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The Official News & Technical Journal Of The International Society For Pharmacoeconomics And Outcomes Research
Policy Assessment

Health Care Reform in the United States One Year Later

Allan M. Korn, MD, FACP, BCBSA, Senior Vice President, Chief Medical Officer, Office of Clinical Affairs, Blue Cross and Blue Shield Association, Chicago, IL, USA

(The following was presented during the First Plenary Session, “Health Care Reform in the United States - One Year Later“ at the ISPOR 16th Annual International Meeting, May 23, 2011, Baltimore, MD, USA. The findings and conclusions in this report are those of the author and do not necessarily represent the official position of Office of Clinical Affairs, Blue Cross and Blue Shield Association)

Reform has brought us the good and the bad and the ugly. The good things, of course, are that by 2014, we will have eliminated preexisting conditions, lifetime and annual limits as pre-conditions for coverage, as well as provided for dependent coverage through age 25. Preventive services will be covered without co-pays, and early retirees will have access to health insurance. But there are some bad things, too. Physicians, hospitals and pharmaceutical companies in particular will continue to exhibit behaviors that will cause patients to bear the many burdens created by these providers.

And then there’s the ugly: cost, quality, and – foremost – safety. Health care reform as defined in the United States under the Patient Protection and Affordable Care Act (ACA) will successfully improve access to care for uninsured and under-insured Americans. But the bill is silent on these critical clinical and business issues.

Let us begin with “value”. For those financing health care in the United States, what does “value” mean when looking at a delivery system that is out of control and for which recent legislation does little to create control mechanisms? We believe that saving lives has inestimable value. We believe that “prolonging life” has estimable value, but it is very high if we desire it. “Prolonging death,” although also estimable, has very low value if we’re honest (and it is remarkable how often clinicians fail to distinguish between these outcomes). We also know that gratuitous and/or medically unnecessary care have no value. Yet such care represents approximately $700 billion of the nearly $3 trillion that is spent on health care in the United States each year.

You have all seen the numbers about spending in the US health care sector, but Figure 1 is compelling. If we add up the United States’ total costs for national defense, food, energy and motor vehicles, we would still come up with about $300 billion less than what we spend on health care each year. That’s a very big number.

Figure 1. Annual figure for 2009 projected by Centers for Medicare and Medicaid Services. Other data points are as of Q4 2009.

Note: Health care costs reflect National Health Expenditure (NHE) which measures the total amount spent in the United States to purchase health care goods and services during the year. The amount invested in medical sector structures and equipment and in non-commercial research in the United States is also included. Source: Bureau of Economic Analysis (2010); Centers for Medicare and Medicaid Services (2010)

The recession may have ended but unemployment in the United States remains high, and its debt is rising very quickly. Although there is likely to be some tinkering with the ACA based on ongoing litigation, it is unlikely that it will be repealed. Some movement of the insured from employer-sponsored group coverage to individual policy coverage is inevitable. Most health insurance in the United States is sponsored by employers so that individual families have very little understanding of the true cost of health care. The $20 co-pay at the physician’s office is seen to be the cost of a comprehensive new patient office visit with a couple of lab tests, for example; the other $600 is hidden from view.

Figure 2. Source: U.S. Census Bureau (2009) Historical Health Insurance Tables, Table HIA-2.

Figure 2, above, illustrates the source of insurance coverage for Americans. In 2008, of 300 million Americans, 255 million had insurance. The minority of them purchased it individually, as shown by the darker of the blue bars. 176 million either received insurance coverage through an employer, through Medicare or some other mechanism whereby they had neither the opportunity nor obligation to make a choice. Health care reform will inevitably change this. When an individual or family goes into the individual insurance market in 2014 (through exchanges as defined by the ACA), families must make choices and, most importantly, write checks. On the low end of the estimates (Fig. 3), we can see that the individual market may grow from 5% of the market to as much as 19% the market. There will therefore be an enormous increase in a family’s awareness of what they’re spending and what they’re buying. This is a fundamental market change that will impact how Americans do business in the health care marketplace. Value for money will have, at long last, arrived in the health care marketplace.

