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DrLyle’s Thoughts on the President’s AMA Speech 6/15/09

June 16, 2009 News 4 Comments

obamaPresident Obama spoke today in front of the AMA, where he quickly got to the routine line about “We need to computerize our medical records and spend more on preventive care”… a popular theme, and yet us pragmatists know we need to do more.

And then, our President said more: “But as important as they are, investments in electronic records and preventive care are just preliminary steps. They will only make a dent in the epidemic of rising costs in this country”. Wow, finally someone admits it! So what do we have to do to make a realistic dent in healthcare costs?

President Obama went on to make it very clear that two things need to happen:

First, “Reform the way we compensate our doctors and hospitals” (which essentially means a shift from fee for service payments to a capitated/P4P system). He elaborates by saying, “We need to bundle payments so you aren’t paid for every single treatment you offer a patient with a chronic condition like diabetes, but instead are paid for how you treat the overall disease. We need to create incentives for physicians to team up – because we know that when that happens, it results in a healthier patient. We need to give doctors bonuses for good health outcomes – so that we are not promoting just more treatment, but better care.” Of course, I am all for a system that rewards quality and efficiency over simple volume of services – it’s the right thing to do and lends itself much more to innovation!

On the other hand, the capitation model got ugly in the for-profit HMO days, so we will need to be careful how we implement this. Fortunately, it is encouraging to see how the Kaiser model has evolved since those days. Just ten years ago, they had a pretty bad reputation for “rationing care” due to their capitated system, but now their patients seem consistently satisfied. This is in large part because of changes Kaiser has made in both care and expectation management, but I think also because the consumer perspective has changed with the Interneting of America… what may have seemed liked “denials” ten years ago (e.g. you can’t come in, a nurse can handle your care over the phone) now seems like a convenience (e.g. would you like to do a virtual visit with a physician extender instead of driving all the way to the office?). Finally, a use of technology that works equally well for physicians, patients and payors!

Second, he said we need to “Improve the quality of medical information making its way to doctors and patients” (which means identify and spread evidence-based best practices). He noted that a recent study “found that only half of all cardiac guidelines are based on scientific evidence. Half. That means doctors may be doing a bypass operation when placing a stent is equally effective, or placing a stent when adjusting a patient’s drugs and medical management is equally effective – driving up costs without improving a patient’s health.” He also quoted the great Gawande New Yorker article on this subject of cost disparities not affecting quality of care (btw- I love that our President is actually reading this stuff!). And then he summarized, “figure out what works, and encourage rapid implementation of what works into your practices”.

Of course, this will scare certain specialists who do a lot of procedures… and since the AMA represents many of those docs- I imagine they will be very wary about this issue (I wonder if there were “boos” at this time?). But, it is the right thing to do – our healthcare system simply can’t survive if we keep paying for every new procedure and test dreamed up by our scientists- why do they get to be innovative and our payment system remains so stagnant!

On the other hand, we need to reconcile this issue with the constant advancement of science that makes America great. Perhaps we can look at other nations to understand how this can be done effectively, or again review Kaiser’s and other stable capitated systems to see how they determine what is the best and most cost-effective treatments they can offer. Some will cry “rationing”, but that is indeed misleading in a nation where we already ration care to so many Americans who are under-insured and non-insured.

So I agree with President Obama – we can do better. It is quite clear that our current system is simply not sustainable long term, nor is it a “fair” system due to its inability to provide access to all Americans. So I hope we will be able to tell our children in ten years that we were part of the movement which allowed us to become a nation where we can provide the best healthcare to all Americans in the most convenient and cost-effective way possible. It is right financially, it is right morally, and it is right clinically. Now Mr. President, just make sure those words move into action.


Lyle Berkowitz, MD is an internist and healthcare informatics expert. He is Medical Director of Clinical Information Systems for a large primary care group in Chicago. He also blogs at Change Doctor.

Comments 4
  • Outcomes-based payments make sense from a preventative care perspective, absolutely. It has long been an exquisitely unbalanced reimbursement system that pays so well for procedures and so poorly for the oft more complicated, demanding, and time-consuming patient education, guidance, and preventative care delivered by primary care providers.

    However, I’m curious:
    1) Won’t poor compliance on a patient’s part require unbalanced effort and services on the physician’s part in an attempt to bring them along, creating unfair demands upon the provider’s time for the uncooperative, eroding their availability for the cooperative?
    2) Will providers be incentivized to retain non-compliant patients who would otherwise erode their income base?
    3) Just as there will be financial “punishments” for providers if patients are non-compliant, will uncooperative patient also have financial reprimands for their unhealthy behaviors?

  • My best comment is that there is no single answer, but if we create the RIGHT INCENTIVES – then let the market and providers be creative and innovative in figuring out how to deal most efficiently with both the doctors/patients who want to work together, as well as those who don’t. America has always been built on that concept – and it can be a double edged sword since the reimbursement system has to be well balanced for quality and cost, but I think we are much closer in a setting where we get “care coordination” PMPM fees vs. simple FFS fees.

    I’d add that I do agree with the idea of “rewarding” patients who are compliant (eg provide a partial refund on insurance premium or give bonuses to buy healthy things/services)- assuming that the definition on compliance is very clear and obvious. Of course, that may just be a nice way of saying we are punishing those who are not compliant. But let’s also recognize regardless of financial rewards/punishments, the non-compliant will suffer in their own way (eg poor health). And they should not drag down their doctors with them financially, as there have always been things like stop-losses and other measures to ensure that won’t happen. But again, with the right incentives in place – it will be very interesting to see what people come up with – I still remember hearing about the pre-natal clinic which gave away lottery tickets to get all the economically disadvantaged mothers to come into the clinic – it worked well and created an enormous ROI by decreasing pre-term births. Hmmm… maybe that is the answer for the rest of America – see your doctor, be compliant, and get a national lottery ticket!

  • Dr. Lyle, I may not wait for a national lottery! May be a good idea for just our local little practice to encourage regular check-ups! (I see many folks who can’t afford or remember other stuff which needs attention standing in line weekly to buy lottery tix at 20 bucks a pop!)

    I, of course, understand that the non-compliant will suffer from their own neglect, but I worry we may create a financial disincentivization to continue to see those difficult patients.

  • Great piece Lyle
    I wish some of our local (Australian) politicians could speak with the same fervour around the need for healthcare reform.
    Maybe I need you to come back and restoke the fires.
    Seriously it is refreshing to see this level of leadership being taken on the important issue of healthcare reform. I wish you luck with it and hope my government is watching with great interest.

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