Finding Out About Health Care Bureaucracy the Hard Way

A persistent theme for Health Care Renewal has been how concentration and abuse of power in health care trap patients and heath care professionals in a maze of bureaucracy, perverse incentives, deception, and conflicts of interest.  To anyone who has to make the transition from person to patient, some of these problems become immediately obvious.  Consider, for example, this account of "going into a hospital for a minor procedure":

The very idea of being a patient is anathema. To people of my generation -- the 'me' generation -- who like to be in control, the experience begins with loss of control. First the paperwork -- three or four times paperwork has to filled out and given to a succession of strangers. Then they take all of your belongings, they tell you to take your clothes off, and make you put on a gown that leaves you nearly naked, put in you in very small room, bring you inedible food according to a schedule they determine.

And if you try to sleep, they leave lights on, and do everything they can to make sure you can't. At the end, if you are lucky, they deign to discharge you. Those of us who are boomers, entering a period where we will be drawing the biggest healthcare expenditure, will not put up with this.

This description of health care in the real world may not seem surprising to readers of Health Care Renewal. When health care is run by business people with no experience or training in actual patient care, and controlled by a proliferation of managers and bureaucrats (whose numbers increased by a factor of 8.26x from 1983 to 200), usually with similar business backgrounds, all motivated by short-term financial incentives to "make the numbers" at all costs, what other result would one expect?

Of course, many people outside of health care may not appreciate these problems until they become patients themselves. The person who wrote the description above apparently had avoided in-patient hospital care until the events he described, so on that basis his surprise can be excused.  On the other hand, his outrage was understandable.

But wait - the above is actually a quote by a speech to the Innovation Forum by no other than Jeffrey Kindler, Esq, the current CEO of Pfizer, the world's largest pharmaceutical company.

So his apparent surprise at what he found when he became a patient is ample evidence how unfamiliar he had been with real health care on the ground until this experience.  In fact, that the CEO of the world's largest drug company was so unfamiliar with the real world of health care until he had to become a patient ought to prompt some outrage too. 

I am not recommending that all executives of health care organizations undergo procedures. However, making sure that no one gets to a top leadership position in a health care organization without some real world health care experience might lead to some salutary changes in how health care is run.

Also, we noted here that Mr Kindler had been rewarded last year by his board of directors for his "constructive participation in the US legislative process to advance Pfizer's goals of achieving a more rational operating environment...." Maybe had he had his minor procedure earlier, he might have also wanted to advance the goal of making health care less bureaucratic and more focused on the patients.

Hat tip to Jim Edwards' blog on BNet.

Post Title → Finding Out About Health Care Bureaucracy the Hard Way

Are the Health Plans of the Very Rich Different from Yours and Mine?

Yesterday, the New York Times published an intriguing story about "Cadillac" (that is, expensive) health insurance plans,

Goldman Sachs is one of the nation’s richest banks, and hundreds of top Goldman employees have a health care package to match — one of the 'gold-plated Cadillac' plans cited by those involved in the health care debate in Washington.

Goldman’s 400 or so managing directors and its top executive officers participate in the bank’s executive medical and dental program as part of their benefits, according to documents filed with the Securities and Exchange Commission. The program generally costs the bank $40,543 in premiums annually for each participant’s family.

Those taking part in the plan include the company’s chief executive, Lloyd C. Blankfein, and four other top officers, as well as managing directors, whose base salary is $600,000.

Goldman’s medical coverage entered the health care discussion on Sunday when David Axelrod, senior adviser to President Obama, cited the Goldman program as an example of the expensive benefits the administration might consider taxing to help pay for its health care program.

'The president actually was asked this the other day by Jim Lehrer, and what he said was that this was an intriguing idea to put an excise tax on high-end health care policies like the ones that the executives at Goldman Sachs have, the $40,000 policies,' Mr. Axelrod said.

A proposal by Senator John F. Kerry, Democrat of Massachusetts, would impose an excise tax on the insurers that issue policies like Goldman’s, with the expectation that the insurers would pass along most, if not all, of the cost to employers who buy the plans.

Leaders of the Senate Finance Committee, which is working on bipartisan version of the health care legislation in Congress, had long expressed interest in taxing some employer-provided benefits — a move many budget experts say would help slow the steep rise in health costs.

