Report Cards, P4P, EMRs, and Disease Management An Analysis of Managed Care 2.0.

Report Cards, P4P, EMRs, and Disease Management An Analysis of Managed Care 2.0

The debate about quality has been corrupted in two ways Quality problems have been exaggerated; this is usually accomplished by confusing inferior quality with access barriers. Discussion of QI has been limited to those activities which plans can conduct (e.g., financial incentives, report cards). QI which leaves out plans (e.g., public health, ending the nurse shortage) gets less attention.

Example of exaggeration of the quality problem “Extensive research has documented that all three forms of clinical quality problems – underuse, overuse, and misuse – are ubiquitous in American medicine….” (p. 166). Elise C. Becher and Mark R. Chassin, “Improving the quality of health care: Who will lead?” Health Affairs 2001;20(5):164-179, 166.

Becher and Chassin offered this proof of “ubiquitous” inferior quality A 1998 Rand literature review finding 30- 40% underuse and 20-30% overuse, and malpractice studies finding, 1% misuse. But a far more extensive Rand study (2003) found 46% underuse and 11% overuse. Overuse and misuse obviously involve provider error. But underuse may not.

Rand reported 46% underuse and 11% overuse But Rand made no attempt to determine what caused underuse and overuse. Examples of Rand findings for diabetics: * 24% had A1c measured every six months; * 14% had annual eye exam; * 23% had urine protein checked annually; * 56% received dietary and exercise counseling; * 45% had follow-up visit every six months.

Researchers ignored underuse until late 1990s “Most health services research to date has been directed at identifying and reducing excessive utilization. Little attention has been given to underuse of care.” Two scholars at the RAND Corporation (R. L. Kravitz and M. Laouri, “Measuring and averting underuse of necessary cardiac procedures: A summary of results and future directions,” Joint Commission Journal on Quality Improvement 1997;23:268-76).

Example of misuse of the 2003 Rand study (conflating quality and access) “[D]espite the extensive investment in developing clinical guidelines, most clinicians do not routinely integrate them into their practices. In a recent study of US adults, Elizabeth McGlynn and colleagues found that more than half did not receive the recommended … care….” Dan Mendelson and Tanisha V. Carino, “Evidence-based medicine in the United States: De rigueur or dream deferred?” Health Affairs 2005;24:133- 136, 134.

Another example of the misuse of the Rand study “Research has shown that physicians incorporate the latest medical evidence into their treatment decisions 50 percent of the time (McGlynn et al, 2003).” US Department of Health and Human Services, Office of National Coordinator for Health Information Technology, The Decade of Health Information Technology: Delivering Consumer-Centric and Information-Rich Health Care, July 21, 2004, 3.

Another example of misuse of the Rand study “Physicians deliver recommended care only about half of the time….” (citing McGlynn et al.) Richard Hillestad et al., “Can electronic medical record systems transform health care? Potential health benefits, savings, and costs,” Health Affairs 2005;24:1103, 1110. This article, also by Rand scholars, was funded by the computer industry hailing the benefits of EMRs.

Rand facilitated misunderstanding: “our results need no risk adjustment” “We primarily chose measures of processes as indicators, because they represent the activities that clinicians control most directly, [and] because they do not generally require risk adjustment….” Elizabeth McGlynn et al., “The quality of health care delivered to adults in the United States,” New England Journal of Medicine 2003;348:2635-45, 37.

Outcome and process measures Outcome measures reflect changes in patient health. Examples: mortality rates after surgery, cholesterol level, and ability to carry out activities of daily living. Process measures reflect how well providers comply with standards of care. Examples: percent of children vaccinated, and percent of diabetics given eye exams.

Underuse is affected by factors outside physician control No health insurance or insurance with pre- ex exclusions or out-of-pocket payments; Other barriers (patient values, low income, illiteracy, immobility, transportation, daycare, change in residence or insurance).

Evidence that health insurance affects underuse by diabetics “[A]though an estimated 35 percent of those with health coverage had received a blood glucose test, a cholesterol test, eye exam, foot exam, and influenza vaccination, just 14 percent of those without health coverage received the same set of services.” US GAO, Managing Diabetes: Health Plan Coverage of Services and Supplies, February 2005, 19.

Evidence that patient behavior affects process measures Three-fifths of elderly Medicare beneficiaries who receive an appropriate recommendation for cholecystectomy fail to have it done; half of insured patients who should, according to a stress test, have an angiogram do not get it; and a fourth of insured patients who, according to their angiogram, should have angioplasty or bypass surgery receive neither. Sources: SM Asch et al., “Measuring underuse of necessary care among elderly Medicare beneficiaries using inpatient and outpatient claims,” JAMA 2000;284:2325-2333 (cholecystectomy bullet); PP Garg et al., “Understanding individual and small area variation in the underuse of coronary angiography following acute myocardial infarction,” Med Care 2002;40:614-626, and M Laouri et al., “Underuse of coronary angiography: Application of a clinical method,” Int J Qual Health Care 1997;9:15-22 (angiogram bullet); LL Leape et al., “Underuse of cardiac procedures: Do women, ethnic minorities, and the uninsured fail to receive needed revascularization?” Ann Internal Med 1999;130:231-233, and M Laouri et al., “Underuse of coronary revascularization procedures: Application of a clinical method,” J Am Coll Cardiol 1997;29:891-897.

Patient refusal has been documented in studies of … warfarin for atrial fibrillation, aspirin for heart attack, hypertension medication, vaccines for influenza and pneumonia, blood glucose tests, colorectal cancer screens, and radiation therapy for cancer. Sources: SD Weisbord et al., “Is warfarin really underused in patients with atrial fibrillation?” J Gen Intern Med 2001;16:743-749; J O’Neil, “A small step for women’s hearts,” New York Times, February 22, 2005, D6; BS Bloom, “Continuation of initial antihypertensive medication after one year of therapy,” Clin Ther 1998;20:671-681; PR Dexter et al., “Inpatient computer-based standing orders vs physician reminders to increase influenza and pneumococcal vaccination rates: A randomized trial,” JAMA 2004;2366-2371; VS Elliott VS, “Researchers call for more diabetes testing,” American Medical News, September 22/29, 2003, 19; LC Walter et al., “Pitfalls of converting practice guidelines into quality measures: Lessons learned from a VA performance measure,” JAMA 2004;291:2466-2470; N Bickel et al., “The quality of early-stage breast cancer care,” Ann Surg 2000;220-224..

