Managing Managed Care

Our inequitable, inefficient, oftentimes uncaring health care "system," revealed. -- Jeffrey G. Kaplan, M.D., M.S.

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Healthcare Reform in the U.S.

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The United States is the only wealthy, industrialized country that does not ensure that all of its citizens have healthcare coverage.

Insuring America's Health: Principles and Recommendations, Institute of Medicine at the National Academies of Science, January 14, 2004, last accessed Tuesday, February 2, 2010

"The debate over health care reform in the United States centers on questions about whether there is a fundamental right to health care, on who should have access to health care and under what circumstances, on the quality achieved for the high sums spent, the sustainability of expenditures that have been rising faster than the level of general inflation and the growth in the economy, the role of the federal government in bringing about such change, and concerns over unfunded liabilities."

"Most personal bankruptcy in the United States is caused at least partly by medical debt[1][2] which is almost unknown in other countries in the developed world.[3][4]The United States spends a greater portion of total yearly income in the nation on health care than any United Nations member state except for East Timor (Timor-Leste),[5] although the actual use of health care services in the U.S., by most measures of health services use, is below the median among the world's developed countries."[6]

Wikipedia—"Health Care Reform in the United States"

The healthcare debate continues.... Many of the healthcare reform ideas have been proposed and debated, ad nauseam with nothing to show for it.  Congress has failed to act time after time and president after president has failed to deliver.  It's getting old.

Here's a brief history of non-events, promised in various 'State of the Union' addresses:

George W. Bush in 2005:

“To make our economy stronger and more productive, we must make health care more affordable and give families access to good coverage....I ask Congress to move forward on a comprehensive health care agenda, with tax credits to help low-income workers buy insurance, a community health center in every poor county, improved information technology to prevent medical error and needless costs, association health plans for small businesses and their employees, expanded health savings accounts, and medical liability reform that will reduce health care costs and make sure patients have the doctors and care they need.”

Bill Clinton in 1993:

“All of our efforts to strengthen the economy will fail unless we take bold steps to reform our health care system....The American people expect us to deal with health care. And we must deal with it now.”

Richard M. Nixon in 1974:

“The time is at hand this year to bring comprehensive, high-quality health care within the reach of every American. I shall propose a sweeping new program that will assure comprehensive health insurance protection to millions of Americans who cannot now obtain it or afford it.”

Harry S. Truman in 1949:

“We need — and we must have without further delay — a system of prepaid medical insurance which will enable every American to afford good medical care.”

Barak Obama last week in his address said that after generations of failure to come to closure on legislation, Congress is closer than ever to give us a National health plan and he challenged the Centrists: “'If anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors and stop insurance company abuses, let me know.'"

"But the debate has raged for so long that there was not much new for Mr. Obama to contemplate."

David Herszenhorn. "A Deep Divide Separated by Plenty of Common Ground" Prescriptions, NY Times; posted Jan. 31, 2010

No option on the table is ideal, so consider 'Single Payer'


  1. Creating high-risk pools for enrollees with preexisting conditions
  2. Channel patients into Medicare and rely on the federal government as the ultimate risk bearer.
  3. The individual mandate—characterized by the Supreme Court as an annual tax assessed against individuals who have not purchased qualified health insurance within the calendar year.
    • [Nevertheless,] whereas ​"Switzerland, Singapore, and Germany .... achieved universal coverage and made insurance affordable even for their citizens with highest health care costs by instituting an individual mandate. One major difference, however, is that unlike the ACA, the mandates instituted by these countries are reinforced with effective penalties for nonparticipation, thus ensuring that lower-cost enrollees—generally healthier individuals—balance out the costs of the others who require more medical resources."
    • "If the goal is universal health coverage that provides care even for patients with the highest health care costs without relying on public insurance programs, the financial burden must be spread across the whole population. This requires either massive government spending, whether through high-risk pools or Medicare, or requiring individuals to purchase insurance."
    • "Maintaining the popular aspects of the ACA requires keeping its less popular part, and achieving the stated goal of universal coverage requires a serious commitment to individual responsibility."

See: "Achieving Universal Coverage Without Turning to a Single Payer: Lessons From 3 Other Countries."  JAMA, accessed 2/27/17

To paraphrase Peter Drucker, business management guru, you cannot manage what you don't measure and you cannot measure what you don't manage.  Single payer is, to me, a former physician-executive, an opportunity to collect more comprehensive process and outcome data, and then better manage the continuum of care by it.

With single payer system, by definition, we can integrate all the patient care data in all the applicable settings—hospital, primary care physician (PCP)/medical home, specialty and ancillary care.  This non-silo view of things also allows incentives to be better aligned. For example, I, as a practitioner can make more if I help patients better, and I practice within a reasonable standard, efficiently, cost-effectively and effectively.  The obverse is that if I churn, over utilize, over refer, fractionate the care, have a high preventable hospitalization rate, etc., I should make less.

