re in a free market society, so, we’ll take whatever the market can bear! I’ll show you this in some graphs later on in this post.

Here’s a true story about this.

I was going from hospital to hospital teaching a course in Bioethics (hardly anyone in the health care sector understands what this really is, by the way). I’m in a 30 bed rural hospital, 150 miles from any big city. The subject came up about the money being spent in the USA for health care. Someone brought up doctors’ salaries. A nurse got up and spoke in a thick English accent. These were her exact words, “I would never go back to England and be a nurse, because my salary here is astronomical compared to what I was paid in England.”

Yes, she used the word astronomical!!

OK, you’re getting the picture but this is still sort of my opinion and anecdotes (with references to back it up, though). How about an analysis by some of the top health care economists in the USA? Well, here’s that:

If you don’t know or believe that these guys are the heavy hitter health care economists, just Google Uwe Reinhardt.

Notice the reference to lower use of health services. Yes that’s true, except for those high tech devices you read about in the last post (which aren’t solely driving the difference in total costs per capita).

I could actually go on for dozens of pages with examples of hospitals in “one-hospital” cities and towns charging whatever they want, ancillary service providers employing pricing strategies, endless pharmacy pricing examples, etc. But, now, I’m going to shut up and just show you the data.

Let’s start with some capacity data. According to the Dartmouth Atlas, the more capacity, they higher the utilization of services and the higher the costs. These graphs will show you that, from a global perspective, that isn’t the case because the USA has lower capacity of doctors and hospitals than other countries and the costs are HIGHER. The one thing we are equal with regard to capacity is nurses.

OK, so that Dartmouth Atlas fundamental doesn’t work there! Here’s why: It’s the prices! The Dartmouth Atlas is based on Medicare data with a standardized fee schedule. The prices are fixed.

The Doctors

We pay PCPs and nurses more than any other country. Specialists are third. But we have more high cost specialists than any other country. Suggests more referrals from lower cost PCPs to Specialists so the unit cost of physician care is higher.

What about Hospitals?

Less Hospital beds.

Less and declining hospitals.

Shorter Hospital Admissions

Cost per day in the Hospital

USA has half the hospitals and length of admissions but 4x the average cost of a hospital day. Prices….

Cost of Hospital Procedures

The Prosthesis is the actual artificial hip they put into patients.

If you’re on a high deductible health plan, want to go to Argentina for your Colonoscopy?

An Angioplasty is what you get to reverse or prevent a heart attack, without having to have surgery.

An angiogram is an X-ray where they inject a dye so they can see what your arteries look like.

And then there is the Pharmaceutical Industry


Got the point?


  1. The main reason why health care costs are more in the USA than other countries is higher prices.
  2. The USA has higher prices because the USA is a free enterprise country. It’s perfectly acceptable for a health care provider to charge or negotiate for as much money as they can get.
  3. Health care providers use a variety of tactics to maximize their revenue/income at the expense of the general pubic/citizens.
  4. The competition component of the free enterprise system is generally absent in health care economics, which most economists and health care administrators downplay or deny, fueling  US health care cost escalation.

[Addendum; The following article was published in the Annals of Family Medicine in their July/August 2017 issue: “Comparing Medical Ecology, Utilization, and Expenditures Between 1996-1997 and 2011-2012”; Ann Fam Med 2017;15:313-321. https://doi.org/10.1370/afm.2084. It documents the same phenomenon as I saw in the fourth paragraph from the beginning of this post, which the finance folks perpetually dismissed:

“Although the number of individuals with visits during an average month and the total utilization of medical services were largely unchanged between the 2 time periods, total expenditures increased markedly. ”

“Over the past 15 years, changes to the medical care system and society at large have resulted in no differences to small differences in most categories of medical care in terms of the number of individuals seeking care or in the number of services. On the other hand, the expenditure framework showed increases in expenditure in nearly every category. Total expenditures increased by 47.2%, from $246 per individual per month in 1996-1997 to $362 per individual per month in 2011-2012. During this same time, the total number of individuals with a visit in an average month and the total number of visits were unchanged. Collectively, the study’s findings therefore suggest that the increases in expenditure have little to do with an increase in the number of individuals receiving services or the total volume of services, but much to do with the cost of treating the same number of individuals with the same number of services.”

It’s the prices, stupid!


Why The United States Health Care System Costs So Much – Part Six – Administrative Costs

Why The United States Health Care System Costs So Much – Part Six – Administrative Costs

Berwick and Hackbarth define Administrative costs thusly:

“Administrative Complexity: the waste that comes when government, accreditation agencies, payers, and others create inefficient or misguided rules. For example, payers may fail to standardize forms, thereby consuming limited physician time in needlessly complex billing procedures. We estimate that this category represented between $107 billion and $389 billion in wasteful spending in 2011.”

As you can see, Administrative Complexity is the biggest wedge in this graph. In actuality, you should add Administrative Complexity and Pricing Failures together to get Prices (Berwick and Hackbarth’s definition of Pricing Failures has to do with the perverse “market forces” only, i.e., “the waste that comes as prices migrate far from those expected in well-functioning markets”. See my post on Prices, in which this is all inclusive.) I say this because the health care providers have to make their profit margin expectations and they are funding resources to manage the administrative complexities in the US health care system which drives up prices.

So, what makes up Administrative Complexity? Well, you can divide this up into three categories:

  1. Health Insurance complexities
  2. Government laws, regulations/Legal and Compliance
  3. Health Care Provider “internal” rules and policies

Let’s go through each of these.

Health Insurance Complexities

This is my favorite pet peeve, and I worked in several health insurance companies. As a physician executive in those health insurance companies, I did everything I could to minimize the administrative burden to members (patients in insurance speak) and health care providers.

Here’s what those companies foist on members and providers:

Company specific rules
Prior authorizations
Eligibility procedures
Billing procedures

NOTE: Every insurance company has different rules about these. Trying to keep up with them all is an administrative nightmare!

Company specific rules

Each insurance company has “rules” they want the health care providers (herein called providers) to follow as a provider in their network. These are laid out either in the contract between the insurance company and the provider or in the provider handbook. The rules described in the contract usually require a notification period (defined in the contract) for changes, but, a lot of the handbook rules can be changed at any time by the insurance company. The provider can’t change any rules; it’s a one-way street.

Here’s an example. An insurance company had a rule allowing the Medical Director of the hospitals in their network to call the insurance company Medical Director and discuss inpatient cases whose admission, or some days of the admission, had been denied by the insurance company (herein called health plan). Often, the health plan had incomplete information about the admission and a five-ten minute conversation to their Medical Director and faxing some additional information caused the Medical Director to approve the admission or denied days. One day, without warning, when the hospital Medical Director called the health plan to discuss a case, he was told the health plan changed its rules and would not be allowing the hospital Medical Directors to speak to the health plan Medical Directors, and, if he wanted a reconsideration of a case he had to file a formal appeal. Filing a formal appeal was time consuming, required a series of administrative steps with the health plan, photocopying dozens of medical record pages, etc. This added even more administrative costs to the hospital AND the health plan. The health plan was OK with increasing their additional costs because they know that hospitals will not file formal appeals for a certain percentage of cases because of the workload to file them, and that the health plan would be more likely to uphold the first denial decision using a non-person-to person appeal process. The money saved because of these two things is way more than the salary and benefits of a couple of FTE to manage the extra work.

Members are also subject to health plan rules. If you are in a health plan, you have gotten a member handbook and a “summary of benefits” which are just like in that Libery Mutual car insurance commercial where the woman says the page in her handbook says “blah, blah, blah..” Have you read every page of your member handbook? If you did, did you understand it all, or, are you sure your interpretation of the rules is the same as the heath plan’s?

The one that is most irritating to members is when they get referred to a specialist or a testing facility that is not in the health plan network by a PCP, or when they are referred to an in-network provider but the PCP doesn’t know she has to file a prior authorization for the service with the health plan. The member gets a denial for the service and the bills. For members, rules changes by the health plan usually require, by state or federal regulations, advanced notification. However, these are usually letters sent to members about things they haven’t experienced yet and they forget about the letters. If a member doesn’t like the denial, they have to file a formal appeal, which is just as labor intensive for the member as the hospital scenario above.

All of this adds costs to the system.

Prior Authorizations

Both providers and members hate these. They are a foundational function in any health plan.

There are two kinds of prior authorizations (PA’s), medical necessity and administrative.

For Medical Necessity, the stated reason by health plans for prior authorizations is to make sure providers are practicing according to best medical practices. For some prior authorizations, that’s actually true. Health plans usually have “Medical Policy” committees that review literature and they contract with proprietary companies that have physicians on panels that review literature and offer opinions and recommendations (Winnifred Hayes for example), and they usually get the opinion of an in network physician, then they promulgate a policy. An example would be a prior authorization for bariatric surgery (you know, those surgeries obese people get so they can lose weight). You have to be overweight by a certain amount, and ascertain that you have an obesity related complication, like diabetes, etc. This would all be based on the medical literature’s recommendation of who should get this type of surgery.

This is all well and good except there are sometimes circumstance that aren’t defined in the literature that should be taken into account. Remember in one of my previous posts when I talked about the “bell curve”, that people and the way things impact them isn’t identical for every person? Well, this is also operative with PA’s. Some health plans are more flexible about this than others. Only a Medical Director can make a medical necessity denial and it is considered by most states that Medical Directors doing PA’s are practicing medicine and have to be licensed in the state where they are making these denial or approval decisions. They can actually be sued for malpractice related to their making health plan medical necessity decisions.

Another problem with medical necessity policies is, there are often financial reasons for the wording in medical policies or in their implementation. That’s why, if you looks at several health plan medical policies for the same procedure, they will have different approval elements, even thought the literature is the same.

That’s because the real first reason for PA’s is not to make sure the providers in the network are practicing according to best practices, but to save the health plan money.

And the administrative burden for PA’s is quite high. Obviously, health plans have dozens of staff, mostly nurses (who have been sucked out of the health care caregiving systems) processing PA’s all day long. Provider offices always have a person trying to run down prior authorization processes. The PCP has one trying to generate them and the Specialist has one trying to make sure the authorization has been approved before the patient arrives or when they arrive.

And health plans often just apply the PA’s to hassle providers and members enough that they don’t want to go through the effort of getting a PA. So, whether the patient needs something becomes a moot point. The administrative burden to request a PA results in a deferral of the patient getting the service.

The other PA is called an Administrative PA. This is when the contract between the member and the health plan specifically says something is not covered by the premium the member is paying. These things are variable by health plan. An example would be, cosmetic surgery is not covered under the health plan contract. If a member or provider requests coverage of something cosmetic, the denial doesn’t require any type of supportive medical literature. The member simply didn’t pay for cosmetic procedure coverage. A non-physician can make administrative PA denials since there is no application of medical necessity. Of course, members and providers will still appeal administrative denials, which is labor intensive and requiring provider and health plan resources, adding to costs.

Here are some true stories about PA’s.

This first one is interesting because it ended up the member agreed with the final outcome but the provider didn’t.

A request came across my desk from an Oncologist to have a patient with gastric cancer to go to a major distinguished cancer center for a Phase 2 clinical research trial. A Phase 1 trial determines if the new treatment is safe. A Phase 2 trial determines if the new treatment does something positive (you don’t know it is positive or negative until the end of the trial). A Phase three trial determines if the new treatment is as safe or safer and the same or better than the current standard of practice. Health plans generally don’t cover Phase 1 or 2 trials. This is because they only want to cover things that have a known beneficial effect on a person and you can’t say that for Phase 1 and 2 trials. Plus, it’s a way to decrease medical costs.

Anyway, I got this request. I called the Oncologist who strongly advocated for the patient getting the Phase 2 trial covered. His main selling point was, the patient was relatively young, had a treatment resistant cancer, hadn’t responded to standard therapy and should have a chance to get whatever treatment is available, whether one knew it worked or not. This position actually violates the bioethical principle of beneficence, which, summarized, says a doctor can’t offer a treatment to a patient unless the net benefits to the patient outweighs the harms. You can’t say that for a Phase 2 trial. You have no idea how many conversations I had with Oncologists about this. They just wanted their patient to get something whether it was proven or not. Like I said before, most health care providers don’t understand bioethics.

I then called he patient. His Oncologist had convinced him he should have the treatment in the Phase 2 trial. I asked him if he minded if I called the principle investigator of the trial to get more information. He said that would be fine. I told him I would call him back with what I found out.

I called the principle investigator. He was a really nice guy. He described the protocol to me. It was a three drug combination given over 24 hours in an IV drip. I asked him how many people were in the trial and did he have any preliminary outcome data. He said the patient in my health plan was only the fifth person to be enrolled so he had no data yet. I asked him if there was a study that preceded this one using the same drugs. He said there was! The previous study gave the drugs in an IV bolus (pushed with a syringe over several minutes). I asked him how that study turned out and he said they stopped the study because the patients were dying faster from the treatment than the disease. (See what I mean about Phase 2 trials?) He said they thought if they gave the same drugs in the same doses over 24 hours, they might help without killing people.

I thanked the research physician for being so transparent about his research. I called the member and relayed exactly what I had heard. He immediately said, “Please cancel my request, I don’t want to take that chance.”

This is one reason why there are PA’s.

On the other hand, here’s a Pharmacy one that is the opposite. People get fungus in their toenails. You’ve seen ads about that on T.V. It’s considered cosmetic. It just looks bad. The standard treatment was griseofulvin, an oral antifungal. Griseofulvin has a fair amount of adverse effects including liver dysfunction, requiring lab test monitoring and you have to take it for at least 6 months for it to be effective. In 1996, terbinafine came out. It had fewer side effects, reduced required lab testing, lower incidence of liver dysfunction, and you only had to take it for 12 weeks. The health plan pharmacy department designated terbinafine as requiring a PA which stated the patient had to have an immunocompromising condition, like diabetes or HIV, and the fungus had to be causing a significant irritation to the skin or a bacterial infection in the skin adjacent to the nail. All other requests were considered cosmetic, the nail just didn’t look good. This made the PA a medical necessity PA.

There was NO PA for griseofulvin. That meant a doctor could prescribe it for any toenail fungus infection in any person and without any sign of irritation or infection! The real reason terbinafine was under a PA was BECAUSE IT COST FIVE TIMES WHAT GRISEOFULVIN DID (griseofulvin being generic). No matter how I pressed the pharmacy department pharmacists, they wouldn’t admit that the PA was strictly to save money so they could meet their pharmacy budget drug spend target.

PA’s require appeals processes. There is usually a first level, where a Medical Director decides upholding or overturning a denial, a second level appeal where a health plan Appeals Committee, consisting of health plan staff, who vote to uphold or overturn the denial, and a state Department of Insurance (DOI) Appeals Committee where persons hand-picked by the DOI decide. A state Appeals Committee may have physicians or not on the committee. Sometimes the committee is only citizens with no medical background. With the state committee, it is funded by your taxes! More money going to health care administrative costs!

Bottom line for PA’s: There are good PA’s and there are bad PA’s. You won’t know the difference. If you really think you need something, appeal, appeal, appeal!

I always tried to implement things to minimize the burden on providers and members regarding PA’s. The Finance guys were very resistant to reducing PA’s or making it easier for providers to obtain PA’s (The rationale for the latter is, the more work a provider has to do to request a PA approval, the less likely they will ask. This, of course, keeps the health plan’s medical costs down).

Here are some of things I did in health plans that were pretty much reversed after I left, usually because the Finance guys put pressure on my predecessor.

To determine if you are actually getting cost savings from a PA, you have to have a net cost reduction according to this formula: Amount of money saved with a PA – the administrative cost to do the PA = a positive number. Otherwise, your costs are higher due to excessive administrative costs.

Here’s an example. If it costs $50 on average to process a PA and only 1% of the PA’s are denied, the service with the PA has to cost $5000 for breakeven in the formula above. If the procedure costs less than $5000, you’re wasting administrative dollars.

I had my Vice President of Medical Operations do this calculation annually. If the result was a negative number, we discontinued the PA. This freaked out the Finance guys because they said the Hawthorne Effect was causing the 1% denial rate (the Hawthorne Effect is: when you are watching someone they are more likely to “do the right thing”). To offset this rationale we monitored the frequency of the services every six months. It was rare that they increased. When I left that health plan, they re-instituted all of the PA’s we discontinued, and their costs didn’t go down.

Another thing we did was, we set up a website where the criteria for PA approvals was displayed by PA. The provider would check off which criteria had been fulfilled and checked another box stating that the information provided was true and if not the provider would be subject to fraud charges. If the criteria were met, the provider got an immediate PA approval online. They loved this! Within six months of my leaving that health plan, the website was inoperative. Back to the faxing of PA’s! More money spent on administrative costs!


Notifications are when a provider, usually a hospital or ER, has to notify the health plan within a set amount of hours that a health plan member was admitted there. It has nothing to do with a PA. If you don’t notify the health plan within the specified time frame, the bill sent to the health plan is denied, the provider loses the revenue for that service.

This is essentially an administrative hurdle that health plans know a service provider can’t meet all the time. As a matter of fact, for most notifications, a service provider only meets the time line at most 90% of the time. A health plan can reliably predict they will save 10% of the costs for those services if they implement a notification rule. They often do this without warning. Even if they warn you, they give you a short lead time, knowing you can’t gear up for the notification overnight. I saw this in action in every health plan I was in.

Notifications are simply tactics by health plans to save money. But they cost money in administrative costs, especially to the providers trying to avoid a denial. The health plans just have a computerized edit in their IT system, so it doesn’t cost them much if anything.