Negotiators have not yet determined the value of the plans that would set off a tax on the insurance companies; the numbers under discussion range from $20,000 to $40,000 annually, a senior administration official said.

The lower end of that range would increase the amount of money the tax would raise but would also hit some middle-class workers, whose unions in some cases negotiated robust health benefits in lieu of pay increases. Typical employer-provided plans cost $13,000 to $20,000 per family, depending on the location and the age of the plan participants.

A health care package costing $40,000 or more a year would generally have no co-payments or deductibles, according to Paul Fronstin, an analyst at the Employee Benefit Research Institute, a Washington nonprofit that studies benefits. It would also have no limits on doctors or procedures, no restrictions on pre-existing conditions and no requirements for referrals.

Few people have such policies, Mr. Fronstin said. 'It would only be top executives who run big businesses, mainly people in the C suite,' said Mr. Fronstin, referring to companies’ chief officers.

It was not clear from this article how many top corporate executives have such plans, and whether leaders of other kinds of organizations, like large not-for-profits, also have them.

My main concern about such plans is not how much they contribute to top corporate leaders' compensation packages. Such packages are generally already so outrageously huge that providing $40,000 rather than $13,000 worth of health insurance is a trivial increase. My concern is not that plan recipients' demands for health care will collectively increase health care costs, because they include only a tiny portion of the population.

My main concern, instead, is how much these plans further insulate already cocooned top executives from the vicissitudes of daily life, particularly related to coping with our current dysfunctional health care system. What benefits executive health care plans provide is not clear, but presumably they insulate executives from having to deal with the managed care/ health insurance bureaucracy which frustrates patients seeking particular services, but not necessarily the most expensive, or least beneficial services. Such executives might thus not have gut level appreciation of how dysfunctional the health care system has become for even insured patients. Since top executives often are disproportionately influential members of the "superclass," their disconnection from the realities of dysfunctional health care is likely to translate into little real support by the powers that be for meaningful health care reform. There support may be further retarded by the influence of their fellow superclass members whose personal fortunes depend on the status quo in health care.

Real improvement of health care may depend on finding leaders who have better understanding of the plight of real people.

Post Title → Are the Health Plans of the Very Rich Different from Yours and Mine?

"I'm Not a Hospital Guy Anymore"

Some of the issues most important to us at Health Care Renewal are how bad leadership and governance of health care organizations threaten physicians' core values, and thus help fuel our continuous health care crisis of rising costs, decreasing access, stagnant quality, and demoralized health care professionals. These issues are not often discussed in the "main stream medical media," but have been creeping in more often lately.

An important cri de coeur just appeared in the Cleveland Clinic Journal of Medicine, by Thomas F Lansdale III MD [Lansdale TF. A medical center is not a hospital. Cleveland Clinic J Med 2008; 75: 618-619. Link here.] Dr Lansdale dealt mainly with poor leadership of teaching hospitals that threatened the core clinical and academic mission.

The leadership was poor in that it was ill-informed about health care and its values, and perhaps incompetent:

Now the medical center, riddled with 'centers of excellence' instead of departments, answered only to administrators who cared nothing about medical education, except for the Medicare dollars they would lose if they cut the training programs. They spent enormous amounts of money marketing the centers of excellence, and they cut everything else to manipulate the bottom line.

Poor hospital leadership was abetted by poor leadership of accrediting agencies and insurance companies.

We struggled to keep up with the unending deluge of arcane demands from the accreditation organizations watchdogging our teaching efforts.

we capitulate to the for-profit insurance industry that informs us they won’t pay for day 4 of Mr. Jones’ hospitalization because he has failed to meet some arbitrary criteria in their manual.

The effects of the poor leadership were mediated through a stifling bureaucracy that ignored the health care and educational mission.

Nurses now cared for their patients by managing their own support staff, and spent much of their time entering useless information in the computer.

I couldn’t stand the management retreats in which we obsessed about 'customer service' while the waiting time in the emergency department ballooned to 12 hours because there were 'no beds.' There were plenty of beds, but no nurses to staff them.

Furthermore, as we have seen time and time again, managers were quick to suppress any criticism of their power.

