“Good enough for Government Work”: Quality, cost, and gaming the system, Part 3 (of 4 parts)

This is part three of the Charles Odegaard Lecture, delivered at the 27th National Conference on Primary Health Care Access, April 6, 2016

The VA is an example of how quality can be and is compromised when public sector funding is cut. In the area of public health, it can have an even greater impact, and no fewer apologists. When, under cost-cutting mandates from the state of Michigan the city of Flint changed its water supply from treated Lake Huron water to the industrially-polluted Flint River, the complaints of citizens were ignored. When concerned health care providers, like Dr. Mona Hanna-Atisha (pictured), raised warnings about rising lead levels in the children of that city, she was attacked and vilified. But she was right and they were wrong, or, perhaps worse, lying. Poisoning our children to save money. If individual health care is jeopardized when those responsible are being rewarded for cost-cutting, we can do a truly impressive job of harm when we destroy the public health infrastructure. And let us not forget that a major reason this was able to happen was Racism; that they were not “our” children, at least not those of the state authorities.

We need more emphasis on quality. Indeed, quality, not cost-cutting, needs to be our primary metric. Spending less should only be acceptable when quality is not negatively impacted. I realize that this is also subject to interpretation; “quality” has almost as many different interpretations as “waste”, and is frequently (if, hopefully, usually unconsciously) associated with “what benefits me”. I am talking about health care that is of benefit to most people, and is considered basic – keeping patients clean and out of their own filth, feeding them, treating the diseases that we know how to treat, doing surgery when it is of clear benefit, not having excessive waits for specialty care that compromise outcomes. And, most importantly, not providing financial incentives for limiting care. From a cost-cutting point of view, money is fungible, whether it comes from ‘cutting the fat’ or cutting needed care; but from a healthcare point of view, there is a big difference. (I refer to healthcare here as “caring for people’s health”, not the industry of the same name!)

This is the big issue, and it is amazing to me that it sometimes seems like such a mystery. If most of our incentives are to cut costs, to keep our jobs or to make bonuses or to keep our agency functioning, costs will be cut. Even when those cuts negatively affect quality, in real and dramatic ways. The argument for privatization goes something like “the private sector can do it better because, motivated by the opportunity to make profit, they will discover efficiencies that government employees do not, and run a ‘leaner ship’”. The problem is that, while there may be some examples of this happening, what usually happens is that costs are cut by cutting services, and making off with the profit, or bonus. The ship is made lean by cannibalizing its parts, and the only thing which is certain to be maintained in fine working order is the lifeboat in which the parties responsible hope to escape in while the rest sinks. This scenario is repeated over and over again, whether services are actually provided by private and for-profit organizations (think drug companies, insurance companies, nursing homes, and increasingly hospitals) or whether “private sector incentives” are built into publicly provided services, as in England at Mid-Staffordshire, or, increasingly, in the US in Medicare.

Profit may not be a great incentive to provide better health care, and is an uncertain to very poor guarantee of quality, but it is an excellent incentive to generating profit. Think of drug companies like Turing and its former CEO, Martin Shkreli, the poster child for unfettered greed, and his 5000% increase in the price of pyrimethamine, or of Valeant, the Canadian pharmaceutical company that recently doubled the price of secobarbital, an 80 year old barbiturate, in anticipation of California’s assisted suicide law. Think of the increase in price of colchicine, a drug that was used (in its plant form) to treat gout in ancient Egypt 3500 years ago, from 10 cents to $5 a pill when the FDA “encouraged” its manufacturer to conduct new studies and banned the generic (finally reversed last year, with generic colchicine again available.) Think of the insurance companies whose profit was baked into the ACA, making it costly and still not covering everyone. The ACP has recently called for government controls on drug pricing. The fact is that you can’t count on private for-profits to provide quality, unless you really trust Martin Shkreli.

Interestingly, in contrast to the Triple Aim advocates, critics of Sen. Bernie Sanders’ proposal for National Health Insurance system, Medicare for All, assert his math must be wrong, that we couldn’t both save money and deliver quality health care to everyone. (The Chicago Tribune editorial endorsing no one in the Democratic primary says: “Sanders first amused Americans who know their fiscal math with proposals for free college tuition, expanded Social Security, $1 trillion in infrastructure spending, "Medicare for all" .... The nonpartisan Committee for a Responsible Federal Budget calculates that his economic plans would push the top federal tax rate to about 77 percent”).[1](By the way, they really mean the topmarginal federal tax rate, which was, for the record, 90% when I took civics in junior high.) I don’t know if they are disingenuous or purposely befogging the issue, since it is clear that every other developed country delivers care to all its people for, usually, 1/3-1/2 of what we spend per capita in the US, with much better outcomes by most or nearly all measures.

