Wednesday, February 28, 2007

Government vs. Market Reform - Overcoming Cultural and Political Barriers to Innovations and High-Performance Care

The following appeared on February 5, 2007 in and is reprinted with permission

The Mayo Clinic in May 2006 and the Commonwealth Fund in August 2006 recommended similar frameworks for improving health care in the U.S.

Mayo Clinic, National Reform Symposium Recommendations

1. Build public and business mandate for national change
2. Define essential care for all Americans
3. Encourage formation of integrated systems
4. Transparency among systems and physician practices
5. Results-based reimbursement with patient component for incentives
6. Reward consumers for choosing high quality health plans and providers

Commonwealth Fund, High Performance Health System Recommendations

1. Expand universal coverage
2. Implement major quality and safety improvements
3. Work towards a more organized delivery system that emphasizes primary and preventive care that is patient-centered
4. Increase transparency and reporting on quality and costs
5. Reward performance for quality and efficiency
6. Expand the use of interoperable Information technology
7. Encourage collaboration among stakeholders

Narrowing the Reform Gap

What’s striking about these reports--one from a conservative physician organization and the other from a liberal think tank--is their similar goals: coverage for all, patient-centered care, pay-for-performance rewards, market transparency, stakeholder collaboration, integrated systems, and a universal IT infrastructure to make it all happen.

These similarities indicate a narrowing ideological reform gap between conservatives and liberals. Neither report calls for universal coverage financed by the federal government. Both reports recognize the American system is unique. Americans historically embrace a heterogeneous private-public system based on competitive capitalism.

Blending of Private and Public Models

The U.S. health system now blends three models--private insurance with doctors and hospitals, public contracting by Medicare and Medicaid with private and public providers, and public integrated systems like the VA and public safety-net hospitals.

Both reports say a future system will combine and require market and public policy upgrades. The market and the government each have their place.

The market can innovate, respond to consumers, educate them and create efficiencies. Public policies can address information, risk, and access deficits by promoting health, social good, transparency and accountability. Government can set rules, ensure universality and invest in research to improve care, but it cannot deliver care across the board.
Neither markets nor government alone can do what needs to be done.

The Importance of American Cultural Factors

Unfortunately, American culture may impede combined market and government innovation.

For 230 years, American culture has shared these features:
• Distrust of centralized government
• Faith in voluntary individual initiatives, rather than big organization or big government mandates
• Resistance to sweeping obligatory policy changes
• Reluctance to heavily tax the healthy and wealthy to aid the sick and the poor
• Belief in equal opportunities but not necessarily in equal outcomes
• Freedom of doctors to practice in whatever setting they choose, large or small, independent or as employees
• Freedom of hospitals, doctors and patients to engage in voluntary free market, fee-for-service transactions without government oversight
• Belief in the powers of medical technology
• Insistence on immediate access to latest medical technologies
• Willingness to engage in partisan politics to achieve either conservative, liberal or local political goals.

Partisan Politics

Today, partisan politics poses barriers to a high performing system. Everybody knows money and politics are the mother’s milk of systematic health care improvement, but it is considered politically incorrect to say this publicly.

Others have not been so shy about distinguishing between political goals--left and right.

Daniel Patrick Moynihan, the late senator from New York and a liberal lion, explained the political problem this way, “The central conservative truth is that it is culture, not politics that determines the success of a society. The central liberal truth is that politics can change a culture and save it from itself.”

Milton Friedman, the conservative economist, in making the case for competitive capitalism, argues, “The preservation of freedom is the protective reason for limiting and decentralizing government. The great advances of civilization have never come from centralized government but from individual genius, strongly held minority views, and a social climate permitting variety and diversity. By imposing uniform standards, central government could undoubtedly improve the level of performance, but in the process government would replace progress by stagnation and substitute uniform mediocrity.”

And so, the national ideological battle is joined.

Local and Regional Cultural Clashes--the RHIO Rodeo

What politicians seldom mention is intense rivalries among health care stakeholders at regional and local levels. We are, after all, a competitive society. The best recent example of this is difficulties in forming Regional Health Information Organizations (RHIOs).

RHIOs are a grand concept. In theory, they would share data among various regional or local entities, avoid duplication, make patient care safer and more effective, achieve practice efficiencies and render more transparent aggregate costs of the entire cost episode for consumers who now pay a larger portion for their care.

Unfortunately, RHIO stakeholders are “competitors.” As such, they reluctantly share data, lest their rivals learn their costs, strengths, weaknesses and strategies.

Six Forces Driving--and Killing—Health Care Innovations

As Regina Herzlinger has outlined in “Why Innovation in Health Care is So Hard,” Harvard Business Review, May 2006, six forces, all political in one way or another, can drive or kill innovation.

• Stakeholders--Political foes can kill innovation. Examples: “bad-mouthing” by hospitals and physicians of Health Stop, a chain of physician walk-in clinics; certificate-of-need laws blocking physician-owned ambulatory care centers or specialty hospitals; and medical establishment’s condescending criticism of “integrative” medicine.
• Funding--Health care funding may depend on FDA approval, Office of the Inspector General scrutiny, Medicare payment decisions, commercial insurers’ estimate of long-term cost benefits, and doctors’ and consumers’ receptiveness. These funding decisions rest on political lobbying, e.g, device manufacturers attempting to persuade Medicare of safety benefits of implanted heart pacemakers, or lobbying by cancer or physician organizations to compensate providers for colonoscopy screening.
• Policy--Innovation viability tends to be political. Policy-makers have erected a network of regulations to prevent human damage caused by incompetent or fraudulent behavior. Policy-makers are acutely aware almost anything they endorse automatically becomes a niche industry that has the potential of being exploited by health care entrepreneurs or aggressive consumers. These government-based programs generally live on in perpetuity, never to die, never to fade away.
• Technology--Here politics can be a nightmare for innovative entrepreneurs. Timing is everything. Move too early and infrastructure to support innovation may not be place. For example, electronic or personal health records will not take wing until Medicare and commercial insurers reward doctors for IT installations. Another example is the pay-for-performance movement. For P4P to take hold, doctors and hospitals must have electronic health records in place. Move too late and competitive advantage goes away.
• Consumers--Health care consumers are a force to be reckoned with. Consumers belong to AARP, disease associations, Internet “disease tribes,” gray panther organizations, and high deductible health plans. Six million now own health savings accounts. But innovations may hinge on patient privacy issues, doctors recognizing that prompt payment at the point of care speeds cash flow, and hospitals acknowledging that greater price transparency is the key to their futures.
• Accountability--To prove beyond reasonable doubt that innovations satisfy demanding consumers and cost-pressured payors can be a tricky proposition. Are these innovations safe and effective? Do they save money? Are they superior to existing products? For start-up companies, the answers to these questions, which may take years to answer, can be critical to success or failure, as start-ups “burn” through their cash and lose investors.
Overcoming Barriers Depends on Where One Sits

How can one overcome these barriers these political, policy and market barriers? The answers, of course, depend on to whom one talks.

In my 2005 book Voices of Health Reform, I interviewed 41 national health leaders.

Not surprisingly conservatives favored consumer-driven care, health savings accounts, high deductible plans, IT innovations, physician-based ownership initiatives, decentralization of care and a market-based, consumer-driven system. Conservatives maintain consumers are not to be pampered. They are perfectly capable of making the right choices--given enough information and enough transparency.

Progressives, again not surprisingly, favored greater Medicare and Medicaid funding. They regarded consumer-driven care as a temporary ideological “fix” that would not save money, blasted market forces as cost-inflators, and repeatedly said most consumers, particularly the old and the ill, are unable to differentiate care on basis of cost and quality. Progressives predicted the entire system would collapse within a few years after the Bush Administration ended.

Real and Virtual Integration

On both sides, experts are calling for a more organized approach to care through larger integrated systems--both real and virtual. Americans have a penchant for individualism and privacy. Since 60 percent of doctors remain in groups of four less and 75 percent in groups of 10 or less, I predict most larger provider organizations will be virtual. That is, they will be composed of independent physicians rather than salaried physicians working under one corporate roof.

Can We Have Universal Coverage?

Universal coverage is on everybody’s agenda, but can it be done? Some are betting on innovative state programs, such as the ones in California, Massachusetts, Maine, and Vermont. But will other states follow like lemmings over the universal cliff? There are signs Pennsylvania and Illinois are making their moves. Others say individual mandates, as in car insurance, may do the job. All believe universal participation by whatever means--employer, government or individual mandates--will be necessary.

Spurs to Innovation

Adding 47 million uninsured to the market might galvanize innovation. Removing Stark Laws, moratoria on physician-ownership of facilities, and certificate on need laws would also help innovation. Policy decisions, already in existence in Switzerland, a country that requires all citizens to buy insurance and emphasizes consumer-centered care, may provide another answer.

Market-Based Pricing

Basing pricing on performance, better outcomes, keeping patients healthy and transparency may help improve the system by aligning consumer, payor, and health plan interests. The Bush Administration has announced providers dealing with CMS must move towards price transparency. Already 42 states require that hospitals post prices. But moves to make pricing more transparent are going slowly, partly because keeping patients healthy doesn’t pay and partly because changing systems to inform and accommodate consumers, takes time, energy, money and political compromise.

Government Oversight

Whatever evolves, government oversight will be necessary. Herzlinger recommends a Security Exchange Commission for health care because of the uncertainties and abuses of price and quality in a rapidly changing system. Consumers need adequate information, and health care organizations and providers may need financial results verified by an independent auditor.

To sum up, a consensus is growing among various political constituencies that something needs to be done to improve health care. This improvement will require markets to innovate, government to change policies that restrict innovations, more incentives to reward consumers for choosing quality, more rewards for providers to give measurably superior care and larger organized, integrated and coordinated systems of care.

Tuesday, February 27, 2007

Clinical innovaations, retail clinics, -Consumer Health Care Innovation: A List of In-Store Clinics

This is my third blog on retail clinics – those small in-store clinics located inside stores staffed by nurse practitioners.

• In my first, December 22, 2006, I described how Prohealth Physicians, a 200 provider primary care group in Connecticut, was setting up its own in-store clinics.
• In my second, February 15, 2007, I told why these clinics would not take the primary care world by storm because many consumers would still prefer going to a more professional setting to a doctor they knew and who knew them.
• In this, my third, I shall simply list existing retail clinics – their operators, headquarters, locations, retailers, and slogans – for the listless among you.1,2

Here’s the list.

