Senate Finance Committee: Health Care Incentives and IT

Last Tuesday, a Senate Finance Committee hearing saw health care experts calling for adoption of health IT, an overall increase in transparency and pay-for-performance programs to improve care and reduce costs.

These are two issues that we have returned to over and over during the course of this blog. The current incentive system in place is, as George C. Halvorson put it in Health Care Reform Now!, perverse. A move towards performance-based metrics and payments is something that could go a long way towards re-aligning the cumbersome and costly approach used today. Health care IT is well known as a means of not only trimming down administrative costs but also as a way to increase efficiency and eliminate a majority of duplicate testing and paperwork-driven errors.

Via Healthcare IT News:

"We believe that aligning financial incentives is the right approach to pushing quality to a higher level," [Greg] Schoen [MD, regional medical director of Fairview Northland Medical Center in Princeton, Minn.] said. "By creating a positive incentive to improve quality, pay-for-performance is an engine for improvement and can be a framework for fundamental transformation."

He is far from the only one bringing these views to the Senate. Samuel R. Nussbaum, MD, executive vice president of clinical health policy and chief medical officer at WellPoint, Inc., was also present and vocal as was Peter V. Lee, executive director of the National Health Policy at the Pacific Business Group on Health.

Also via Healthcare IT News:

Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee said he would hold two more healthcare reform hearings this year.

With healthcare spending outpacing the overall economy and inflation, "we simply cannot afford to continue paying for inappropriate or inadequate medical care," he said.

The time is right for change. We have labored too long under the non-system that currently holds sway. All of the differing elements needed are aligning to make this the perfect time to implement true reform of American health care. Now.

SOURCE: "Experts push transparency, P4P, and healthcare IT for healthcare reform" 09/10/08
photo courtesy of Marion Doss used under its Creative Commons license

George C. Halvorson and The Senate Finance Committee

On July 17, 2008, George C. Halvorson gave testimony to the Senate Finance Committee on the role of health information technology in improving health outcomes. The full text of his testimony is available in PDF format from the Senate Finance Committee's website.

If you would just like the highlights, but prefer to get them from someone a little more removed from Mr. Halvorson than we are, you should check out the post made by Condor over on the Searlings Got Plowed Blog. (I like to get multiple sources and perspectives so I feel compelled to offer them to our readers when I can.)

Here is one small excerpt that really grabbed me. Mr. Halvorson, in the course of detailing what Kaiser has already implemented in the way of electronic health records, shares the following letter received by his company. It's a letter that shows the human impact of these technological advances:

This last example was highlighted for me by a recent letter from a member that puts a human face on these statistics.

Early last year, I came to your facility to have a foreign body removed from my eye. I visited your Ophthalmology Department and your competent staff dealt with this minor emergency. What made this visit so meaningful was my interaction with your nurse after my visit with the doctor. In addition to giving me some after visit instructions, she noticed in the computer that I needed a mammography exam. I had been reminded before but I tend to be too busy to take care of my own health. This time the nurse was very insistent. She even made me an appointment so I could walk in and get the exam within the hour. Since I did not have to wait too long, I had the exam done that day. Well, they found a mass in my right breast and it was cancer. I have gone through chemotherapy and radiation therapy and today I am cancer free.

I am convinced that I am alive today because of your organization’s focus on my total health. My interaction with your entire health care system has been nothing but positive. I am especially appreciative to the young nurse who took the time to convince a stubborn old lady to take responsibility for my health.

Thank you for giving me many more years to thrive.

This letter describes a simple act by one of our nurses, but it was possible only because the nurse had access to that information, acted on it, and was part of an integrated health care system that encourages this series of events.

If you are at all interested in the application of technology in this fashion, I highly advise taking a look at the full text of his testimony. If it is food for thought you are looking for, this is a banquet!

Download PDF here.

SOURCE: "Testimony of George C. Halvorson Chairman and Chief Executive Officer Kaiser Foundation Health Plan and Kaiser Foundation Hospitals Before the Senate Finance Committee" 07/17/08
photo courtesy of Mr. George Halvorson

Bernanke Addresses Health Care Issues

On Monday, Federal Reserve Chairman Ben Bernanke addressed the Senate Finance Committee's Health Reform Summit (full transcription here). Bringing his financial acumen to the table, he reframed the question of health care cost, putting into a perspective of "What are we gaining from these expenditures?" rather than the usual absolute and simplified "What does it cost?"