(Patient refusal cont.) Patient refusal accounted for 59 percent of the underuse of colorectal cancer screens among Veterans Affairs patients. At a 2005 meeting of the American Heart Association, investigators reported on a study which found that doctors recommended aspirin on a daily basis to about 95 percent of women who had suffered heart attacks and stroke, but that only 54 percent of the heart-attack patients and 43 percent of the stroke patients complied with the recommendation. Sources: Walter et al., op cit.(colorectal bullet); O’Neil, op cit. (aspirin bullet)

Thus, current research permits us to say… Overuse occurs 11% of the time and Misuse (malpractice) occurs <1% of the time. Underuse due to provider failure occurs some unknown percent of the time. These figures reveal serious problems, but they do not add up to “ubiquitous.”

Exaggerating the problem of inferior providers serves insurance industry Insurance industry has used the picture of inept providers to promote managed care. QI that does not assume inept providers and/or which insurance companies cannot do – that is, which does not fall under the rubric of “managed care” – gets much less attention.

Managed care is not the only way to improve quality Other methods with more substantial evidence to support them include: Ending the nurse shortage; ending waiting times for emergency services; insuring the uninsured and under-insured; conducting public education campaigns re appropriate medical care and the effects of unhealthy behavior; rolling back the excesses of managed care; measuring and sharing performance results privately with providers; conducting controlled trials and other forms of traditional research to find new treatments and to evaluate the efficacy of existing treatments.

Managed care has gone through two stages Managed Care 1.0 relied on * financial incentives (capitation and bonuses), and * utilization review and drug formularies. Managed Care 2.0 relies on * report cards, which facilitate P4P, and * disease management.

Definition of terms Report cards: Any document purporting to measure the quality of care given by particular providers which is used to reward or punish providers. Pay for performance: Any method of paying providers based on grades on report cards.

(Definitions cont.) Report card advocates propose that providers be rewarded and punished by * market forces (plans, employers, and patients avoid low-scoring providers and patronize high-scoring providers), and/or * “pay for performance” (insurers pay low scorers less, high scorers more).

DMAA’s definition of DM Activities conducted by third parties that: * Identify people with certain diseases by examining their medical records or claims; * Rely on evidence-based practice guidelines; * Educate patients (may include surveillance); * Measure processes and outcomes and report the results to patients and providers. Source: Disease Management Association of America http://www.dmaa.org/definition.html, accessed February 9, 2006.

Another definition of DM “‘Disease management’ is the latest catchphrase in the ever-evolving American health care spectacle. … [D]isease management is ‘a systematic, population- based approach to identify persons at risk, intervene with specific programs of care, and measure clinical and other outcomes.’” Thomas Bodenheimer, “Disease management – Promises and pitfalls,” New Eng J Med 1999;340:1202-1205, 1202.

Report cards are now advocated simultaneously with … “Interoperable electronic medical records” (EMRs) (aka, regional and national health information networks) and “Pay-for-performance” methods of reimbursement in order to reward high scorers and punish low scorers.

Interoperable EMRs are advocated in order … To facilitate collection of medical records on all Minnesotans/Americans all the time, and To “risk adjust” scores on report cards. “Risk adjustment” refers to the process of adjusting scores on report cards to reflect differences in patient health and other factors outside of provider control.

In sum, Managed Care 2.0 means … (1) Report cards, which require interoperable EMRs and pay-for-performance methods of reimbursement; and (2) Disease management.

Managed Care 2.0 appeared in the wake of the failure of MC 1.0 “Events of the past year demonstrate beyond a doubt that managed care has failed – and failed dismally. The greatest single ethical crisis facing American health care as we move into new year is what to do about it.” Art Caplan, director of the Center for Bioethics at the University of Pennsylvania ("In 2001, managed care our No. 1 health crisis," MSNBC, December 21, 2001 http://www.msnbc.com/news/671464.asp, accessed December 23, 2001). http://www.msnbc.com/news/671464.asp

(Failure of MC 1.0 cont.) “Managed care is basically over. People hate it, and it's no longer controlling costs. Health-care inflation is now back in the double digits. So if it's not saving money, then why should we have it? But like an unembalmed corpse decomposing, dismantling managed care is going to be very messy and very smelly, and take awhile.” George Lundberg, former editor of JAMA who as recently as 1996 had co- authored an article defending managed care (Linda Marsa, “Former JAMA editor laments the state of medical care,” Los Angeles Times, March 26, 2001, http://www.latimes.com/print/health/200103 26/t000026016.html, accessed March 28, 2001).http://www.latimes.com/print/health/200103 26/t000026016.html

MUHCC’s position on report cards and pay-for-performance Quality: Report cards and P4P have not been shown to improve quality, and some research indicates they harm patients. Cost: Report cards and P4P have not been shown to save money, and may raise costs. Small-scale report card and P4P experiments should be conducted; report cards P4P should not implemented on a wide scale.

MUHCC’s position on EMRs Quality: EMRs may enhance quality in some clinics and hospitals. Evidence does not support the claim that making EMRs interoperable will improve quality. Cost: Evidence does not support the claim that EMRs, with or without interoperability, will reduce cost. Providers should not be required by government, or given financial incentives financed by taxes, to buy EMR hardware and software.

MUHCC’s position on disease management Quality: DM has been shown to improve quality. Cost: The evidence does not warrant the claim that DM will save money. Because DM can improve quality, research on effective means of DM should continue, and effective DM programs should be covered by insurance or delivered through public health agencies.

Report cards The following slides examine the claims made for report cards, pay-for-performance, and electronic medical records.