Eligibility Procedures

Every time you see a health care provider, they have to check with the health plan to make sure you are a member and you have the needed coverage. More work and cost for the provider.

Billing Procedures

This is obviously sending a bill to a health plan. Nowadays most bills are sent electronically. The bills have to be processed by a “clearinghouse” company, which costs the provider money. The billing requirements can also be different among health plans which can cause confusion, rejected bills, etc. The providers usually challenge any billing rejections, which means there is a department and set of processes for that at the health plan. Just another opportunity to increase costs.

Government laws, regulations/Legal and Compliance

This administrative complexity group has become quite onerous. There are federal and state laws, Medicare and Medicaid regulations (for Medicaid there are both state and federal, Medicare is federal), Department of Insurance (state) regulations, The Joint Commission (accreditation) standards, NCQA (for health plans, etc. It’s especially onerous for hospitals, who have entire departments dedicated to maintaining compliance with all of these entities. Just keeping track of all of the requirements is daunting. There is usually a VP of Compliance, compliance officers, and the largest portion of the Quality Department (another reason Quality is #4), all dedicated to this effort.

And then, there is the site visit. Each government agency or accreditation agency will come and do a site visit, where they spend up to a week combing through the hospital or health plan looking for “deficiencies” or “findings”. If a hospital gets a warning with lead time that a site visit is scheduled, they stop all work except direct patient care and focus on looking for deficiencies and either fix them or hide them before the site reviewers show up. This delays any implementations or improvement projects. The delay is longer if there are significant “findings” because these have to be fixed within a certain period of time, like 90 days, with the regulator or accreditor doing a follow-up site visit to ensure things were actually fixed. Time virtually stops at hospitals until the second site visit.

Health Care Provider “internal” rules and policies

Health care systems, for some reason, like to impose rules on themselves that increase their administrative costs and burden. This always seemed weird to me since they had enough external rules and regulations to deal with.

There are several reasons for this category:

1. Either administrators or doctors dictate a task or a process without analyzing the impact. They just pile on one task on top of another. Soon, the administrative work gets in the way of taking care of patients.

Here’s one showing how rules get in the way of taking care of patients. At a medical group in which I saw patients, there was the “ten minute rule”. If a patient was ten minutes late for any appointment, they had to reschedule. They were pretty strict about this. They weren’t concerned with what patients were going through or why they were coming in. Maybe their baby had a diarrheal BM just as they were getting in the car. Maybe they had a flat tire. Maybe the traffic was horrendous. Didn’t matter.

FYI, I never followed this rule unless, when I was a PCP, a patient was a chronic no-show or always came late. Then we warned them that if they came late and their problem wasn’t acute, they would be rescheduled.

I was seeing same day patients in a clinic when the receptionist came back to tell me a patient was over ten minutes late and did I want her to reschedule. I said, no, tell her I will see her, but she might have to wait a little bit. The receptionist left. My nurse said, “You should make her wait at least an hour before you see her.” I said, “Why would I do that?” She said, “ You should punish her for being late.”

WHAT?!? Punish a patient?

This rule got in the way of taking care of patients. Who knows what might happen to them between the day they were asked to reschedule and the rescheduled day.

2. The Legal Department or Compliance Department institutes tasks or policies to “minimize legal risk”. Most of these raise provider administrative costs.

Here’s a couple.

In any state I’ve practiced, an Advance Practice Clinician (Nurse Practioners, Physicians Assistants) can see patients without a physician present as long as there is some formalized oversight process. In one health care system I worked in, the legal department pushed the rule that a physician must be on site for an APC to see patients. This really played out negatively in Urgent Care. At one point, they didn’t have enough doctors to man the Urgent Care (UC) centers for all the times the UC center were advertised to be open. This resulted in the UC centers closing at times. This rule increased administrative costs (because the higher priced physician had to be present) and they lost revenue when there weren’t enough physicians.

Here’s another Urgent Care one.

In all of the UC centers at one health care system, all of the doctors and APCs had to be Advanced Cardiac Life Support and Pediatric Advanced Life Support certified (ACLS and PALS). These certify practitioners to run Codes (like Code Blue’s). This alone cost money because, since it was required, the UC centers had to pay for the certification courses. These are every two-year certifications. The UC center didn’t run mock codes to keep practitioner skills up. There were rare Codes in the UC centers. Some practitioners who had been there for years had never run a Code. The literature says just doing high quality Basic Life Support (BLS) until a patient gets to an ER has better outcomes than doing codes in the field. Plus, because there weren’t many Codes in the UC’s, the drugs in the crash carts expired and had to be thrown away and replaced with new drugs (costly). Since we were in a big city and the ambulance response times were less than 10 minutes, it was possible to discontinue ACLS and PALS, train staff in BLS and remove the crash carts from the UC centers saving a ton of money. As a matter of fact, when I was in a different state, our legal department advised us that we could do that, and we did.

And here’s validation for ambulance response time. Here’s a table from a study that determined ambulance response times in urban, suburban and rural areas:

The median response time is six minutes and the average was seven minutes for urban and suburban (we were in urban). The worst response times were 12-14 minutes in urban and suburban.

The Legal folks for these UC centers would not even give an opinion about discontinuing these things. Their stance was, it was better to keep doing what was being done. After all, the providers were certified, weren’t they? I’m sure I could have shredded their argument in a court. Me, “Doctor, when was the last time you had to run a Code?” Doctor, “When I was in training.” Me, “Never at the Urgent Care Center?” Doctor, “No, sir.” When was the last time you participated in a mock Code at Urgent Care?” Doctor, “Never.” Me, “What dose of epinephrine do you give a 3 year old with V-fib?” Doctor, “I don’t know, I’d have to look it up. We have posters on the wall of the procedure room to remind us.” Me, “What if the patient is not in the procedure room?” Doctor, “Uh, I dunno. Ask a nurse to run there to find out?” Urgent Care settles out of court.

I’ve had compliance officers tell me I should make my staff do things they were saying we must do because “it was a reg” (a regulation). When I read the regulation, it said nothing like what they wanted me to make my staff do. When I showed them the regulation language and said, “It doesn’t say what you are saying”, they would say, “Well, but the regulator’s intent when they were voting on this was what I told you”. I would say, “Were you there when they voted?” they would say, “No, but I know how they think.”

What?!?? The compliance officer is a mind reader?

Every time this happened I eventually got to actually asking the regulator to validate their regulation, including the “intent”. 100% of the time, it was exactly what the language said in the regulation, not what the compliance officer was advocating. If I just went along with the compliance officers, I’d have increased administrative burden on my staff for no reason. And add administrative costs to the health plan’s premiums.

This one story is even worse.

According to DOI regulations, if a health plan denied a medical service in process, like a patient is getting physical therapy visits and the concurrent review nurses advise the Medical Director that the case doesn’t meet medical necessity requirements anymore, then the member had to be notified in writing that further Physical Therapy visits would be denied. At the same time, as a value-added service (purportedly, to reduce health care costs) health plans offered Case Management services to members, which is not considered a medical service, it’s an administrative service. A compliance officer was talking on the phone to a staffer in the DOI who was a member of our health plan. and had been in case management. As is typical of case management, when the person met their case management goals, their enrollment in case management was discontinued, which was relayed to him verbally on the phone. He told the compliance officer that it would have been better if he had also gotten a letter. The compliance officer came to my staff and told them they had to send letters to members when their case management was being discontinued, that the DOI had told her we must do it. This would have added administrative costs. I de-bunked that one, too. There was no DOI requirement that we inform members who are discharged from case management in writing. We didn’t do it.

You have no idea how many times the legal and compliance folks convinced the administration that we had to do something we didn’t have to do to the point that it interfered with getting business goals accomplished, with no credible foundation for their opinions. This is another flaw in health care administration. Because health care administrators are usually C-players (subject of another post), they defer business decisions to their lawyers, which should never happen. Lawyers are called “counsellors” for a reason. They are supposed to counsel business owners on the risks, “loopholes”, etc. in the laws pertaining to the business situation at hand. A business owner should always make the business decisions. Never lawyers.

Needless to say, the compliance and legal folks didn’t like me.

But I did minimize administrative costs for the health plans, our members and our network providers. Too bad it never lasted after I left.

Why The United States Health Care System Costs So Much – Part Seven – Fraud and Abuse

Why The United States Health Care System Costs So Much – Part Seven – Fraud and Abuse

Health Care Fraud and Abuse. You read about this periodically in the newspapers or hear about it in the news feeds. I’m not going to get into what people normally think of when they think of health care fraud and abuse, you can get all of that at this prestigious website:

National Health Care Anti-fraud Association


First, here are the definitions of Fraud and Abuse:

Fraud – Medicare defines fraud as typically including any of the following:

  • Knowingly submitting, or causing to be submitted, false claims or making misrepresentations of fact to obtain a Federal health care payment for which no entitlement would otherwise exist
  • Knowingly soliciting, receiving, offering, and/or paying remuneration to induce or reward referrals for items or services reimbursed by Federal health care programs
  • Making prohibited referrals for certain designated health services

Abuse – Medicare defines abuse as:
 Practices that, either directly or indirectly, result in unnecessary costs to the Medicare Program.
Abuse includes any practice not consistent with providing patients with services that are medically necessary, meet professionally recognized standards, and are priced fairly.

Commercial health plans basically follow these rules, just insert the health plan name where it says Medicare.

Well, we already know the “priced fairly” element is violated all the time but no one is held accountable.

Anyway, there are several things that go on that could be categorized as fraud and abuse that you rarely, if ever find on the Internet.

First a little background.

It turns out, no one seems to know the full extent of fraud and abuse (F&A). This is because insurance companies don’t know if F&A occurs until they find it. They generally have no systematic, accurate way of finding all of it. A lot of times it is either a whistleblower or the folks doing the frauding get so outrageous you can see an unusual blip in claims payment reports. Most reports on F&A are about recoupments of what was found, not the actual total of what was actually F&A.

So, you’ll read about how much Medicare recovered in a year. You might get estimates of what some actuarial institution think is the amount of F&A going on. So much so that the FBI estimates that F&A billings are generally between 3 and 10% of the total spend. So, since the USA spends about $3 trillion a year on health care you’ll see estimates of between 90 and 300 billion dollars a year. Quite a spread.

As a Medical Director of several health plans, I can tell you this is true. They don’t know how much F&A is going on, just how much they found. Then how much they “recouped”. They had the same problem with provider contracts. They knew, pretty much, when they underpaid a provider, because the providers would file a complaint. They didn’t know when they overpaid providers because; guess what, when providers were overpaid, they rarely complained to the health plan. They played the odds that the health plan wouldn’t figure this out.

Here are some true stories.

There was a physician group in the network of a health plan I worked for who signed a capitation agreement with the health plan. This meant, they got a fixed lump sum per member of the health plan that was assigned as a primary care patient of the physician group. The contract configuration department in IT forgot to shut off the fee-for-service switch in the claims payment system. The physician group got paid both capitation and fee-for-service for six months before someone in the claims department figured it out. It’s hard to comprehend that the accounts receivable folks at the physician group didn’t notice this, getting large monthly checks in addition to their capitation payments. Or how about the physician group’s finance department? Oh, sorry, we’re talking about those finance folks again. Of course they’re going to be happy about more cash coming in. Let’s roll the dice!! They owed $1.5 million after six months.

Most of the overpaid (against their contract) “abusers” are specialists. When you go to their offices and explain how they were overpaid, they act shocked and surprised. I actually started thinking that maybe, at conferences specialists go to, they have a seminar on how to act surprised when the health plan comes and tells them they’ve been overpaid! In one health plan, a specialist group was overpaid for 3 years and owed several million dollars. After the shock and surprise, they then cried about how hard it would be on their business to give the money back. I guess they have crying seminars, too. What really should have happened is they should know when they are being overpaid and report it to the health plan, just like when they figure out that they are being underpaid. That always amazed me how underpayments were easily detected by providers but overpayments weren’t. Always sounded fishy to me.

Here’s another one. I joined a health plan who had been in the Medicare Advantage business for about 2 years. I’d been involved with Medicare Advantage-type programs (they had various names over time, like, Medicare Risk plans) for about 15 years. At the first Medicare meeting I went to, the staff and finance folks were complaining about excess costs in out-of-network hospitals because, since the hospitals were out-of-network and didn’t have a contract with the health plan, the health plan had to pay full billed charges for admissions, ER visits, tests, etc., at those hospitals. The meeting was a steering committee and had legal and compliance folks on it. I told them, my understanding was, if a hospital is a Medicare certified hospital (which >90% are), they can’t accept more than Medicare rates for any Medicare beneficiary. The staff, backed up by the legal and compliance folks, said I was wrong, they had the Medicare directive about this. They had to pay billed charges. I asked them to bring it to the next meeting.

At the next meeting they brought copies of the directive. It was an internal-to-the-health plan document that had nothing directly from Medicare in it. I told them that it wasn’t acceptable; I wanted the actual Medicare rules describing this. At the next meeting they all came in with sheepish grins, as I had been correct. They had the Medicare rules describing exactly what I said (See why I have an issue with these legal and compliance folks?). Anyway, the Medicare staff immediately got reports from finance and proceeded to “recoup” all of the over payments by re-processing the out-of-network hospitals’ claims against the Medicare fee schedule and demanding a refund of the difference between the fee schedule amount and the hospital’s billed charges (which you know now are incredibly whimsical and over-priced). We got millions back.

The thing is, all of those hospitals knew they were being overpaid. They said nothing. When the health plan figured this out, the legal and compliance folks didn’t pursue reporting them to Medicare because they paid the health plan back. That’s sort of like capturing a bank robber who hadn’t spent any of the money and letting him go because you got the money back. Isn’t it?

So you can see why the F&A numbers can be spurious.

Here’s another provider abuse issue that no one can enforce. Some providers have patients come back to their office more often than they need to, just to increase their revenue. You can see this in utilization reports where some providers have visits per year for some conditions that are 3-4 times the majority of the providers in that field (could be physician, Physical Therapist, whichever). No one seems to be able to do anything about this except tell the provider they are variant and asking them to stop doing it. Isn’t that abuse? “Not medically necessary”?

DME (Durable Medical Equipment) providers use this tactic. They get a prescription for oxygen therapy for a certain amount of time. The time runs out and the physician doesn’t renew the prescription. The DME provider doesn’t go to the patient’s house to pick up the oxygen unit and keeps billing the health plan. The health plan doesn’t know the physician didn’t renew the oxygen. Several months later, the DME company picks up the unit, but has now billed the health plan for several months of unnecessary charges. Usually a health plan finds this when they do benchmarking against national utilization statistics. Isn’t this abuse? I’ve never seen a health plan report a DME company for this. Isn’t that “not medically necessary”?

This one is one that really irks me. It’s been going on since I first started being involved with being in capitated physician groups and the insurance industry.

A patient gets admitted to a Psychiatric Hospital. The hospital figures out what the health plan’s hospitalization benefit is. Like, let’s say four weeks. They keep the patient in their hospital for the full four weeks whether the patient needs it or not. They discharge the patient on the last day of coverage. Six months later, the patient again needs hospitalization. The hospital refuses to accept the patient because the patient has no insurance coverage for it.

The Skilled Nursing Facilities and Acute Rehabilitation facilities do the same thing. They know the coverage limits, usually a number of days, that the patient has for their services and keep the patient until they exhaust their benefit, whether they need the services or not, then discharge them. They technically meet “medical necessity” because medical necessity is based on the number and type of services being provided, not the functional status of the patient (which is assessed by the staff in the offending institution anyway, no external party assessment). Result? Wasted health care dollars for, really, unnecessary services.

OK, that’s enough for F&A that’s not considered F&A by health care providers.

Then there are patients committing F&A. What? A patient can commit F&A?

Yup. There are two ways.

The first is, when applying for health insurance that gets “underwritten” (meaning the premium is based on the patient’s personal “profile”, like how many conditions they have, age, gender, etc.) which, in turn, determines the amount of their premium. This will be a common occurrence if the Republican Obamacare repeal and replace plans go through.

What happens is, people lie on their applications to get a better premium rate. This is not an uncommon happening. As a Medical Director, I had to review cases that the F&A unit nurse staff couldn’t determine were true fraud cases. So I saw this personally.

The second is, people give other people their insurance card and some of their credentials, like a driver’s license, and have the other person get health care services on their health plan. This occurs in Commercial plans to some minor extent, but it is more prevalent in Medicaid in states where there is a fair amount of uninsured or under insured folks. Poor neighbors “helping” other poor neighbors.

FYI, the health plans have a lower threshold for filing charges with the Attorney General for patients than for providers. Yes, stricter with their customers than their business partners. Imagine that!

So, that’s my take on Fraud and Abuse. Or, when is fraud and abuse not fraud and abuse?

Or, providers and patients behaving badly.

Why It Is so Difficult for Health Care Systems to Perform to Expectations

Why It Is so Difficult for Health Care Systems to Perform to Expectations

Health care institutions and systems have existed in the US since colonial times. Globally, even longer especially in Europe. You would think that by now, running health care systems would be so refined and reliable that they would beat out the airline and nuclear energy industries.

Regrettably, this is not true. A recent British Medical Journal article cited Medical Errors in the US accounted for ~250,000 deaths and was the third highest cause of death in the US (Medical error—the third leading cause of death in the US.; Makary MA, Daniel M. BMJ. 2016;353:i2139.) This number is larger than the numbers previously reported by the Institute of Medicine because the IOM numbers are inpatient cases only. Mr. Makary, through the use of other information sources, “extrapolated” the data to estimate the rate for the US population, which would include ambulatory deaths.