From the economist's perspective, the question of whether we are spending too much on health care cannot ultimately be answered by looking at total expenditures relative to GDP or the federal budget. Rather, the question, whatever we spend, is whether we are getting our money's worth. In general, good information and appropriate incentives are necessary to allocate resources efficiently. In health care, the necessary information should include not only the clinical effectiveness of certain tests or courses of treatment but also their cost-effectiveness. As the regional comparison of health-care costs illustrates, cost-effective approaches may be at least as useful as more costly approaches in delivering good health outcomes.

His remarks were tightly focused on health care cost and its impact on the U.S. financially. Monetary policy and overall comments about U.S. economy were not addressed other than as they affect health care. He also declined to make any solid policy recommendations.

Among other issues, Bernanke pointed out that rising costs of health care are quite liable to reduce access to health care as the lower income elements of the U.S. are priced out of both care and insurance. Hardly an earth shattering observation, but one that is lent weight by his bringing it up in this particular forum.

"The best way to reduce the fiscal burdens of health care is to deliver cost-effective health care throughout the entire system"

Hopefully this will turn some attention towards the inadequacies of the "pay per procedure" methodology that has driven American health care for decades.

SOURCE: "Chairman Ben S. Bernanke At the Senate Finance Committee Health Reform Summit, Washington, D.C. Challenges for Health-Care Reform" 06/16/08
photo courtesy of Ashley Pollack, used under its Creative Commons license

Salazar Speaks Out

On Tuesday, the United States Senate Finance Committee held a hearing entitled "Seizing the New Opportunity for Health Reform." Goals and principles of health care reform were addressed along with a reaffirmation that reform efforts should be comprehensive, not incremental, and that quality health care should be available to all citizens of the United States.

Senator Ken Salzar of Colorado, a member of the Committee, was one of those who addressed the hearing. Here are some excerpts from his address brought to us via the full transcript on Trading Markets.com:

"While many in our nation go without care, it certainly is not due to a lack of health care spending. In 2005, health care expenditures in the U.S. totaled over $2 trillion dollars - nearly 15 percent of our gross domestic product and the highest spending level of any developed nation by far. So I ask myself - with so much of our money being spent on health care services, how can so many of our people lack access to affordable, high quality care" It is a dynamic we all struggle to understand, and I look forward to hearing the panel's thoughts on this during today's discussion.

"When I go back to Colorado and talk to the people in my state, their number one health concern is the cost of care. The price they must pay drives every decision they make when it comes to their personal health - which is certainly not the way we should be making life-altering decisions for our friends and loved ones. For those people without insurance, the problem is obvious - they cannot afford to pay the staggering "sticker price" for health care services out of their pocket - and they rely too heavily on emergency services which are inefficient, expensive and less than ideal. But the growing plight of the uninsured causes difficulty for individuals with insurance as well, as many of the costs of treating the uninsured are passed along to all consumers and result in increased premiums and cost-sharing obligations. This often means that even those with insurance cannot afford to seek treatment because they cannot afford their high deductibles and copayments, creating a vicious cycle of unmet health care needs.

As someone who has had recurring health issues of various sorts, I can attest to this. Many times I have had to forgo seeking professional care because it was a choice of that or rent. (Writers don't make very much unless they happen to be Stephen King or Tom Clancy.) On one or two occasions it ended up with me having to go to the emergency room, vastly increasing the expense both for myself and or others.

Now I have insurance thanks to my wife's job at a local university, although that does not improve matters much from they way they were before. Several hundred dollars a month go towards coverage, but attempts to use it reveal a labyrinth of paperwork and bureaucracy that often seems designed to prevent our use of the policy.

"As I listen to discussions of health care reform, I can come to only one conclusion - our goal must be universal access to affordable, high quality health care for every person in this country. While I am sure that my colleagues on the Committee may have differing perspectives on how we can achieve this goal, I am convinced that there are common principles that can tie us together and hope that former Secretaries Shalala and Thompson can help us identify those areas. Prevention, health technology, primary care, chronic care coordination - these are concepts that we know hold value - and the time has come for us to delve into the details of incorporating them into our health care system and realigning the system's incentives to make sure they are addressed."

Indeed, these are all issues that George C. Halvorson brings up in his book Health Care Reform Now! as being critical to effecting substantive, positive change in our current "non system." Let us hope that Sen. Salazar finds many kindred spirits on the Senate Finance Committee.

SOURCE: "Senate Finance Committee Takes First Step to Discuss Broad Health Care Reform Solutions" 05/07/08
photo courtesy of Phil Roman, used under its Creative Commns license