Governor claims report cards will improve quality, reduce costs “[R]ewarding providers for improved health outcomes and encouraging patients to use the best providers will not only help contain costs, it will improve the quality of care,’ Pawlenty said.” (“Governor Pawlenty unveils ‘Smart Buy’ Alliance to slow health care costs and improve quality,” press release, November 29, 2004, http://www.governor.state.mn.us, accessed November 30, 2004).

The Legislature claims report cards improve quality, cut costs Minnesota Statutes Sec. 62J.43, signed by Governor Pawlenty on May 29, 2004, says: “To improve quality and reduce health care costs, state agencies shall encourage the adoption of best practice guidelines…. The commissioner of health shall facilitate access to … quality of care measurement information to providers, purchasers, and consumers by … disseminating information … on adherence to best practices care by physicians and other health care providers….”

Governor-Legislature claims rely on three assumptions (1) Report cards improve quality more often than they damage quality; (2) Quality improvements inevitably lead to cost reductions; (3) The cost reductions achieved by report cards will outweigh the cost of producing report cards.

There is little evidence that report cards improve quality “Despite … extensive adoption of quality measurement and reporting, little research examines the effect of public reporting on the delivery of health care, and even less examines how report cards may improve care. …[T]he potential … negative consequences of public reporting are largely unexplored.” Rachel M. Werner and David A. Asch, “The unintended consequences of publicly reporting quality information,” JAMA 2005;293:1239-44, 39.

Report cards could damage quality three ways (1) By being inaccurate (steering patients to inferior doctors); (2) By inducing doctors to reject sicker patients; (3) By inducing doctors to shift resources from unmeasured to measured patients.

Report cards can be accurate for some things, e.g., vacuum cleaners Consumer Reports’ report card on vacuum cleaners: * Offers grades on 38 vacuum cleaners on a five- point scale (from excellent to poor). * 3 quality measures: - cleaning (carpet, bare floors, w/ tools) - other results (ease of use, noise, emissions) - features (bag, brush, manual pile adj, weight) * Kenmore (Sears) got 79 points, Sanyo Performax and Panasonic Fold N’Go got 53

But patients are not floors, and doctors are not vacuum cleaners Comparisons of quality are not useful if the playing field is not level, that is, if the conditions under which quality is measured are not the same. Keeping the playing field level is much easier to do while measuring the quality of vacuum cleaners than it is while measuring doctors and hospitals.

Many factors outside provider control influence health outcomes Factors that influence health outcomes that are outside of provider control include: * Patient health status prior to treatment; * Patient insurance status (presence of deductibles and co-pays; no coverage for service being measured; no coverage at all) * Patient income, education and values.

Failure to measure health status affects scores The next slide illustrates how scores on hospitals can be distorted when differences in patient health are measured only crudely. It shows that when “stage of illness” at admission was ignored, 18 of 65 hospital units scored above or below average, but when it was factored in, only 6 scored above or below average.

Hospital mortality rates vary depending on “stage of illness” Hospital mortality rates for 13 hospitals and five conditions * under HCFA and Green-Wintfeld Models ** Actual Mortality RateHCFA ModelGreen-Wintfeld Model Above expected range 8 2 Within expected range4759 Below expected range10 4 Total 6565 *Low-risk heart disease, severe acute heart disease, cancer, stroke, and pulmonary disease ** HCFA adjusted mortality rates for only a few of the factors that could have affected patient mortality that were outside hospital control (risk adjustment included age, sex, diagnoses other than the principal diagnosis, number of hospitalizations in the past 12 months, referral source (physician or nursing home), and urgency of admission (emergent, urgent, or elective)). Green- Wintfeld added to the HCFA adjusters an adjustment for “stage of principal diagnosis at admission.”

Income affects preventive services for insured patients* “[L]ower SES [socioeconomic status] patients had lower compliance with Pap smears, mammograms, and diabetic eye exams, and were less likely to have a referral or make any office visit…. These income effects are not confined to the poorest patients but span the entire socioeconomic spectrum.” Peter Franks et al., “Effects of patients and physician practice socioeconomic status on the health care of privately insured managed care patients,” Medical Care 2003;41:842-852, 842 * Patients were all insured by the same plan, described as “the largest local managed care organization” in the ten-county area surrounding Rochester, New York.

“Quality-of-care” scores for diabetics vary depending on measure of quality (1) LDL cholesterol under 13073% (2) Measure (1) + doctor has responded to high reading, + patient has contraindications to statins87% (3) Measures (1) + (2) + other factors*90% * “Other factors” included: patient refuses to take lipid-lowering medications; lipid management low priority or difficult to address; no primary care visit after high reading; has active care elsewhere; other interventions tried within six months of high reading (diet, exercise, or other lipid-lowering drug). Source: Eve Kerr et al., “Building a better quality measure: Are some patients with ‘poor quality’ actually getting good care?” Medical Care 2003;41:1173- 1182.

Experts say risk adjustment of report card grades is essential “The interpretation of [medical] outcomes is further complicated by the need to make adjustments for comorbidity and the intensity and state of the patient’s illness – a far from trivial undertaking.” Paul Ellwood (“Outcomes management: A technology of patient experience,” New England Journal of Medicine1988;318:1549-1556). “[T]he importance of co-morbidity must be stressed.... If co-morbidity is not considered, there will always be the potential for individual providers … to be unjustly accused of poor quality because of patient selection….” Richard W. Asinger, MD (“Constructive use of clinical databases,” The Medical Journal of Allina, 1996(1):31-34, 32).

(Experts say risk adjustment is essential, cont.) “Case-mix adjustments are made in almost all profile analyses to account for the differences in provider performance attributable solely to differences in the populations served” (p. 764). “Risk adjustments contribute vitally to reducing unfair profile evaluations” (p. 765). Cindy L. Christiansen and Carl N. Morris, “Improving the statistical approach to health care provider profiling,” Ann Intern Med 1997;127:764-768. “Accurate risk adjustment is necessary for observational and health services research, including comparison of outcomes of different treatments and quality assessment.” Jay F. Piccirillo et al., “Prognostic importance of comorbidity in a hospital- based cancer registry,” JAMA 2004;291:24241-47.

