Doctor and Patient: Getting Doctors to Think About Costs - NYTimes.com

My first formal lesson on health care costs occurred one afternoon on the wards when I was a medical student. The senior doctor in charge, a silver-haired specialist known for his thoughtful approach to patient care, had assembled several students and doctors-in-training to discuss a theoretical patient with belly pain. After describing the patient's history and physical exam, he asked what tests we might order.

One doctor-in-training proposed blood work. A fellow student suggested a urine test. Another classmate asked for abdominal X-rays.

My hand shot up. "A CAT scan," I crowed with confidence. "I'd get a CAT scan!"

There was complete silence. Everyone turned to stare at me.

The senior doctor coughed. "That's an awfully expensive test," he said, a grimace appearing on his face. Another student asked him just how much a CT scan cost, and he shifted uncomfortably in his seat and shrugged. "I don't really know," he said, "but I do know that we can't just think about the patient anymore." He took a deep breath before continuing, "We are now being forced to consider costs."

That was 20 years ago, when the managed care movement was first in the headlines. Today his lesson still rings true, as doctors continue to struggle to reconcile cost consciousness with quality care. And doctors-to-be are not getting much help in learning how to do so.

But one nonprofit organization, Costs of Care, and the young doctor who created it are determined to change that.

Over the last two years, Dr. Neel Shah, a senior resident in obstetrics and gynecology at Brigham and Women's Hospital in Boston, has been collaborating with medical educators and health care economists at Harvard Medical School and at the Pritzker School of Medicine at the University of Chicago to create a series of videos and educational materials designed to help medical students and doctors-in-training learn to make clinical decisions that optimize both quality of care and cost. With support from the American Board of Internal Medicine, these educational modules, called the Teaching Value Project, could represent a significant breakthrough in how medical students learn to be conscious of costs.

The patchwork of payment patterns that mark the American medical system makes it particularly difficult to teach young doctors. Net costs for treatments and medications vary depending on region, payer and even specific hospitals, so medical students and trainees often end up learning what is relevant only to their particular workplace. They might learn to prescribe a certain drug for diabetes because it is cheaper in their hospital formulary, only to discover later that the reverse is true in a different hospital or after policies have changed.

"When learning is haphazard like this, it's hard for young doctors to see the entire picture," said Dr. Vineet Arora, an assistant dean at Pritzker who is working on the Teaching Value Project.

Cost variations aside, it can also be a challenge simply to get hold of precise costs for patients. Dr. Shah recalls one woman who refused to get a potentially lifesaving ultrasound until she knew how much it would cost her. Her doctors and nurses "sweated out every minute," concerned she would collapse at any moment, said Dr. Shah, before finally hunting down a figure later that afternoon, and the patient consented to paying the $600 cost.

The Teaching Value Project uses a rough pricing hierarchy rather than exact dollar figures to gauge costs, similar to the approach at well-known restaurant or travel search sites, which helps young doctors avoid getting mired in price variations and hairsplitting details. When combined with the project's lessons on common cost errors that doctors make, the pricing hierarchy can bring clarity to clinical decisions.

For example, a young doctor might plan on ordering an ultrasound of the heart, or an echocardiogram, for an otherwise stable patient in the hospital because the wait for inpatients is shorter. But if that doctor also knows that echocardiograms are much less expensive when administered to outpatients, he or she might instead decide to wait and order it after discharge.

Similarly, a team of trainees might believe they are being cost-conscious by debating whether to get a battery of moderately expensive tests for a patient in the intensive care unit. But then they might learn that the time they are devoting to the debate is actually costing more than the tests themselves because of the expense of keeping the patient in an I.C.U. bed even a few extra hours.

"Zagat has figured it out," Dr. Shah said. "Knowing whether it's one, two or three dollar signs can be enough to influence behavior."

The group recently posted an introductory video, a tongue-in-cheek look at what hotels would be like if they were run like hospitals. At the "Hotel Hôpital," prices are never listed; concierges order expensive cabs pre-emptively, or "prophylactically," even if you don't need one; and no one working in the back office can decipher your surprise $20,000 hotel bill.