I was marginalized when I protested the budget cycles bleeding out support of medical education in favor of the annual purchase of new scanners and surgical gizmos.

The results were:

Medical education slowly slipped from being a calling to folks like me, finally succumbing to bureaucratic lunacy. The pace of teaching and caring for acutely ill patients became intolerable.

The biggest casualty, of course, was the nursing staff. Underpaid, depleted of leadership and morale, they simply disappeared. They were replaced by agency nurses who worked their shifts and didn’t know the doctors or the patients.

We lurch toward physician computer order entry, clinging to the false belief that software programs will prevent adverse drug reactions and delivery of the wrong dangerous drug to the wrong patient. We understaff our pharmacies so that they can’t get the medications to the patients on time or alert us to our own prescribing errors. We burn out our nurses despite years of loyal service

So finally,

My real job is to do everything in my power to keep my patients out of the medical center. I walk the halls now and don’t recognize the institution I grew up in and came to love. Everywhere I look, I see not magic and promise, but dirt and danger.

I'm not a hospital guy anymore.

Read the whole thing, and weep.

So I get to say again: health care is reeling under poor leadership of increasingly large and dominant health care organizations, enabled by poor governance structures. We need to make health care governance more representative of its constituencies, accountable, transparent, and subject to ethical standards. We need health care leaders who are informed about health care and understand its values, are committed to the mission ahead of personal gain, and are unfailingly ethical and honest. Meanwhile, demoralized doctors and nurses succumb to foolish bureaucracy piled up by self-interested managers, and it is the patients finally who suffer the most.

Post Title → "I'm Not a Hospital Guy Anymore"

Middlemen and a Health Care System Dominated by Bureaucrats and Managers

The Wall Street Journal today wrapped up its series on "middlemen" in health care. The summary article has some telling quotes, and some very important data. To start with the quotes,

A lot of the money goes more toward fattening middlemen's bottom lines than toward improving the quality or efficiency of American health care. 'At the end of the day, the only reasonable conclusion is that we waste a huge amount of money on the most nuttily cumbersome administrative system in the world,' says Henry Aaron, a Brookings Institution economist.

While the middleman business booms, health-care costs keep rising, the ranks of the uninsured grow, and paperwork expands as each party in the system tries to enlarge its slice of the pie. 'There's more money to be made by monitoring cash flow than monitoring patients,' says David Cutler, a prominent Harvard University health economist.

And here are the statistics. According to the article, the majority of people who work in doctors' offices, 1.8 million out of 3.3 million, do so in non clinical jobs. Nearly a majority of people who work in hospitals, 2.3 out of 5.5 million, do so in non clinical jobs. So currently almost 50% of people who work in what appear to be the most clinical settings are not doing clinical work.

Health care has been taken over by clerks, bureaucrats, and managers.

This appears to be the fruit of the movement began in the 1980's to break the medical "guild," which some economists held responsible for the high cost of health care (see post here).

The results has been even more rapidly increasing health care costs, decreasing access, stagnant quality, and of course, dispirted professionals tired of contending with myriad clerks, bureaucrats, and managers, most of whom do not seem to understand health care or believe in its values.

And this horrendously complex, bureaucratic non-system is a fertile breeding ground for the conflicts of interest and outright criminality we discuss so often on Health Care Renewal.

Some happy new year to us from the WSJ.

Post Title → Middlemen and a Health Care System Dominated by Bureaucrats and Managers

At UC, Perks Even Go to the Executive's Assistant

"The very rich are different from you and me," said F. Scott Fitzgerald.

In academic medicine, even the top executives' aides appear to be different from you and me.

We had previously posted about an ongoing controversy about the huge University of California (UC) system pays its top managers, including those who oversee its medical schools, or to whom the leaders of these medical schools report.

The latest anecdote to surface, courtesy the San Francisco Chronicle, is about the pay and perks given to the Executive Assistant of UC President Robert Dynes. His current assistant, "who handles Dynes' correspondence and appointment, among other duties," followed Dynes when he moved from San Diego to UC headquarters. For her pains, she received a $25,563 relocation allowance in addition to actual moving expenses, a $520,000 low-interest mortgage, a guaranteed severance package of six months of pay and benefits plus $10,000, and a salary of $106,250.