That would give one pause. But the situation is even broader than this. US health care systems are notoriously inefficient. They are highly reliant on people providing their products. And generally people have a 2 sigma error rate (95% accuracy) when they are doing only one thing at a time. This can fall to 1 sigma (68%) if they are doing more than one thing at a time, especially complex tasks, which are common in health care. There is abundant waste in health care, estimates by the Rand Corporation and the Institute of Medicine being in the range of 30-40% waste. No other industry/business would accept this level of waste. Definition of waste: an act or instance of using or expending something carelessly, extravagantly, or to no purpose.

The US health care system is guilty of all three of the “acts” in the definition.

So, why is this? Why is it that health care systems, which have your LIFE at stake, are so inefficient, wasteful and error prone?

Here are the reasons.

  1. The administrators that run the health care systems are mediocre.
  2. There is a lack of physician leadership.
  3. Most clinical managers in health care are licensed clinicians who never had any formal management training.
  4. Health care management training is woefully inadequate.
  5. Health care management is a task oriented management system vs. a process management system.
  6. The answer to any business/operations problem in health care is: add more people

First, let’s go over some definitions.

What is the definition of a “leader”? Depends on whom you ask!

The MBA-types would probably articulate something close to this definition from the Business Dictionary (businessdictionary.com) – A person or thing that holds a dominant or superior position within its field, and is able to exercise a high degree of control or influence over others. (This definition almost sounds fascist.)

Merriam-Webster definition – a person who leads. (Pretty vague.)

Dictionary.com definition – a guiding or directing head, as of an army, movement, or political group.

Gallup definition from “The One Thing You Need To Know” – Leaders provide a vision and are able to motivate people to follow them to achieve that vision.

Team Technology definition – Leadership is setting a new direction or vision for a group that they follow, ie: a leader is the spearhead for that new direction.

In my experience, the Gallup and Team Technology definitions are more closely related to superior performances.

What’s the definition of a “manager”?

Business Dictionary – An individual who is in charge of a certain group of tasks, or a certain subset of a company. (More concrete than  leader)

Merriam-Webster – a person who conducts business or household affairs.

Dictionary.com – a person who has control or direction of an institution, business, etc., or of a part, division, or phase of it.

Team Technology – A Manager controls or directs people/resources in a group according to principles or values that have been established.

“The main difference between leaders and managers is that leaders have people follow them while managers have people who work for them. A successful business owner needs to be both a strong leader and manager to get their team on board to follow them towards their vision of success.”

The difference between a leader and a manager is important. Not all people in positions of leadership can actually really lead. They act more as managers than true leaders. This is the biggest issue in health care. Who people call (or call themselves) leaders are actually just managing. This creates inertia, because there is a lack of vision.

The administrators who run the health care systems are mediocre.

I’m here to tell you, it starts at the top. And by the top, I mean the C-suites in health care. The administrators. The MBA’s who are supposed to be running the operations of the health care institutions in our country. Essentially, there is a lack of effective administrative and physician leadership in health care. Let’s start with the administrators.

The “MBA-types” running the health care systems and institutions in the US are generally “C-players”. Oh, there’s an occasional B minus- player, and they stand out and appear to be A-players, but, really, they are B minus-players in a sea of C or less players. I have personally never seen such a group of rigid thinking, uncreative, and just plain underachieving people when it comes to administrators running health care systems. Their forte’s are building buildings, starting up new services, like a day surgery center, and manipulating finance numbers to maximize profits. For the rest of running a health care system, they are woefully inadequate.

The main reason for this is, the A and B-players are in industries that require brains and assertiveness and pay a heck of a lot more for it. Unless an MBA is in the upper echelons of a multiregional or national health insurance company, they don’t get paid nearly as well as, say, a Donald Trump business executive, someone on Wall Street, someone at GE, someone at Bank of America, etc. So, the health care industry attracts the next levels down. The ones that can’t make it in the higher-powered industries. The below B-players. The smaller the hospital, the lower the GPA score. Yes, all the way down to the “F” level.

I can’t tell you how many times I’ve sat across a health care administrator’s desk, explaining something four different ways and they sit there looking like a deer looking into headlights. The sad part was, they and their MBA colleagues discount what the clinicians say or propose. Mainly because they don’t understand it. And clinicians are generally smarter than the health care level MBA-types. That’s why they hardly ever get along, the clinicians can see through them. The MBA’s don’t like that.

Now, I’m not saying there aren’t any C or less clinicians, there certainly are! But they don’t control complex services impacting thousands and thousands of patients.

I already told you about the COO who stated we didn’t have to do anything urgently about patient safety because it had been going on for a long time. And the administrator who thought it was unnecessary to train ICU nurses.

Here’s another true story about how these MBA guys operate.

I started a job as the Regional Medical Director of a Staff Model HMO. The Regional Administrator and Regional Marketing Manager were vacant positions. There was a part time HR manager. That’s it, me and a part time HR manager.

Since I had done some contracting with provider offices in another position, I was tasked with contracting with the HMO’s network providers. This was usually part of the administrator’s job. I had never contracted with a hospital before, but I understood their operations. The Contracting Specialist had initially been hired to be the Regional Administrator but was demoted (hence the vacant Regional Administrator position. See what I mean about C-players?). So, the MBA was incapable of doing this work and they tasked me, the DOCTOR, to do it.

The Contracting Specialist for the region and myself sat down with the executives of the first hospital on our list. My strategy was to try to understand their cost structure and then fashion a deal where we both “made out”. I had studied books like “Getting to Yes.” I started the conversation by saying we didn’t want to ratchet down on the hospital fees we would pay to the detriment of the hospital but I also couldn’t afford them a lucrative fee schedule that would negatively affect our health plan budget for health care services.

Now, hospital contracts have two general “sections”: Inpatient and Outpatient. Inpatient was pretty simple in those days, a DRG (lump sum per admission) or a Per Diem (lump sum per day). It was the Outpatient that was complicated because of the multiplicity of services (Lab, X-ray, PT, ER, etc.)

My first category for negotiation was for Lab services. I asked the Execs if they knew the profit margins on the tests in their Lab, like, what was their margin on a Complete Blood Count (CBC). I used to deal with this in my private office, so I knew how this should go. In my practice, I paid a reference lab $10 for a CBC and charged $20 for it, so my margin was $10 or 100%.

The CFO and CEO said they didn’t have that data. I asked them if they knew if their Lab made money for them or lost money. They said they didn’t know. I shifted to the X-ray department and asked the same two similar questions: Did they know the margin for the X-ray tests or whether the X-ray department made or lost money. They said they didn’t know.

I asked them how they managed the financials of the hospital if they didn’t know where in the hospital they were making or losing money. They said they just looked at the total expenditures for the entire hospital then looked at their total revenue stream. If it looked like they weren’t going to meet their financial/margin goal they renegotiated insurance contracts for more money.

Is anyone reading this running a business? Is this how you operate? And remember, I’m the Doctor! There’s no MBA or HCA or any other business school acronym after my name!

They couldn’t target any areas where they were losing money and attempt to stop the hemorrhage. They just did what hospitals are wont to do – it’s called “cost plus”. You just look at the roll up of your expenses and manipulate the price to make a profit margin. This is the main tactic these MBA guys use and is a foundational reason why hospitals and health care systems are so inefficient. Instead of fixing where inefficiencies exist, they just price to pay for the waste.

Here’s another.

I fulfilled my obligation in the National Health Service Corp (NHSC) in 1985. During that NHSC tenure, I was a whistleblower on an administrator who was embezzling money from a “community” owned mini health care system. I had gained access to the financials and figured out what was going on. So, I got somewhat proficient reading financial spreadsheets. Part of the operation’s revenue was a capitated HMO contract. I got to see how this affected the revenue of the health care system, with all of the nuances of a capitated environment, like risk pools, withholds, etc.

In 1986, I was in a different state in a medical group with a significant number of patients as members in a capitated health plan contract. I was in a small satellite clinic, and the office manager would share the financial information with me. The way the plan worked was, we were given a lump sum per patient per month and we had to pay everything except hospital bills. I actually had one woman in a back office who paid the claims, was the Provider Services representative, and the Member Services representative. I did all of the Utilization review and non-hospital provider contracting. Yes, just two of us! Because of this situation, I was able to get a hold of the HMO contract.

After reading the contract, I met with the administrator of the medical group. I told him, my estimation was, the HMO contract was not a beneficial contract for the medical group. There was too much risk for the way the member premiums were being allocated between the HMO and the medical group, i.e., the group was being underpaid. He scoffed at me and told me the contract was a huge boon to the group. I complained to the physician leaders of the group (remember, I was the newbie) who told me the administrator knew what he was talking about, I should stop complaining.

Six months later, the medical group was on the brink of bankruptcy. Another HMO bought out the HMO with whom we had the contract. The new HMO’s initial assessment was, our medical group and three others in their merger and acquisition were on the brink of bankruptcy DUE TO THE ORIGINAL HMO”S CONTRACT!!!

Our medical group actually did go bankrupt. The other three survived because the new HMO revised their contract terms TO PAY THEM MORE FOR WHAT THEY WERE RESPONSIBLE FOR! Our group was too far gone by the time that offer arrived. Thanks to the administrator.

Here’s one more. I have about a hundred, but, you should be getting the point.

I’m in a four-physician clinic that belongs to a large multispecialty group. It’s been losing $500-750,000 a year. It’s only a three-year old clinic. I’ve been there a year and have been at the meetings where everyone is bemoaning the losses. The clinic consists of two Internists and two Pediatricians who are on call every other day and every other weekend. The office hours are 8:00 AM to 8:00 PM Monday -Friday, which means the physicians have to work in shifts: 8:00 AM-4:00 PM and 12:00 noon to 8:00 PM. There are Saturday morning office hours from 8:00 AM-1:00 PM. Whoever is not on call for the weekend staffs the Saturday clinic.

The clinic staff consists of two receptionists (one for the Internists and one for the Pediatricians), 1.5 FTE clerical, 1 FTE X-rays, 1 FTE lab tech and an office manager. There is a nurse for each physician.

The office manager quit. The medical group lead physician came to me and asked me if I will become the Medical Director of the site. I would be responsible for all of the operations and clinical areas. I had to hire another office manager. My main goal besides making sure the clinic ran well was to reduce the financial losses, for which the medical group administration couldn’t heretofore come up with a solution. (The MBA guys)

The first thing I did was start doing busy studies of everything in the clinic, compiling graphs of the frequency of use of services. I figured, if it was a good method for tracking vital signs, it should work for something like this. I had a graph for physician visits by day, session, hour, etc. I had graphs for number of X-rays per session, number of lab tests per session, number of cancellations, number of no shows, appointment slot vacancy rate, etc. No one had tracked these before.

What I found out were things like this:

In the evenings, the X-ray rate was 0-1 X-ray per session (mostly zero). The lab test rate was 1-3 per session (mostly 1-2). The no show, cancellation and vacant appointment slot rate was highest on Tuesday, Thursday and Friday evenings. We lost tons of money on those evenings between staff costs and wasted supplies (supplies in the lab and X-ray departments which had to keep things running despite not doing anything). The Saturday clinic was breakeven for Internists and the Pediatricians made money.

I suggested that the clinic close for the evenings on Tuesdays, Thursdays and Fridays and that there be no X-ray after 5:00 PM on days the clinic was open until 8:00 PM. This was initially met with resistance because the administrator kept saying we were closing at times when there was activity (revenue) opportunity. I finally convinced the physician leaders to try it for six months (they owned the medical practice).

In six months, we were running at breakeven. I guess they don’t teach operations measurement and improvement in those MBA schools.

There is a lack of physician leadership.

This is a national problem. Doctors are generally not admitted to medical schools for their leadership abilities. It is more for their academic achievements and their individual drive. They get no leadership or management training. They are trained to assess, diagnose and then give orders within a task oriented environment.

In my experience, only about 2% of the physicians in the US physician population are true leaders. Some of the other 98% get into leadership positions, but they are far from being leaders. And half of that 2% don’t want to leave their practices for leadership positions.

The thing is, when these true leader physicians get into leadership positions, magic happens. They can be truly transformative. Unfortunately it’s not a common occurrence.

Not that the non-true-leader physicians don’t assume leadership positions. Here’s a figure from the 2017 Medscape Physician Survey about it.

A significant proportion of physicians want a promotion. My interpretation is, they want an escape. An escape from seeing patients (more evidence that being a physician is more of a job nowadays).

And there’s another fact about this:

A higher percentage of women want a promotion than men. Probably part of the same phenomenon where women are part time about three times more than men. Child-rearing and lifestyle. Being promoted means more possibility of predictable work hours.

So, what happens is, you have smart but not leadership skilled physicians teaming up with mediocre MBA administrators. Result = lack of leadership, no vision, no real progress.

What you generally get from the non-true leader physicians is a lot of talking. Intelligent talking, but just talking. They haven’t been trained or have the skills to make administrative/operational things happen. It’s parallel to what happens on the clinical floor. Doctor decides something should be done, tells staff to do it. Someone else has to make it happen. Same dynamic. Except on the clinical floor, someone does it. In administration, usually no one does it. So things stay the same and the physicians get frustrated. Then they start to complain. Next, they are asked to step down for being a curmudgeon.

This sets up the classic antagonism between hospital administration and the doctors. You have no idea how many disparaging comments I’ve heard administrators say about physicians in meetings and conversations. When I was the CMO of a health plan with a physician President, we banned any staff member from saying anything negative about a clinician. It would affect every interaction they would have with a clinician. It’s called transference.

So, here is a typical example of how a clinic meeting goes where the staff always defer to the physicians (It’s like a cast system. Talk to any office staff person who has been at these types of meetings.)

Set-up: Physician office with 6 physicians having a monthly all staff meeting before electronic medical records. I.e., everything is paper.

Office Manager: Ok, folks, the docs have an issue related to test results. Dr. Jones, do you want to present this?

Dr. Jones: We physicians have been having a terrible time with test results being filed before we see them. The medical records staff is filing them prematurely. This has to stop.

Office Manager: How many of you are having this problem?

All physicians raise their hands.

Dr. Jones: Well, I know how we can fix this. Starting tomorrow, every test result that comes in must be put into an envelope with the patient’s PCP’s name on it and the envelope has to be stamped with the date. A new envelope per physician is delivered every day. That way, all the test results will be distributed daily. The physician will review the test results, put them back in the envelope and put it in their out box to be filed. Any questions?

Guess what happens the next day? New tasks. No measurement. No one has analyzed the process to see what the root cause was to having tests filed before they get to the physician. This is how physicians “lead”. More of an authoritative manager type leadership.

And most Medical Directorships are filled with non-leader physicians.

Again, Non-leader physicians + mediocre administrators = minimal progress.

Most clinical managers in health care are licensed clinicians who never had any formal management training.

This is really a sin.

Nurses, Physical Therapists, Respiratory Therapists, Radiology Techs, etc. do not get any management training to get their licensure. None, Nada, Nyet. Is it any wonder that health care operations don’t work well, since these folks do become the managers?

Even when you have someone with manager or leader aptitude, health care systems have not invested in adequate management training. What usually happens is a licensed caregiver in a given field is perhaps more passionate or more conscientious than the others in his/her department. There is manager turnover and they promote the conscientious person. Often, they just start their new manager job without any training. Maybe there are some cursory classes they can take. There are never any mentoring programs. These promoted clinicians either sink or swim in their new jobs. If they sink badly, they get fired (a proficient worker now out of the system). If they tread water they are left alone, even though performance is minimally adequate. If they do well, they get promoted again, usually eventually over the limit of their competence (The Peter Principle) but by then, they’ve been around so long, and everyone else around them is a mediocre manager, they maintain their positions. Not much progress. Operational difficulties. No vision. Again.

I hired a person to oversee a non-clinical function in a health plan. She had spent several years as a manager in the banking industry. During her interviews and orientation she related the training programs the bank had put her through. They were very organized and comprehensive. And many hours/days long. I’ve never seen anything in health care that got near what she got for management training. The health care system wouldn’t give her credit for the years she was a manager in the bank when they determined her compensation because “it wasn’t in health care” even though she was the best trained manager I ever hired. Go figure!

Health care management training is woefully inadequate.

I’ve mentioned this before, including the above, so I’ll keep this section short.. Health care training programs for managers are superficial and lack validation from something like the Kirkpatrick Model for proving their effectiveness. As I said before, if there is a “training program” it is some degree of classroom activity (education, not training) with no follow-up and no mentoring program. Then, when a manager has “bad numbers” like low employee satisfaction or financial numbers, they get disparaged by administration and put on corrective action plans, when the corrective action plan should be the administration actually training managers.

Health care management is a task oriented management system vs. a process management system.

I’ve talked about this in previous posts. As in the office staff meeting above, “improvements” in health care systems are usually the addition of tasks that have not been validated or proven to be an improvement. Usually a manager just comes up with an idea and wants it implemented the next day.

[There’s a Quality Improvement saying, “Every improvement requires change, but, not every change is an improvement.” You have to prove that. Some changes make things worse.]

I’ve actually been in high level C-suite meetings where a performance or operational issue came up where a senior “leader” who has no knowledge of the department, its processes or its issues, blurts out a fix and wants it implemented by the next meeting! Not “could we have a diagnostic assessment of what is causing the issue with options for improvement” or anything like that. But it has to happen because he is a senior “leader” giving an order. Kind of a culture of fear issue.