The group expects to complete its first full Teaching Value module this summer, with more planned over the next few years. It also hopes to collaborate with professional medical organizations to help raise cost consciousness among more established practicing physicians.

All involved are quick to acknowledge that as appealing as the approach may be, the Teaching Value Project represents only a beginning for medical students and trainees. "Our goal isn't for them to master the entire topic before graduating," Dr. Arora said. "It's to get them thinking about how to integrate cost consciousness into practice."

Dr. Shah added: "At the end of the day, what we are talking about is spending our patients' money in a way that is both ethical and pragmatic. To do that, we will all need to create a culture where it becomes awkward not to think about cost."

http://well.blogs.nytimes.com/2012/03/15/getting-doctors-to-think-about-costs/?pagemode=print

Hospitals Aren’t Hotels - NYTimes.com

You should never do this procedure without pain medicine," the senior surgeon told a resident. "This is one of the most painful things we do."

She wasn't scolding, just firm, and she was telling the truth. The patient needed pleurodesis, a treatment that involves abrading the lining of the lungs in an attempt to stop fluid from collecting there. A tube inserted between the two layers of protective lung tissue drains the liquid, and then an irritant is slowly injected back into the tube. The tissue becomes inflamed and sticks together, the idea being that fluid cannot accumulate where there's no space.

I have watched patients go through pleurodesis, and even with pain medication, they suffer. We injure them in this controlled, short-term way to prevent long-term recurrence of a much more serious problem: fluid around the lungs makes it very hard to breathe.

A lot of what we do in medicine, and especially in modern hospital care, adheres to this same formulation. We hurt people because it's the only way we know to make them better. This is the nature of our work, which is why the growing focus on measuring "patient satisfaction" as a way to judge the quality of a hospital's care is worrisomely off the mark.

For several years now, hospitals around the country have been independently collecting data in different categories of patient satisfaction. More recently, the Centers for Medicare and Medicaid Services developed the Hospital Consumer Assessment of Healthcare Providers and Systems survey and announced that by October 2012, Medicare reimbursements and bonuses were going to be linked in part to scores on the survey.

The survey evaluates behaviors that are integral to quality care: How good was the communication in the hospital? Were patients educated about all new medications? On discharge, were the instructions the patient received clear?

These are important questions. But implied in the proposal is a troubling misapprehension of how unpleasant a lot of actual health care is. The survey measures the "patient experience of care" to generate information important to "consumers." Put colloquially, it evaluates hospital patients' level of satisfaction.

The problem with this metric is that a lot of hospital care is, like pleurodesis, invasive, painful and even dehumanizing. Surgery leaves incisional pain as well as internal hurts from the removal of a gallbladder or tumor, or the repair of a broken bone. Chemotherapy weakens the immune system. We might like to say it shouldn't be, but physical pain, and its concomitant emotional suffering, tend to be inseparable from standard care.

What's more, recent research suggests that judging care in terms of desirable customer experiences could be expensive and may even be dangerous. A new paper by Joshua Fenton, an assistant professor at the University of California, Davis, and colleagues found that higher satisfaction scores correlated with greater use of hospital services (driving up costs), but also with increased mortality.

The paper examined patient satisfaction only with physicians, rather than hospitals, and the link between satisfaction and death is obviously uncertain. Still, the results suggest that focusing on what patients want — a certain test, a specific drug — may mean they get less of what they actually need.

In other words, evaluating hospital care in terms of its ability to offer positive experiences could easily put pressure on the system to do things it can't, at the expense of what it should.

To evaluate the patient experience in a way that can be meaningfully translated to the public, we need to ask deeper questions, about whether our procedures accomplished what they were supposed to and whether patients did get better despite the suffering imposed by our care.

We also need to honestly assess our treatment of patients for whom curative care is no longer an option.

I had such a patient. He was an octogenarian, but spry, and he looked astoundingly healthy. He'd been sent to us with a newly diagnosed blood cancer, along with a promise from the referring hospital that we could make him well.