Figure 3.  Source: BCBSA State Coverage Model.

Many people on the 2014 exchanges will be eligible for subsidies which will be structured to be income-sensitive. Only 23% of individual purchasers will be paying totally out-of-pocket for their health insurance (Fig. 4). But everyone, including those on Medicaid (a program providing care for the indigent), is required to pay something. Americans will thus be aware of what it is they personally spend on health care. And because they’ll also know the size of their subsidy, they’ll have an idea of what the total price is.

Figure 4. Source: US Census Annual Social and Economic Supplement, 2009; HR 3590; Consultant analysis.

Cancer care costs provide an illustrative example of the facts that are soon to confront average Americans. United States chemotherapy drug price trends are depicted in Figure 5. The GDP is shown on the bottom line. Overall health care costs are shown above it, and above that is total cost of cancer care. The topmost curve depicts the prices for cancer drugs. These are data from a large Blue Cross Blue Shield plan on the east coast of the United States. How can this be, you might ask? An example would be illustrative: Thalidomide when withdrawn from the market in the mid-1960s for obvious reasons cost pennies a pill. Now that it’s known to be active in certain types of multiple myeloma, the acquisition costs for a Blue Cross Blue Shield Plan today could reach $117,000 per patient per year. Neither this nor similar issues were addressed by Congress in the ACA. Hence, “the bad and the ugly.”

Figure 5. United States Chemotherapy Drug Price Trends.

Pharmaceuticals represent a special problem, especially insofar as “value for money” cannot be achieved by any purchaser of pharmaceutical products, be it an employer or family. Figure 6, for example, highlights the contributors to waste in America’s health care system today. Those highlighted in yellow are pharmaceutical-related. There is much that we can and must do as clinicians, pharmacists, and as those who develop drugs to deal with this large amount of waste in the system today.

And there is yet another pharmaceutical-related issue. Those of you who initially went into research probably believed in your heart of hearts that the process of discovery and development was straightforward: you would first invent, and then study a new product. Once studied, it would be approved by appropriate regulatory bodies and then brought to market and sold. Yet the model we actually have in the United States today has been inverted: We still invent first, but then we seek immediate regulatory approval based on a limited clinical indication. We then begin aggressive marketing and selling (while passively watching the off-label market flourish), and finally start the real research. It is difficult if not impossible to withdraw something even if it is proven that it does not work since people become committed to using it. The power of testimonials is seductive and irresistible to regulators, although we all know that the plural of anecdote is not data. The need for evidence-based practices must therefore be continually emphasized and taught.

Figure 6. Source: PricewaterhouseCoopers’ Health Research Institute. The Price of Excess: Identifying waste in healthcare spending. 2008.

It is now clear that we must actually change the way care is delivered in the United States today, demanding that accountability occur where care is delivered rather than where it’s financed. The latter, of course is what’s happening in the United States today. Whatever the problem, the payer, the government, or the health plan is its etiology. Attention is never focused on where the care is delivered, where the cascade of diagnostic and therapeutic interventions begins, where medical errors occur, and where excess cost and regrettable morbidities begin.

Health care finance and delivery is extraordinarily complex and complicated, so much so that few physicians understand it even within their own specialties, let alone outside of them. So how could a patient? As much as a patient would like to take control of his/her own care, such expectations are unrealistic. The delivery system must absolutely assume an assertive and definitive role in organizing, overseeing and measuring the cost, quality, safety and outcomes of the care it delivers to patients.

Centers of Excellence (COE) are common across the United States. They are generally procedure-specific. When the Blue Cross Blue Shield Association began building its COEs, they, too, were condition-specific and provided access to centers for heart surgery, rare or complex cancers, back surgery, knee and hip replacement, bariatric surgery, and organ transplants. Each designated hospital had significantly better than average outcomes, yet we have learned that this criterion is not enough. We now know that if safety is lacking, even when technical excellence is present, the result is likely to be: “the operation was a success, but the patient died.” And so Blue Cross Blue Shield now requires, in addition to excellence in a specific specialty, that the hospitals’ boards of trustees are engaged in a review of safe practices at each board meeting. There must be documentation that the board is monitoring central line infections, surgical site infections and decubitus ulcers (bedsores). Forty percent of the points necessary to be designated as a Blue Distinction center are now based on such criteria. Safety was not addressed in the ACA legislation. American physicians, nurses, health workers and their hospitals must therefore address this issue. And thus the Blue Cross Blue Shield Association has raised its bar for those hospitals seeking to be defined as true centers of excellence. American hospitals are increasingly interested in becoming designated as Blue Distinction centers since patients are increasingly being redirected to them. The national discussion related to ACA continues to remain silent on this issue.