Health care administrations do not understand process at all. They don’t want to take the time to break processes down and redesign them to be efficient and reliable. They don’t understand process reliability or human factors, even though the vast majority of interactions with patients are human to human.

A health care system I was in actually had a person, who was nationally known from a health care “improvement” consulting organization, give a talk about health care process reliability. It was the most superficial, uninformed presentation I have ever heard about the subject. And everyone at the presentation was sooo impressed with the presentation. Just ignorance, really.

If you really want to know about what you need to create and maintain a highly reliable organization with reliable processes read “Becoming a High Reliability Organization: Operational Advice for Hospital Leaders”, AHRQ Publication No. 08-0022, April 2008. Now that’s the presentation that should have been given. I don’t know if any health care system has adopted any of what is in this treatise. It’s almost ten years old now.

The answer to any business/operations problem in health care is: add more people.

This is the result of all that you have read above this paragraph. Since the Health Care Systems’ administrations are incapable of building or redesigning health care processes to be reliable, non-error-prone, or efficient, the only way to keep things together is to hire more people to maintain the workarounds and necessary human effort to over come the inefficient processes so they still, at least, function. Like adding scribes when the EMR is so non-intuitive for physicians to enter information or find things in it. When there is a way to do it (e.g., without scribes) by using available technology and redesigning the practitioner work. Here’s how this could go relative to scribes:

Eliminate the PC in the exam room. No monitor, keyboard or mouse.
Utilize a large Microsoft surface (13-15 inch) or an Apple iPadPro.
The provider wears a headset connected to a real time dictation application, like Dragon.
The provider carries the tablet from room to room. Since most practitioners use 2-3 rooms, there is less cost for hardware since you only need one tablet per practitioner instead of 2-3 PC’s with keyboards and mice.

The practitioner enters the room, introduces him/herself and starts taking a chief complaint and history. In real time, like a pathologist does while doing an autopsy, the practitioner dictates the history, asking the patient if he/she is relaying the information accurately. Then the practitioner does the physicial exam, dictating the findings in real time through the headset. The practitioner then sits next to the patient and they both view the tablet while the practitioner and patient develop the care plan, the practitioner orders any necessary tests, treatment or medications. The practitioner has the patient validate that what he/she has dictated is accurate and that the patient is in agreement with the plan, then discharges the patient in the EMR in real time.

No scribe.

Here’s the final story of this post. Still about throwing people at operational problems.

I’m a VP/Associate Professor of Medicine at a Family Practice Residency Program. The billing office Director comes to our upper management meeting complaining that they are missing the encounter information to bill Medicare, Medicaid and insurance companies for things that the residents did in the hospitals. This was a large amount of revenue lost each month. The President of the program tasks the Dean of Academic Affairs to convene a group to solve the problem. The Dean says he will do that, but he knows how to fix this already. Since I had been trained in Process Improvement in a previous position in another organization, I volunteered to be on the “team”.

We meet a few days later in a conference room. I had invited key individuals that could be involved in the billing for services process. A resident, an attending, billing office folks, etc. The Dean comes in and says, “Thanks everyone for coming, but, this is going to be a short meeting because I know how to fix this. We are going to hire a person to go around the hospital every day and ask the residents what they did that day and fill out encounter forms.”

That was like waving a red cape in front of a bull for me. So, I said, “I’m sorry, we are not agreeing to adding a person until we understand exactly what is going on now.” After a few go-rounds with the team members, the Dean was overruled and we started mapping the current process with a start point at “the resident does something billable” to an end point of “the bill is submitted for payment.”

I won’t get into every detail of the current process or the revised process, as that would be too tedious and long, but, the front end process went something like this:

Every Monday morning the residents had a resident’s report and education session. During that session, on a rotating basis, one of the residents would run around the room and ask the residents what they had done to patients FOR THE PAST WEEK! Now, physicians are smart, but, thinking they can remember every billable service they did for a week was pretty naïve. The resident collating the data had a sheet for each resident which once completed, he handed in to the business office. These forms went through the business office processes to generate bills.

At the same time, residents had to submit proof of their doing certain procedures (like spinal taps) in order for them to meet certification requirements to become board certified. What they were doing currently was jotting these procedure down on scraps of paper or in a pocket notebook with the pertinent patient and procedure information and the date. At the end of the year they would dump this information on the administrative staff to organize and data enter it into a residency program database. This data would be retrievable at time of certification.

We spent two hours mapping the current process. It had swirls and side tracks and tangents. After two hours, it looked so disorganized and bizarre that the whole room burst out in laughter, probably to avoid crying! During the next hour the team devised this new system

A 5×7 “patient card” with all the common service procedures and their CPT codes would be printed in bulk and distributed to hospital wards at the nursing stations.

When a resident admitted the patient, they would stamp a card with the patients hospital card information (they looked like credit cards) and check off the procedures they did at admission.

When the residents had their daily attending rounds the next day, where they presented the cases of all of their patients daily to an attending, they would hand the card to the attending, who thereafter kept the cards in a deck. As the residents gave report on their patients, the resident would recite the services provided during the past 24 hours including the CPT code (this taught the residents CPT coding, an extra benefit!). The attending checked off the CPT codes (the resident never touched the card after handing it to the attending).

When the patient was discharged, the attending put the completed card in a locked box in the daily resident’s report room. Every day at 3:00 PM, someone from the business office would unlock the box and carry the cards to the billing office where the card went through the revised billing office process. At the same time, the procedures required for the Family Practice certification were also gleaned from the same cards and data entered into the programs certification database.

This resulted in three things:

Billings soared! The President was almost gleeful about it.
The residents learned about coding.
The residents didn’t have to independently track their documentation of procedures needed for certification.
The administrative staff didn’t get a dump of procedure information in big boluses once a year.

The funniest thing about this experience was, the Dean didn’t want to present this to the residents. He was convinced he would be lynched by the residents. So, I volunteered to present it. At the end of my presentation they said, “What? I only have the card on day one of an admission?” Me, Answer, “Yes!” Residents, “And I don’t have to keep track of my procedures?” Me, Answer, “No!” The next thing was a standing ovation! The Dean missed an incredible engagement opportunity!

No staff hired…..

Yes, it can be done.

It’s not currently in health care systems’ DNA.

And as another real life example, a recently published article is Health Affairs Blog, a group of folks from the University of New Mexico is convincing people, and has managed to get the NM Medicaid program to mandate hiring and paying Community Health Workers (CHW) to deal with social determinants of health. They report no data that the program actually does anything. Now, I’m a proponent of CHW’s and Promotora’s, but, to disseminate a model and get the model mandated requires some hard data that it is doing something, not just a warm an fuzzy feeling about it, because these CHW’s cost money. There should be quality and financial outcome reporting either included in the article or as a reference in the article. According to the article, the only data they have is the social determinant data they collected. Read ithe article for yourself. Zero validation of it doing anything. And they actually say it’s successful:

“Acknowledging the success of the CHW model, in 2017, New Mexico Medicaid required all managed care organizations to increase their CHW contacts with clients by 20 percent.”

As is usual in health care, they don’t actually report the success other than adoption. Just add people. Push for adoption. Same ol’ same ol’….

Diffusion Of Community Health Workers Within Medicaid Managed Care: A Strategy To Address Social Determinants Of Health

Addendum September 21, 2017: Here’s another example. in an article in the Annals of Family Practice (“The Chief Primary Care Medical Officer: Restoring Continuity,  Noemi Doohan,  MD, PhD, Jennifer DeVoe,  MD, DPhil; ANNALS OF FAMILY MEDICINE, VOL. 15, NO. 4 ✦ JULY/AUGUST 2017) the authors propose adding a “Chief Primary Care Officer” to promote improvements in continuity of care and communication across  caregivers to improve patient care. So, let’s just add another $300,000 C-suite position to the Chief Executive Officer, Chief Quality Officer, Chief Information Officer, Chief Operations Officer, Chief Medical Officer and Chief Nursing Officer. The first question is, what are all of these other “officers” doing? What is needed is systems improvement not another expensive C-suite Executive. If every hospital system in the country (including “solo” hospitals) hired a CPCO, as these two naive MD-PhD’s propose, the cost to the US would be around one billion dollars, using $250,000 as a salary and benefits estimate. Really? How about spending that on designing reliable health care processes.

What Should Be The Number One Priority for The US Health Care System

What Should Be The Number One Priority for The US Health Care System

On the front page of this blog-post website I list what the priorities are for Health Care Systems in the US. I didn’t poll anyone. I didn’t have to. I’ve lived it for 40 years. In case you can’t recall the list, here it is:

  1. Money – Profit, Margin (even if they are “not for profit”)
  2. Growth – more opportunity for revenue = more profit potential
  3. Patient Satisfaction – this is based on niceties, not clinical (I have a pretty hospital room, for example)
  4. Clinical Quality -you getting the best care possible
  5. Employee Satisfaction – includes the physicians and APCs who have privileges at the hospitals
  6. Charity/uninsured care – the reluctance to have to negatively affect the health care system’s profit margin for these folks

A lot of my previous posts relate data, literature and personal experiences that support my list. And, if you don’t believe my list, maybe you’ll believe Quint Studer, who was President of Baptist Hospital when they won a Malcolm Baldrige Award. FYI, Quint got his masters degree in Special Education, not an MBA. Maybe that’s why he was so good (refer to my post “Why It Is So Difficult for Health Care Systems to Perform to Expectations”). And, so you won’t think I paraphrased or altered Quint’s writing in his book “Hardwiring Excellence” here is a photo of the page for you to read:

So, what should be the number one priority for a health care organization or person? Do I really have to ask?

It should be YOU, the patient!! Of course!

If it were you that was the number one priority in health care, what would that look like? I can tell you, it would be a lot different than it is now. How? There would be a relentless focus on creating the most reliable, error-free and efficient health care processes (the processes you are in related to your health status) as humanly and technologically possible. It isn’t that way now.

Here are some reasons:

Safety is one step away from the worker

“One step away” means, for the vast majority of safety failure events, it is the patient (you), not the “caregiver” that gets harmed. This is very, very different than other industries where, if there is a safety failure event, the worker gets harmed (maybe solely or along with customers). Examples:

In a chemical engineering company, if there is an explosion because two gases or liquids are accidentally mixed together, it’s the workers who get killed or maimed.

In the nuclear energy industry, if there is a sudden nuclear facility meltdown, the workers are among the dead and harmed (e.g., Fukushima)

In the airline industry, if the plane goes down, the pilots and flight attendants are killed and harmed along with the passengers.

In the construction industry, if there is a construction accident, it’s the workers who are killed or maimed.

In the coal mining industry, if there is a mine explosion or collapse, it’s the miners who get killed or maimed.

So you see placards in these places of work that say something like: “264 days without an accident” or “307 days without a worker’s compensation claim”

In health care, it would be seconds, not days between defects harming patients. These are called Adverse Events. The main reason being, 99% of the time, it is the patient who is killed or injured/harmed, not the worker. The staff has no personal “skin in the game”. You are likely to be much more diligent to prevent a harm event if you are at risk of being killed or harmed.

Now, there are some instances where health care staff are personally at risk. It is usually related to getting an infectious disease, like HIV. In these cases, there are some pretty good risk avoidance devices and attempts at procedures, like Universal Precautions (gown and glove before doing certain things) and IV catheters and syringes that have been engineered to prevent a staffer from sticking themselves with a needle.

These, worker related events, are much simpler problems to address than the complex nature of the multiple exposures a patient gets when they are in the health care system. And their number of worker events is miniscule compared to patient related adverse events. Examples:

The patient is the one who loses their good leg when a surgeon cuts off the wrong leg.

The patient is the one who is harmed when a sponge or instrument is left in their body during a surgery.

The patient is the one who is killed or harmed when they get an overdose of a medication or the wrong medication

The patient is the one who is harmed when a patient doesn’t get what they need or they are misdiagnosed or their test diagnosing a lethal disease gets lost.

In all of the above, the worker is unaffected. Remember the story in my post about Patient Safety? The child died. The staff lived and were unharmed.

In my experience, while trying to get health care systems to be relentless about how they actually deliver the care, this is what gets in the way. The worker isn’t harmed. Remember the COO of a system saying he didn’t think anything had to be done urgently to address patient safety because the errors had been going on for a long time? He wasn’t the one affected by adverse events. I’m betting you wouldn’t have said something like that, since you’re the one who would get killed or harmed.

The funny (or sad?) thing is, you only need a few mortal (or not even mortal) events in other industries to get the whole nation up in arms about a company (not even the whole industry). Remember when Ford Explorers were rolling over, with people killed? How about the Takata airbags (they are going bankrupt, I read)? How about Chipotle and the diarrhea (they haven’t recovered from that yet)? The Chevy Cruze ignition switch problem killing some people? Remember the national outrage about those? Chevy had to stop selling Cruze’s until they fixed the ignition switches.

There were less than 25 people killed in each of these cases. In health care, in hospitals alone, there are 210,000 people A YEAR dying of process errors. (“A New, Evidence-based Estimate of Patient Harms Associated with Hospital Care, John T. James, PhD.;J Patient Saf & Volume 9, Number 3, September 2013)

That’s 575 people A DAY!! A Southwest Airlines 737 jetliner holds 143 people. That 273 people dying a day is the equivalent of four 737’s crashing a day. (Who thinks Southwest Airlines would still be in business if four of their 737’s crashed per day?) With no significant reduction in 15 years! And that’s only DEATHS in the hospitals. According to an article in the September 18, 2013 in BMJ Quality & Safety, 43 million people are injured worldwide each year due to unsafe medical care!!!

Here’s an analysis done on patients in US Hospitals on the prevalence of adverse events (“‘Global Trigger Tool’ ShowsThat Adverse Events In Hospitals May Be Ten Times Greater Than Previously Measured”; David C. Classen et al; Health Affairs, April 2011 30:4):

“Overall, adverse events occurred in 33.2 percent of hospital admissions (range: 29–36 percent) or 91 events per 1,000 patient days (range: 89–106). Some patients experienced more than one adverse event; the overall rate was 49 events per 100 admissions (range: 43–56).”

That means 49% of hospital admissions have an adverse event. And it’s not piquing anyone in the US or  in heath care’s sensibilities.

Conclusion: The fact that it is the patient and not the worker who is at risk for the vast majority of deaths and harms in health care from errors and defects is a hindrance to creating reliable, error-free health care processes. The worker is one step away, not at risk.

Reliability is cultural; health care doesn’t have that culture

Even though the tools are available to create reliable processes in health care, the culture must propel that. Here are excerpts from the AHRQ treatise on reliability, “Becoming a Highly Reliable Organization”, 2008:

“At the core of high reliability organizations (HROs) are five key concepts, which we believe are essential for any improvement initiative to succeed:

  • Sensitivity to operations. Preserving constant awareness by leaders and staff of the state of the systems and processes that affect patient care. This awareness is key to noting risks and preventing them.
  • Reluctance to simplify. Simple processes are good, but simplistic explanations for why things work or fail are risky. Avoiding overly simple explanations of failure (unqualified staff, inadequate training, communication failure, etc.) is essential in order to understand the true reasons patients are placed at risk.
  • Preoccupation with failure. When near-misses occur, these are viewed as evidence of systems that should be improved to reduce potential harm to patients. Rather than viewing near-misses as proof that the system has effective safeguards, they are viewed as symptomatic of areas in need of more attention.
  • Deference to expertise. If leaders and supervisors are not willing to listen and respond to the insights of staff who know how processes really work and the risks patients really face, you will not have a culture in which high reliability is possible.
  • Resilience. Leaders and staff need to be trained and prepared to know how to respond when system failures do occur.”

None of the above bullet points have anything to do with tools (like The Improvement Model, FOCU-PDCA, Lean Six Sigma). They all relate to what should be in the hearts and minds of health care leaders, managers and staff. Unfortunately, in health care, these things are not. The “corporate” leaders are preoccupied with Profit and Growth, the managers are executing tasks, the line staff are executing tasks, the providers are looking at individual patient issues, patient by patient (myopic view of the system).

I actually presented a synopsis of this AHRQ treatise to the board of a large physician group, hoping to gain some motivation from the group to start a cultural shift toward reliabilty. The comments from the meeting evaluation went something like this,” I don’t know how this pertains to me”. Enough said.

It turns out, even if you, as an individual, have the predispositions listed by AHRQ above, they are quickly suppressed by the leaders, managers, and the systems in health care. You generally “give up” as no one listens; no one in authority is willing to change their paradigm. You get worn down. You have no idea how many times I’ve heard that from conscientious staff and providers who decide they just don’t have the energy anymore to fight the resistance from “the higher ups” and they fall back in line with the culture of “it is what it is”, their hopes dashed. Back to “it’s just a job”.

This is different from a company like Toyota. Sakichi Toyoda was the founder of what we know as the Toyota automobile company. Sakichi actually started with loom weaving. He also came up with two basic Lean concepts: The 5 Why’s and “Pulling the Andon cord”.