(Experts say risk adjustment is essential, cont.) “We found that patient characteristics were 315 times more important than hospital characteristics in predicting mortality after simple surgery, so small errors in risk adjustment may loom large compared to hospital differences.” Jeffrey H. Silver and Paul R. Rosenbaum, “A spurious correlation between hospital mortality and complication rates: The importance of severity adjustment,” Medical Care 1997;35;OS77-OS92, Supplement, OS87.

Unadjusted report cards damage access for sicker patients “Performance-based contracting gave providers of substance abuse treatment financial incentives to treat less severe OSA [Office of Substance Abuse] clients in order to improve their performance outcomes. Fewer OSA clients with the greatest severity were treated in outpatient programs with the implementation of PBC [performance-based contracting].” Yujing Shen, “Selection incentives in a performance-based contracting system,” Health Services Research 2003;38:535-552, 535.

Even risk-adjusted report cards can damage access for sicker diabetics “[We found that] if those physicians with the worst profiles... for 1991 managed to discourage the patients with the top 5% of HbA1c levels (representing only 1-3 patients per physician) from returning to their panel, they would in most cases achieve a panel HbA1c profile in 1992 that would be substantially improved than average..... Thus, the patient’s HbA1c levels from the previous year proved a far better predictor of what a patient’s HbA1c level would be in the current year, better than... our case-mix adjusters. Manipulating their patient pool, based on a patient’s prior year HbA1c level, is the easiest way for physicians to have a substantial improvement in their profile” Timothy P. Hofer et al., “The unreliability of individual physician ‘report cards’ for assessing the costs and quality of chronic disease,” JAMA, 1999;281:2098-2105, 2103; emphasis added.

New York’s heart surgery report card First physician-specific report card Grades performance of hospitals and surgeons on heart surgery using 30-day mortality as quality measure Considered most accurate report card in America Has been more carefully examined that any other report card

New York heart surgery report card is the gold standard “New York State’s measurement and publication of coronary artery bypass graft (CABG) surgery mortality rates has emerged as a model in the campaign for useful performance data…. The reality is that these measures of performance are … the best available, and that substantial improvements are not likely for some years.” Stephen F. Jencks, “Clinical performance measurement -- a hard sell,” JAMA 2000;283:2015-2016, 2015, 2016.

NY heart surgery report card is rigorously adjusted 72 risk factors are adjusted They include: number of coronary arteries occluded and degree of occlusion previous heart attack hemodynamic state just prior to surgery (ability to maintain blood pressure) chronic obstructive pulmonary disease kidney failure smoking history (last two weeks, last year)

NY report card is expensive The New York Department of Health pays for: –“five full-time equivalent staff maintaining the database...” and –“a utilization review agent … to audit a sample of 50 cases from half the hospitals each year.” The three dozen heart surgery hospitals in NY pay for: “data coordinators to collect and maintain their databases; most hospitals have a full-time coordinator dedicated to this task.” Source: Edward L. Hannan et al., “Public release of cardiac surgery outcomes data in New York: What do New York state cardiologists think of it?” Am Heart J 1997;134:55-61, 62)

Results of 1998-2000 NY report card on 34 CABG hospitals Statewide 30-day mortality average: 2.32% Three hospitals had higher-than-expected rates Two hospitals had lower-than-expected rates 29 hospitals had expected rates Source: New York Department of Health, Adult Cardiac Surgery in New York State, 1998-2000, http://www. health.state.ny.us/nysdoh/heart/pdf/1998_2000) cabg.pdf, accessed January 16, 2005.

Results of 2000-2002 NY report card on 36 CABG hospitals Statewide 30-day mortality average: 2.27% Three hospitals had higher-than-expected rates Three hospitals had lower-than-expected rates 30 hospitals had expected rates Source: New York Department of Health, Adult Cardiac Surgery in New York State,2000-2002.

Outliers on 1998-2000 and 2000- 2002 NY hospital CABG reports 1998-20002000-2002 High mortality rates Albany Med Ctr (4.08%) Buffalo General (4.67%) Ellis Hosp (6.13%) Mount Sinai (4.86%) Mount Sinai (6.01%) NY Hospitals Ctr (4.31%) Low mortality rates Lenox Hill (1.15%) St. Josephs (0.90%) Winthrop U Hosp (1.10%) Staten Island (0.82%) Vassar Brothers (0.00%)

Rates for 1998-2000 NY hospital outliers two years later 1998-2000 2000-2002 Albany Med Ctr 4.08% 2.83% Ellis Hosp 6.13%3.29% Mount Sinai 6.01%4.86% Lenox Hill 1.15% 2.02% Winthrop U Hosp 1.10% 2.78%

Change in outlier status among 156 surgeons,1998-2000 to 2000-2002 report 156 surgeons met criteria for grading in 1998-2000 report * ; 21 (13%) were outliers 14 had higher-than-expected mortality rates 7 had lower-than-expected mortality rates All 21 outliers were graded in 2000-2002 report, but in that period only 6 of these 21 were outliers * Criteria were either 200 operations during this period, or at least one operation in each of 1998, 1999, and 2000. Source: Calculations by Kip Sullivan based on data in New York Department of Health, Adult Cardiac Surgery in New York State, 1998-2000, http://www. health.state.ny.us/nysdoh/heart/pdf/1998_2000) cabg.pdf, accessed January 16, 2005.

Study suggested New York report card improves quality Odds of death from CABG surgery in NY relative to rest of US, 1994-1999: 0.67 Source: Edward L. Hannan et al., “Provider profiling and quality improvement efforts in coronary artery bypass graft surgery,” Medical Care 2003;41:1164- 1172, Table 4, 1170 (subjects were Medicare beneficiaries; risk adjustment was done with 12 adjusters from administrative data)

But the study in the preceding slide was poorly done The study in the preceding slide is not credible because it examined mortality rates only among New Yorkers who underwent CABG surgery. The study did not attempt to determine if NY surgeons were refusing to perform surgery on sicker heart patients. The next several slides indicate that is what happened.