The Assistant's salary apparently exceeds that given to some university professors. One history professor noted that the Executive Assistant's salary exceeded his starting salary as a full professor. Her salary also exceeds the California Governor's senior executive assistant's salary.

However, the Chronicle reporters noted, "Office workers at the university system typically aren't eligible for perks such as those received by O'Callahan, who holds a nonunion position." Granting a relocation allowances or low-interest mortgages to office workers appears to violate existing UC policies. A UC Regent who is currently reviewing the university's compensations policies and practices noted, "You have policies that should be lived by. That's why you have policies."

An official of the union that represents some UC office workers commented, "It reinforces the old adage that it's not what you know, but who you know."

It also reinforces the impression that at the intersection of academics and health care, the playing field is tilted to benefit those in the headquarters office more than those who actually take care of patients, teach, or do research.

Post Title → At UC, Perks Even Go to the Executive's Assistant

An Economist Puts Down a Physician's Cri du Couer

We previously posted about the consequences of turning control of health care over to managers and bureaucrats, a movement which may have been inspired in part by Einthoven's call in the late 1980's to break up the physicians' "guild." In that post we discussed an op-ed article in the New York Times by Dr Peter Salgo, a cri du coeur (pardon my bad French) about how increasing business pressures were fraying the doctor-patient relationship.

The article drew some responses. One letter, which wowed one of my favorite fellow health care bloggers, was from Professor Uwe Reinhardt from Princeton University, an internationally known health economist. Reinhardt was not kind to Salgo's article.

• Salgo argued that "as health-care dollars became scarce in the 1980's and 90's," hospitals began using business strategies to control costs. Reinhardt countered that total health care spending rose from 1980 to 2000. With all due respect, his reading of Salgo was obtuse. Salgo's phrase seemed to refer to increasing pressures on hospitals' reimbursement, not total health cares spending. And although Salgo was addressing hospitals, Reinhardt added somewhat gratuitously that "per capita spending on doctors services increased even more rapidly." Of course, while spending on doctors increased, the costs imposed on many doctors, at least those in primary care and other cognitive specialties, increased even faster, so that those doctors' income at best barely kept up with inflation (for example, see this survey.)
• Salgo argued that "publicly traded H.M.O's ... began restricting doctors to an average seven-minute 'encounter' with each customer." Reinhardt countered , "I defy him, or any doctor, to produce a memorandum from an H.M.O. to that effect. During the 1990's, H.M.O.'s did extract discounts from doctors. To keep their income at previous levels, doctors voluntarily shortened visits. The H.M.O.'s were not to blame." Here Reinhardt was quibbling, in my humble opinion. Managed care organizations (and Medicare and Medicaid) drove down fees paid to all physicians, while requiring more paper-work and other bureaucratic burdens that increased all physicians' costs. Since anti-trust laws prevented physicians from collectively negotiating with managed care, whatever objections they had to these changes were ineffective. Managed care (and Medicare and Medicaid) mandated changes in physicians' incentives such that those who still wanted to earn a living had only one realistic alternative, to see more patients. It is true that managed care did not directly "restrict" the time physicians spent on patients. But managed care's control of physicians' financial incentives left physicians little choice. Calling how physicians responded to these changing incentives "voluntary" entails a rather collectivist definition of the word, to put it politely.

One wonders why Reinhardt felt the need to take such a heavy-handed approach to Salgo's cri du coeur. Perhaps economists have little sympathy for such intangibles as the doctor-patient relationship, or perhaps Professor Reinhardt was influenced by interests other than those deriving from his academic position.
Prof Reinhardt turns out to be yet another academic who also sits on the board of directors of multiple public commercial health care corporations.

• He is on the board of directors of Boston Scientific, a medical device manufacturer, a position he has held since 2002.
• He is on the board of Triad Hospitals, a for-profit hospital network, a position he has held since 1999.
• Last, but distinctly not least, he is on the board of Amerigroup, a commercial managed care organization, a position he has held since 2002.