[Side bar: When I started a medical director position in a relatively large hospital system in 2000, they hadn’t heard of the 5 Why’s. That’s how naïve health care was/is]

Sakichi essentially created the Toyota culture. The story goes, Sakichi had a building filled with looms on which women wove cloth. At times, a loom would mis-thread the fabric. The weaver would weave for a while without stopping and notice the mis-thread when that section was completed . She would take the fabric with the defects and throw it in piles outside the back door of the building. Sakichi noticed this and clearly saw this as waste, which was costing him money (which related to: he had to charge more per piece of fabric to make up for the waste). He got all of the weavers together and told them to watch for the mis-threading and as soon as they noticed the issue they should stop work and call for help. Then someone would help figure out what made the loom mis-thread and fix the loom. Stopping and asking for help is called Pulling the Andon cord; the 5 Why’s are used to figure out what is the root cause of the problem.

That was over 100 years ago. Reliability and minimizing waste is an inextricable part of the Toyota culture that has been there from the start. The Toyota company is one of the lowest defect companies in the world. They created Lean, which is a sophisticated defect reduction, efficiency improvement system.

The reliability mentality is absent or minimal in almost all health care systems. There are a few institutions that get close. Virginia Mason in Seattle seems to have taken Lean to heart. Intermountain Health Care in Salt Lake City UT has been using The Improvement Model for 30 years. Most health care organizations haven’t shown that they can sustain that type of improvement culture for that long. Geisinger Health Care is another that actually warrantees some surgeries. Most of their efforts are hospital based.

Unfortunately, the above organizations are outliers. And once you get out of organized systems like the above, reliability thinking basically falls off like a cliff. The systems in the ambulatory care environment are woefully unreliable.

A recent article in JAMA Surgery is telling in its title – Safety for the Surgical Patient—What Will “Move the Needle”?; JAMA Surgery July 2017 Volume 152, Number 7. They are admitting that nothing has changed in the surgery arena since the Patient Safety movement began in 1998.

The management systems in health care can’t integrate and sustain tried and true reliability systems, strategies and tactics.

This is the main reason health care systems can’t sustain process improvements intended to increase reliability in health care processes. The management system is not aligned with and the managers are not (and often can’t be) trained in process management. The management system is task oriented, the managers come from task oriented environments and jobs/positions, and task completion is valued by health care systems. Not so much for process management.

As a certified Lean Six Sigma Green Belt, I’ve either led or been a participant on many process improvement projects whose goals were to create highly reliable clinical processes. Here are the issues that inhibit successful implementation and sustainment of highly reliable processes:

Senior Leadership doesn’t understand and isn’t completely bought into what it takes to create and sustain changes that support reliability. They generally don’t put the time and attention into making things happen and holding the accountable managers accountable. They are used to something more tangible, like, re-contracting for a better price for knee replacement implants. They can see an immediate savings/ROI with that. With projects like Lean or Six Sigma projects, the improvements in reliability and quality are much less tangible and the lead-time for ROI is often 12-24 months. Sometimes, there is no financial ROI, the positive outcome is less morbidity and/or mortality.

Health Care Leaders usually have zero process improvement experience or training. Their answer usually is , “We have committees for those things”. And they never attend those. So, process improvement becomes just something going on in the organization that “those clinical and quality folks do.” Senior leaders pretty much give lip service to quality improvement. They like it, but to them, they should “just know it’s going on”. They like to brag about it at conferences. That’s about it.

Rule #1: If Senior Leadership is not 110% invested in process improvement, very little process improvement will occur, be successful, or be sustained.

Here’s an example of how leaders “support” process improvements in health care.

I’m a Medical Director at a hospital. I’m a Lean Six Sigma Green Belt helping a nurse manager get her Lean Six Sigma Green Belt. There is an issue at the hospital related to Code Blue’s and “Pre-code Blues” (when a staff person or family member notices a patient looks bad but hasn’t coded). There are too many. The hospital has a “Rapid Response Team” (another waste of money) but they haven’t tracked any KPI’s (Key Performance Indicators) to say they are at all effective.

We used the nurse manager’s floor for the “Beta” project. The nurse manager identified a team, which included a person from every job position on the floor and a hospitalist physician. We met every Wednesday at lunch time in their staff room for six months. The main assessment findings were, there was no standardization of anything related to “periodically assessing patients” including when to escalate. No standard forms, no standard process, no standard communication, no standard “triggers” (when to call the charge nurse or Rapid Response Team), no standard time sequences. Nothing standardized. Each staff person did what they did according to the way they wanted.

The team standardized everything. New standard forms for documenting vital signs. Clear triggers for Nurse Techs to call nurses and within a specified time box. Etc. The KPI for the project was unexpected transfers to the ICU for worsening clinical condition. These fell 43% and sustained there for a full year while I monitored the process.

Now, I had to calculate an ROI, because, if I couldn’t get a positive ROI, we couldn’t implement these changes in any other hospital floor. That was what the leadership valued over everything else, an ROI.

I had to partner with a finance manager to calculate the ROI (Oops, here comes trouble!) When we did the ROI, for one year for one hospital floor, the project saved $750,000 in avoided ICU costs, including shorter lengths of stay in the hospital since the patients in the 43% didn’t spend any extra days in an ICU. I thought, “This is great!” But, not so fast. The finance manager said,” Wait, look at this line item here on the financial analysis.” She pointed to a negative $50,000. I said, “What’s that?” She said, “That’s the impact to the hospital’s bottom line.  (Recall the Studer paragraph and bottom line.) That’s the ROI to the hospital.

It turned out, the ICU days the transferred patients were using, when they had to get transferred there, had a higher contribution margin (the net a hospital makes) than a regular floor bed. For the hospital, the project reduced their revenue, hence the negative number.

So, I said, “But the patients and the payers are spending $750,000 less a year, we’re making care more affordable.” She said, “We’re not concerned with what others are saving. We don’t know what they do with their savings. We don’t get any of it. You can’t implement this anywhere else in the hospital”. I said, “But, the patients in the 43% have less morbidity. They are healthier! Doesn’t that mean anything?” She said, “Sorry, that doesn’t count with us. You have to produce the money to spread it.”

Me being a person who doesn’t quit, I started thinking about it. What came to mind was, if we weren’t transferring patients to the ICU, then the ICU has more capacity (my Lean Six Sigma mind kicked in). I had calculated the “number of ICU days avoided” as part of my dashboard. I went to the Bed Management (the department that accepts transfers from smaller hospitals and doctor offices) director and asked what the demand was for external ICU admissions and how many did we decline in the last 12 months. He told me they declined 1200! That demand was way higher than the capacity we generated, so, I could count every avoided ICU transfer day in a revised financial analysis. And, on top of that, a transfer to the ICU from outside the hospital had a higher contribution margin than a transfer from the floors. I met with the Finance manager again and had her include this in the calculations. It came out to a positive $250,000! We spent the next year spreading the standard work.

But you can see what’s important to the leadership. Not your health status. And not really the reliability of the process, just the money saved.

The health care management systems and their upper managers do not know how and won’t accept doing what it really takes to implement and sustain a process improvement. Health care leaders think you do a project for, say, three months, re-design a process, do a show and tell at the completion of the project and hand off the newly designed process to the manager of the department and move on to the next area. They think that the manager and staff can execute the tasks in the new process flawlessly at that point in time. Spending more time on that is a waste of time. (As a matter of fact, some senior leaders think the team process for creating the new improved clinical or business process is wasteful. I’ve actually been at meetings where the senior leaders bemoan the fact that the staff and managers are spending part of their “paid time” “sitting in a conference room”. They think that is so wasteful they calculate the cost of the staff’s salaries spent in improvement activities and call it a waste of money. They don’t get the fact that the people doing the work usually come up with the best ideas of how to fix the processes. They’d rather pay a consultant to come in and just tell the staff what to do (just give them the tasks)).

In true process improvement cultures, they understand that, for up to six months after a significant process improvement, the managers of the work floor should spend 50-75% of their time on the work floor auditing what the staff are doing and encouraging them to keep doing what was implemented during the project. This “habituates” the staff to the new way. If you don’t do this, the staff (and the manager) regress back to the “old way”. In the Toyota Production System, this is called “standing in the Ohno circle”.

The other thing is, managing a process is very different than monitoring task completion. There is always a “dashboard” of Key Performance Indicators (KPI) that have to be measured and monitored by the manager. If a KPI performance degrades below a pre-set value, the manager is supposed to take action to get the KPI back to expected performance levels. Health care managers: a. don’t prioritize the measurement system as being important, b. are distracted from monitoring or measuring because they are already overwhelmed with tasks (often meaningless, legacy tasks), which are the things they get evaluated on for raises, and c. are not adequately trained in the skills and tactics necessary to create an action plan to “revive” a degrading KPI.

Rule #2: Before embarking on process reliability improvements, make sure you have either adequately trained managers to process manage or have sufficient resources to assist managers in process management until they are proficient at it.

Rule #3: Assess and remove no or low value tasks from managers who are now accountable for process improvement and process management.

Here’s an example of how this currently plays out in health care.

I was a Medical Director of a hospital. Several years before, the Endocrinologists decided they didn’t want to be on call or take care of inpatients (See “Why Physicians Prefer Doing Shift Work”). They changed their hospital privileges to Consulting only.

Probably the most critical, emergent, serious condition in all of Endocrinology is Diabetic Ketoacidosis (DKA). The Endocrinologists had delegated care of DKA to the Intensivists (These are physicians who only take care of patients in Intensive Care Units minus Cardiac Care (the Cardiologists do that)). It’s like a Cardiologist delegating heart attacks to non-Cardiologists. I could never figure that out, why Endo’s would want to do that, but, it’s got to be “lifestyle rules, man!”. I actually had an Endocrinologist tell me he was happy that he didn’t get awakened in the middle of the night anymore with reports on blood sugar, potassium and bicarbonate readings. I seriously don’t get it.

I have to stop the story here to give you a little insight on how a lot of Specialists think. As a Primary Care Physician, I saw this a lot and had to challenge Specialists about the following phenomenon. Now, Specialists are really smart people. At the same time, they are only generally knowledgeable about the little stripe of Medicine in which they were trained. And they read their specialty journals, which can have very early experimental articles in them. Some of the articles are about experiments on animals. The Specialists reading these articles will, in their minds, extrapolate from these very early experiments to their (and often my) patients (you) without a Phase I, II, or III clinical trial. I actually had a Neurologist tell me what a goal blood sugar should be in a stroke patient because she read an article about the level of glucose in rats’ spinal fluid compared to their blood sugar. Really, a rat!

OK, so, thinking within that context, the standard of care for DKA is IV fluids, careful attention to blood sugar and blood electrolytes and an IV insulin drip. It’s been the standard of care for decades. The insulin drip allows you to adjust the dose of insulin commensurate with the blood sugar level and degree of acidosis (amount of acid in the blood). The Intensivists had decided to use a long acting sub-cutaneous insulin, like insulin glargine instead of an IV insulin drip. The package insert, Pharmaceutical company monograph and even the TV ads for the long acting insulin clearly stated “Not to be used in Diabetic Ketoacidosis”.

The Intensivists basically said they could ignore this recommendation because, theoretically (the operative word), since the long acting insulin created a steady, linear amount of insulin in the blood of ambulatory diabetics, just like the IV drip does in the hospital, they could use it in DKA, it was the same thing. ……Theoretically.

See, they were extrapolating from an ambulatory environment with a stable patient to an inpatient environment with a critically ill patient.

Well, I had to actually do a lot of Columbo work to track down the actual research that leads all long acting insulin Pharmaceutical companies to clearly state that no one should use their long acting insulin in DKA (they all say that, even the new ones like Tresiba). It turns out, a very well respected physician researcher at an academic institution started a study to see if long acting insulin (the exact one the Intensivists were using, too) could be used to treat DKA. But, I couldn’t find an article published on his findings. So, I emailed him and asked him where the article was published. His answer was, there is no article. They had to stop the study early because too many study patients experienced severe hypoglycemia (low blood sugar). They deemed long acting insulin inappropriate for treatment of DKA.

So, with this information in hand, I had to get the Vice President of Medical Affairs to tell the Intensivists to stop using the long acting insulin and use the standard of care: IV insulin. Really, they wouldn’t stop just based on the evidence.

But, now, we had to re-create a reliable process and a set of tools to make sure the DKA patients got the standard of care, since the process had deteriorated due to the physicians deviating from it for some time. We did a Lean Six Sigma project and installed the new process. For three months, I personally went to the ICU and did a chart extraction audit on every single DKA admission to the hospital. This created a score and documented any process errors that could be addressed the next day. Not that there were that many DKA admissions, about 5 a week maximum. The audit was a one sheet form with the critical steps of the process in the left column, a check mark column in the middle and a comments column on the right. Each patient took less than 10 minutes to audit. The Electronic Medical Record was incapable of doing this kind of audit, so the auditing couldn’t be automated.

The project was a success. Shorter length of stay, less hypoglycemia, etc. The project was handed off to the nurse manager of the ICU. Within a week, there were DKA patients who didn’t get an audit. I met several times with the nurse manager who bemoaned the fact that she had (guess what?) a lot of other tasks to do and it was hard to get to these medical record audits. (Ten minutes 3-5 times a week!). So, I went to the Quality Department where they had nurses called Clinical Project Coordinators (CPC), a part of whose job is to do medical record audits. I asked if they could do the audits to “relieve” the ICU nurse manager. They said they were too busy. I reported this to senior leaders. They were unwilling to order the managers in the ICU or Quality Management CPC’s to do the audits. Who knows which patient is getting what or when now.

See what I mean? No desire, no accountability, not made accountable. The current health care management system doesn’t value process management.

Quality Management Staff and Leadership must be nurses. This is another sacred cow in health care. In every health care organization I have been in when I get there, all of the positions in the Quality Management department have “Nurse required” in their job descriptions.

Now, I love nurses. They were my eyes and ears and even part of my brain when I was practicing. I have the utmost respect for nurses. At the same time, the nursing profession self selects a certain type of person. A task oriented person.

It’s just how it is. They get orders from a physician or APC and they execute the orders. This starts in nursing training. Often nurses trying to offer their opinion or expertise from the nursing point of view get shut down by physicians. Some people who go into nursing at some point (either in school or in practice) get frustrated with being relegated to “just following orders.” They leave the profession and go into some other line of work where their ideas are valued. This leaves a nursing workforce satisfied with following orders. Doing tasks.

So, the Quality Management Departments are not manned with people who have a talent for systems thinking, which is required for building and maintaining reliable work processes. If you try to get them to think from a systems perspective, the usually leave. My observance of hospital and health plan Quality Management departments is there is a lot of nurse turnover. The ones that stay are usually doing accreditation and compliance work, which is task oriented. The staff charged with planning and implementing clinical improvements don’t stay very long because they are sort of scolded for getting no results. And, other than passing regulator and accreditor site visits, their accomplishments are usually meager.

I owned Quality Management in three organizations. I actually built one from the ground up in one organization.  After watching how difficult it was for nurses to drive process improvements and the frustrations they had to endure, I came to the realization that the type of person in Quality management had to change if I wanted to reach my quality and reliability goals. The first time I tried this was when I was the CMO of a health plan.

I got to this health plan just as they were re-organizing. The Quality Management department was viewed as ineffective; the health plan could never get beyond a one year NCQA status (National Committee for Quality Assurance). The best status you could get was a three year accreditation, meaning, NCQA wouldn’t come back to audit you for three years. The Director of Quality Management was being “ushered out”. I had to hire a new one. I reviewed the job description and re-wrote it so being a nurse was “preferred” but not required. This was a hard sell with the HR department, but I got it through. I started receiving applications. One was from a Respiratory Therapist (RT) manager.

I interviewed several candidates. All but the Respiratory Therapist were internal to the health plan and they were all nurses. The Respiratory Therapist not only impressed me with her systems and process improvement thinking, but she came in with a notebook detailing her self-started projects she had done in her department (on her own, not charged by hospital leadership). I knew she was the person I wanted.

Several days after my interview with the Respiratory Therapist, I got called to the health plan President’s office. He said, “I heard through the grapevine that you are seriously considering hiring a Respiratory Therapist and not a nurse to head up the Quality Management department.” I said, “Yes, she’s my front runner.” He said, “If you hire her you are likely going to have a mutiny or mass exodus of the nurses in the department. They don’t want to report to a non-nurse. They think only a nurse can head up the department. So do others in management who have complained to me.” I said, “But, I want the right person.” He said, “Look, I’m going to leave this decision up to you, but when it blows up in your face, you’ll get no support from me. You’re on your own.”

I hired the RT. I had to personally visit each of the other candidates to tell them they weren’t hired to keep the lid on things (rather than a phone call or letter/email). Some of the nurses left. We re-hired staff. Within a year, the RT Director of the Quality Management Department was the golden child of the health plan. She got Lean trained and was doing Kaizen events. We got a three-year accreditation the next year.

Health Care Leadership is preoccupied with making money and growing the business, leaving little or no time to champion reliability. Health care leaders have a choice: Spend, like,  $200,000,000 on hard-wiring reliable processes of care or building a new facility somewhere where they think they can gain market share. 100% of the time, the facility wins. In the last company I worked for, the spending for improving reliability was over 100 times less than building buildings and was less than their patient satisfaction initiatives budget. I’ll bet if someone did a study about this, they would find similar numbers throughout the US health care system.

Rule #4: Don’t build another facility until the processes in your current facilities has an error and defect rate at least equivalent to Toyota.

This has never happened in the history of Medicine. Don’t you think it should? Your life depends on it!

The real bottom line is: The Health Care industry doesn’t have the will or talent to create and sustain reliable health care processes.

Now that you have the current state of affairs, stay tuned for how to accomplish the degree of reliability in health care processes you deserve but are not getting now. That’s my next post.