Recent studies find NY report card damages health overall “[O]ur results show that report cards [on heart surgeons] led to increased expenditures for both healthy and sick patients, marginal health benefits for healthy patients, and major adverse health consequences for sicker patients. Thus, we conclude that report cards reduced our measure of welfare over the time period of our study” (p. 577). “[M]ore severely ill … patients experienced dramatically worsened health outcomes” (p. 583). David Dranove et al., “Is more information better? The effects of ‘report cards’ on health care providers,” Journal of Political Economy 2003;111:555-588.

Reason: NY report card induces surgeons to reject sicker patients “[M]andatory reporting mechanisms inevitably give providers the incentive to decline to treat more difficult and complicated patients” (p. 581). “Report cards led to a decline in the illness severity of patients receiving CABG in New York … relative to patients in states without report cards” (p. 583). David Dranove et al., “Is more information better? The effects of ‘report cards’ on health care providers,” Journal of Political Economy 2003;111:555-588.

(NY report card induces surgeons to reject sicker patients, cont.) “The [December 19, 1991] Newsday article stated that several [NY] surgeons warned that some surgeons were turning down difficult cases to protect their statistics” (p. 410). “[A]n article appeared in the New York Times entitled ‘Faint hearts.’ As fate would have it, a woman was turned down for surgery because she had a fresh, large myocardial infarction. Her daughter was a reporter for the New York Times. After great difficulty, the daughter eventually found a surgeon who would operate on her mother” (p. 411). Bradley J. Harlan, “Statewide reporting of coronary artery surgery results: A view from California,” J Thorac Cardiovasc Surg 2001;121(3):409- 17.

(NY report card induces surgeons to reject sicker patients, cont.) “The incentive to refuse treatment for high- risk patients has created a kind of spiritual crisis in the field of cardiac surgery. Heart surgeons … are shrinking from taking on the toughest cases because of statistics.” Sandeep Jauhar (“When doctors slam the door: Under the current system, a doctor’s reputation may depend on his or her willingness to turn away a dying man,” New York Times Magazine, March 16, 2003, 30, 34).

Even the best surgeons don’t trust the NY report card “’[T]here is nothing that separates me from the rest of the people on the list,’ Dr. [Jeffrey] Gold said…. And even though Dr.Gold is ranked at the top of the [1994] report, he has qualms about it. ‘I’m concerned about the predictability of it,’ he said. ‘I certainly would not use it as the sole way of selecting an institution or a surgeon.’” Elisabeth Bumiller (“Death rankings shake New York cardiac surgeons,” New York Times, September 6, 1995, A1, B11)

New York’s angioplasty report card is having a similar effect “An overwhelming majority of cardiologists [79%] in New York say that, in certain instances, they do not operate on patients who might benefit from heart surgery, because they are worried about hurting their rankings on physician scorecards issued by the state, according to a survey released today.” Marc Santora, “Cardiologists say rankings sway choices on surgery,” New York Times, January 11, 2005, A18.

Report cards cause resource shifts to services being graded “Although paying for high quality is an innovation with obvious potential benefits, it may also lead to the misallocation of … resources…. The medical director at one of California’s largest managed-care organizations described the problem succinctly: 'Everybody's doing what they are required to do in responding to the quality measurements that are being used. Every ounce of energy is being diverted to responding to these; not one ounce of energy is going to any other aspect of quality.” Lawrence Casalino, “The unintended consequences of measuring quality on the quality of medical care," New England Journal of Medicine 1999;341:1147-1150, 1147.

(NY’s angioplasty report card, cont.) “[T]he patient population in the Michigan [angioplasty] registry had a significantly higher frequency of comorbidities…. [A] case selection bias driven by the fear of public reporting of higher mortality rates in New York was one possible explanation ….” Mauro Moscucci et al., “Public reporting and case selection for percutaneous coronary interventions,” J Am Coll Cardiology 2005;45:1759- 65.

(Report cards cause resource shift, cont.) “[I]f providers face a number of tasks and resources are limited, then effort will be allocated toward those tasks that are explicitly rewarded, taking resources away from other activities. Inevitably,... the dimensions of care that will receive the most attention will be those that are most easily measured and not necessarily those that are most valued.” Meredith B. Rosenthal et al., “Paying for quality: Providers’ incentives for quality improvement,” Health Affairs 2004;23(2):127-141,139.

(Report cards cause resource shift, cont.) “From the present study [which found HMOs were less likely to detect colorectal cancer early] and the earlier breast cancer study … [which found HMOs were more likely to detect breast cancer early] one can infer that the incentives of health plans are to allocate resources to those activities upon which they are measured…. This suggests that preventive screening for conditions such as colorectal cancer that are not required to be in a report card (such as HEDIS) are more likely to be neglected.” Anna Lee-Feldstein et al., “Health care factors related to stage at diagnosis and survival among Medicare patients with colorectal cancer,” Med Care 2002;40:362-374, 374.

Example of a shift in resources triggered by report cards “… [I]t may seem that an optimal performance standard would be to maximize the percentage of patients who have an HbA1c <7.0%. Such a standard may divert a … health system’s attention from treating poorly controlled patients to disproportionately focusing on the larger numbers of patients who are slightly above this cutoff.” Rodney A. Hayward et al., “Quality improvement initiatives,” Diabetes Care 2004 27 (Suppl. 2):B54-B60, B56.

Reports on number of procedures do not pose risks report cards do For a few procedures, evidence exists that quality is higher at hospitals that do high volumes of those procedures. Reports on the number of procedures do not create the three report card risks: (1) Inaccuracy (2) Doctors avoiding sicker patients (3) Doctors shifting resources away from unmeasured to measured services

“Practice makes perfect” rule has been found for … * Treatment for AIDS (strong correlation) * Pancreatic cancer surgery (strong) * Esophageal cancer surgery (strong) * Abdominal aortic aneurysm surgery (strong) * Congenital heart disease surgery (strong) * Coronary-artery bypass surgery (weak) * Coronary angioplasty (weak correlation) * Carotid endarterectomy (weak) * Other types of surgery for cancer (weak) * Some orthopedic procedures (weak) * Treatment of low-birth-weight and premature babies (weak) Source: Kenneth W. Kizer, “The volume-outcome conundrum,” New England Journal of Medicine 2003;349:2159-2161.