Thus, he has fiduciary duties to uphold the financial interests of all three companies and of all three companies' share-holders. Presumably, it is in the financial interest of the latter corporation to defend the actions of commercial managed care in general against any criticisms by physicians. So was his written put-down of Salgo based on his academic background and experience, or on his corporate fiduciary duties? I cannot tell.
Prof Reinhardt did not reveal his fiduciary responsibilities to these three corporations in his letter to the New York Times. Nor did he reveal them on his official Princeton web-page, nor in at least some of his publications in prominent journals on varying aspects of health care policy since 2002 which I could review. See, for example this article in JAMA, this article in Health Affairs, and this letter in the British Medical Journal. These discussed topics that were likely relevant to the interests of device manufacturers, for-profit hospital systems, and/or commercial managed care organizations. (And the latter two both chided physicians for their interests in preserving or enhancing their incomes.)

So once again I say in summary, it seems that the more one looks, the more examples one finds of academics influential in health policy who also are directors of health care companies, yet who may not have always revealed their conflicts when writing about health care, even when their works relate to the interests of the companies whose interests they were legally bound to protect. So how much of their influential work reflects their professional and academic research and beliefs, and how much reflects their fiduciary responsibilities to commercial organizations? Inquiring minds really want to know.

Post Title → An Economist Puts Down a Physician's Cri du Couer

Health Care Bureaucracy

The New York Times reported on the bureaucratic hurdles patients face, especially in regard to paying their health care bills. Some of the quotes in it are priceless:

But become a patient, and you enter a world of paperwork so surreal that it belongs in one of Kafka's tales of the triumph of faceless bureaucracy.

Nothing is as it seems: patients receive statements that often do not reflect what is actually owed; telephone calls to customer service agents are at best time-consuming and at worse fruitless. The explanation of benefits that insurers send out - known as E.O.B.'s - are filled with unintelligible codes.

I'm the president's senior adivser on health information technology, and when I get an E.O.B. for my 4-year old's care, I can't figure out what happened, or what I'm supposed to do - Dr. David Brailer, National Coordinator for Health Information Technology

I understand the words of diagnoses and procedures. But codes? No. Or how things are paid or not paid? I don't understand that - Dr. Blackford Middleton, Harvard Medical School

The number of bureaucrats between the point of service and the final cash reckoning is just incredible. - Dr. Thomas Delbanco, Harvard Medical School

You can't be just sick. You have to be sick and drowning in paperwork. It's comical. It's unbelievable. What if I was an elderly person, or a single person? What if I wasn't healthy enough to handle it? - Cancer patient

I'm paying through the nose for this premium, and when I go to the doctor it's a roll of the dice as to whether or not they'll pay it. It seems like it depends on the mood of whoever happens to be doing the claim that day, or on the phases of the moon. - Patient who received three radically different E.O.B.'s from his insurer for three visits for bronchitis

The article also suggested that 30% of US health care expenditures now goes for administration, although it gave no source for this data. If true, that means the US spends more than $300 billion a year on health care bureaucracy.
Funny, I thought those who proposed managed care said it would save money....
Anyone still doubt that there is something horribly wrong with how many of our health care organizations are run?

Post Title → Health Care Bureaucracy

Why Do We Have Pandemic (Un)Preparedness?