• Aurora Quick Care, Milwaukee, 17 locations in Wisconsin, Aurora Pharmacy, Piggly Wiggly, Wal-Mart, “No appointment. No Waiting. No Hassle.”
• Curaquick, Sioux City, Iowa, 11 locations in Iowa, Nebraska, and Ohio, Hy-Vee, Pharm Discount Drug, “The nurse is in.”
• HealthRite, Atlantic City, 1 location in New Jersey, ShopRite grocery stores, “Health care right when you need it!”
• Medpoint Express, South Bend, Indiana, 3 locations in Indiana, Wal-Mart, “Get well sooner.”
• MinuteClinic, Minneapolis, 156 locations in Arizona, Connecticut, Florida, Georgia, Indiana, Kansas, Maryland, Michigan, Minnesota, Missouri, Nevada, North Carolina, New Jersey, New York, Ohio, Rhode Island, Tennessee, Texas, and Washington, CVS, Target, Supervalu’s Cub Stores, Bartell Drugs, QTC, “You're sick. We’re quick!”
• QuickClinic, Akron , Ohio, 3 locations in Ohio. ACME Fresh Market, Ritzman’s Pharmacy, “On the spot relief.”
• QuickHealth, San Francisco, 7 locations in California and Iowa, Farmacia Remedios, Longs Drugs, Wal-Mart, “We make quality medical care affordable and convenient.”
• RediClinic, Houston, 29 locations in Arizona, Georgia, New York, Oklahoma, and Texas, HEB, Wal-Mart, Duane Reade, “Get well. Stay well. Fast!”
• SmartCare, Greenwich Village, Colorado, 12 locations in Colorado, North Carolina, and South Carolina, Kerry Drug, Wal-Mart, “Convenient healthcare for everyday needs.”
• Take Care Health Systems, Conshohocken, Pennsylvania, 36 locations in Kansas, Missouri, and Oregon, Brooks-Eckerd Pharmacy, Rite Aid, Osco, Sav-On Drugs, and Walgreen’s, “Professional Care, Always There.”
• The Little Clinic, 14 locations in Florida, Indiana, and Kentucky, Kroger, Publix, “Convenient neighborhood care.”


In-store clinics’ rise signals arrival of consumer-driven health care. Modern consumer now yearn for quick, low-cost, convenient clinical service with no waiting during off-hours. Clinics are an example of four types of innovations,

• changes in industry or market structure (shift to decentralized settings),
• demographic or population changes (search of demanding, time-bankrupt babyboomers for convenience),
changes in perception , mood, and meaning (approval of retail outlets as appropriate sites for care),
disruptive innovation (substitution of nurse practitioners for physicians.)


1. Bohmer, Richard, “The Rise of In-Store Clinics – Threat or Opportunity? New England Journal of Medicine, volume 356, pages 765-768, February 22, 2006.
2. Scott, M.K, Health Care in the Express Lane, The Emergence of Retail Clinics, prepared for California Healthcare Foundation, January 30, 2007.

Monday, February 26, 2007

Clinical Innovatons - Innovative Approaches to Time --The Inelastic Asset

The New York Times recently carried this short word piece, which I quote in full: 1

Insights: The Ticking Clock in the Doctor’s Office”

“Patients on routine visits to their primary care doctors often have a lot of questions but not enough time to get good answers.”

“That is the conclusion of a group of researchers who reviewed videotapes of almost 400 visits in three medical settings. Their report appears online in the journal Health Services Research.”

“The problem is a result of pressure on doctors to limit visit lengths so they can see more patients, said the researchers, who were led by Ming Tai-Seale of the Texas A&M Health Science Center.”

“The patients whose visits were reviewed were 65 or older and had a range of incomes. The median time for visits, the researchers said, was just under 16 minutes.”

“During that time, patients tended to bring up six subjects. About five minutes was devoted to one major topic, with the others receiving as little as one minute.”

“With only about two minutes of talk time on even the major topic from each speaker,” the authors wrote, “we could not help but wonder how much is accomplished during such a brief exchange.”

“When a patient presents a complex problem, the doctor has two basic choices: extend the visit by taking time from another patient, or limit the time spent on other subjects.” “The second choice was the most common one, the study found.”

Drucker on Inelasticity of Time

This report brought to mind a profound passage by Peter F. Drucker, 2 my favorite social and managerial philosopher because it’s impossible to read the man without learning something.

“Effective people know that time is the limiting factor. The output limits of any process are set by the scarcest resource. In the process we call ‘accomplishment,’ that resource is time.”

“Time is also a unique resource. One cannot rent, hire, buy, or otherwise obtain more time.”

“The supply of time is totally inelastic. No matter how high the demand, the supply will not increase. There is no price for it and no utility curve for it. Moreover, time is totally perishable and cannot be stored. Yesterday’s time is gone forever and will never come back. Time is, therefore, always in exceeding short supply.”

Creating More Time for Patients

What can physicians do to create more time for patients and less time for hassles and paperwork?

Here’s a laundry list.

• Read The Successful Physician: A Productivity Handbook for Practitioners (Marshall O. Zaslove, MD, an Aspen Publication, 1998.)
• Buy a copy for each member of your staff.
• Read Managing Patient Expectations: The Art of Finding and Keeping Loyal Patients (Susan Keane Baker, Jossey-Bass, 1998.)
• Buy a copy for each member of your staff.
• Instruct patient to write top three questions in advance.
• Forbid interruptions.
• Consolidate answering of phone calls and emails.
• Encourage patients to ask questions about minor illnesses by email.
• Set aside “asymmetric” time to answer e-mails without interrupting patient flow and be paid for it too, a luxury you don’t have with phone calls.
• Have a nurse practitioner or physician assistant handle minor problems.
• Hire a “scribe” to take notes while you do the history.
• Get an electronic health record, and enter your findings via a touch screen or with key strokes.
• Install a piece of software, the Instant Medical History, so patients can narrate their history, guided by a clinical algorithm, before entering exam room.
• Ask your nurse how you could do things better and more efficiently.
• Delegate clinical tasks to others.
• Cross-train your staff to do different tasks.
• Re-engineer – go into a solo practice with a lean staff, lean IT systems, and a lean space.
• Cut overhead dramatically so you can spend more time with patients.
• Schedule group visits for patients with common problems.
• Become a concierge physician or go to a cash-only practice, charge a retainer fee for unlimited attention, slash overhead, eliminate third party payment, sharply reduce your patient load so you can spend more time with each patient.
• Reread The Successful Physician: A Productivity Handbook for Practitioners.

1. Nagourney, Eric, “Insight: The Ticking Clock in the Doctor’s Office, New York Times, February 6, 2007.
2. Drucker, Peter, The Effective Executive, Harper & Row, Publishers, 1966.
3. Zaslove, Marshall, MD, The Successful Physician: A Productivity Handbook for Practitioners, An Aspen Publication, 1998
4. Baker, Susan Keane, Managing Patient Expectations: The Art of Finding and Keeping Loyal Patients, Jossey-Bass Publishers, 1997.

Sunday, February 25, 2007

Clinical innovation - Disruptive Innovation at Work: One Solo Doc, One Internet, One Room, One Year Later

It's no secret that health care delivery is convoluted, expensive, and often deeply dissatisfying to consumers. But what is less obvious is that a way out of this crisis exists. Just as the PC replaced the mainframe and the telephone replaced the telegraph operator, disruptive innovations are changing the landscape of health care Nurse practitioners, general practitioners, and even patients can do things in less-expensive, decentralized settings that could once be performed only by expensive specialists in centralized, inconvenient locations. If the natural process of disruption is allowed to proceed, the result will be higher quality, lower cost, more convenient health care for everyone.”

Clayton Christensen, Richard Bohmer, John Kenagy, “Will Disruptive Innovations Cure Health Care?” Harvard Business Review, September 1, 2000

Every once in a great while,
thanks to God, Google, Good Friends, and Go-Go Bloggers,
word reaches me through outer, inner, or cyberspace,
that some Wild and Crazy Guy,
has turned the world of health care upside down
by disrupting the way things ought to be,
or are presumed to be by those in the know.
The way things ought to be, of course,
is doctors working in teams in big groups1,2
to get the right things done at the right time,
for the right reason with the right measurable results.
But now my good friend, Doctor Val Jones,
Senior Medical Director at the Revolution Health Group,
owners and developers of,
a comprehensive website designed to empower consumers,
and to turn the cosnumer health care world downside up,
sends me word through her personal blog,
which you can google by typing in ValJonesMD
or going through,
that this Wild and Crazy Guy in Rochester, New York
Gordon Moore, MD, a family doc, working alone,
but on the faculty of the Institute of Health Improvement,
has come up with and implemented,
this Wild and Crazy Idea,
that One Doc Working Alone in One Room,
with no support staff and nothing but a computer
with Internet access to keep him company,
can revolutionize solo practice,
by making it more productive, profitable, and fun.
Sure, I know it sounds crazy,
But he backed and documented
the theory and work of his practice
in a medical journal article,
“Going Solo: One Doc,
One Room, One Year Later.”3
In one year, he did the following:
Maintained open access scheduling,
meaning he saw patients on the day they called;
took his own call, reduced other access barriers,
developed deep and personal relationships
with his patients by spending 30 minutes
with each one of them;
reduced his patient load
from 25 to 30 to 12 patients each day;
operated without support staff,
in one room of 150 square feet,
averaged $65 per patient visit, and
expected to take home $155,000 a year,
thanks to a lean IT system and low overhead.
He did this with high patient satisfaction rates,
and a high percent of quality goals met.
He built his unorthodox practice
on these four basic principles:
1) Access. Patients have unlimited access to the care
and information they need when they need it.
2) Interaction. Interaction between the patient and care team is deep and personal.
3) Reliability. The system exhibits high reliability in that it provides all and only the care known to be effective.
4) Vitality. The practice has vitality: happy employees, a spirit of innovation, and financial viability.
Along the way as he practiced these principles,
he developed and articulated these philosophical axioms.
Interaction is not the price we pay to submit a claim.
It is the essence of what we do.”
“The strategy of exhortation, “Try harder! Read one more article!
Check one more time! Go to one more conference! is bankrupt!”

What do I call this Wild and Crazy Guy’s strategy
of solo practice, lean IT systems, one room, no support staff,
ridiculously low overhead, spending more time with patients,
developing deep and personal relations with happy patients,
meting clinical goals of quality,
and upsetting the multispecialty conceptual applecart,
at least in this isolated instance,
that being in integrated groups the only way to practice?
I call it “Disruptive Innovation!”