Now we have the emergence of Accountable Care Organizations (ACOs.) They are mentioned in the Accountable Care Act and are intended to lead us into a competent, compassionate and safer delivery system. Can they? Maybe, but not likely, based on recent history. When the recent Centers for Medicare and Medicaid Services (CMS) ACO regulations were proposed, it was delivery system CFOs and business organizers who protested the initial financial model. They thought that the financial rewards were inadequately matched to the financial risks. Risks to whom? Certainly not to patients. For in spite of the financial concerns that have derailed the implementation of ACOs, there was no chorus of clinical voices saying “Wait a minute: reducing the 300,000 annual preventable deaths caused by medical errors and hospital acquired infections by only 25% isn’t enough. We can and must do better. Let’s rewrite the regulation for this reason.” Where were those voices? Who would these people be?

We should each, therefore, envision an ACO owner’s manual entitled, “Accountable to Whom and for What.”

Its chapters should be titled:

  • Keep me safe.
  • Have access to the knowledge, experience and skills to meet my needs.
  • Use them promptly, judiciously and with prudence.
  • Know the difference between prolonging my life and prolonging my death.
  • If you have a problem with the above, ask me.
  • Have the data to prove the above.
  • Repeat.

Or, stated a bit differently:

  • Don’t hurt me (safe)
  • Only do what works (effective)
  • Ask me first (patient centered)
  • Don’t make me wait (timely)
  • I need to be able to pay you and feed my family (efficient)
  • Treat me as you would treat your family (equitable)

Sound familiar? It has been 12 years since the Institute of Medicine in the United States articulated these attributes of a competent, compassionate and safe health care delivery system in its report, To Err is Human, and yet precious little progress has been made since then.

To achieve these goals, a new paradigm is needed. Actually, entire belief systems must be abandoned and replaced by beliefs, systems and practices that put the patient’s needs, rather than the delivery system needs, at their center. This is our greatest challenge. The notion of continuing medical education must be replaced by a practical and meaningful infrastructure that is self-directed, monitored and measured, directed at specific gaps in knowledge and/or performance, offers real-time decision support with up-to-date practice data, and has a measurable (and measured) impact on patient outcomes, understanding and behaviors.

In the United States, there is a major movement into a new model for the delivery of primary care, euphemistically labeled as a “patient-centered medical home.” This is probably a good thing. Primary care must be re-empowered and re-capitalized for these homes to succeed. Such medical homes must make certain that there is access to culturally-sensitive care. There must be a way to systemically identify individual patients and their needs. There must be community resources that must be tracked and coordinated if care is to be improved in a meaningful way. Population health issues must be confronted and addressed. Measurement is essential if improvement is to be demonstrated and sustained. Nowhere in the Affordable Care Act are any of these challenges mentioned. Yet this is the transformation of the delivery system that is essential if those purchasing and receiving care are to realize value for money.

Patient-Centered Medical Homes are proliferating. We call them “patient-centered,” but are they?

The experience of a patient who had received a year of care in a redefined medical home is illustrative. The patient, highly educated and knowledgeable about his disease and with a supportive family, had been living with beryliosis, a chronic lung disease for more than 20 years. He opined that chronic disease knows neither episodicity nor respite. It travels with the patient. Its home is where the patient is, at the family residence, the work place, travelling, and only very occasionally, at the clinic or hospital.