But we couldn't. He was too old to tolerate the standard chemotherapy, the medical fellow on duty told him. When I came into his room a little later he said to me, with a stunned and yearning look, "Well, he made it sound like I don't have a lot of options." The depth of alienation, hopelessness and terror that he was feeling must have been unbearable.

The final questions on the survey ask patients to rate the hospital on a scale from worst to best, and whether they would recommend the hospital to family and friends. How would my octogenarian patient have answered? A physician in our hospital had just told him that he would die sooner than expected. Did that make us the best hospital he'd ever been in, or the worst?

Hospitals are not hotels, and although hospital patients may in some ways be informed consumers, they're predominantly sick, needy people, depending on us, the nurses and doctors, to get them through a very tough physical time. They do not come to us for vacation, but because they need the specialized, often painful help that only we can provide. Sadly, sometimes we cannot give them the kind of help they need.

If the Centers for Medicare and Medicaid is to evaluate the patient experience and link the results to reimbursement, it needs to incorporate questions that address the complete and expected hospital experience. It's fair and even valuable to compare hospitals on the basis of how well they maintain standards of patient engagement. But a survey focused on "satisfaction" elides the true nature of the work that hospitals do. In order to heal, we must first hurt.

Theresa Brown, an oncology nurse, is a contributor to The New York Times's Well blog and the author of "Critical Care: A New Nurse Faces Death, Life and Everything in Between."

http://www.nytimes.com/2012/03/15/opinion/hospitals-must-first-hurt-to-heal.html?_r=1&nl=todaysheadlines&emc=edit_th_20120315&pagewanted=print

BBC News - Should it be legal to pay for bone marrow donations?

A mother in the US is desperate to find bone marrow donors to save the lives of her three daughters who are critically ill from a rare blood disorder. Now, she is challenging a federal law barring her from compensating prospective donors.

Thousands of Americans who need transplants die every year because they cannot find a suitable donor, advocates say.

They propose a controversial way to encourage more people to come forward: Pay them.

"It is widening the donor pool. A lot of times employers don't pay for the time off that these donors take from work," says Doreen Flynn of Lewiston, Maine.

"So I think in those instances those people can say, 'you know I can do that,' knowing that there will be a support system for them at the end."

Ms Flynn's three daughters have a rare genetic blood disorder called Fanconi Anaemia. Their bone marrow does not make enough blood cells to keep them healthy and their only hope for survival is a transplant.

It is against US law to sell body parts - including bone marrow. But last year, Ms Flynn won a court ruling in favour of compensating donors whose blood stem cells are collected using a process called aphaeresis.

Instead of undergoing surgery to remove the fatty tissue containing the cells, donors are given medication that stimulates stem cell production. The surplus cells are forced out of the bones and extracted from the blood stream.

The procedure is comparable to giving blood, campaigners say, and the judges who ruled in her favour said it rendered the phrase "bone marrow transplant" obsolete.

But the Obama administration has appealed the ruling. It argues the aphaeresis contravenes federal law banning the sale of human organs - including bone marrow.

Jeff Rowes, a lawyer for the Institute for Justice, which represents the Flynn family, says the law is out of date.

"When congress passed the National Organ Transplant Act in 1984, you could only get these blood stem cells out of the bone marrow by sticking a needle in your hip," he says.

"Now, you can get the blood stem cells the same way that we donate other blood components like plasma and platelets. You can compensate donors of plasma and platelets and there's no reason why you shouldn't be able to compensate bone marrow donors when you get the cells in exactly the same way."

The government challenge is a major setback for the Flynn family, who are running out of time to find a match for 13-year-old Jordan.

She's become so sick doctors have only a couple of months left to perform a transplant with the most suitable donor they can find - and even that won't guarantee her survival.

"The whole process of getting a transplant scares me because I know people who passed away afterwards," Jordan says, sitting in her bedroom decorated with posters of Justin Bieber and other teen idols. "But I try to stay positive."