Review We have reviewed the first of three assumptions that have to be true in order for report cards to work: that report cards improve quality of care. Report cards can damage quality three ways: (1) By being inaccurate; (2) by inducing providers to refuse to treat sicker patients (regardless of how accurate the report card is); and (3) by inducing providers and plans to shift resources away from unmeasured services.

We turn now to the last two assumptions about report cards: (2) Quality improvements inevitably lead to cost reductions; (3) The cost reductions achieved by report cards outweigh the cost of producing report cards.

Quality improvement does not inevitably lead to lower costs “[A]lthough it's a widely held belief that quality health care leads to lower costs, insurers have no data that directly measures return on investment of their P4P [pay-for-performance] programs.” Healthleaders (Paula DeWitt, “The new incentive plan”, March 2004, http://www.healthleaders.com/magazine/cover.php? contentid=53006, accessed April 10, 2004)http://www.healthleaders.com/magazine/cover.php? contentid=53006

(Quality improvement does not lead inevitably to lower costs, cont.) “Results of this study show that it is possible to increase SFDs [symptom free days] in children [with asthma]…. However, the improvements were realized with an increase in the costs associated with asthma care.” Archives of Pediatrics and Adolescent Medicine (S.D. Sullivan et al., “A multisite randomized trial of the effects of physician education and organizational change in chronic asthma care: Cost-effectiveness analysis of the Pediatric Asthma Care Patient Outcomes Research Team II (PAC-PORT II),” 2005;159:428- 434, 428).

(Quality improvement and costs, cont.) “Right from the start, it has been one of the great illusions … that quality and cost go in opposite directions. There remains very little evidence of that.” Donald Berwick, President and CEO, Institute for Healthcare Improvement (“’A deficiency of will and ambition’: A conversation with Donald Berwick,” Health Affairs, Web Exclusive, January-June 2005, W5-1-W5-9, 7)

Report card infrastructure will be expensive “To achieve an NHIN (National Health Information Network) would cost $156 billion in capital investment over 5 years and $48 billion annual operating costs [or a total of about $400 billion over 5 years, or 2% of total spending].” Note: This is infrastructure only. The cost of grading thousands of services provided by hundreds of thousands of providers is extra. Rainu Kaushal et al., “The costs of a National Health Information Network,” Ann Int Med 2005;143:165-73, 165

Report cards on providers suffer defects similar to those on schools No Child Left Behind report cards on schools have been criticized for the same reasons provider report cards have: * They don’t adjust for factors outside school control and are therefore inaccurate; * they shift resources away from unmeasured services; and * they are costly.

Bipartisan group concluded NCLB impedes quality improvement “The underlying problem is that all schools … are measured equally, regardless of differences in socioeconomic factors … or unique challenges the … schools face” (p 15). “[S]chools are reluctant to accept transfers because they fear it would increase their chance of [failing]” (p. 22) National Conference of State Legislatures, Task Force on NCLB, Final Report, February 2005.

Governor assumes Alliance can measure quality accurately “The Smart Buy Alliance will adopt uniform methods of measuring quality of care … and will purchase health care based upon those measurements…. Consumers and purchasers cannot make good … decisions in the marketplace without access to … easy-to-understand information about health care... quality. The … Alliance will require health plans and providers to participate in efforts to make such information available. The Community Measurement Project … [is] an example of the type of information to be made available.” (“Governor Pawlenty unveils ‘Smart Buy’ Alliance to slow health care costs and improve quality,” press release, November 29, 2004, http://www.governor.state.mn.us, accessed November 30, 2004).

Diabetes quality measures, Community Measurement Project None of these measures is risk-adjusted (1) % patients with HbA1c less than or equal to 8.0 (and 7.0): OUTCOME* (2) % patients with LDL-cholesterol less than 130 (and 100): OUTCOME (3) % patients with blood pressure less than 130/85 (and 130/80): OUTCOME (4) % patients over age 40 taking aspirin: PROCESS* (5) % patients known to be nonsmokers: OUTCOME (6) % patients with annual screening for kidney and eye complications: PROCESS (7) A composite of the first five measures * An “outcome” measure is one that measures the effect of treatment on patient health. Survival after surgery is an example of an outcome measure. So too is reported pain level in arthritis patients following drug treatment. The outcome measures shown above are sometimes called “intermediate outcome” measures because they are not equivalent to absence of disease but are rather physiological indicators that serve as rough predictors of health in the future. A “process” measure is one that measures how frequently doctors complied with a recommended process, such as taking blood pressure or administering beta blockers after a heart attack. Source: Gail M. Amundson and John Frederick, “Medical group quality data: a reality,” MetroDoctors: The Journal of the Hennepin and Ramsey Medical Societies, January/February 2004, 17-19.

HMO advocates have called for report cards for 35 years “A performance reporting system of proven reliability would be developed and installed to provide both individual consumers and quantity buyers (e.g., HEW) with accurate information on the comparative performance of alternative sources of health care. (HMOs would be required to make such information available.)” Paul M. Ellwood et al. (“Health maintenance strategy,” Medical Care 1971;9:291-298, 297).

(HMO advocates have called for report cards, cont.) “The development of an effective system of collecting and disseminating data on quality and outcomes is an essential component of a health care reform strategy. Such a strategy will allow the monitoring of the impact of cost containment initiatives on health care quality.... The Commission and the Commissioner of Health will work collaboratively to collect and disseminate comparative data on the quality of services provided by providers, health plans, and ISNs in order to facilitate competition and continuously improve systemwide health care quality.” Minnesota Health Care Commission (Containing Costs in Minnesota’s Health Care System: A Report to Governor Arne H. Carlson and the Minnesota Legislature, January 25, 1993, 28).