What It Takes To Make Health Care Reliable

What It Takes To Make Health Care Reliable

I don’t have to reiterate the degree of errors, defects, adverse events, harms and deaths due to unreliable health care processes. I don’t have to reiterate the incredible inefficiencies in the current health care systems, whether the delivery of care or the financing of health care (like insurance companies and government health care programs like Medicare and Medicaid). I don’t have to because you can easily Google umpteen references to these things.

And this is a huge problem: all of the references you can Google are ignored. Ignored by health care. Ignored by Health Insurance Companies. Ignored by government agencies.

Oh, sure, they give lip service to it and relate “ways” they are addressing these things, but the interventions are weak and not nationally organized.

Sure, they can relate some interventions that are somewhat successful, like reducing central line infections in ICU’s. But what about PICC lines put in elsewhere? Why haven’t there been significant reductions of adverse events and deaths nationally overall? You’ll see all of these articles about saving money but the Medical Price Index is always 3-5 times the Consumer Price Index and cost is twice as high as any other nation’s.

It’s because the current cultures and leaders of health care don’t have the will to make where you get your medical care reliable.

In my previous posts, I’ve gone over a number of these things, so, now it’s time to offer solutions.

So, here they are.

Foundational premises:

  1. It starts at the top.
  2. It has to be inclusive.
  3. It has to not promote fear and reprisals.
  4. It has to promote learning.
  5. It has to promote listening.
  6. It has to use data wisely (data transformed into actionable information).
  7. It has to be intolerant of less than excellent execution.

First, look at this book cover, you’ll be seeing it again:


The number one national priority

The number one national priority for creating and sustaining the health care industries being as reliable as a companies like Toyota and Motorola is:

Reinstate Certificate of Need (CON). Place a moratorium on building new buildings and expanding health care services (unless there is a validated shortage that meets CON requirements) and funnel the money currently being spent on expansion into creating reliable and safe health care processes.

For example, it costs (depending on the number of beds) between $200,000,000 and $500,000,000 to build a hospital. But hospital care processes are known to be inefficient and error-prone, so, the money is being spent to perpetuate the health care unreliability status quo. No hospital system has ever devoted (let’s use the low end) $200,000,000 to radically improving the reliability, efficiency and safety of the care processes in a hospital. Never. Not even over a two-year period (which you could argue is the time it takes to build a new hospital).

Until the US nationally decides to do something like this, it will be a long time (or perhaps never) before our health care system has an error rate similar to Toyota.

Leadership solutions

I already gave you an example of leadership that demands excellence and reliability (the Sakichi Toyoda story in a previous post). This mentality is absent in health care. Leaders don’t champion the types of tools and measurement systems that Toyota does. Companies that adopt the Toyota Production System (TPS) excel in reliability and competitive cost of product (like Hyundai, which was producing less than mediocre automobiles in 1993 and now rivals Toyota in reliability and cost. They adopted the TPS. And it was due to the CEO (relentless leadership. You should read the Hyundai Story.) How about Jack Welch’s adoption of Six Sigma at GE? Similar story. Leadership driven.

Health Care leaders are too invested in making profits their legacy way (cost plus) and building new buildings and services, which has been the core competency of the health care industry leadership for 100 years (instead of safely and efficiently taking care of patients). So they are selected or self-selected for that purpose, not for making sure you get the right care at the right time in the right place without errors or defects or harm.

Here’s a typical example of that legacy way of making a profit from the American Hospital Association Underpayment Fact Sheet, 2015:

“In the aggregate, both Medicare and Medicaid payments fell below costs:

  • Combined underpayments were $51 billion in 2013. This includes a shortfall of $37.9 billion for Medicare and $13.2 billion for Medicaid.
  • For Medicare, hospitals received payment of only 88 cents for every dollar spent by hospitals caring for Medicare patients in 2013.
  • For Medicaid, hospitals received payment of only 90 cents for every dollar spent by hospitals caring for Medicaid patients in 2013.
  • In 2013, 65 percent of hospitals received Medicare payments less than cost, while 62 percent of hospitals received Medicaid payments less than cost.”

So, for Medicare, they were -12% and for Medicaid they were -10%. And they get that “extra” charge for that “Facility Fee” (See my post about “Prices”). Their strategy is to lobby Medicare and Medicaid for higher payments. Here’s a recent example of this lobbying strategy:

(Source: Modern Healthcare August 3, 2017)

Where is the AHA’s relentless program for reducing waste = reducing costs?
Nowhere. It’s a cost plus strategy.

Didn’t I already explain that experts from places like the Rand Corp. and the Institute if Medicine have estimated that there is 30-40% waste in the current system? These hospitals aren’t UNDERPAID! They have too much waste in their processes and their way of doing business. It costs too much for them to provide the services. Even if you took the lowest waste estimate (30%) and halved it you would get a savings of 15%, which means the hospitals would have a 3-5% positive margin on Medicare and Medicaid if they eliminated waste. But, instead, they have a VICTIM’s mentality. Ooohh, we’re underpaid! Poor us! Pay us more!

How about getting busy and investing in efficiency and safety to be able to make money on Medicare and Medicaid instead of building that new hospital in the next suburb?

There is actually a company called Premier that helps hospitals try to be less costly. They broker contracts for better rates for hospitals for supplies. They can show hospitals where there might be cost opportunities. The have a program called “Medicare Breakeven” that started in 2013, whose goal is to help hospitals re-design for efficiency and reduce costs so they don’t lose money on Medicare. If hospitals breakeven on Medicare, they have a +2% margin on Medicaid.

Premier partners with almost 500 hospitals across the US. I wonder how many hospitals are enrolled in the program. I wonder if they actually made it to breakeven. I’ve never seen an article about it. I’m thinking, no one has made it yet or there would be press releases about it. I know the hospital system I was in when I heard about this decided to decline to participate, and they were losing 12% on Medicare.

They need to Lean out their processes, not get paid more.

Solution 1. The Boards of Directors of health care institutions must start demanding excellence and reliability and drawing C-suite leaders from industries that have a proven record in safety and reliability. They must mandate the elements of being a reliable organization as described by AHRQ. Otherwise, nothing will change in health care. This is called demanding a culture of reliability.

MBA colleges and universities need to start imbuing their students with product reliability and how to build and maintain reliability cultures, not just how to read spreadsheets and optimize profits. Maybe they all should have to certify as Lean Six Sigma Black Belts to get their MBA.

Here’s an example of what goes on now. Financials rule.

I was in an integrated delivery system. It was March and the Finance Department and CFO presented financial projections to the Senior Executives. Their findings projected that the organization would miss its profit margin by 1%, which in the company was, $13,000,000. Take note that I’m saying missing their margin, not losing money. Let’s say they budgeted a margin of 4%. The projections said it would be 3%, so, $39,000,000 profit instead of $52,000,000.

The CEO, CFO, CMO and COO called all of the next level “down” leaders (so, the VP’s) into a room and told them that, as of the next pay period, their salaries would be cut by 10% (which apparently approximated $13,000,000) and they couldn’t get that money back unless they reversed the projected $13,000,000 shortfall PLUS ANOTHER $1,000,000!! Luckily, that happened and the VPs were “trued-up” in the first quarter of the next year.

In my entire 45+ year career in medicine, I have never seen a health care system dock people’s pay because of not meeting a clinical goal, including goals for things like the Mortality Rate (yes, YOU DYING!!), or NQF Serious Harm Events, or Readmission Rate, etc.

If a health care system had a culture of clinical reliability, they would use the same tactics they use to make profits and grow and apply them to clinical measures. Like cutting people’s pay for missing a clinical goal. I don’t believe that has ever happened in health care. Not even places like the Mayo Clinic.

Here’s another one. I’m a Medical Director in a hospital. They are having a terrible time getting patients from the Emergency Department (ED) into the inpatient floors where they really belong. Patients are staying in the ED waiting for a bed. They call these patients “ED Boarders”. Some of them are in there for 1-2 days waiting. There is evidence like the below related to patients boarding in the ED who should be in an inpatient bed:

“Mortality generally increased with increasing boarding time, from 2.5% in patients boarded less than 2 hours to 4.5% in patients boarding 12 hours or more (p < 0.001). Mean hospital LOS (Length of Stay) also showed an increase with boarding time (p < 0.001), from 5.6 days (SD ± 11.4 days) for those who stayed in the ED for less than 2 hours to 8.7 days (SD ± 16.3 days) for those who boarded for more than 24 hours. The increases were still apparent after adjustment for comorbid conditions and other factors.” (“The association between length of emergency department boarding and mortality”; Singer, AJ et al; Acad Emerg Med. 2011 Dec;18(12):1324-9.)

We actually validated this with our own data, which said people staying in the ED longer than 10 hours had a higher mortality rate and length of stay.

So, I’m in a strategic planning meeting in the Fall with all of the hospital’s Senior Leaders. They are proposing what the “threshold” measure (a goal that must be met) should be for Senior Leaders to get their annual bonuses. I proposed that we should choose “Zero boarders in the ED for longer than 10 hours.” I figured this would galvanize the Senior Leaders to analyze and process improve as a company-wide team to decrease inpatient throughput time and reduce the time boarders were in the ED, TO SAVE LIVES! I was the only leader to propose a clinical measure for bonuses. Did they choose that? Nope. They chose a financial measure. They chose a threshold within their core competency bandwidth. Not to be crass, but, basically guaranteeing they will get their bonuses. Moving a clinical measure was too risky.

Solution 2. Senior Leaders must spend time “on the workplace floor” a significant and specified amount of time to truly experience what the systems and processes in their organizations are like.

Senior Leaders tend to be reluctant to spend time on a clinical floor to actually experience what is going on. This includes physicians who take on Medical Director roles. For me, it was an easy decision to continue to see patients even while I assumed Medical Director roles, even to the C-suite level. I actually made the HR folks write it into my job description. I know many physicians who, once they assumed Medical Director roles, never saw another patient. I actually had a colleague of mine who called me one day because the company he was working for re-organized and his Medical Directorship was eliminated. He was asking if I knew of any Medical Director positions that were available. I didn’t know of any. He was disappointed. I said, “Well, you’re a board certified ER physician, right? You can work in an ER until you find something as a Medical Director, can’t you?” He said, “Oh no, I haven’t been in an ER or seen a patient for 20 years! I need a Medical Director position.” I thought to myself, “Who’s fault is that?”

This was not an isolated incident. I would say 75% of physicians who get to the “full time” Medical Director level stop seeing patients. There was one physician hired into a Chief Medical Officer position that part of his role required applying medical judgment, which, in turn required that he have a license to practice, who, when he applied for the license, was declined a license on the basis that he hadn’t seen a patient for so long, the Medical Board wouldn’t approve his license because they felt he might not be competent anymore.

The nurses are worse. I’ve NEVER seen a nurse who got into a full time Nurse Director or “above” position spend any time doing nursing on a clinical floor, be it inpatient or ambulatory. Never.

And as far as the MBA’s (or MHA; Masters of Healthcare Administration), spending time on a clinical floor, or even an administrative floor, is viewed as equivalent to cleaning out septic tanks. Once they get promoted, they never want to “go back”. As a matter of fact, it’s hard to get them to do anything except hang out in their offices and go to meetings. Some will do “walk arounds” where they schmooze with staff then disappear. They are pretty clueless as to the realities of what is going on in their companies. Very different from the CEO of the Ritz Carlton who spends at least a week a year going to one of the Ritz Carlton hotels and doing a “job a day”, like being a housekeeper one day, doing room service one day, working in maintenance one day, etc. I really admire that guy for that.

Here’s a story exemplifying this. I was a Medical Director in a hospital system where the Board Quality Sub-Committee tasked the leadership with reducing the mortality rate, which had been unacceptably high for years, despite several attempts to reduce it. I told the senior leaders I knew how to move that dot. They asked me to come back in two weeks with a plan, which I did. One of the elements was requiring all of the leaders at a Director level and “above” to spend 4 hours twice a month actually doing either what they were trained to do (like nurses doing nursing, physicians seeing patients, MBA’s being ward clerks, MHA’s being receptionists, or intake persons, etc.) or shadowing a clinical or administrative person if they felt they were now incompetent due to absence from doing the job they were originally trained to do or had done in past positions. (I actually had Medical Directors reporting to me whom I had asked to consider seeing patients for four hours a week who told me they didn’t want to do it because they hadn’t seen patients for so long they felt they would be dangerous to patients. Sad.)

Anyway, at the next meeting they had the previous meeting evaluation comments at the back of the meeting packet. There were several comments next to the agenda item that included my plan that said things like “There is no way I can spend 4 hours every two weeks doing line staff work. I’m too busy” or “I don’t see how my spending time doing line staff work would be productive”, etc.

See, no appetite to experience the dysfunctional processes they created or maintained. I was thrilled when Undercover Boss came out a year or so later. I revisited the subject using the experiences of the bosses on Undercover Boss as leverage, but, alas, I got the same responses.

I’m sorry, but, unless you are personally experiencing what patients and staff are going through, you will never feel you are on a burning platform and motivate the company into making the changes that need to be made.

Solution 3. Mandated adoption of models like Lean and Six Sigma by certifying and accreditation agencies.

As noted in my previous post “The Real Story Behind the Opioid Epidemic”, The Joint Commission was quick to mass-mandate pain as a fifth vital sign and ramp up the opioid epidemic leading to thousands of deaths a year, but they fail to mandate a relentless focus on reliability and safety. Why won’t they mandate implementation of Lean or Six Sigma? Why won’t state hospital certifying agencies, Medicare or Medicaid mandate this? Why didn’t the Affordable Care Act mandate this? Oh, that’s easy, the ACA was pretty much a financing law, not a “let’s make health care affordable by making health care more efficient and reliable”. (It’s all about the money, again.)

By the way, Lean and Six Sigma includes in their foundations The Improvement Model. Using The Improvement Model alone, which is an incremental improvement model, it would take 30-50 years to get to the degree of reliability you can get with Lean and Six Sigma in 5-10 years if they are implemented correctly. Cases in point, The Institute for Healthcare Improvement, which primarily relies on hospital system “collaboratives” using improvement models like “The Improvement Model” has had pretty negligible impact. They totally missed their 5 million lives campaign goal. Amusingly, they never even figured out how to measure it! And Intermountain Healthcare has used and taught The Improvement Model for 30 years. Their reliability rate is nowhere near Toyota’s or the Nuclear or Airline industries.

Remember this?:

This book is about mistake proofing. Mistake proofing virtually eliminates errors and defects. There are industries in the US where this book is a “bible” for their safety and reliability programs. Mistake proofing is a key element in Lean. It’s called Poka-Yoke.

“A pokayoke is any mechanism in a lean manufacturing process that helps an equipment operator avoid (yokeru) mistakes (poka). Its purpose is to eliminate product defects by preventing, correcting, or drawing attention to human errors as they occur.” (Poka-Yoke – Wikipedia)

You especially want to use mistake proofing when 1. A human is a step in the process and, 2. A defect causes a catastrophic event (like a train wreck).

Here’s an example of the difference between Six Sigma and Lean with mistake proofing:

Putting your car in gear or starting your car engine: The difference between Six Sigma and Mistake Proofing.

As of 2015, 263.6 million vehicles were registered in the US. Assume that each vehicle moves twice a day. That results in 527.2 million opportunities for a car to lurch forward or backward if a car is in gear when the engine starts or with the engine running as the transmission is engaged.

Six Sigma means you’ve improved a process so that there are only 3.4 defects or errors per 1,000,000 opportunities. If the process of starting your car or putting the car in gear was refined to the six sigma level, then the formula would be 3.4/1,000,000 x 527,000,000 = 1792 defects per year. In other words a car would lurch forward or backward, potentially causing injury or property damage 1792 times a year or about 5 times a day.

Mistake proofing eliminates this potential. You cannot start your car or put it in gear unless you have your foot on the brake. Number of errors a year = 0.

If you applied Six Sigma to surgeries:

There are about 23,982,000 surgeries in the US per year. If you could “six sigma” surgical processes to avoid errors/defects, and assume that the maximum errors per surgery is one, that would be only 81.5 surgical errors a year in the US. For 5500 hospitals. Wouldn’t you want that as a patient?

Here’s how weird it can get in health care. About 15 years ago, McKesson developed and released a robot to dispense medications in hospitals. The way the robot works is, medications are loaded into the machine in unit dose packets. The packets have a UPC code on it that has the medicine name (like aspirin), the type (like tablet) and the dose (like 325 mg). The robot is 99.999% error free and the 0.001% error is when the robot occasionally drops a packet, not that it picks the wrong packet (it then goes back an picks the next same, correct packet and delivers it so the error never reaches the patient) . It turned out at the time that the robots were deployed that no drug company supplied drugs in unit doses with the elements needed for the robot to pick the packet on the drug company produced unit dose packet. The UPC codes were on the box that contained unit doses or the drug only came in bottles with 30-90 tablets. And the UPC codes only included inventory control information. In order to have packets to load into the robot with the proper UPC coding, a person had to manually put the medicines into packets and create and print UPC codes to stick on the packets. Since a human doing only one task, on average, has a 2 sigma level error rate (5 errors/100 opportunities or 50,000 errors/1,000,000 opportunities), the entire robot process was only 2 sigma instead of better than six sigma.

I actually emailed C. Martin Hinckley, the author of Make No Mistake!, asking him if mistake proofing could be applied to health care processes. Here is his email response:

In general, the level of mistake-proofing in health care is minimal or poorly implemented, but desperately needed. Perhaps a few examples can illustrate. 