The Washington Post has an editorial today about US pandemic preparedness, or lack thereof. It noted, in particular, that a big obstacle to developing and administering a vaccine for avian influenza is that "American pharmaceutical companies, scared off by liability issues and low profits, no longer make vaccines at all." Additionally, it notes that the country will need to provide "help for US hospitals, which are filled to capacity."
It would be well for editorial writers to ponder why a country that spends more than $1 trillion on health care a year is unable to produce any vaccines, and does not have enough hospital beds to respond to natural disasters.
In general, despite our immense spending, the US has decreasing capacity to provide primary care, to provide acute care, and to provide for public health. Although millions of words have doubtless been written about our ever-rising health care costs, there has been too little enquiry about where all that money is going.
I hardly have all the answers. Yet perusal of Health Care Renewal would suggest that much of the money is not being wisely spent, and far too much fails to provide health care on the ground.
For example, we have put up numerous posts on how we over-pay for some drugs, devices, and procedures, especially those that are new and apparently high-tech, or once were. Most recent examples range from $1600 screws used for spinal surgery (see post here) to currently marketed brand-name prescription drugs whose yearly price increases are far greater than inflation (see post here).
We seem to spend inordinate amounts on management, administration, and bureaucracy, on marketing, and on legal expenses. Regarding the former, the number of health care managers grew over 700% from 1983 to 2000, and there are now more managers in the US than doctors (see post here). The CEO of a not-for-profit health care system can command more than $500,000 in total compensation (see post here), of a not-for-profit managed care company, over $1 million (see post here), and of a for-profit managed care organization, over $100 million (see post here).
All too often, those who run US health care organizations have conflicts of interest. Recent examples include those alleged about the board of the University of Medicine and Dentistry of New Jersey (see post here), advisory panels of the US Food and Drug Administration (FDA) (see post here), top leaders of the US National Institutes of Health (NIH) (see posts here and here), etc., ect. Some have wound up convicted, e.g., recently, the former CEO of the Fletcher Allen health care system (see post here).
Thus, it seems that the excess power concentrated in ever-larger US health care organizations, and mismanagement, conflicts of interest, and even corruption at the tops of these organizations have diverted resources away from actually providing health care to those who need it. We spend more and more on hospital management, but have fewer acute care hospital beds. We have endless supplies of drugs for erectile dysfunction and restless leg syndrome, but not of influenza vaccine.
But we won't be able to address this problem until enough people become aware of it.

Post Title → Why Do We Have Pandemic (Un)Preparedness?

Embattled Hospital Advertises for an Arts Curator

Things have been pretty tough for most hospitals in the UK. According to the Daily Telegraph, many hospital trusts have been going heavily into debt. In 2004, they were collectively 366 million pounds sterling in the red, and are projected to be about 800 million pounds in debt this year. As the Telegraph put it, "frantic cost-cutting measures had led to closed wards, cancelled operations, reduced staff numbers and angry creditors." Furthermore, "economists blame higher spending on NHS bureaucrats, increased reliance upon the private sector, higher costs of NHS litigation and higher wage bills." Although in 2000 the government "decided there were too few hospital beds per head of population," "the number of overnight beds in England has fallen steadily, from 186,290 in 2000 to 184,207 last year."
I wonder how those in the US who champion global budgeting in a single-payer health system as a way to nearly painlessly control health care costs would respond?
Meanwhile, a truly picturesque example of questionable management priorities has appeared. Addenbrooke's Hospital in Cambridge has been under fire since a patient committed suicide after asking a physician to "direct her to a tall building so she could jump off" (see the article in the Guardian) and for having one of the worst MRSA (methicillin resistant staphylococcus aureus) rates in the country (see article in the Cambridge Evening News). So the hospital received plenty of unwanted publicity when it advertised a part-time art director's position (at a 37,000 pounds per year rate), described as a "dynamic art curator to manage, lead and develop the hospital's art collection" (see the article in the Times). The hospital claimed that the money came from charitable donations, and that "the therapeutic benefits of art in hospital which embraces visual arts, poetry, music, dance and gardens is well recognised and encouraged by the Department of Health" (see the article in the Daily Mail.) But in the Times, an unnamed hospital nurse said "it's disgusting," and noted that the salary rate for the curator was only slightly less than that of a nurse manager.
The tendency of hospital administrators to focus on their pet projects, even when basic care is under threat, apparently is not limited to the US.

Post Title → Embattled Hospital Advertises for an Arts Curator

Tommy Thompson on the US Department of Health and Human Services Bureaucracy

This isn't new, but I just found it, and couldn't resist posting it.
This quote appeared in the Milwaukee Journal Sentinel last month, from a press conference Thompson gave after he announced his resignation.

"Out here, in this department, you get an idea and you have to vet it with all the division heads and the 67,000 employees. . . . then it goes over to the supergod in our society, and the supergod is O.M.B. [Office of Management and Budget.] And they turn you down nine times out of 10, just to show you who the boss is. Then it goes to the young intelligentsia of the White House, who don't believe that anything original or good can come from a cabinet secretary. And if you do get by them, it goes to the president. And if the president does agree with it, it goes on to the Congress, and if Congress ever does pass it, it's time to retire."

Post Title → Tommy Thompson on the US Department of Health and Human Services Bureaucracy