This patient had previously experienced all of the vicissitudes of the unmanaged US health care delivery system and was impressed that the model he had recently encountered was better suited to self-management than more routine models of care. His additional insights, however, were stunning and should be informative to us all. To paraphrase his thoughts: “Living with a chronic illness is like having another full-time job.” First, there is the career-job. Next come family; then the house, car and lawn, and finally, the continual responsibility of managing lifestyle and medications to optimize health. The latter is inevitably given the lowest priority.

No complex full-time job can be undertaken and managed without staff comprising, at least, a “Deputy Program Manager.” The myriad details of living with and managing a chronic illness in the context of competing priorities makes the definition of such a role obvious and needed. No such position could realistically be created, but a partially dedicated clinician was able to approximate such a person. It nonetheless fell a bit short.”

Although fairly compulsive about self-management and self-care, frequent calls and reminders were found to be essential for health maintenance. Small, early signs of potential problems were easily subjugated to the pressure of his other three “full-time jobs,” and the prompting and encouragement, as well as the interventions insisted upon by his nurse often precluded significant medical problems.

The impact on his family was meaningful as well. Once the role of disease oversight was reliably assumed by a knowledgeable health care professional, the burden to his family – especially his wife – immediately diminished. Family dynamics improved and the focus of family interaction was entirely on family, rather than “family coping with chronic illness”. This was, perhaps, his most surprising and unexpected benefit of the intensive medical home initiative.

Frequent, ongoing contact and never-ending risk assessments were valuable and not realistically achievable without dedicated, knowledgeable support. For this patient, the medical home was where he lived, not where his doctor and nurse-manager worked.

While current medical home models focus on the physician work environment and strive to create a practice that lends itself to the management of patients in a more cost-effective and patient-centered way, such a model would seem helpful only to those patients with routine problems or episodic health issues. What this patient conveyed was a far more pressing need: for day-to-day support in dealing with a chronic disease that knows neither episodicity nor respite. So while he was grateful for the improvement in care, his situation begs us to ask the question of how we define a medical home: Is it my doctor’s office, his team and my illness? Or is it my home, my doctor and our team?

What might the role of a pharmacist be in this new scheme? Medication errors are the most common cause of preventable medical injury. Lack of medication reconciliation at the time of transitions in care is especially troublesome. Non-indicated drugs, absence of the right drug when indicated, improperly monitoring risky drugs, and knowing when to stop are all troubling issues in the United States. Knowing the difference between education which says, “I learned it”, and performance which says, “I did it” is something that most clinicians cannot achieve with respect to drugs. Pharmacists simply must assume a higher and more prominent role in clinical drug management.

If, for example, you were to submit a list of generic names to any reasonable primary care physician, he or she will recognize about half a dozen that he/she frequently used, but if asked to reconcile those against the brand or generic drugs prescribed by a consulting rheumatologist or cardiologist, inaction would prevail. Pharmacists must do that. Pharmaceutical misadventures, risks and alerts appear in the pharmaceutical literature, not in the New England Journal of Medicine. An Accountable Care Organization or a Medical Home must be equipped to deal with the risks and morbidities associated with improper drug use, inadequate monitoring, overuse and toxicities.

Off-label drug use is another looming problem. One definition of off-label use is a clinical trial where n=1, with no patient protections, and no data collection – all of which are really bad ideas. Although innovation must continue, without documentation of clinical experience there is no collective learning. There are obvious consequences for patients who offer themselves for treatments that may well have already proven to be harmful or, at best, to have had no value. Also, the process of collecting anecdotes randomly, rather than in a structured way, can delay the introduction of possibly important therapies. Registries must be implemented for such off-label use.

It is apparent that it is not good enough to be “good” in a reformed health care system. Providers must learn to be “good for me, the patient.” Don’t hurt me. Keep me safe. Only do what works. Be effective. Ask me first. That’s patient-centered. Isn’t this where we started with the IOM report in 1999? How hard would it have been to embed this either in the ACA law or the ACO regulation? Such principles are largely absent from each or have been challenged by providers. Shame on them. Shame on us.

We see that at both the macro, policy level and at the micro, patient- centered level, the ACA was and remains silent on many critical issues facing the American people and those who have the responsibility for financing their care. One year later there are still more questions than answers.


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