1. Halvorson, George, and Isham, George, Epidemic of Care: A Call for Safer, Better, and More Accountable Health Care, Jossey-Bass, 2003.
2. Lawrence, David, From Chaos to Care? The Promise of Team-Based Medicine, Perseus Publishing, 2002.
3. Moore, Gordon, “Going Solo: One Doc, One Room, One Year Later, “ American Academy of Family Medicine, March 2002..

Saturday, February 24, 2007

Clinical innovation - Innovation in the System at Large and in a Dermatologist’s Office: Mohs than Meets the Eye

The other day I was in a dermatologist’s office to have a small squamous cell carcinoma on my left temple excised. In the waiting room, I met a distinguished elderly gentlemen. Upon learning I was a doctor, he bluntly informed me, “The system is broken, and it has to be fixed.”

Greed and Corruption as Problems

As it turned out, he had done his part, serving on a hospital board and on a focus group for a large physician group. His position was that “ Greed” (with a capital “G”) has “Corrupted” (capital “C” here too) health care. He cited the 600 pharmaceutical lobbyists carrying “satchels of cash” to influence the recent Medicare Part D decision, the 100,000 pharm reps crowding doctors’ offices, and the 30% of national spending devoted to marketing and administration by private health plans. “One man’s greed is another man’s livelihood,” I thought, but I held my tongue.

Government as the Solution

His solution was government care for all, as administered by fair-minded and even-handed government managers. Presumably these managers would wipe out inequities, end private greed and waste, and correct glaring deficiencies, such as waiting endless hours in the ER.

I can’t say I blame him for his cynicism. He recently had chest pain and spent 9 hours on a gurney in the ER while ambulances whisked patients in and out, patients who took priority over him, and this in a hospital in which he was an incorporator.

How to Fix the System

What do people mean when they want to “fix the system?”

• Do they want to “fix it,” as my friend does, by federalizing, streamlining, and equalizing health care. We may inching close to federalization. On February 21, The Wall Street Journal carried an article “Government Pays Growing Share of Health Costs,” which said government already pays for 45% of all care.

• Do they want the states - like California, Massachusetts, and Pennsylvania, - to lead the way by implementing their own universal solutions requiring businesses, health care providers (hospitals, doctors, health plans), the self-employed, and the uninsured (either individually or through government subsidies) to kick in and make health insurance mandatory?

• Do they want to “fix it” by slashing out-of-pocket costs by whatever means possible? We could partially do this by rationing care and limiting choice by limiting the number of drugs in pharmaceutical formularies doctors and patients could choose from.

• Do they want to “fix” it by herding physicians into large groups like Mayo and Kaiser-like programs to decrease “fragmentation?” That way consumers could go to trusted highly-rated, high performing institutions rather than patronizing independent physicians, whose performance may not be rated or measured. That might save consumers the trouble of looking for just the right specialists, create a kind of one-stop medical shopping center, and lead to more consistent and measurable care.

• Do they want to “fix it” by unleashing market forces so well-informed consumers can pick and choose on the basis of price and quality?

Dealing with Specialists in the Present System

But what, pray tell, are we going to do with the present system, particularly those specialists practicing alone or in small groups dotting the health care landscape? Are we going to regulate their fees, buy up their practices, compel them to follow government guidelines, force them into larger groups? I have no idea.

Anyway, there I was, by choice, at a solo dermatologist’s office, a Mohs dermatologic surgeon no less. Mohs “surgeons” are dermatology sub-specialists who devote their professional careers to excising basal cell and squamous cell carcinomas of the skin.

They’re in demand. They combine surgery with doing periodic frozen sections on the spot to determine, as they proceed, margins of the tumor. If the initial excised tissue shows tumor, they re-excise to make sure the margins are clear. Some Mohs dermalogists think of themselves as a combination of dermatologist, pathologist, and surgeon.

Why Am I Telling You This?

Because Mohs surgeons show complexities of a highly specialized system and difficulties of transforming the present system into a unitary enterprise. I suppose we could just superimpose government-financing on the present system, but even fools know that would break the federal bank. Or we could leave it the market and judgment-calls of individual consumers. When push comes to shove, we’ll have to combine top-down reforms with bottom-up innovations.

My Real Purpose

My real purpose is to show little innovations can make a big difference. Small things based on patient convenience are important. Here the first innovation is outpatient surgery performed in the office. The second innovation is reduced costs because office procedures cost less than inpatient procedures. The third innovation is getting the whole thing done as one setting, rather than coming back at a latter time for another procedure.

These are trivial innovations in the larger scheme of things -- making the system equitable, affordable, and accessible for all -- unless you're the patient. My personalinterest in this, I trust you will recognize,is only skin-deep.

Friday, February 23, 2007

Clinical innovations - Of Demographic and Perceptual Innovations: Brown Spots, Botox, and Erasure and Removal of Skin Lesions

In Innovation and Entrepreneurship, Peter F. Drucker says changing demographics and perceptions offer unprecedented innovative opportunities. This holds true for medicine, as well as business.

Changes in demographics – defined as changes in the population – are predictable. The U.S. population is aging. Aging will impact what services will be demanded – and offered. Skin changes of aging – wrinkles, brown spots, keratoses, skin tags, sagging, unsightly hair, and skin tumors – are more visible and are more apparent than aging changes in other organs.

Changes in perception
may be more subtle. But no doubt there has been a change in how we view aging. “Sixty, “it is said, “ is the new forty.” Translated, this means we never want to grow – or look old. This change in perception has created a vast market for health –care magazines, alternative medicine, physical fitness centers, other “wellness” services, cosmetic surgery, Botox injections, and erasure or removal of irritating skin blemishes or lesions telegraphing age.

Brown Spot Day

The other day I was talking to a medical school classmate who heads up a group of five internists in Maryland. While serving in the U.S. Army, his medical post had a “brown spot day.” That day occurred once a month, when he and his medical colleagues could commandeer a flask of liquid nitrogen from the commissary. The Army doctors used the precious liquid nitrogen to “freeze and kill” brown spots, usually seborrhea keratoses or other unsightly ski lesions, such as warts.

Today my classmate and his four partners have a tank of liquid nitrogen in the hallway adjoining their offices, and they use the liquid nitrogen to “freeze and kill” skin lesions in civilian patients. He says they are “very careful” about which lesions to freeze.

They know full well not to freeze something that might represent a malignant melanoma or basal or squamous cell carcinoma. They refer any suspicious lesion directly to the dermatologist. He and his partners are sometimes reimbursed for their work, but not always. Instead their purpose, he says, is to please patients and save them time and expense by doing the freezing while patients are in the office.

Botox Injections

The internists do not inject Botox to erase skin wrinkles. That is a different, and much more lucrative kettle of fish. Because of the quest patients to look younger, Botox injections are growing by 30 to 40% a year. It’s a question of patient demand.

Here is how Marcy Tolfkoff, JD, writing in the February 6, 2006, issue of Medical Economics describes the Botox injection scene/

”One person's poison is another's passion and this is certainly true with Botox Cosmetic, a derivative of Clostritium botulinum that paralyzes muscles and keeps you from frowning or wrinkling. The craze may have started in Hollywood, and first become popular in New York and Los Angeles, but now millions of women (and some men) across the country are demanding—and getting—the smooth, young faces that Botox provides.”

“In fact, Botox injections are the most popular cosmetic procedure performed in the US. The number of minimally invasive cosmetic procedures such as Botox injections has risen dramatically, from 1.6 million injections in 2002—when Botox first received FDA approval for cosmetic use—to more than 2.9 million anatomic sites injected in 2004, according to the American Society of Plastic Surgeons. Although Botox is only approved for smoothing of the glabellar lines between the eyes, it's used off-label for multiple other cosmetic reasons such as crow's feet and laugh or frown lines.”

Botox injections, generally not covered by insurance, cost $250 to $650 per session, with an average price of about $500 per session. Therapeutic effects show in 3 to 5 days, and injections must be repeated at 4- 6 month intervals to maintain the de-wrinkling effect. Side effects and complications are rare.

Removal of Skin Lesions

Another general internist I know has gone into the skin lesion biopsy and removal business. This makes clinical, convenience, and cost effective sense.

• It makes clinical sense because aging patients, particularly those who have been exposed to the sun earlier in life, often develop basal cell or squamous cell carcinomas. If these lesions are small, primary care physicians, who has been trained to do biopsies, are perfectly capable of removing small tumors.
• It is also convenient for consumers, who may feel they don’t have the time to go to a general or plastic surgeon, particularly when the lesion can be removed while the patient is in the office.
• It makes economic sense, for the health system, the patient, and the doctors. Specialists, almost by definition, justifiably charge more for the services. Medicare pays more for removal of one skin lesion, which may take 10 minutes to perform, than for a one hour visit.

One physician who feels strongly it’s within the province and competence of primary physicians to perform minor surgical procedures is John L Pfenninger, MD. He founded the National Procedures Institute in 1989 in Michigan to reach outpatient procedural skills to primary care physicians. The Institute provides over 130 Continued Medical Education (CME) Courses at many national locations, covering a full range of office procedures. By learning procedural skills, Dr Pfenninger maintains, physicians improve continuity of care, provide comprehensive services, reduce health care costs, and enjoy an enhanced practice style.

Controversies or Opportunities for Innovation
The practices of freezing brown spots and warts with liquid nitrogen, injecting Botox to temporarily erase wrinkles and lines, and encouraging primary care physicians to remove or biopsy skin lesions, aren’t without controversy and may involve turf battles with specialists. One man’s beat may be another man’s division. Nevertheless, these practices represent windows of opportunity for some physicians and considered legitimate practices by medical authorities and , in the case of Botox, by the FDA.

Thursday, February 22, 2007

Cliniaal innovation - The Kaiser Way: Clinical Systems Engineering and Systems Thinking

“It’s time to stop functioning as a highly localized, unacceptably idiosyncratic cottage industry – with the exam room functioning as a medical cottage.”

George C. Halvorson, Chairman and CEO, Kaiser Foundation Health Plan and Kaiser Foundation Hospitals, World Bank Presentation, “It’s Time to Create an Industrial Revolution in Health Care,“ September 15, 2005

After my last blog on Toyota and use of its “lean” manufacturing model at Virginia Mason Medical Center in Seattle and at Park Nicollet Clinic in Minneapolis, a friend sent me a slide presentation by George Halvorson before the World Bank in Uganda in 2005. George is CEO of Kaiser – a $30 billion integrated system headquartered in Oakland, California.