Observing a nurse insert an IV, the materials were laid out in preparation. The order of executing the cleansing was done incorrectly twice. Each time the nurse had to go to a storage closet on the other side of the floor to retrieve the correct materials, and start over again. This added 10 minutes to the execution of the task. If someone had not been observing the process (even though I am not familiar with the correct sequence), it is not clear whether or not the nurse would have retrieved additional materials until the process could be executed correctly. The key problem is that the sequence is not an obvious part of the task. The correct solution would be to have an IV insertion kit, where each required item is presented in the correct sequence. Ideal would be a folded kit, where one and only one item can be accessed at a time, and then only in the correct order. Although there is a minor packaging cost to present the materials in this way, the risk of doing the task incorrectly is dramatically reduced and the elimination of wasted motion and materials more than pays for the expense. 

Observing phlebotomists, we watched as labels for vials were dropped (without detection by phlebotomists) as they departed to collect samples. At times, they selected the incorrect specimen label, or used the incorrect specimen vial. In a stat situation, this can result in delayed testing, and life threatening consequences. A better solution that would be relatively inexpensive would be to upload a prioritized list of draws to a bluetooth device. When the phlebotomist scans the patient’s armband, a portable printer  (weighing just a few ounces) prints the exactly the correct number of labels, where each label has a symbol linked to the correct vial to use for each label. Because the labels are only available for each patient it is virtually impossible to select an incorrect label. All required specimens are collected, and errors in using the wrong vial can be completely eliminated.

EMAR carts represent an example of an extremely poor implementations. The intent is that the nurse scans the meds and the patient’s armband to assure that the meds are consistent with the patient needs. Unfortunately, moving the carts into the room creates a major problem for nurses. It takes longer than traditional methods, and if an urgent situation arises, they can not leave the cart unattended without securing the meds. To avoid these problems, nurses scan the barcodes in the patient books at the nurses station, circumventing the entire purpose of the EMAR carts since the nurse may then deliver the meds to the wrong patient. Good mistake-proofing always makes the process easier. As an alternative to an EMAR cart would be a small secure box prepared for each patient. The nurse carries the small box with a barcode scanner to the patient’s bedside. When they scan the patient’s armband, the scanner provides a bluetooth signal which is detected by the box. If the box matches the patient ID, the box opens. Now, the nurse doesn’t have to push a cart around. The equipment and use is significantly simpler. In an urgent situation they can simply close to box to the secure the meds and leave it in the room (rescanning the correct patient armband reopens the box).

We have observed similar problems in Clinical Chemistry, in OR with tool packs, in Emergency Rooms, in the arrangement heart catheters, in cleansing of scopes for colonoscopies and so forth. 

It is generally quite difficult for implementers to translate the mistake-proofing techniques from another industry into their own environment. To illustrate, an automotive example at first glance may seem to have little or no application in healthcare. However, the principles that prevent omitted parts in an automobile assembly are generally the same as those that prevent an omitted part in an OR tool pack! This is the reason that classifying the problem is so essential. Use the classification scheme to identify the outcome you are trying to prevent, such as an omitted part. Then review solution principles for that classification to see if you can find one that you can use. Look up examples for the selected principle, and try to translate the solution into your environment.”

I tried for eight years in one healthcare system to get mistake proofing incorporated into every improvement effort, to no avail. I even worked with a process improvement engineer from a manufacturing company that used C. Martin Hinckley’s book to create an easily used solution tool (we called it the “solution starter”). It turns out there is a “hierarchy” to mistake proofing. Here is a copy of that tool with the hierarchy, with examples in the right column:

I’m here to tell you that the majority of health care interventions in process improvements are in the low impact section of the above chart. Health care needs more high impact solutions.

Making improvements in health care processes currently looks like this:

An error occurs that makes it to the attention of  the risk management department or the quality department. It’s usually something big, like a sponge or instrument left in a patient, a wrong side surgery, a patient seriously harmed by something a staff person or a doctor did or ordered. As per Joint Commission standards, a root cause analysis ins done to determine what could have been done differently and the quality committee or department recommends a change in the process. The staff is “trained” (again, really educated) and it is presumed the recommended changes are happening. There is no measurement of compliance to the new process to ensure a) the staff are compliant with the new actions and 2) that the new process step change actually worked.

Plus, it is one hospital’s answer to a national systemic problem. So, there are 5500 different ways people are trying to make things better. Wonder why it is taking so long and progress is so slow?

What should be done is like what happened with Central Line Infection Prevention (except they didn’t go “all the way”). Dr. Pronovost and his team proved that by using a certain protocol, central line infections could approximate zero incidence. What didn’t happen is the protocol wasn’t mandated nationally. Adopting it is voluntary. I guarantee you every hospital in the US isn’t following that protocol.

To prove my point, read “Wrong Site Surgery”; Kathryn E. Engelhardt, MD; Cynthia Barnard, PhD, MBA; Karl Y. Bilimoria, MD,MS; JAMA November 28, 2017 Volume 318, Number 20; pp. 2033-2034. Here’s the URL so you can read it. https://jamanetwork.com/journals/jama/article-abstract/2664463. Notice how often they say what they recommend “may” do something. No proof. They admit that their interventions are solely relegated to their hospital/hospital system. I actually can’t figure out why JAMA would even publish this weak article except their editors are probably as clueless about what it takes to make true improvements as the rest of health care leaders.

So, here’s a synopsis of why the current Joint Commission model doesn’t work:
1. There usually isn’t a measurement system set up to monitor and prove success.
2. The intervention is hospital or hospital system specific and is usually created and implemented by process improvement amateurs.
3. Most interventions are weak and people based, meaning prone to error, distraction and apathy.
4. Interventions are not nationally organized and are always voluntary/optional.

Until this changes not much progress will be made. What is needed is funding similar to the way biomedical research is funded, maybe through the NIH, and process improvements, like the central line infection protocol, when proven to be truly effective, should be mandated for every hospital in the nation.

Solution 4. Change the health care Quality Committee make-up

This category is especially irritating to me. With few exceptions, health care Quality Committees are made up of these following types of individuals: Board of Director members, C-Suite Execs, VPs, Executive Directors and Directors. Who is missing? Line staff (like nurses doing nursing, Physicians and APC’s who are seeing patients, clerical staff working at patient contact sites or in cubicles), and, most importantly patients.

Whenever I requested a shake-up in Quality Committee make-up to include the missing folks, I got these types of responses:

“Well, we all used to do those things so we remember what it was like” (yeah, but, like 10-20 years ago)

“Some of our board members are our customers/patients, so we have that covered” (yeah, but, their fiduciary responsibility is to the company, they are biased)

I actually got to do this in one health care organization. It was because I was running a region of the organization and the C-suite guys were 80 miles away. We had a practicing physician, an APC (both had to not have any administrative duties), a clerical person (like telephone switchboard operator) and a staff nurse on our Quality Committee. The remainder of the committee was staff who were required to be on it by NCQA (Administrator, Medical Director, Marketing Director, Quality Manager, Utilization Manager, etc.).

You have no idea how many times the “non-traditional” members of the committee would say, “What, you guys really think that would work?” or “I need to talk about this with my peers and I’ll report next committee.” Otherwise, the “administration folks” would have gone forward. The other perk with having these “non-traditional” folks on the committee is, they would tell their co-workers what was going on and why (minus any confidential information, like case reviews). The Quality process became transparent to the staff. Can you imagine the committee member who was a telephone operator talking about the committee over lunch with her co-workers?

Unfortunately, that was the only place I could get this to happen. Too much elite-ism and too much fear on the part of the Execs of folks like line staff, physicians/APCs and patients knowing what was going on.

Unless the Quality Committee make-up is changed as noted above, don’t expect meaningful changes at the necessary speed required to make a difference.

Solution 5. Stop using Risk Adjustment to manage clinical change

Ok, I’m going to say something that probably all of the Medical pundits will call heresy. Everyone should stop using risk adjustment to create and manage/maintain clinical improvements.

I’ll say it again. Everyone should stop using risk adjustment to create and manage/maintain clinical improvements.

For those of you who don’t want to hear this, read my lips: Everyone should stop using risk adjustment to create and manage/maintain clinical improvements.

Of course, at this point the Medical pundits are likely demanding I have evidence to support my statement. Well, I do! They do too, but they 1. Ignore it and, 2. It’s a sacred cow that makes all the clinical people feel better about not doing so well. Remember, the WHO ranked the US something like 44th in the world for health care quality. And there are pundits saying, “It’s because our population is sicker.”

So, what is Risk Adjustment? It’s a group of statistical models that take various aspects of a patient, like age, gender, medical conditions, medications, etc (depending on the model) and give that person or a group of patients a risk score (or something similar). Then you can aggregate the individual risk scores to create a “population severity rating” or a population level risk score. For example, Medicare does this with what they call Hierarchical Condition Categories. Based on data in bills sent to Medicare by providers, Medicare calculates a risk score for each Medicare patient. Then Medicare applies the risk scores to various things related to the Medicare population, like payments to Medicare Advantage Plans and penalties for hospitals for select conditions related to mortality and readmissions. If a Medicare Advantage plan has a higher than average risk score for the population they are serving, Medicare “risk adjusts” the payment upward, i.e., they pay the health plan more because their population is “sicker”; “they would be expected to spend more money.” For the hospitals, the higher the risk scoring, the more they allow a higher mortality or readmission rate. What happens there is, when they “risk adjust”, i.e., the higher the risk score, the LOWER the mortality rate or readmission rate becomes “statistically”. Here’s how that works:

Hospital “A” has a mortality rate for heart attack of 3%. Let’s say Medicare doesn’t allow a mortality rate higher than 2% and would penalize this hospital if their risk score is 1 or less. But, due to the bills sent in by the hospital and other providers caring for Medicare beneficiaries in that hospital region, the Medicare Risk Adjustment model says Hospital “A” has a severity weight of 1.5. They divide the actual mortality rate (3%) by the severity weight (1.5) and the rate is risk adjusted to 2%. Voilà! No penalty. But wait! 3% of the patients actually died! Is that OK?

So, what happens now is, Hospital A says it is “doing OK”! They didn’t get penalized. They don’t have to do anything about people dying from heart attacks.

This is the problem with risk adjustment. Hospital “A” now has a false sense of security relative to its heart attack patients. And, since hospital Quality Departments prioritize working on regulatory and accreditation compliance over anything else, which includes things like Medicare penalties, Hospital “A” will take improving heart attack care off their work list. After all, they didn’t get penalized. The CEO and CFO won’t be on their backs about heart attack mortality because no money was lost in penalties.

I’ve seen it go the other way. A hospital I worked in had a “raw” mortality rate for a Medicare penalty condition that was lower than the Medicare average, but Medicare’s risk adjustment model said the risk score was so much below 1.0 that when they divided the risk score into the mortality rate, the mortality rate was higher than allowed (i.e., the mortality rate went up “statistically”). [Example: Hospital Mortality rate is 1.5%. Risk adjustment index is 0.7. Therefore,  1.5% divided by 0.7 =  2.1% “statistically”]

So, the hospital had to pay a penalty! Turns out, the lower risk score was due to inadequate coding on the bills being sent to Medicare by the hospital and the providers in that hospital region. It wasn’t that the patients were really less sick than the average Medicare beneficiary.

Here are the problems with risk adjustment.

  1. The Risk Scoring Models are imperfect models. Most are linear models using R-squared calculations and Mean Absolute Error (MAE) to report accuracy. Most are only up to 50% accurate for concurrent risk scoring (meaning where a patient’s risk is right now) for “Commercial” populations (ages 0-64) based on R-square. That means they are at least 50% wrong. It’s much lower, in the 15-20% range for “prospective” risk (trying to predict if a patient is going to be worse or better)(Accuracy of Claims-Based Risk Scoring Models; Society of Actuaries, 2016). The MAE’s are ~100% (An MAE of zero would indicate that the estimated risk score was always perfectly accurate). The smaller the population, the lower the percent accuracy. When you get down to the individual person level, you might as well have a monkey throw a dart at a matrix of risk scores tacked to a wall. The models vary in accuracy based on how you filter them. For example, they are pretty accurate when dealing with the group: “top 1% of spenders”. But that seems logical because of the narrow bandwidth with relative similarities of conditions of the most ill patients. These models are better used to assess groups of over 10,000 people or people who are already really sick.

There are some emerging non-linear models out there now using things like machine learning. They are too new to fully evaluate yet. The Society of Actuaries evaluated one model and found the R-squares lower than the linear models, but the MAE’s were better. Still a work in progress. Maybe they need different measures than R-squared or MAE, since they are non-linear models.

Risk adjusting/Severity weighting requires a comparator group. What this means is, your population is compared to another population or group of populations to get “severity rating”. You usually end up with something like an “index” or observed vs. expected ratios where 1.0 is average, below 1.0 is better then average and over 1.0 is worse than average. Each model uses different comparator populations. For example, MIDAS, a time honored hospital Quality Department data tool, uses about 800 hospitals, only 85 of which are categorized as a >400 bed hospital. The other 715 are smaller hospitals. Premier has about 500 hospitals, 80% of which are >400 bed hospitals. Not the same populations. Even though you can “filter” by hospital size, the statistical reliability based on 400 hospitals (Premier’s 80% of 500) is different from just 85 or so >400 bed hospitals in MIDAS. I’ve actually had the same data submitted to both of these companies and gotten very different results for the presumably same measure (mortality index).

This is true of all severity weighing/risk adjusting models. So, if the comparative group is performing poorly and you are performing a little less poorly, you look good, but you are really still not good. You are just the best of the bad. The whole risk adjustment idea inhibits motivation to improve care processes.

And clinical folks feel assured when their index is 1.0, when that is the “average” or, in other words, usually, mediocre. With an index of 1.0 they feel that they don’t have to do anything to get better. Scoring a 1.0 is an OK place to be to them when really it isn’t. Unless of course, everyone is performing almost perfectly, which isn’t the current reality.

Risk adjustment/Severity weighting and Risk Scoring models rely on bills submitted by hospitals and providers. So, the final scoring depends on how good a hospital or provider is with coding admissions or visits. You can be terrible at coding and doing a great job taking care of patients and get dinged by Medicare or an insurance company. Or, you can game the coding system, not be taking care of patients well, and look really good! Believe me, I’ve seen both of these things.

Here’s an example. A nurse in Michigan was working for a consulting group who went into hospitals and showed them how to “optimize” their coding. The nurse left the consulting company and got a job in the Claims Department (remember, a claim is a bill when it reaches an insurance company) of our health plan. Her job was looking for hospitals and providers who were “over-coding”. That could be coding for something that really didn’t exist or unbundling services that were considered part of a global service and should be billed inclusive to the global service code. So, this nurse went to the same hospitals where she taught them to “optimize” their coding and did audits against “correct coding’” to look for “over-coding” and then discounted the same coding she had previously taught them as being optimal coding as now being coding abuse!! That led to reductions in the hospital’s reimbursement. The hospitals angrily ushered her to the door of the hospitals and told her to never return!

What do you think that did to the hospital’s risk scoring? For the health plan I was in, the risk score went down. For insurance companies that didn’t do the audits that nurse did (or Medicare) the risk score was higher.

There is a high degree of variability in the way each model is calculated. This means you can look good in one model and bad in another. When I was a Medical Director in insurance companies, this was the biggest complaint of providers. They would have contracts with several insurance companies who were profiling them for payment rates and quality outcomes and bonuses. Each insurance company told them something different. To the point where the variation was so high, the providers just tossed the profile reports in the trash can. I had a network Pediatrics group tell me that our profile results said they were in the worst quartile of risk adjusted performance and our biggest competitor said they were the best Pediatric group in their network! In reality it can’t be both! It was risk adjustment methodology differences.

There was an article published in the New England Journal of Medicine that describes this phenomenon (“Variability in the Measurement of Hospital-wide Mortality Rates”; David M. Shahian, M.D., et al; N Engl J Med 2010;363:2530-9.) Here’s the Abstract results and conclusions sections:

“Vendors applied their risk-adjustment algorithms and provided predicted probabilities of in-hospital death for each discharge and for hospital-level observed and expected mortality rates.


The proportions of discharges that were included by each method ranged from 28% to 95%, and the severity of patients’ diagnoses varied widely. Because of their discharge- selection criteria, two methods calculated in-hospital mortality rates (4.0% and 5.9%) that were twice the state average (2.1%). Pairwise associations (Pearson correlation coefficients) of discharge-level predicted mortality probabilities ranged from 0.46 to 0.70. Hospital-performance categorizations varied substantially and were sometimes completely discordant. In 2006, a total of 12 of 28 hospitals that had higher-than-expected hospital-wide mortality when classified by one method had lower-than-expected mortality when classified by one or more of the other methods.


Four common methods for calculating hospital-wide mortality produced substantially different results. This may have resulted from a lack of standardized national eligibility and exclusion criteria, different statistical methods, or fundamental flaws in the hypothesized association between hospital-wide mortality and quality of care. (Funded by the Massachusetts Division of Health Care Finance and Policy.)”

So, there you have it. These models are too imperfect to be used in creating and maintaining reliability and safety of processes in health care systems. They could be useful in following progress over time, like measured annually, to see if health care improvements are making an impact in a population, or for actuaries to use for large groups of beneficiaries in insurance plans, but risk adjustment/severity weighting should not be applied when managing the processes of care. The Raw Rate is the better measure. And the goal rate should be the Raw Rate, not an index or risk adjusted.