So why are cost estimates in the US so high, when other developed countries do it for so much less? A great deal of it is that profit is built into the system. When we read about the problems of our system, we hear from insurers, who think providers charge too much, and providers, who think insurers pays too little, and each with an army to try to get what it wants. It is not because we care too much about patients. In Canada, there is a single payer national health insurance program (called “Medicare”) where the government pays the bills for largely privately-delivered care. The fact that it is private delivered is part of why their costs have risen second only to ours, but there is some central control. In Switzerland, there are multiple payers, insurance companies that are, however, forced to charge the same amount and provide the same basket of services, and be non-profit. How do they compete then? Why, on service to their patients! What an incredible idea! If you call your company to complain and can’t get through, you switch to another! As long as our system is predicated on building in excessive profit for providers, insurers, and drug companies, it will be fantastically expensive, albeit a full-employment program for those people trained to try to get bills paid and, on the other side, to deny payment. And it will be about cutting costs, not improving quality.

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[1] http://www.chicagotribune.com/news/opinion/editorials/ct-marco-rubio-tribune-endorsement-clinton-sanders-0310-md-20160309-story.html

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“Good enough for Government Work”: Quality, cost, and gaming the system, Part 1 (of 4 parts)

This is part one of the Charles Odegaard Lecture, delivered at the 27th National Conference on Primary Health Care Access, April 6, 2016

“The dream of reason did not take power into account”.

--Paul Starr, "The Social Transformation of American Medicine", 1982

In 2008, the British Healthcare Commission began an investigation into conditions at Stafford Hospital, run by the Mid-Staffordshire Health Trust.[1]The investigation was prompted by patient complaints and a higher-than-expected death rate, and it and subsequent[2]investigations uncovered a pattern of both poor quality care and cover-ups by those running the hospital. It became a major national scandal. In 2014, whistleblowers began to reveal the extent of problems in the Phoenix Veterans Administration system, with long delays for appointments, inadequate care, and even excess deaths. The investigation revealed enormous cuts in services, as well as efforts to cover up the problems, similar to those in Stafford. Moreover, it turned out that the problem was far more extensive across the VA than just Phoenix.

These two events are discussed by M. Gregg Bloche in his NEJM Perspective “Scandal as a Sentinel Event — Recognizing Hidden Cost–Quality Trade-offs”[3]. The details of the two scandals differ, as do the health systems of the two countries in which they occurred, but there are disturbing similarities.

“As with the VA scandal,” Bloche writes, talking about Staffordshire, “politicians blamed individual perpetrators and one another, and the prevailing narrative highlighted lapses of character and culture…In both cases, performance standards often proved incompatible with resource constraints….The fakery was discovered, and perpetrators were punished. But the truth that trade-offs between quality and cost were embedded in budget constraints remained submerged.”

So, while more rigorous standards were being set for performance, budgets were being cut. These cuts made it difficult or impossible to meet those standards, and administrators in both systems covered up the problems. They lied about their compliance with the standards -- and, not coincidentally, often got financial bonuses for doing so (or at least got to keep their jobs). In addition to the probably unnecessary deaths, outcomes were more generally poor care for all patients. In the British case, the excess deaths were pretty well documented, as were the stories of patients lying in urine and excrement, inadequate food, and unavailable nursing care. In the US, at the VA, proving excess deaths was more difficult, but excessively long waits, particularly for specialty services, may well have contributed to unnecessary or premature mortality, and falsifications by the administrators were very clear.

In both cases, heads rolled – local administrators, the head of the Mid-Staffordshire NHS Trust, and in the US eventually the head of the VA.  The politicians, in the US Congress and the British Parliament, who had been responsible for the funding cuts in the first place, took no responsibility and indeed used these scandals to act in a self-righteous manner, denouncing “those responsible”, while being clear that this did not include themselves. Nowhere in the discourse in the media are the budget constraints and cutbacks acknowledged as a major cause of the problem.