Because of space lack, I won’t go into Halvorson’s 93 slide PowerPoint in any depth. Basically, it expands the Toyota approach of system engineering and industrial engineering to the U.S. health system as a whole, a much larger scales that seen at Virginia Mason and Park Nicollet.

Now onto Halvorson’s presentation. He starts by observing that:

• Kaiser is the largest integrated health system in the Western World with 8 million members, 142,000 employees, 32 hospitals, and 12,000 salaried physicians. That was in 2005.

• He then characterizes the 2005 U.S. health system as world’s most expensive with superb technology and techniques, mediocre outcomes, and inconsistent quality.

• He goes on to describe the “Wobbly Parts of U.S, Health Care” -- the medical record, inconsistent access to current science, patient compliance, patient follow-up, and outcome tracking. He notes these are the “obvious” flaws of U.S. health care.

I like Halvorson’s use of the word “wobbly.” Wobbly means moving unsteadily from side to side, weak, and unable to keep one’s balance. This is apt. Our system is unbalanced, with too much stress on what goes on “inside” exam rooms and hospitals and not enough on what goes on “outside” – patient compliance, follow-up, and outcomes.

To solve this “outside” problem, as a solution Halvorson pushes electronic medical records – for consistency, standardization, quality tracking, and diagnostic support – and for following patients outside the exam room to see if they are complying with instructions and improving outcomes. The key to this, says Halvorson, is e-support – e-visits, e-scheduling, e-reminders, and e-care.

In Halvorson’s clear-minded world view, it logically follows that we can overcome our system’s lapses and improve performance through systematic, organized, and purposeful use of “systems” and “systems thinking.” By systematically applying data, we can organize in teams to provide answers, tamp down variables, strive for zero defects, coordinate everyone through e-systems, and put all relevant data at physicians’ fingertips in the exam room.

What we need to do, Halvorson stresses, is stick to the fundamentals --measuring, analyzing, improving, and controlling the system’s moving parts – and systematically re-engineering to target and modify constantly moving health care changes. I commend Halvorson’s presentation for your review. You can find both the PowerPoint and video versions by googling “George C. Halvorson, World Bank.”

But alas, the chasm between “what is” – only 10-12% of U.S. doctors in integrated systems, only 20% using electronic health records, only 20% communicating with patients by e-mail – and “what ought to be” – doctors working in large systems electronic records giving them unlimited accessibility to compliance, follow-up, and outcomes data – still yawns wide.

But who knows? Maybe someday we will get there. In the meantime, thinking and practicing in system-oriented organizations will help reduce costs, rationalize care, and improve outcomes. Until then, the Kaiser model, which serves slightly less than 3% of Americans, will serve as an experimental model of what can be done when professionals with a vision work together.

Wednesday, February 21, 2007

Clinical Innovation - Systematic Innovation in U.S. Health Care: Toyota’s Lean Manufacturing Method and Its Application to Health Care

Successful entrepreneurs do not wait until the ”Muse kisses them” and gives them the bright idea, they go to work.”

Peter F. Drucker with Joseph A. Maciariello, “Systemic Innovation,” The Daily Drucker, HarperBusiness, 2004

This blog’s shtick is innovation. I contend if doctors are to take control of their practices and to make them grow, prosper, and improve, they must innovate, or government, health plans, and health systems will control their practices for them.

In a talk I gave in January in Orlando, I quoted an e-mail message sent to me by George Halvorson, chief executive officer of Kaiser Permantente, in which he predicted, “Science and process engineering will help bring health care per capita costs down before we reach the breaking point.”

I pray this is so. Science and process engineering had better work to reduce costs, or the U.S. health system may be headed for a cost meltdown. If current trends continue, health care as proportion of GDP will rise to 40%, by 2050. That would break our system of financing health through employers, pension funds, and Medicare/Medicaid.

As Daniel McFadden, a Nobel Laureate from the University of California, cogently notes, “In terms of health delivered per dollar of cost, our system is grotesquely inefficient. We spent $6,102, nearly 17% of GNP. Our neighbor Canada’s single payer system costs $3,165 per person per year, about half our expenditure, or 10% of GNP.”

McFadden adds, not kindly, “Most Americans are aware that our health-care system is in deep trouble, a dog’s breakfast of private providers and insurers that has weak incentives for quality control and cost containment.”

But how to ensure quality and contain costs? That’s the $2 trillion question, the amount the U.S. now expends for health care.

Cutting this spending may be where the Toyota model of quality improvement and cost control through innovation enters the picture. A cartoon character of a race-driver on the cover of the February cover of The New York Times Magazine explains how Toyota has conquered the universal care world:


But, critics will surely say, Toyota is a multinational corporation, not a Mom and Pop operation like many small medical practices (60% of doctors are in groups of six or less, and 40% are in one or two person practices). In physiican practices, you need some sort of organizational critical mass to make a Toyota-type philosophy work.

True enough, which is why Toyota’s approach is being tested in groups with enough size to make it work.

• The Virginia Mason Medical Center in Seattle, consisting of 480 doctors, a 336 bed hospital, and a regional network of neighborhood clinics, has been working on perfecting and applying Toyota’s manufacturing to health care since 2002. 2 Doctors are required to understand how Toyota manufactures cars. Virginia Mason’s senior executives have traveled multiple times to Japan to see how Toyota does it. In 2003, Dr. Garry Kaplan, Chairman and CEO of the medical centers said, “We've done two trips to Japan, and will do another in the near future," These trips and subsequent ones were about learning the techniques of what's called "lean manufacturing," and then applying them to health care.

“Lean” mans doing only what’s needed, taking the fluff out of processes, and eliminating waste. W. Edward Deming, an American statistician who pioneered the quality control and continuous improvement movement in Japan, estimated as much as 40% of a company’s expenses result from waste – from poorly designed systems and processes.3

The Deming approach has worked for Virginia Mason, who have slashed 40% to 50% of costs related to respiratory inventory supplies and space needed to provide other services. The radiation oncology staff has cut the time from patient check in to leaving the department from 42 to 15 minutes, and the time spent waiting for chemotherapy has been reduced from 4 hours to 90 minutes.

• The Park Nicollet Clinic in Minneapolis, one of the largest multispecialty clinics in the U.S. with over 960 physicians in 45 specialties and subspecialties, has achieved similarly impressive results using the Toyota Practice System (TPS), also called the “lean model.” The basic idea is to implement standardized processes across the clinic to end waste, reduce costs, and improve quality and safety. In 2006, Park Nicollet announced it had saved $15 million in the previous two years,

Among other things, Park Nicollet changed its old “batching”system of seeing patient in groups of five to a “waterfall” system in which patients arrive and depart one at a time in a continuous flow. The ultimate goal across the Park Nicollet enterprise is to cut the time patients spend in care by one-half and to increase the “throughput” by two while spending more time with each patient. The endoscopy clinic has doubled the number of patients it sees while increasing measured satisfaction. Similar results have been achieved in Park Nicollet’s Cancer Center, Heart Center, Urgent Care, and Wound Clinics.

The Toyota model is probably applicable to other multispecialty clinics and health-based integrated systems.

But will it work in widely dispersed small practices? Will it require doctors to consolidate into larger more centralized groups? Will it work in “virtual groups,” held together by a central electronic medical record system? Could the federal government, under a single payer system, adopt the Toyota model nationwide?

Maybe not now, but in a generation or so when survival of small practices is at stake. The Toyota model works on the premise that all participants work together in teams, resources be spent on analyzing systems of care, traditional practice flow patterns by disrupted and changed, processes be standardized, defects be cut to zero, and statistical goals for improvement and safety be routinely met.

Will this approach work among individual “democratic” physicians who entered medicine to “be their own boss.” I have my doubts. As for the federal government, national and domestic politics and provider resistance would surely hinder standardization across all regions of the country.

Consensus is always possible, but it is hard to visualize working in today’s polarized political environment, swinging left and right, and caught up in the relative virtues of a market vs. a government-driven system.


1. McFadden, Daniel, “A Dog’s Breakfast,” Wall Street Journal, February 16, 2007.
2. Gertner, Jon, “From 0 to 60 to World Domination: How Toyota Conquered the Care World,: The New York Times Magazine, February 18, 2007.
3. “Toyota Gives Virginia Mason Doctors a Lesson in Lean,” Puget Sound Business Journal, September 12, 2003.
3. Gabor, Andrea, The Man Who Discovered Quality, Times-Books, 1990.

Tuesday, February 20, 2007

Clinical Innovation - Serving the Underserved As a Health Care Innovation Strategy

I keep in touch with successful physician innovators I have known. One of these is Lucien Wilkins, MD, a retired gastroenterologist with homes in Boone and Wilmington, North Carolina. Lucien now heads up his own consulting firm Lucien Wilkins MD Consulting.

Lucien now spends his time setting up, organizing, financing, and otherwise making possible new ventures, new services, and new facilities in underserved parts of North Carolina.

According to the 2000 census, in the 1990s North Carolina rural counties grew by 18% and added 600,000 residents. By comparison, over the same period, urban North Carolina grew by 25%, or 800,000 new residents. Overall, the state expanded from 6.6 million to 8.0 million from 1990 to 2000, a 21% increase.

Net migration, the number of people who moved to North Carolina minus the number who left, accounted for 70% of the population increase. In rural areas, in-migration soared over 70% of growth. Aging of baby boomers and influx of retirees is the changing the age distribution of rural North Carolina, with particularly rapid aging in the Mountain region. Although the fastest growing counties surround the Research Triangle and Charlotte, several rural counties along the coast are also exploding in growth. North Carolina is expected to surpass 12 million in population by 2030.

These stark growth figures did not go unnoticed by Dr. Wilkins. As a practicing gastroenterologist in Wilmington, he could not help but observe many patients with gastrointestinal cancers from rural towns and farms came too late to be treated. He was acutely aware growing rural areas were medically underserved, and he vowed to do something about it.
He learned from executives at the DeWitt Corporation, a real estate and construction firm, that incoming retirees asked two basic questions: 1) What is the price of the property? 2) Where are the medical services?

In partnership with Dewitt, Dr. Wilkins helped scope out the most rapidly growing rural areas and defined their level of medical services. Then, in conjunction with the real estate and construction arms of Dewitt, they built a half-dozen Big MACCs (Multispecialty Ambulatory Care Centers) in underserved rural regions.