High-deductible advocates also call for report cards “Consumer-directed health care supposes a new formulation – one driven by consumers with cash- in-hand, demanding to know for themselves who is the best urologist in town, … how do I get the most value for the money I’m spending? Information systems to support this movement will grow exponentially. But the information... is not an end to itself. The real revolution will come when health-care consumers use that information to reward higher quality and punish the mediocre….” Greg Scandlen, Galen Institute (“How consumer- driven health care evolves in a dynamic market,” Health Services Research 2004;39;1113-1118, 1117)

But accurate report cards are almost nonexistent "[W]e have no assurances that the competition of [health] plans... will reward those who deliver higher quality care.... [P]urchasers and consumers have not, so far, rewarded or punished plans based on quality.... If purchasers and consumers had tools that allowed them to buy on quality,... the thinking that lay behind the original HMO movement may still play out" Paul M. Ellwood, Jr. and George D. Lundberg, ("Managed Care: A Work in Progress," Journal of the American Medical Association 1996;276:1083 - 1086, 1085).

(Accurate report cards are almost nonexistent, cont.) “[P]hysician profiles are not and may never be ready for public consumption.” Andrew Bindman,“Can physician profiles be trusted”? JAMA 1999;281: 2142-2143, 2143)

(Accurate report cards are almost nonexistent, cont.) “Hospital profiling remains an unproven strategy for improving outcomes of care.” David W. Baker et al., “Mortality trends during a program that publicly reported hospital performance,” Medical Care 2002;40:879-90, 879.

Quality can be improved without report cards The Cooperative Cardiovascular Project induced large improvements in quality of care of heart attack patients in four pilot states by giving doctors feedback (at the hospital, in seminars, by phone, and by mail). Improvements included increased use of aspirin (84% to 90%) and beta blockers (47% to 68%), and reduced one-year mortality (32.3% to 29.6%). Source: Thomas A. Marciniak et al., “Improving the quality of care for Medicare patients with acute myocardial infarction: Results from the Cooperative Cardiovascular Project,” JAMA 1998;2179;1351-1357

(Quality improvement without report cards, cont.) Other methods of improving quality without report cards include: (1) Traditional research; (2) Establishing universal health insurance; (3) Reducing drug prices; (4) Ending the nurse shortage; (5) Public health programs.

Electronic medical records (EMRs) The following slides demonstrate that the evidence does not support the claim that interoperable EMRs will improve quality or reduce costs.

Advocates claim EMRs can do it all “[B]y computerizing health records, we can avoid dangerous medical mistakes, reduce costs, and improve care.” George W. Bush, State of the Union Address, January 20, 2004 (quoted in Rainu Kaushal et al., “The costs of a National Health Information Network,” Ann Int Med 2005;143:165-173, 165).

(Advocates claims re EMRs cont.) “It is widely believed that broad adoption of electronic medical records (EMR) systems will lead to major health care savings, reduce medical errors, and improve health.” Richard Hillestad et al., “Can electronic medical record systems transform health care? Potential health benefits, savings, and costs,” Health Affairs 2005;1103-1117, 1103.

Proponents make three claims (1) EMRs save time; (2) EMRs improve doctors’ decisions; (3) EMRs facilitate the production of report cards which in turn improve quality. None of these claims have been proven.

EMRs have not been shown to save time for providers “With the exception of pharmacy settings, there is little consistent evidence that IT [information technology] systems save time for providers. In some instances, the literature suggests the reverse.” Medicare Payment Advisory Commission (Report to Congress: New Approaches in Medicare, June 2004, 163)

(EMRs don’t save time, cont.) “Only 13% of [100] trials evaluated the impact of the CDSS [clinical decision support systems] on clinician workflow, with more than half of these CDSSs requiring more time and effort from the user compared with paper-based methods.” Amit X. Garg et al., “Effects of computerized clinical decision support systems on practitioner performance and patient outcomes: A systematic review,” JAMA 2005;293:1223-1238, 1226.

EMRs have not been shown to improve health “Fifty-two trials [of clinical decision support systems] assessed patient outcomes …. Only 7 trials reported improved patient outcomes….” Amit X. Garg et al., “Effects of computerized clinical decision support systems on practitioner performance and patient outcomes: A systematic review,” JAMA 2005;293:1223-1238, 1231.

(EMRs and health, cont.) “In 2001, the Agency for Healthcare Research and Quality … determined that 14 safety practices had greater strength of evidence regarding their impact and effectiveness than any practice which relied on IT. These include such low-cost items as appropriate provision of nutrition … and use of maximum sterile barriers while placing central intravenous catheters to prevent infections.” Medpac (Report to Congress: New Approaches in Medicare, June 2004, 162)

Some studies report harm done by computers “We found that a widely used CPOE [computerized physician order entry] system facilitated 22 types of medication error risks. Examples include fragmented CPOE displays that prevent a coherent view of patients’ medications, pharmacy inventory displays mistaken for dosage guidelines, … and inflexible ordering formats generating wrong orders.” Ross Koppel et al., “Role of computerized physician order entry systems in facilitating medication errors,” JAMA 2005;293:1197-1203.

NHIN advocates’ favorite “studies” are opinions, not evidence Two papers cited frequently by EMR advocates: * Richard Hillestad et al., “Can electronic medical record systems transform health care? Potential health benefits, savings, and costs,” Health Affairs 2005;1103-1117, 1103. * Jan Walker et al., “The value of health care information exchange and interoperability,” Health Affairs Web Exclusives, January-June 2005; 24, Suppl. 1):W5-10-18.

Hillestad et al. Conclusion: “Fully standardized HIEI [health care information exchange and interoperability] could yield a net value of $77.8 billion per year….” According to an accompanying paper, savings would amount to 1.6 percent of health spending in 2019 (Clifford Goodman, “Do it for the quality,” 1125)

(Hillestad et al. cont.) Authors are part of the Rand HIT Project. Funded by Cerner, GE, Hewlett-Packard, Johnson and Johnson, and Xerox. Their methods were extraordinarily biased: –“[T]he currently useful evidence is not robust enough to make strong predictions, and we describe our results only as ‘potential.’” –“We chose to interpret reported evidence of negative or no effect of HIT as likely being attributable to ineffective or not-yet effective implementation.”