In single payer, when the incentives are properly aligned, "for profit health care" becomes an oxymoron, medical loss ratios will once again be used to help us refocus on putting 'patients before profits,' and the gross disparity of earnings—PCP to specialist—will diminish, allowing the primary care supply to better meet the demand for appropriate, timely care.

— Public option wouldn't work; it has no strength in numbers for the negotiators.  Specifically, it will not allow the insurers to negotiate lower prices from hospitals, doctors, durable medical equipment vendors, etc.  Nor will it allow doctors, incentives based upon their good efforts.

Here are the mechanics of creating such an incentive program: 

  1. You will need population data such as a single payer system can afford.
  2. Translate those data into comparable information: Assimilate data from all relevant settings, develop a longitudinal picture of care and acuity-adjust it.  The best construct for these purposes is "episodes of care." It can tell you which processes give the best outcomes.
  3. Next comes 'comparative effectiveness analysis' fieldwork.  It helps you figure out what works; what doesn't.  You evaluate the contribution of those who participate in care processes. Given the level of illness, are their collective outcomes better?  (Note: this type of analysis necessitates also controlling for things that are beyond the command of those participating in the healthcare equation such as the patient's employment status, competing priorities in their lives, generally, the vicissitudes of life). 
  4. With this information, you can then align the incentives so that patient, practitioner and facility have the same objective—the right care at the right time and place and that there are no incentives for delaying care—bureaucratic hurdles, for example; no incentives for over utilizing—for instance, unnecessary antibiotics or blind alley testing; no incentives for under utilizing—such as, delayed physical therapy, mental health care, etc.).  With incentives aligned, everyone's on the same page with a single goal of efficient, effective and accessible care.

I understand that President Obama wanted accountability in "No Child Left Behind" [See "Playing to Learn" comment, below].  He wants it to move from paying based upon volume to paying for performance—Sound familiar?

Why reinvent the wheel?

Take a minute—please identify the source of this recommendation: (The challenge was submitted by a National HMO Medical Director):

  1. Group practice of medicine, preferably around a hospital. 
  2. More effective public health and preventive services available to the entire population based on its needs. 
  3. Group-based payment for health services structured through the use of insurance or taxation to share health care costs broadly across people and time. 
  4. Enhanced coordination between medical and community services; and 
  5. Make improvements in medical education to strengthen the social content of curriculum and expand the supply of general practitioners, as contrasted with specialists.

"Report of the Committee on the Costs of Medical Care" - Summary of Recommendations."—1932.

Our health care system is particularly inefficient and, for some, inaccessible.  As for the quality of care, by any measure it is variable at best.  Why is it so hard to fix?  Why do we pale in relation to most of the industrialized world?

Quoting the venerable Dr. Arnold S. Relman of the New England Journal of Medicine fame, "This problem [the lack of 'practical suggestions'] is a direct result of "the inappropriate organization and perverse economic incentives of a health care, Top Ten delivery system that motivates physicians and medical institutions to maximize their income rather than focus on optimal patient care.”

For Dr. Kaplan's Medical Economics' editorial comment on this subject, see Bernie Sanders' "'Medicare-for-all' gets mixed reviews from docs.'"

The byline is: Physicians react after democratic presidential candidate Bernie Sanders unveiled his single-payer healthcare plan this week.  » Read what they said

The Top 10 Challenges to Managing Health Care's Cost, Quality and Access, i.e. Managing the Care:

  1. Value: to enhance it, practitioners must be aligned to minimize Cost while maximizing Quality and Access
  2. Pay for what works well. Money's the main stimulus: management suffers from always having inadequate provider incentives
  3. Information technology (IT) limitations—live with it!
  4. Measure and manage; this requires that data be translated into information (If there's no EHR data, use claims data).  Use it to build an awaareness of what happens to patients over time. [See Abpout MMC on the home page for a simple way to get at this.]
  5. Episodes of care—a grouper technique that shows all care over time, regardless of setting and it is case-mix or acuity-adjusted
  6. Outcomes—the key parameter of what we want to reward; clinical results, strangely, are neither tracked nor optimized in most health care practices
  7. Case or disease management
  8. Guidelines/pathways—medical and surgical
  9. Lack of patient loyalty or engagement—it is one of the main stumbling blocks. (A related one is job-lock; move away from 'pre-existing conditions,' waiting periods, heavy co-pays and deductibles, employer-based insurance and state border restrictions)
  10. Defensive medicineis a distraction and it is insidiously costly, despite claims to the contrary​.

Cross-referencing to; medical Economics' blog:

“” April 16, 2016


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