Today Dr. Wilkins is an independent consultant. His relationships still involve consulting with DeWitt. Wilkins has expanded his other consulting to include building centers to provide wellness and fitness services, constructing senior centers and housing complexes, organizing more Big MACCs, some in more suburban and urban areas, and cultivating relationships and investors among medical groups, hospitals, and venture capitalists.

What drives Dr. Wilkins are his vivid memories of futilely trying to treat last stage cancer patients from underserved regions. His entrepreneurial philosophy has become to place first-rate facilities and specialists where people work, live, play, and retire so that people in underserved regions can be diagnosed and treated early and appropriately.

This may sound like a simple philosophy, as indeed it is. But like most successful innovators, Wilkins is a strong proponent of simplicity. Many health care participants, he says, make things more complicated than they need be. He maintains the best ideas have a strong sense of direction – and his case – only one moving part – serving the underserved. He is also a major believer in building trust and confidence before launching any innovation. Without the requisite trust and confidence, nothing happens.

Monday, February 19, 2007

Government reform - Worries about a Government-Sponsored Universal Coverage

On February 1, Val Jones, MD, senior medical director of the Revolution Health Group, posted the following blog on her personal blog site (ValJonesMD’sblog: Dr. Val and the Voice of Reason). She asked fellow bloggers, including myself, to join the debate.

Here is her blog entry.

Why I Worry about a Government-Sponsored Universal Coverage System

Within the past few years the Centers for Medicare and Medicaid Services (CMS) chose to enforce a rule (casually known as the “75% rule”) that resulted in denial of services to many heart, lung, and cancer patients requiring rehabilitation therapies.
CMS was looking for a way to cut costs in rehabilitation facilities, and decided to create a rule whereby these facilities would lose their approval status if they admitted too many patients with certain conditions. The CMS arbitrarily decided that 75% of all patients admitted to inpatient rehabilitation facilities had to have one of 13 diagnoses, or else the rehab facility would not qualify for Medicare reimbursement. Many important diagnoses were not included in those 13, including cancer, heart and lung disease, and many types of orthopedic injuries.

What does this mean? It means that getting admitted to a rehabilitation facility is no longer based on need, but on diagnosis code. Because of the financial pressure exerted by CMS (Medicare is the primary payer for most facilities) these rehab centers cannot afford to be delisted. So they turn away patients in need, for patients who have the “right” diagnosis.

What has this rule done?

1. Limited clinical decision making by doctors – a physician is no longer able to recommend patients for acute inpatient rehabilitation purely based on their need for it.
2. Decreased choice for consumers – people recovering from heart attacks, cancer or COPD (to name a few) will generally not be offered the opportunity to be rehabilitated in an acute, inpatient setting.
3. Reduced quality of care – rehabilitation facilities specializing in oncology or cardiopulmonary rehab will need to divest themselves of aggregated expertise. Since these centers would no longer qualify for Medicare funding, they can’t afford to remain centers of excellence in these fields of medicine. Instead, they will need to turn their attention to the 13 diagnoses that qualify for inpatient rehabilitation.
4. Puts lives in danger – patients who are not admitted to acute rehab will be forced to recover in nursing homes (also known as “sub acute facilities”) that do not have the level of expertise to take care of them safely.
The 75% rule is one example of the kinds of decisions that a government sponsored universal healthcare system will make. When one payer (government or non-government) develops a monopoly, their decisions can single-handedly limit consumer choice, prevent physicians from exercising clinical judgment, and decrease quality and safety of care. What will Americans say when the decision to fund organ transplants for people over 65, for example, is denied across the board?
When medicine is no longer applied in a personalized (case by case) manner, and population-wide rules are in effect, we will face ethical dilemmas far surpassing those we already have. A system that serves the needs of many still fails the needs of some – and when we lose the flexibility to “bend the rules” for the exceptions we will lose the best of what American medicine has to offer

And here is my response:

I agree with Dr. Jones. She describes what Medicare does and what a universal coverage system will do – make capricious and arbitrary decisions based on diagnostic codes and numeric quotas. Government has no other choice: its functionaries are too far removed from care sites to make clinically relevant decisions based on personal needs, so it must resort to impersonal codes and quotas. Unfortunately, in the clinical trenches, patients, particularly those with multiple chronic ailments, don’t fall neatly into diagnostic niches, and care must be individualized on a case-to-case basis, regardless of the code or quota. A centralized government run system will inevitably suffer in “hardening of the categories.” A system based on universal vouchers giving caregivers latitude to do what needs to be done is more equitable, workable, and humane.

Richard L. Reece, MD

Sunday, February 18, 2007

Doctor patient relati0nships - High Touch-High Tech Innovations at the Patient-Doctor Interface: A Baker’s Dozen + A Website

Today I spoke to Susan Keane Baker, a national expert on managing patient expectations at the patient-physician interface.

Until recently, this interaction interested only physicians, who considered the patient relationship a private matter. But times are changing, sometimes dramatically, with struggles of health plans to retain members, competition between hospitals and doctors for the high-cost procedure market , emergence of Internet-savvy cost-conscious consumers seeking to rate doctors , the Joint Commission’s concern with health literacy of consumers, and a current campaign of Medicare and AHRQ (Agency of Healthcare Research and Quality) to measure patient satisfaction and to tie that satisfaction to pay for hospitals and doctors.

Linking Pay to Patient Satisfaction

Linking hospital and doctor pay to patient satisfaction has caught the health industry’s attention. CMS and AHRQ have initiated a federal program called CAHPS (Consumer Assessment of Health Providers and Systems), CAHPS develops and distributes surveys to evaluate patient-doctor relationships. Surveys probe care aspects for which patients are the only source of information, as well as aspects consumers and patients identify as important.

Annual Surveys of Patient Satisfaction

CMS is also conducting annual surveys of recipients enrolled in Medicare Advantage plans and the original Medicare plans concerning their experiences and their evaluation of the care they receive in these health plans.

Patient surveys ask about:

• Getting care quickly
• Getting needed care
• How well providers communicate
• Health promotion and education
• Shared decision making
• Provider knowledge of patient medical histories
• How well office staffs communicate

This survey information may eventually be tied to:

• Quality improvement programs
• Continuing certification
• Public reporting
• Accreditation
• Pay for performance
• Accountability

Ostensibly this information will.

• Help Medicare beneficiaries and the public make more informed choices among health plans.
• Help identify problems and improve quality.
• Enhance CMS' ability to monitor Medicare plans’ quality and performance.

Big Brother, in other words, will be watching hospitals and doctors and basing reimbursement on consumers’ answers to questions about satisfaction and quality. Consumers’ answers will be categorized as: always (5), usually (4), sometimes (3), rarely(2), never (1). If hospitals or doctors’ average numeric score is high, they will presumably be rewarded, if low, they may suffer from yet to be named consequences. One consequence is likely to be public reporting of high and low performers, or perhaps I should say “satisfiers.”

CAHPS surveys raise issues and eyebrows. How reliable are patient satisfaction surveys? Do patient satisfaction surveys correlate with care quality? Does patient satisfaction have anything to do with physicians’ technical competence? Is intrusion into patient-physician relationships a proper role for government, long considered to be sacrosanct by the medical establishment? And what innovative steps can hospitals and doctors take to cope?

Susan Keane Baker, MHA, is a good person to whom to talk to about patient-physician interactions. Trained as a hospital administrator, Susan is author of Managing Patient Expectations: The Art of Finding & Keeping Loyal Patients (Jossey-Bass, 1998, San Francisco.) Her book has been ranked #3 on’s list of 100 top sellers in the general medicine category.

More recently, she and Leslie Bank, Director of Customer Service at Montefiore Medical Center in the Bronx, co-authored, “I’m Sorry to Health That…”: Real Life Responses to Patients’ 101 Most Common Complaints about Health Care (rL Solutions, 2006, Toronto). Susan is currently working on the 2nd edition of Managing Patient Expectations.

Susan has seventeen years experience as vice president at New York and Connecticut hospitals. She has also directed the quality initiatives program for a national PPO with 19 million members. Since starting her own company in 1994, Susan has spoken in 45 states. She gives 100 presentations a year, mostly to hospital groups.
For her communications work, Susan has been awarded the General Electric Circle Award and a Life Communicators Award of Excellence. She is a Certified Speaking Professional, the highest earned designation of the speaking profession. Susan is a Fellow of the American Society for Healthcare Risk Management and a Commissioner of the Connecticut State Commission on Medicolegal Investigations.

Thirteen Moments of Truth, A Baker’s Dozen

Susan basically preaches this gospel to hospitals and doctors: pay attention to human details: recognize the power of word of mouth, create a strong first impression, listen closely, elicit patient feedback, educate patients, and use best practice techniques. Above all, anticipate the following 13 human moments of truth where patients form their opinions:

1. calling your organization,
2. making an appointment,
3. receiving directions,
4. meeting the receptionist,
5. waiting in reception or exam room,
6. meeting the clinician,
7. giving a history,
8. having an examination,
9. having an invasive procedure,
10. giving a lab specimen,
11. receiving discharge instructions and leaving the organization,
12. obtaining test results,
13. receiving a bill.

Train yourself and your staff to meet patient expectations at these critical 13 moments of truth. Any of these 13 moments can be a turn-off or a turn-on. The trouble for doctors and their staff is, of course, is that these moments are hard to keep in mind all at once.

Physician Websites and E-Mail Communication

If there are any two innovations physicians can undertake to satisfy patients, particularly the demanding up-and-coming and aging baby boomers, it may be creating a practice website telling patients what to expect and using e-mail to communicate with patients about minor problems not requiring patients’ physical presence.

There are a number of companies out there to help doctors develop these websites and to facilitate email communication , including Medem, Inc. and Revolution Health, Inc. You can find other companies by googling “physician websites.” Use of email lends itself to e-visits, sometimes called virtual visits.

As patients visit the Internet more, physicians are using the Web to build and maintain loyal patients. An effective website facilitates scheduling appointments, refilling prescriptions, getting directions to the office, giving doctor credentials, educating patients, and even offering advice for treating minor illnesses through E-mail communications. Patient and doctor email exchange is still not widespread.. Although now only used by abut 25% of patients, patient-physician e-mail is growing in popularity and is destined to become an effective practice marketing tool for doctors.

E-mail communication is cost-effective, convenient, and time-saving for patients. And many health plans are now paying for virtual visits. E-mail saves physician time on the phone. Here e-mail is a plus since some physicians may spend up to three hours a day responding to phone calls, which also interrupt the flow of their work. Physicians are rarely paid for phone calls. Physicians can answer emails at their convenience. They do this by setting aside a convenient time at day’s end to answer all e-mails. Physicians are overcoming their reluctance to use email , and are finding their initial concerns – malpractice exposure, privacy concerns, overwhelming numbers of emails, and the impersonal nature of email - are largely unfounded.