As I said, this stance is heresy in health care. Even an esteemed physician leader from the Mayo Clinic told me I was nuts. But, he really didn’t know anything about clinical process reliability.

That’s because the first thing a health care provider (using the term generically) will say when they get a report that doesn’t look so good is, “Well, MY patients are sicker!” And you have to prove that is or is not the case before they will talk to you again. So, the risk adjustment paradigm became “the law” in medicine. Then it got applied universally, when it should only be used for certain situations.

It’s like an airline who has various airplane sizes from Boeing 727’s to 747’s being allowed to have more crashes than an airline with only one size, like a Boeing 737 because the variety of airplanes has an increased theoretical complexity risk due to pilots needing to know more to fly the various planes and the mechanics have to know more relative to servicing the various airplanes. You can hear the CEO now saying, “Well, MY airplane situation is more complex than the other company’s”.




  1. US health care systems and their leaders do not have the will or training to create reliable health care processes.
  2. The Boards of Directors of health care institutions must drive the culture of reliability.
  3. There are five solutions that, if implemented forcefully and fully in the US, would dramatically improve health care process reliability.
  4. The possibility that anything in this post would be adopted by the US health care system is unlikely.

Follow up on the FDA and Overuse

Here are some follow-up items related to two of my previous posts: “The FDA, the USPTO and the Pharmaceutical Industry” and “Why The US Healthcare Care System Costs So Much – Part Three – Overtreatment”


First, the FDA, again. There were two articles published this week (August 15, 2017) illuminating more on how the FDA favors the drug and device industries.

In the first article, entitled, “Characteristics of Pre-approval and Post-approval Studies for Drugs Granted Accelerated Approval by the US Food and Drug Administration”; Huseyin Naci, PhD, MHS; Katelyn R. Smalley, BSc; Aaron S. Kesselheim, MD, JD, MPH; JAMA. 2017;318(7):626-636, the authors analyze the research studies for 22 drugs that were given 24 indications under the accelerated approval process of the FDA. Accelerated approval is applied to drugs that treat serious or life-threatening conditions (like cancer, HIV, etc.). “Pre-approval” means studies that were done before the drug was FDA approved and “Post-approval” means the drug is studied after it is released to the public after being approved by the FDA. The post-approval time is when drug companies sell their drugs to the medical community and MAKE MONEY!

Remember that the lower the number of people in studies, the more unreliable the studies are.

There were some significant concerns voiced in this article which should make you take pause about the FDA’s behavior:

All of the research studies used “surrogate” measures to “prove” the drug is effective. A surrogate measure is an indirect measure that doesn’t prove you, the patient, will actually benefit from the drug. Here are some surrogate measures compared to a true clinical outcome measure:

Surrogate measure True Clinical Outcome measure Why is this a problem?
Progression Free Survival (the amount of time a cancer tumor doesn’t grow and you are still alive) Survival (you are still alive) You can have a non-progressing tumor that suddenly activates and kills you in the same amount of time as if you had no treatment. You’re dead within the same amount of time with or without the drug
Increase in mammography rate Breast Cancer Survival Improving a process to increase a “process measure,” like a rate, doesn’t necessarily mean a patient will actually benefit from the intervention, in this case, not die.


Here are some excerpts from this article:

“The clinical trial evidence for therapeutic agents granted accelerated approval by the FDA between 2009 and 2013 shows that 14 of 24 indications for these drugs entered the market on the basis of single intervention-group studies that enrolled a median of 132 patients, which some investigators would consider a small number.”

“Half of required confirmatory studies were completed a minimum of 3 years after the approved drug was on the market.” [Meaning, the drug was on the market for a long time before the drug company completed a confirmatory study. During that time, people could have been harmed and gotten no real clinical outcome improvement. But, the drug company MAKES MONEY!]

“The quality and quantity of post-marketing studies required by the FDA to confirm clinical benefit varied widely across indications. There were few statistically detectable differences in the key design features of trials conducted before and after approval. Nonrandomized studies were common in the accelerated approval pathway both before (60%) and after (44%) market entry. Even though the majority of completed studies showed positive results in the post-marketing period, all completed confirmatory studies demonstrating drug benefit evaluated surrogate measures of disease activity rather than clinical outcomes”.

“For the 10 accelerated approvals between 2009 and 2013 that have since had their requirements fulfilled and labels updated, all of which were for cancer indications, the studies used to confirm clinical benefit tested surrogate measures. The FDA’s senior scientists consider overall survival to be the most dependable end point in clinical trials of cancer drugs. Yet overall survival was among the pre-specified primary end points in only 5% of required confirmatory studies.” [In other words, true effectiveness has never been proven.]

“Another finding from the current study is the slow progression of some post-approval studies. A recent Government Accountability Office report criticized the FDA’s oversight of drugs approved on the basis of surrogate measures.” [?Collusion between the FDA and drug companies?]

“For 14 (58%) of 24 indications granted accelerated approval from 2009 to 2013, results from required confirmatory studies were not available after a median of 5 years of follow-up, and (42%) of 19 incomplete confirmatory studies were either terminated or delayed by more than 1 year. [And the drug companies were making tons of money without confirming effectiveness.]

“Confirmatory studies failed to demonstrate clinical benefit in 2 indications granted accelerated approval between 2009 and 2013. According to the Code of Federal Regulations, the FDA may withdraw a therapeutic agent if confirmatory studies fail to verify its clinical benefit. However, according to publicly available documents, the FDA has neither rescinded its approval nor imposed additional requirements for these 2 indications. Historically, the FDA has rarely withdrawn an indication during the 25 years since the accelerated approval pathway was established. [Only one drug in 25 years. The drug didn’t improve outcomes and increased toxicity. ]

Makes you wonder, doesn’t it?

Here’s the second article: “Characteristics of Clinical Studies Used for US Food and Drug Administration Approval of High-Risk Medical Device Supplements”; Sarah Y. Zheng, MD; Sanket S. Dhruva, MD, MHS; Rita F. Redberg, MD, MSc: JAMA. 2017;318(7):619-625. Rather than going into the detail as I did in the above article, I’ll just give you the summary (“cliff notes”) version printed within the article:

Question: What is the quality of clinical studies and data used to approve modifications to high-risk devices by the US Food and Drug Administration (FDA) panel-track supplement pathway?

Findings: In this descriptive study of 83 clinical studies for 78 panel-track supplements approved between 2006 and 2015, 45% were randomized clinical trials and 30% were blinded. Of the 150 primary end points in these studies, 81%were surrogates and 38% were compared with controls.

Meaning: There are limitations in the quality of the studies and data evaluated by the FDA to support modifications of high-risk devices.

CONCLUSIONS AND RELEVANCE: Among clinical studies used to support FDA approval of high-risk medical device modifications, fewer than half were randomized, blinded, or controlled, and most primary outcomes were based on surrogate end points. These findings suggest that the quality of studies and data evaluated to support approval by the FDA of modifications of high-risk devices should be improved.”

So, for drugs for life-threatening illnesses with serious side-effects and toxicities, and for medical devices that are considered high-risk, the FDA approves based on data that is, at most, only suggestive. And when a post-approval study demonstrates no effectiveness, only once is 25 years, has the FDA rescinded its approval.

Things that make you go “Hmmmm”, right?

Overuse (Overtreatment)

Here are two articles that show that physicians and APCs are doing things they shouldn’t, costing million of dollars and with risks to patients as part of the clinical scenario. And, the recommendations and conclusions in the articles are examples of the legacy way of thinking within the medical community,.

The first article is: “Eliminating Creatine Kinase–Myocardial Band Testing in Suspected Acute Coronary Syndrome”; Matthew D. Alvin, MD, MBA,MS, MA; Allan S. Jaffe, MD; Roy C. Ziegelstein, MD,MACP; Jeffrey C. Trost, MD; JAMA Internal Medicine Published online August 14, 2017.

In this article, the authors describe all of the research that proves that doing a “creatine-kinase-myocardial-band test” (CK-MB test) has no value in diagnosing a heart attack because, for the last 15-20 years, a better test, called the troponin test, has been proven to be more sensitive and specific for a heart attack. Despite this, providers are still ordering CK-MB tests, costing millions of dollars a year for a test with “no value”. Here’s just one short excerpt from the article:

“Once the cornerstone of AMI diagnosis, CK-MB has not yet been eliminated from practice despite considerable evidence supporting cTn (cTroponin) as the preferred biomarker. Data published after distribution of the ACC/ESC/AHA3-5 recommendations show the these clinical practice guidelines have not succeeded in refining practice. Specifically, CK-MB is still used in many US clinical pathology laboratories and US EDs”

The article goes on to say that there are clinical situations that have been cited where doing a CK-MB has actually negatively impacted patient care.

In a non-health care environment, like manufacturing, the industry would simply eliminate the opportunity to “do the wrong thing”. This would be the highest ranking and most effective intervention for mistake proofing the “diagnosis of heart attack” process. Remember this mistake proofing “solution starter”?

The highest impact solution is eliminating the step or option that causes the error. In a true “error reduction” environment, you would just eliminate the option of ordering a CK-MB for a heart attack. It wouldn’t be on any lab order sheet. If a physician ordered it, it would be rejected if the indication was “rule out heart attack”.

But, this rarely occurs with health care because they mostly use the low impact mistake proofing solutions (the ones that are RED!) The above article cites another article by Larochelle et al that implemented the following:

1. Create an institutional specific guideline (when there already are national guidelines by the ACC and AHA) (Revise Procedure/Training, second weakest impact intervention)
2. Educational sessions with practitioners (Revise Procedure/Training, second weakest impact intervention)
3. Dissemination of quick reference cards with the guideline elements on it (Job Aid, third weakest impact intervention)
4. Removal of the CK-MB from the order sets in the electronic medical record. (Eliminate, the highest impact intervention)

The result was, there were zero CK-MB ordered during the 12th month after the changes were made. They didn’t assess the effectiveness of the individual elements described above, but, I would guess that the fourth item was the truly effective solution as it ELIMINATED the option to order the test. The other three are red-zone solutions. The authors actually cite:

“Multiple other groups, including Mayo Clinic, simply removed CK-MB from routine order sets and found 80.0% to 99.8% reductions in CK-MB orders with significant cost savings and without negative impact on patient care or missed AMI diagnoses”

But, then, the authors recommend the following (non-italicized comments are mine):

The methodology and theory of the blueprint and quality improvement initiative are based on the US Health Resources and Services Administration strategies for developing and implementing a quality improvement initiative, with a focus on education, action, and measurement of results. The leader of each institution should assess applicability of this blueprint based on the CK-MB ordering frequency at their respective institution.

1. Design and implement a hospital-wide educational campaign. [Red Zone Solution. This whole following section is totally unnecessary.]
a.Prior to implementation, it is important for health care leaders to establish sufficient organizational readiness for change, specifically in conjunction with these stakeholders, whose ordering practices will be affected by such changes. Tools to measure readiness for change have been previously studied and may be used.
b. Collaborate with physician representatives from the departments of cardiology, internal medicine, and emergency medicine. Frontline physicians in these departments order the majority of cardiac biomarkers within most health care institutions and are the primary stakeholders in the current system of care for ACS patients.
c. Academic institutions must engage the house staff as members of the quality improvement team for an effective initiative.
d. Collaborate with secondary stakeholders, such as pathology and/or laboratory staff, to acquire insight and advice on these changes.
c. Inform physicians that CK-MB adds to the health care system financial burden without adding value to patient care.
d. Present the evidence supporting elimination of CK-MB and exclusive use of cTn to diagnose AMI, identify reinfarction, and estimate infarct size. Education may be provided through various venues, including lectures, pocket cards (Figure 2), online modules, social media demonstrations, and simulations.

2. Partner with information technology and/or laboratory medicine staff to remove CK-MB from standardized ACS routine order sets. Doing this simple step alone has been shown to significantly reduce CK-MB ordering (Table). [Green Zone Solution. Elimination is the highest impact. This is all that is needed.]

 3. Partner with information technology and/or laboratory medicine staff to create and integrate a best practice alert (BPA) into the CPOE to appear when clinicians order CK-MB, such as:
“According to national guidelines, troponin is the preferred biomarker for detecting myocardial injury; CK-MB is only appropriate if troponin testing is unavailable.”  [Red Zone Solution.]

4. Measure data pre-intervention and post-intervention (efficacy points). [This is necessary. Measurement System to document if successful or not]
a. Number of cTn and CK-MB tests ordered, including stratification by department and patient setting (ED, inpatient, medicine vs non medicine units, ICU vs non-ICU).
b. Incidence, missed diagnoses ,and mortality of AMI to ensure patient safety.
c. Review cases where CK-MB is still ordered to determine if it provides value.
d. If necessary, track usage by physician to develop performance feedback profiles.
e. Calculate reduction in charges to patients and health plans, as well as any decrease in hospital costs.

Because health care is mostly a consensus environment rather than a just do it environment, the above has a huge amount of unnecessary work (anything in the red zone solution area) and lead time to implementation delays because the one green zone intervention is an ELIMINATION solution. The only work that really needs to be done is inform the practitioners that current national guidelines eliminated the ordering of the CK-MB test for heart attacks and it will no longer be available for that indication. If an institution wants to insert an alert that pops up in an EMR to inform the practitioner, that should be the only additional work. All of the rest of the above is WASTE, and health care systems already have too much waste already.

The problem is no one in health care has the balls to just say NO when something is inappropriate! You have to “baby” the practitioners through it even when it is extremely obvious. I’m all for Prochaska’s readiness to change and getting buy-in and engagement for many things (like actual process re-design and implementation) but not in a case like this where it is  cut and dried as to what should be done and the intervention is a single step (really, elimination of a step). In the Lean world, they would call a lot of the red zone interventions above “over-processing” (doing more work than necessary to get the desired result).

The second article in this section is: “Unnecessary Staging Imaging in Early-Stage Breast Cancer”; Heather R.Wolfe, MD; Arjun Gupta, MD; Navid Sadeghi, MD; JAMA Internal Medicine Published online August 14, 2017. In this article, the authors go through the literature and proclaim:

“Patients with early disease confined to the breast with no or limited lymph node involvement require no further staging imaging.”

Then they go on to say:

“Although breast cancer care is now largely multidisciplinary, it is often first suspected or diagnosed by primary care physicians. They may be unaware of the needlessness of routine staging imaging in otherwise asymptomatic patients.”

This statement is not supported by any data in the article. It is just blaming! I personally don’t know any Primary Care Physicians who would order the battery of imaging tests that would constitute staging for breast cancer. Stating this in the article is completely inappropriate.

Finally, the authors bemoan the overuse, but don’t put forth one single recommendation as to how to reduce or stop unnecessary staging in the patients with early disease confined to the breast with no or limited lymph node involvement. This seems to me to be another “eliminate” [Green Zone] candidate. What should happen is, any imaging center that gets a request for breast cancer staging has to demand the clinical information that supports the ordering of the testing. If the clinical information is “the patient has early disease confined to the breast with no or limited lymph node involvement”, then the testing should be cancelled. ELIMINATE the testing.

I actually approached a large radiology group in one state where I was working and asked if they would do this.

Radiology request forms usually have three parts: 1) the test you want to order (like, X-ray of the leg), 2) why you want the test (like, “suspect a fracture”), and 3) some clinical information (like, “patient fell 30 feet from a scaffolding. Leg pain. Leg is deformed on examination.”).

Nowadays, it is hard for a PCP, Hospitalist or ED practitioner to remember and keep track of which radiology test is best for the clinical situation at hand,  especially tests like CT-scans, MRI’s and Ultrasounds. But, Radiologists should know, shouldn’t they? Well, THEY DO! For example, their specialty society publishes the indications for all of these high tech tests that are used in breast cancer staging.

So, I asked them if, when they got a request for an imaging study and the request form information didn’t match the indications for the test that was ordered, would they contact the ordering practitioner and either get further information that would justify the test or tell the ordering practitioner they had ordered the wrong test and an alternative test was the best test and they would like to substitute the best test.

This sounds simple, cost effective and helpful for the patient (because, when the wrong test is done, eventually the right test needs to be done. For x-ray tests, patients get extra radiation exposure. They also might be subject to increased out of pocket costs because they needed two tests instead on one).

What do you think the Radiologists said? You would think it was, “Sure this sounds great, and we are well-trained and can do this! After all, the guidelines for which tests should be done in clinical situations are our Radiological Society Guidelines. We HAVE to know them to be board certified!”

Nope. Instead it was , “Oh no. Our role is to do whatever the ordering practitioner orders.” (Does this sound like Nazi Germany to you? “I’m just following orders!”).

So, I said, “You know, when I have a patient in my exam room with abdominal pain and I think they have appendicitis, I don’t send them to the surgeon ordering an appendectomy and he/she just does the appendectomy. I send them to the surgeon and ask for a surgical evaluation and a recommendation as to the next course of action. Maybe that’s an appendectomy and maybe it’s not. That’s what specialists do, other than you. Are you saying you don’t want to behave like a specialist?

Their answer to this was, “We aren’t going to do that. We’ll do whatever the ordering practitioner orders. If you want better compliance by ordering practitioners with the radiological guidelines, you’ll have to figure out how to do that.”

And so there it is for imaging studies. Radiologists don’t want to act like  specialists who know what the best thing to do is according to their own society’s guidelines!” Want to know why? BECAUSE THEY MAKE MORE MONEY DOING THE EXTRA, WRONG TESTS!!!

After all, it’s all about the money.