Walker et al. Conclusion: “[N]et savings from national implementation of fully standardized interoperability between providers and five other types of organizations could yield $77.8 billion annually, or approximately 5 percent of the projected $1.661 trillion spent on US health care in 2003” (W5-10)

(Walker et al. cont.) Funded by the Foundation for the eHealth Initiative, which is funded by the computer and insurance industries among others. “We convened a panel of nationally known experts…. With relatively little research and literature on the value of HIEI [health care information exchange and interoperability], the panelists played an important role….”

Disease management The following slides demonstrate that disease management (DM) is promoted by insurance companies and DM vendors, and that the evidence does not support the claim that disease management will reduce health care costs.

Disease Management Association of America’s board, 2006 Lifemasters Jefferson Medical College Wellpoint Dept of Mental Health, TN Geisinger Health Plan American Healthways McKesson Health Solutions Air Logix Matria Healthcare Magellan Health Services Caremark Rx Sanofi-Aventis Fibrogen Kaiser Permanente Pitney-Bowes American College of Astra-Zeneca Pharmaceuticals Cardiology

DM was begun by the drug industry “The boom in [DM] was initiated by the pharmaceutical industry. By 1995, most pharmaceutical manufacturers had unveiled a variety of [DM] programs. … Merck-Medco Managed Care sells its diabetes [DM] program to … employers and [plans] …, identifying patients with diabetes through its 51-million-person pharmacy data base.” Thomas Bodenheimer, “Disease management – Promises and pitfalls,” New Eng J Med 1999;340:1202-1205, 1202.

No evidence that disease management saves money “On the basis of its examination of peer-reviewed studies of disease management programs…, CBO finds that to date there is insufficient evidence to conclude that disease management programs can generally reduce the overall cost of health care services.” Congressional Budget Office (An Analysis of the Literature on Disease Management Programs, October 13, 2004, http://www.cbo.gov/showdoc.cfm?index=5909&sequence=0, accessed September 25, 2005)

(DM doesn’t cut costs, cont.) “Although interest in … disease management programs is growing, evidence of their clinical and cost effectiveness remains limited. … Without many attractive alternative mechanisms to control costs, many employers are adopting disease management despite the lack of evidence.” Center for Studying Health System Change (Ashley Short et al., “Disease management: A leap of faith to lower-cost, higher-quality health care,” October 2003, Issue Brief No. 69, 3)

(DM doesn’t cut costs, cont.) “Despite high expectations, evidence of both disease management and case management programs’ success in controlling costs and improving quality remains limited.” Center for Studying Health System Change (Ashley Short et al., “Disease management: A leap of faith to lower-cost, higher-quality health care,” Issue Brief No. 69, October 2003).

(DM doesn’t cut costs, cont.) “A growing number of [DM] programs offer to monitor patients with chronic conditions and help avoid dangerous complications…. But the long-term cost effectiveness of such programs has been hard to measure.... There is a chance [DM] programs could actually raise costs….” Wall Street Journal (“Laura Landro, “Does disease management pay off,” October 20, 2004, D4).

(DM doesn’t cut costs, cont.) “‘We’ve made real progress in keeping people healthier who have chronic illnesses,’ says Edward Wagner [with] Group Health Cooperative’s Center for Health Studies in Seattle. ‘But we still don’t know definitively what the economic impacts of disease management are.’ … Dr. Wagner expresses skepticism about outsourced disease-management programs….” Wall Street Journal (“Laura Landro, “Does disease management pay off,” October 20, 2004, D4).

(DM doesn’t cut costs, cont.) DM vendors claim DM cuts costs, but they either offer no empirical evidence or they offer evidence that fails to take into account the cost of DM itself. See for example: RJ Rubin et al., “Clinical and economic impact of implementing a comprehensive diabetes management program in managed care,” J Clin Endocrinol Metab 1998;83:2635-42.

DM can improve quality but at a cost: Example from the research The paper in the next slide is among the best on the costs and savings associated with disease management of diabetes. The paper was funded by Kaiser Permanente, the American Diabetes Association, and Bristol-Myers Squibb.

(DM can improve quality but at a cost, cont.) “Even for the most optimistic picture – a 30-year horizon and assuming no turnover [patients stay with the same plan for 30 years] – the net effect on diabetes-related costs would be an increase of about 25%” (p. 261). “The program used in [this] study may be too expensive for health plans or a national program to implement” (p. 251). David M. Eddy et al., “Clinical outcomes and cost-effectiveness of strategies for managing people at high risk for diabetes,” Ann Intern Med 2005;143:251-64

Example of how the myth that DM cuts costs is nourished “A transformation in diabetes care … has its foundation in comprehensive health management for individuals. This …. can be provided by … endocrinologists, diabetes educators, pharmacists, dietitians and social workers. Yes, it costs, but study after study shows it saves money.” Newt Gingrich, Saving Lives and Saving Money, Alexis de Tocqueville Institution, Washington, DC,148.

But Gingrich cited no studies showing diabetes DM saves money Gingrich cited five studies, but none demonstrated that the savings from improved health offset the costs of DM. For example, Gingrich offered this quote: “Improving glycemic control in people with diabetes is clearly cost-effective.” But the study defined “cost effective” to mean the intervention achieved health benefits (QALYs) at about the same cost as other accepted treatments.

Conclusions Managed Care 2.0 has been oversold just as Managed Care 1.0 was, and will fail to meet expectations as Managed Care 1.0 did.

Governor and Legislature support evidence-based medicine … “DHS will improve the value of Minnesota’s public health care programs as measured by cost, quality and access.... [W]e are undertaking several key efforts. The first is implementing evidence- based decision-making for benefit design and coverage.” Source: E-mail message from DHS Commissioner Kevin Goodno to DHS employees, January 31, 2006

They should support evidence-based health policy as well The evidence does not support * the claim that report cards (or pay-for- performance or “value purchasing”) and EMRs will improve quality and reduce costs; nor * the claim that disease management will reduce costs.

Report Cards, P4P, EMRs, and Disease Management An Analysis of Managed Care 2.0.

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Report Cards, P4P, EMRs, and Disease Management An Analysis of Managed Care 2.0.

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