I have a foreboding, unrelated to the exemplary work of Susan Keane Baker. Big Brother may be watching caregivers, but we in the health system are also watching Big Brother. My main concern is that CAPHS (Consumer Assessment of Physicians and Health Systems), begun with the best of intentions and still small, may grow into a vast intrusive federal bureaucracy with unforeseen, unintended, and undesirable consequences. By spreading its tentacles into private relationships, it may limit freedom and choice. Sometimes we need protection against our protectors. Most consumers, aka, patients, are intelligent and resourceful, and will, on their own, without federal assistance, figure out who are the good doctors and good hospitals.

Saturday, February 17, 2007

Clinical innovation - Innovation in the Emergency Room – Managing Complexity at Ground Zero

I’ve just finished a phone conversation with Wesley Curry, MD, president of California Emergency Physicians ( for the last ten years. The California Emergency Physicians’ organization has existed for 35 years, recently changed its name to CEP, and is expanding outside of California.

CEP covers 62 emergency departments in four states, has 1100 participating physicians, physician assistants and nurse practitioners, who provide care to 2.5 million patients each year. CEP is the largest democratic emergency medical group in the United States. I italicize democratic because Dr. Curry considers the word a badge of honor. It implies “one man, one vote” in terms of governance of the partnership and indicates CEP has broad physician ownership (no physician owns more than 0.5% of partnership assets) and therefore CEP is truly physician led and free of outside investor or corporate influences.

Doctor Curry’s views on innovation in emergency room settings are refreshing. He foresees more efficient and more humane emergency room services will require intelligent physician leadership, creating teams of physician -nurse leaders, delegating emergency department design and function to the professionals who provide patient care in the emergency department and who work there.

“Our distinctive competence is managing physician practice complexity and implementing innovations in simplicity. We improve the patient throughput process in the emergency department of our client hospitals, with the express purpose of seeing both low and high acuity patients in a rapid manner. We strive to minimize the time it takes for a health care provider to see the patient from time of arrival, thereby creating more face time for physicians and nurses with patients."

“Unlike the traditional triage methodology used by most emergency departments for years, we use a provider up front, or provider at triage, to move closer to the entry point of low acuity patients, to evaluate and discharge them in such an efficient manner that they are in the emergency department for a very short time, and often are never put into a treatment room.”

“The overall impact on the emergency department operations is dramatic, with significant reductions in important metrics of performance, such as time to provider and length of stay in the emergency department.”

Curry says a central problem leading to current emergency department inefficiency is that “everybody” – meaning hospital administrators, in-house specialists, other hospital departments, and payers – in the past have determined their own procedures and policies regarding patients in the emergency department. This procedural and policy fragmentation slows patient throughput the care process in our practice environment, essentially slicing patient encounters into multiple components over which we have had little control until now.

This “slicing” of the patient encounter to meet the reimbursement, documentation, availability, and work product delivery preferences of other areas or departments in the hospital, as well as the requirement of all the internal hospital and external government, and insurance company “stakeholders, ” has caused paperwork to explode during my 25 years in emergency medicine. There now is a “slice” of paper for every stakeholder, overseer, and for every perceived purpose of others who do not get face to face with the patient.

“When I started,” Curry comments, “We had one piece of paper per patient for nurse and physician documentation and orders. Now we have a paper blizzard, with perhaps 30 pages or more generated for each patient seen in the emergency department.”

Much of this paper blizzard is dedicated to creating a medical record for people “at the back end” – the hospital, the payer, and in some cases, the lawyer -- rather than expediting care at the “front end” – when patients meet and experience face time with the health care provider (physicians, nurse practitioners, and physician assistants).

The number of individual pieces of papers in the patient’s medical record proliferate with demands for documentation of every aspect of the patient encounter. This distracts from paying attention from what ought to be the true objective, more time for face-to-face doctor-patient interaction and encounter.

Dr. Curry estimates emergency room physicians and providers may spend as little as 30% of their time in front of patients, and the rest dealing with the paperwork and communications with others to resolve aftercare and disposition issues.

He doesn’t see software and information technology as the answer either. He observes, “The ED doctor spends what seems like 2-3 hours each workday logging in, inputting or requesting information and logging out of 6 to 8 software programs that now have become mandatory to use in the patient encounter. One proprietary program may be for obtaining lab results, one for x-ray, one for discharge, one for recalling past charts, and so forth – and each one log-in log-out requires more time for getting through the various security screens which shut down the program if there is no activity after a few minutes, when the provider is away from the computer seeing patients.

He continues, “This logging takes at least 30 seconds to one minute for each program, and in aggregate takes a significant amount of time which could be used to see patients. These programs help retrieve past medical records, and other useful information and document the encounter, but, he asserts, “They have much less value in creating real time efficiency.” Proliferating independent proprietary electronic medical records and other software programs, he adds, “are simply not there yet.”

Dr. Curry sums up his position, “I believe it all boils down to the local physician leadership, coupled with nursing leadership, and hospital senior administrative support, to make an emergency department an efficient place to see our ever growing numbers in patients seen each year.”

“At CEP our goal has been to educate hospital administrators about the whole process, of getting patients seen, evaluated, and admitted to the hospital or discharged home efficiently. We must do this as physician-nurse teams able to lead the process of change in an ever more complex practice environment.”

“We must teach hospitals and other stakeholders about the ‘best practices’ found in our client hospitals, and the enormous impact on the hospital’s bottom line when the emergency department runs smoothly and efficiently, prevent other stakeholders in the patient encounter from torpedoing ED efficiency either on purpose to suit their own needs or inadvertently from a lack of knowledge or their own inefficiencies-- from keeping us from doing what needs to be done – spending time seeing patients.”

He concludes, “To accomplish our mission, we need to serve as mentors for administrators and other decision makers to keep them informed about them what’s taking place at ground zero in the emergency department.”

He gives three examples of what can be done. These examples show the need for commonsensical simplicity to overcome nonsensical complexity. This complexity accounts for what plugs up the ER and creates as bottleneck for efficient care.

• First, he says the use of “smart charts, “ consisting of a paper based medical record and series of check-off boxes and hand written entries, enormously speeds up chart creation and documentation process for low acuity patients in the emergency departments with high patient volumes.
• Second, he cites use of “scribes,” non- professionals with some medical and technical training to “shadow” the health care provider and help document the patient encounter and assist in the creation of medical record and disposition paperwork. Scribes save doctors a great deal of dictating and chart-making time. Doctors may still need to dictate the record for complex patients, but not for patients with minor problems.
• Third, Dr. Curry describes CEP’s Rapid Evaluation Program, where the initial concept was conceived developed by a CEP medical director a number of years ago. Over time this program has been redesigned and improved, and is now being implemented in most of the high patient volume sites in CEP. Using this technique, CEP has cut waiting times from 3 to 4 hours to in many emergency departments to just about 30 minutes on average, and sometimes to as little as 10 minutes.

CEP’s Rapid Medical Evalution Program has received national attention as a proven way to decrease patient waiting times in emergency departments of any type, including large public and teaching hospitals. The RME Program, started in 2002, changes how patients are treated.. Under RME, the treatment process is fluid. It adjusts, based on demand and resource availability, to ensure treatment is provided as fast as possible.

The treatment process begins immediately, including an initial assessment, ordering of labs and X-rays, and in some cases, rapid discharge without using an emergency department bed. When beds are available, patients are placed immediately in a bed and examined by a physician.

The RME approach has positively impacted CEP’s emergency departments. Every CEP emergency facility using RME has substantially cut time to see doctors , with site reductions ranging from 10-80 minutes. RME has slashed numbers of patients leaving without being seen. Patient satisfaction has climbed across CEP sites, and many CEP practice locations are ranked in the top 10% of similar sites nationwide.

RME has resulted in greater revenues for both hospital and emergency department physicians. These improvements have occurred regardless of size, payer mix, and geographic layout of emergency department, including large sites, urban sites, small emergency department with large populations, and rural emergency units.

What impressed me about Dr. Curry is that he intuitively understands innovation fundamentals. According to Peter F. Drucker, the father of modern management theory, every organization must follow four principles of innovation:

• abandon what doesn’t work (the old way of seeing emergency room patients didn’t work);
• take steps to improve (smart charts, scribes, rapid medical evaluation);
• exploit successes (grow nationally with RME system and democratic physician relationship philosophy);
• organize for systematic innovation ( Dr. Curry, although he doesn’t have the title, is CEP’s Chief Innovation Officer, and has assembled a team of like-minded MDs to carry out the mission).

Dr. Curry understood changing “process need” was an important window of innovative opportunity. Everybody knew “something was wrong” with the “process” of seeing patients. It was “obvious” long wait times, clogged EDs, unhappy patients, and even dangers to the health of waiting patients, was not “right.”

What Curry and colleagues did was innovate to provide the missing link – lack of patient face time – and to act upon that knowledge by defining the missing link (lack of physician and nursing leadership), delineating specifically how to solve the process problem (smart charts, scribes, REM, mentoring administrators), stating the objective (shorter wait times), and broadcasting the message that there had to be a better way.

The result of CEP’s innovatively addressing “process need” is that CEP’s approach has become “obvious” and is now being increasingly adopted as a new “best practice” and has the potential to become a national standard in the operations of emergency departments everywhere.

Many effective innovations for bettering the health system begin from the “bottom-up,” from people working in the clinical trenches and dealing with issues on the ground, rather than from well-meaning external or top-down managers and technology experts, who assume they know what’s wrong and how to fix it, but who have never been there and done that.

Doctor Curry says productivity solutions are often either “low-tech” or even “no-tech” and flow from individual seekers of efficiency rather than from system tweakers outside care sites. Answers to productivity problems, Dr. Curry observes, may reside in the mundane rather than the arcane.

Friday, February 16, 2007

Hospitals and doctors - Innovation and Non-Profit Hospitals: Putting Together Pieces of the Puzzle and Overcoming Barriers to Care and Profitability

I spoke yesterday to two California hospital executives, IT types, charged with the responsibility of putting together pieces of an ambulatory outpatient infrastructure puzzle to make their hospital more profitable. Perhaps I should say “infra-culture puzzle” because the regional culture of the organization, the physicians, and the people are of equal import.