And, yet, the politicians were surely responsible, because it was the budget cuts that they imposed, along with the potential they built in to these systems for financial gain on the part of those directly tasked with running the operations, that led to these problems, certainly along with the collusion of the people directly in charge. The process has had two steps  – first, we are going to cut your funding and you are going to have to figure out how to cut in a way that doesn’t, at least obviously and in a manner that reflects on us, cut services. Second, we are going to tie rewards – institutional and personal (direct financial bonuses, or at least keeping your jobs) – to the degree that you can cut costs. We are also going, to a greater or lesser degree, “privatize” operations on the assumption that this will, with the motivation of profit, increase the efficiency (and lower the cost). And if we cannot privatize them, we will use “motivators” characteristic of private enterprise – again see financial bonuses. And now a right-wing group of Koch-funded consultants and legislators is creating a proposal to essentially privatize the VHA, covered by Suzanne Gordon,

“The proposal they have crafted is an exercise in incoherence, denial, and magical thinking. he group believes that private sector hospitals would be willing and able to recreate VHA Centers of Excellence and other programs like the San Francisco VAHCS’s Center of Excellence in Epilepsy or Primary Care Education or Palo Alto’s polytrauma, blind or spinal cord injury rehabilitation programs. It also believes the private sector could fulfill the VHA’s research and teaching missions. As one San Francisco VAHCS researcher told me, “Can you see my eyes rolling?”’ http://suzannecgordon.com/the-plot-thickens/

It is of more than passing interest that both of these events occurred in government agencies that were established to provide necessary care to people. In Britain, the National Health Service, established in 1948 to expand upon the National Health Insurance program that had existed since prior to WW I, is enormously popular because it provides care to everyone. Let’s think about this for a minute. 1948 was soon after the war. Britain, as most of Europe (but not the US) was in shambles, its population of young men decimated, its economy and industrial capacity largely destroyed, its streets covered with rubble from the Blitz (think the street scenes of East London in Call the Midwife from over a decade later), and the last thing that they had was “extra money”.

 
 But the National Health Service was established, not as largesse in a time of plenty, but as a way of meeting the needs of the British people. In the US, a different story unfolded; with its industrial capacity intact and the need to shift from war to consumer production, the demand for labor exceeded the number of workers. Prevented from increasing wages because of wage and price controls, large companies found offering health insurance (non-taxable) a significant inducement, and found common cause with labor unions who could then offer these benefits to their members; a win-win that led to the employer-based health system that has characterized the US since.

In Britain, the Mid-Staffordshire scandal broke under a Labor government, but the seeds were sown when the Conservatives were in control. Recognizing that the NHS was far too popular to be dismantled, the Tories, seeking to emulate the US, both cut funding and established “NHS Foundation Trusts”, like Mid-Staffordshire, which were in a sense semi-privatized and incented to save money by being offered an opportunity to keep some of the savings, which could be used both for reinvestment in the hospitals and health system and to bonus those in charge. In the US, our services to veterans have almost never (as documented by Bloche) kept up with our rhetoric about the heroism of the men and women who serve in our military, and the VA scandal was tightly linked to cuts in funding. Indeed, some of the “solutions” offered by the same Congressmen who were responsible for the cuts involved privatization; this is often proposed as a solution to not having enough money, and almost never works, at least if the goal is improving quality.

As Suzanne Gordon says in her piece on the growing efforts in Washington to privatize the VA:

‘In their document, the Strawmen [the group working on this] justify their position on total privatization by pointing to the fact that the VHA is having trouble hiring new recruits to fill many staff vacancies because of the “stigma” attached to working at the VHA.  They also argue that the current VHA workforce suffers from “poor morale” and a “culture of fear.” Of course, VHA management practices could be significantly improved.  But if there is now a “stigma” attached to working at the VHA, a “culture of fear” within it, or demoralization among its current employees, that is, in great part, due to the bashing conservatives have unleashed in the media and Congress.’

But we’ll get back to that.

(to be continued)

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[1] http://webarchive.nationalarchives.gov.uk/20110504135228/http://www.cqc.org.uk/_db/_documents/Investigation_into_Mid_Staffordshire_NHS_Foundation_Trust.pdf

[2] http://webarchive.nationalarchives.gov.uk/20150407084003/http://www.midstaffspublicinquiry.com/report

[3] N Engl J Med 374;11 nejm.org March 17, 2016, pp 1001-3

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