No small task. It brought to mind two paragraphs I had read this week in the New England Journal of Medicine.1

“Nearly two thirds of hospitals are private, non-profit organizations. In return for exemptions from federal, state, and local taxes, they agree to organize and operate for charitable purposes – structures that do not apply to their non-profit competitors. In a highly competitive marketplace in which profit margins are narrow, this commitment has generated intense economic, legal, and moral pressures.”

“These hospitals face cost increases that will outpace reimbursement, particularly from public payers. They also face growing competition from medical staffs interested in tapping into profits from procedure-based care that can be performed in an outpatient setting. The struggle of nonprofit hospitals to maintain unprofitable services that are needed by the community, such as emergency care, as the same time that more profitable services are lost to their own medical staffs will probably intensify.”

These two were calling me because of this passage in my most recent piece. 2

Local and Regional Cultural Clashes--the RHIO Rodeo

“What politicians seldom mention is intense rivalries among healthcare stakeholders at regional and local levels. We are, after all, a competitive society. The best recent example of this is difficulties in forming Regional Health Information Organizations (RHIOs).”

“RHIOs are a grand concept. In theory, they would share data among various regional or local entities, avoid duplication, make patient care safer and more effective, achieve practice efficiencies, and render more transparent aggregate costs of the entire cost episode for consumers who now pay a larger portion for their care.
Unfortunately, RHIO stakeholders are ‘competitors.’ As such, they reluctantly share data, lest their rivals learn their costs, strengths, weaknesses, and strategies.”

The two executives to whom I spoke were putting together “a kind of RHIO,” and wanted to know if I had any “magic bullet” to overcome problems of competitive jealousies. No, I said, I did not. I suggested, however, they look into a company called Carefusion in Scottsdale that had developed software to bring together pieces of patients’ regional health experience.

Here is how the Carefusion website ( explains the company:

“Hospitals have spent millions purchasing, deploying, and maintaining clinical applications to help improve the delivery of care. All are mission-critical, and in a perfect world, they’d be integrated. Because they’re not, clinicians spend a third of their time rummaging through a maze of dispersed applications for patient data.”
“Hospitals need a solution that is comprehensive yet targeted, value-laden yet cost- effective and strategically designed for the future yet tactically relevant for today.”

“Carefx is the only provider of an open and scalable platform that aids clinicians with sleek, intuitive, and flexible access to patient information and satisfies IT imperatives by fully leveraging legacy investments within an open architecture. Some call this Context Management or Identity and Access Management.”
“We call it Patient Information Aggregation. On board as partners are leading infrastructure and application vendors, including Cerner, GE Medical Systems, McKesson, Siemens Medical Solutions, IBM, Citrix, Novell, and CA.”

Getting a Leg Up in a Fragmented Market

In a fragmented, competitive market, in which all competitors are looking for a leg up, I expect you’ll hear more about “patient information and IT aggregation” as a tool for cutting costs, increasing profits, avoiding duplication, and decreasing “fragmentation” – the bete noire of the U.S. health system. Many believe the paved information highway is the way to a rational, integrated, and profitable system.

The two executives and I fell into a discussion about how a non-profit hospital can enhance its marketing presence, increase its drawing power, and get aligned physicians on board. Among other things, these observations popped to the surface.

• Geographic blessings are important. If your base is in an affluent suburb separated by geographic barriers – a mountain, a bridge, a bay, a river, or a freeway – from competitors, you have a tremendous advantage.

• If you have a special service advantage, such as a region’s exclusive trauma center, you may be even more in the driver’s seat.

• You have to strike out inside and outside your geographic boundaries to maintain your edge . Striking out may feature a salaried physician group bound to your hospital, a contractual agreement with an IPA, a freestanding big MACC (Multispecialty Ambulatory Care Center), strategically located urgent care centers, a reference laboratory, imaging centers, multiple primary care locations, a RHIO, and a system-wide electronic network that binds it all together.

• You have to deal innovatively with the local culture, e.g., California hospitals may have to hire 40 translators to deal with the diverse California immigrant population, 6.5 million of whom are unemployed and contribute significantly to the hospital’s “bad debt.”

• You have to watch state government’s machinations, which could bring crashing to the ground all of your plans and profitability with stroke of a pen. Here the two executives were referring to the Californian universal coverage plan, which would impose a 4% levy on hospitals “right off the top”. "Off the top" means 4% of all of California’s hospitals' revenues. I was told this single law would automatically make two-thirds of California non-profit hospitals true to their name -- “non-profit.”

As I said, putting together pieces of the puzzle is no small task. In many circumstances, when it comes to overcoming obstacles to innovation, geography is destiny.

1. Studdert, D.M., and others, Regulatory and Judicial Oversight of Nonprofit Hospitals, New England Journal of Medicine, 356: 625-631, 2007, February 8.
2. Reece, R.L., Overcoming Cultural and Political Barriers to Innovation and High Performance Care,, February 8, 2007.

Thursday, February 15, 2007

physician business ideas - An Innovative Take on Doctor Recruiting

I was looking at a February issue of the New England Journal of Medicine. More specifically, I was scanning the Classified Advertising Section devoted to recruiting young doctors.

There’s a story here.. Here’s a countdown of number of ads run for each specialty

Number of Ads for Various Specialties

Internal Medicine 99
Cardiology 46
Internal Medicine- Hospitalist 44
Gastroenterology 24
Nephrology 17
Hematology-Oncology 17
Pulmonology 16
Infectious Disease 16
Family Medicine 14
Neurology 7
Pediatrics 7
Rheumatology 7
Primary Care 6
Psychatry 5
Geriatrics 4
Ob-Gyn 3
Emergency Room Physicians 3
Endocrinology 3
Radiology 2
Orthopedic Surgery 2
Anesthesiology 1
Critical Care Medicine 1
Dermatology 1
Occupational Medicine 1
Opthalmology 1
Pathology 1
Radiology Oncology 1
Transplant Surgeon 1
General Surgery 1
Urgent Care 1
Total 352

This list indicates,

• A high demand for primary care physicians – 177 of 352, or 50 %.

• Nearly as high a demand for medical sub-specialists -- 143 of 352, or 41%.

• A low demand for proceduralists and hospital-based specialists – ophthalmologists,
general surgeons, orthopedists, pathologists, radiologists, transplant surgeons, 7 of 352, 2%. This is surprising since hospitals, particularly these specialists, are purported to be in demand by hospitals.

• Only one ad for dermatologists, which I am told, is one of the specialties most in demand among medical students, because of its relatively high income, limited hours, no weekend calls, and low practice exposure -- might indicate positions for dermatologists are filled from within dermatology residency programs through personal networking.

What’s going on here? Is high demand for primary care because of lack of medical students entering primary care specialists? Are primary care doctors becoming hospitalists because hospitals have found hospitalists to be such a valuable commodity? Is there a shortage of medical specialists – or is the aging populations simply increasing the need for them? Do the proceduralists and hospital-based specialists already have job promises before completing their residencies? Perhaps it’s a little of all of the above.

In any event, to give this blog a more human quality, I’ve created a fictitious story of a young internist just finishing residency. I base this story on information from a “2006 Survey of Final Year Medical Residents “from Merritt, Hawkins, and Associates, the nation’s largest physician recruiting firm (

You’re 30 years old and in the final year of your internal medicine residency. It’s been long haul – college, medical school, residency, and fellowship – and you’ve grown weary of delayed gratification.

As a general internist, you’re in demand. You’ve received over 60 inquiries about job opportunities. But you’ve yet to accept any offers. You’ve investigated many opportunities on your own -- mostly through the Internet and personal networking – and to a much lesser extent in the advertising sections of medical journals.

You’ve spent most of this year weighing the job opportunities. Your top four considerations are geographic location, a good financial package, adequate call coverage, and loan forgiveness. As far as practice settings, you prefer a single specialty group, partnership, multispecialty group, or hospital employment – in that order. You would prefer to be in a community of at least 100,000 population. For you and overwhelming number of your other colleagues, rural or small town practice is not attractive.

You’d like to be paid on a salary with production, though a straight salary or an income guarantee aren’t out of the question. You expect compensation in the neighborhood of $125,000 to $175,000. but you’re told some or your internal medicine colleagues are pulling down $200,000. In any event, you need a decent income to help pay off your personal educational debt which is nearly $100,000.

You feel you are “very” prepared to handle the “business side” of your medical career – employment contracts, compensation arrangements, and other facets of employment. You’ve prepared through personal research and talking to your buddies. Your medical school offered a few courses in practice management and even an MD-MBA program, but you were disinclined to take them. You still consider yourself a physician, not a businessman.

Despite the demand for general internists, you worry constantly about finding a good job, earning a decent income, having free time available, and to a much lesser extent, about picking a locale where malpractice rates are low. Still, if you had it to do over again, you’d pick medicine as a career.

You know demand is growing for primary care in general, even two-thirds of your medical school classmates chose residences in surgical, diagnostic, or hospital-based specialties. As a well-trained general internist and primary care physicians, you know you have multiple options, such as becoming a sought-after hospitalists, you’re in a buyer’s market, and you’re optimistic about your future. All you really seek is a decent well-balanced life in an attractive city, with time off to enjoy your life, your wife, and your family. Is that asking too much?

Wednesday, February 14, 2007

Blogging doggerel - - A Valentine Blog

A doctor found himself in a vise and in a bind.
He wanted to send readers an annual Valentine.
But he did not know what to say,
What affectionate note to convey,
Lest they label him out as out of his mind.

So the hapless blogger expressed this thought,
Bless you doctors who for patients have fought.
Keep up your good work.
Never from your duty shirk.
You do it for mankind, not for naught.

As an expression of affection for fellow physicians,
This may sound limp, too weak for real clinicians.
But let me assure you, it’s sincerely heartfelt,
Though it will surely not make your heart melt,
Still it fits, given adverse physician conditions.

Some of you today may be paranoid,
A negative condition you should avoid,
Patients out there still trust you,
To them you’re tried and true,
No one else can fill the vital void.

Tuesday, February 13, 2007

Govrnment vs. market reforms - National Health Statistics: A Function of Universal Coverage or Cultures of Different Societies?

“Come now, let us reason together.”

Lyndon Baines Johnson, 1908-1973

All government –indeed, every human benefit and enjoyment, every virtue and every prudent act – is founded on compromise and barter.”

Edmund Burke, 1729-1797

I/m not an expert on health reform matters. I get lost in the fog and flack of proposals and counter-proposals. The issue comes down to a battle of mindsets, a need for compromise to cover the uninsured. The question is: how?

Incompatible Mindsets

• If your mindset is that government’s moral duty is to redistribute resources to protect the health of all, and that health is directly related to the extent of health system coverage, you think and receive information in a certain way. You generally attribute superior health statistics of other nations to universal coverage, even if these other nations have more homogeneous, smaller populations, and different cultures.

• If your mindset is that private markets provide the best care for most of the people most of the time, provide better access to high technologies, give more health care choices to citizens, distribute resources more efficiently and that the health of the people is more related to cultural behaviors and a nation’s heterogeneous population, you receive information in completely different way.

The Unending Argument

The power and efficiency of government vis-à-vis the power and efficiency of markets is a never-ending argument – an argument unlikely to change mindsets. To progressives, it’s a moral argument: to conservatives, it’s an exercise in reality. You can marshal persuasive arguments on both sides, without convincing either side who is right.

Health Systems and Health of Societies

In a closely reasoned 1987 book, The Health of Nations: True Causes of Sickness and Well-Being (Basic Books), Dr. Leonard Sagan, a Stanford-based epidemiologist, observed health care systems have little to do with reducing death rates or extending average life expectancy. Sagan says social, family, and personal factors loom larger than health coverage. “Technical fixes,” he says, only marginally effect longevity.

Medical care accounts for about 15 percent of the health status of any given population, life style for 20 percent to 30 percent, and other factors – poverty, inferior education, income differences, and lack of social cohesion – for the other 55 percent (David Satcher, MD, et al, Multicultural Medicine and Health Differences, MvGraw-Hill, 2006).

It’s the Morality, Stupid!

Sowhat, progressives argue. Universal coverage is more about a civilized nation’s morality than health improvement. It’s about social equity and fairness. It’s about protecting the sick, the old, the young, and the disenfranchised from medical bankruptcies market vagaries, and exploitation by business. Coverage for all is a social obligation, not a choice. It’s about social consciousness, not allegiance to the almighty dollar, even if a rising economy lifts the material well-being for most citizens.

Innovation and Economic Growth

The entrepreneurial and innovative U,S. economy has outperformed the European economy for the last thirty years – with roughly twice the growth rate, half the unemployment, and a 20% higher standards of living. This superior economic performance is partly because the U.S,’s entrepreneurial and innovative society, partly because of our lighter overall tax burden (less than 30% vs. 45% for Europe), and partly because of heavy European social welfare burdens.

Edmund Phillips, a 2006 Nobel Laureate from Columbia University in a February 12, 2006 Wall Street Journal piece, “Entrepreneurial Culture,” says European economic sluggishness is not solely based on its social model. Phillips believes Europe’s lack of economic performance stems from “a dearth of economic dynamism – loosely the rate of commercially successful innovation.” Europeans, he notes, have an anti-business and anti-entrepreneurial culture. But Phillips adds, “It is hard to see how scaling down entitlements would be transformative for economic performance.” Europeans believe “social wealth” as just as important as “economic wealth,” and refuse to sacrifice one for the other.

Mutually Assured Decline?

Yet, in spite of this economic gap and increasing globally non competiveness, Europeans will not give up their six week vacations, year long pregnancy leaves, rich retirement benefits, and other cradle to welfare entitlements for the health of the economy. Europeans endeors top-down government.

America, on the other hand, is an overwhelming bottom-up society built of compromise between government and business. Our health care system depends partly on the market (68% of coverage), partly on government (27% of coverage), and in the future it will rely on public-partnerships and on Americans taking more responsibility for their health and investing in wellness. Ours is a system of compromise, and Constitutionally guaranteed checks and balances and individual freedoms.

Europe has problems reconciling its economic and social welfare ambitions. Here is how John Naisbitt, who has lived in Vienna for the last six years, who is married to a European, and who understands European culture, explains Europe’s dilemma in Mind Sets! (Collins, 2007).

“The ‘Statue of Europe’ has two hearts and 25 mindsets. The 25 country mindsets are stirring a mixture with ingredients that do not blend: tradition, ambition, welfare, and economic leadership. Here two hearts beat in different rhythms, one for economic supremacy and one for social welfare. Proud and ambitious, each one wants to be right. But to reach either goal, they have to compromise, and neither side is willing to do so. My experience makes me believe that Europe is much more likely to become a history theme park for well-off Americans and Asians. Europe is on the path of Mutually Assured Decline.”

Diverse U.S Culture Influences Health Statistics

The U.S. has a far larger population and is more culturally diverse than any single nation with universal coverage. We receive 67% of the world’s immigrants, and 85% of these new Americans come from cultures of developing nations, particularly Mexico and South America. We’re a vast continental nation with a larger population than nations with government-based systems – 300 million vs Japan 126 million, Germany 82 million, Iceland 300,000, Spain 40 million, Australia 20 million, Canada, 33 million, France 60 million,, U.K 65 million, and combined populations of Norway, Sweden, Finland, and Denmark, 24 million.

By and large, we’re more diverse than these nations. We’re 68% white, 13% Hispanic, 12% black, and 4% Asian, with others making up the difference. Japan and Scandanavia, to take to two obvious, are 95% “pure” in the cultural makeup of their citizenry. Many U.S. immigrants come from cultures where health care is primitive. U.S. immigrants have different health customs and expectations. Unfortunately, we’re a more violent society which contributes to premature deaths of young people. This violence is largely beyond the reach of our health system. We are, in short, a complicated, diversified society with complex problems, one of which is a sedentary, affluent, sometime over-indulgent culture which does not always lend itself to good health statistics

Evolving Compromises

Whatever happens with health reform, we must compromise between our economic and our universal coverage ambitions. That’s why most proposals so far feature a “play or pay” feature, in other words, all businesses must cover employees or pay the federal Piper. And, in some cases, hospitals, doctors, and health plans must pay a tax for providing care. We’re learning we can’t afford to superimpose or replace our existing private bureaucracy with a federal bureaucracy in one dramatic, costly step.

Media and policy makers routinely proclaim the U.S. has a “health care crisis” and is a “broken system.” This is partly because of our infant mortality and longevity statistics, which are worse than many Western nations. We rank 56th in birth of tiny premature infants (less than 14 oz.) and 22nd in longevity.

These worrisome comparisons are fodder for the media. Bad news sells better than good news, talk of big government covering the uninsured sells better than small private innovations for the insured, and political rhetoric about improving health through universal coverage sells better than news about remarkable, but incremental, gains in our medical technologies and their role in improving the health and quality of life of our senior citizens. If we are truly the exceptional nation we claim to be, say those from on high, we ought to do better.

An Analytical Look at Political Proposals

Let’s look analytically at reforms politicians propose. The February 6 issue of the Wall Street Journal contains three useful tables which help put the state of U.S. health care in perspective.

Table 1 – The Coverage Gap

Coverage 1995 2005

Private 70% 68%

Government 26% 27%

Uninsured 15% 16%

Comment: Health coverage has grown marginally worse over the last ten years, perhaps not bad or fast enough to justify political hysteria, but worse. What’s not reflected in this table is the doubling of health premium costs, American industry’s mounting complaints about health costs hurting global competitiveness, and relentless shifting of costs and responsibilities to patients. Also not mentioned is the improving health of U.S. citizens.

Table 2 - Covering the Uninsured Proposals

In OrdeBacker, The Big Idea, Why It Might Work, Why It Might Fail, Who Would Pay

1) President Bush; Give all Americans a tax break for buying insurance; Makes it cheap to buy insurance on the open market, Hurts workers with generous coverage; only modestly reduces uninsured; Cost neutral

2) Sen. Ron Wyden (D. Oregon): Cuts link between employment and insurance, Covers all Americans. Gives people more choice. Subsidizes poor: Radical.Requires people to choose: insurance: Builds on current system without disrupting employer-based coverage: Cost is $60 billion over next five years; Costs not specified.

3) States(includes Massachusetts, California and Pennsylvania: Requires employers to provide coverage or pay a tax: Requires all citizens to have insurance, with low-income subsidies and state pools: Contains ideas that are attractive to liberals and conservatives: Creating affordable plans with desired benefits is hard: New taxes are substantial, e.g. a 4% payroll tax for companies that don’t offer insurance: Combinations of employer’s takes and redirecting federal grants.

4) Former Se. John Edwards : Requires employers to play or pay. Offers individual tax credits and public pools Requires individuals to be insured. Requires insurers to cover everybody: Combines many ideas, builds on work of states Requires large tax on employers who don’t provide coverage, equal to 6% of payroll.Employer tax, rolls back tax cuts for those earning over $200,000
Comment: These proposals are multi-payer, not single payer, solutions. The proposals appeared before Senator Hillary Clinton, said to lean towards a government-run single-payer approach, has offered any specifics, and before Senator Barack Abama has set forth his proposal And they come before Walmart, labor unions , labor unions, AT&T, and several policy groups announced four principles to create "a new American health care system by 2012." The Walmart proposal calsl for universal coverage and say that "businesses, government, and individuals all should contribute.” Whatever side one is on, the nation is at a health policy crossroads, and gauzy talk about a sweeping centralized government-run system is not a prominent part of policy proposals to date, if you disregard Senator Edward Kennedy’s perpetual Medicare-for-all advocacy, multi-payer rather than single payer coverage is a form of political compromise.
Table 3 -- Bush Proposal, Pain for Hospitals, Doctors, and High Income Individuals

1. Cuts Medicare spending by $65.6 billion over 5 years starting in 2008, including $30 billion for hospitals, by slowing growth rate to 5.6% from 6.5%
2. Cuts doctor payments by 10% starting in 2008.
3. Cuts Medicaid spending by $13 billion and through $12.7 billion in administrative cost-savings by slowing growth rate from 7.3% to 7.1%.
4. Increases premiums for Medicare singles making over $80,000and for couples earning over $160,000.

Comment: When you consider that these “cuts” are cuts in rate of growth, not absolute cuts, the cuts are not Draconian. In fact, these “cuts” represent growth rates about twice those of the general economy. Given that reality, and cutting remarks aside, the Bush proposal might by considered generous. Keep in mind that no tree grows to the sky, and that includes Medicare.

Still Democrats, the party of federal entitlements, have already declared Bush’s plan DOA (Dead on Arrival). AARP, the powerful over 50 senior’s group, says the plan represents “piecemeal cuts that threaten to damage critical programs without addressing the fundamental problems that exist in our entire health care system.” In a Congress in which Democrats have narrow majorities, and a President who is Republican, gridlock is likely to persist until after the 2008 elections.