Her seven-year-old twin sister's health is also beginning to deteriorate.

Jorga and Julia were conceived in the hope that their healthy bone marrow could be given to Jordan (children of two parents who carry the Fanconia gene have a 25% chance of being born with the disease). But embryonic screening failed to detect that they too suffered from Fanconi Anaemia.

Despite the desire of the Flynns and other families to boost their chances of finding a match, the National Marrow Donor Program strongly opposes any financial incentives for donors, regardless of the medical procedure.

People who want to sell organs are more likely to withhold medical details and other information that could harm organ recipients, the organisation says.

"Our experience and research show that a donor system that relies on the human desire to help others is far superior to one that focuses on self-gain," the organisation says in a statement.

Some doctors are concerned about the risk, but Dr Imad Tabbara, head of the Bone Marrow Transplant Program at George Washington University Medical Faculty Associates, says unsuitable donors are eliminated through screening.

"It used to be a concern that donors may carry certain infections or certain viruses, but with the technology we have now in terms of screening across the board, I don't think that should be a problem."

He also predicts compensation would increase the pool of minority donors - Asians and African Americans in particular are underrepresented on national registries.

There are 9.5 million registered bone marrow donors in the US and the National Marrow Donor Program has access to millions more around the world.

But it can take several years before prospective donors are matched with a patient, by which time they may be unwilling or unable to continue the process, says Mr Rowes, the Flynns' lawyer.

He thinks compensation will provide an extra incentive to follow through. And he stresses that the payments will not be made in cash, but in the form of $3,000 scholarships, housing allowances or a charitable donation that would be administered as a pilot program by the non-profit group, MoreMarrowDonors.org.

The Obama administration has asked the US Court of Appeals to rehear the case. If, as is expected, the court declines, it could go to the Supreme Court to decide whether science has advanced far enough to eliminate the ethical questions surrounding payments for bone marrow donors.

Mr Rowes says patients should be allowed to decide for themselves the risks of taking organs whose donor has been compensated.

"When somebody needs a bone marrow transplant, it's because they're dying," says Mr Rowes. "Their death is imminent and certain. No donor equals death."

http://www.bbc.co.uk/news/magazine-17346797

Why we wait longer at the doctor’s office in Ontario | Life | National Post

Frank is a successful 45-year-old executive on medication for high blood pressure and depression. He called to book a same-day appointment with me, but refused to tell the receptionist what the problem was. It was one of those days where my itinerary was full of pre-scheduled appointments. But I agreed to squeeze him in, and some time later, Frank arrived with his girlfriend. He was severely depressed, he said, and had thoughts of suicide. A reformed alcoholic with more than 20 years of sobriety, he'd recently started drinking again because of a relationship breakdown and stress at work.

I ended up spending an hour with Frank to assess his condition. I found a psychiatrist colleague at a local hospital who agreed to see Frank in an emergency psychiatric department. We also co-ordinated an urgent assessment at an in-patient alcohol treatment centre. Next, I wrote a note summarizing Frank's medical history for the specialists. Only then did I return to my usual schedule — now with a full waiting room of patients looking at their watches and thinking, "Why can't docs ever stay on schedule?"

The problem? On this day, I'd faced an unexpectedly complex patient. The term "complex patient" refers to people who consume a lot of resources, and it's had a lot of currency lately. Last month's Drummond report, which outlined potential improvements to Ontario's budget, included a section on complex patients. Drummond used a statistic: About 1% of Ontario's population accounts for 49% of home and hospital care costs. The challenge? If we can manage caring for those 1% more effectively, perhaps we can realize significant savings.

So who is this other 1%? According to Drummond: "They are people who are frequently in and out of our health care system, constantly being admitted to, discharged from, and then readmitted to hospitals." That makes it sound as though most complex patients are older and nearing the end of their lives. But that's not always the case. Those deemed complex as a result of heavy use of emergency rooms tend to be young — more than half under 45, according to the Drummond report. They also tend not to have what we might consider as conventionally serious health issues: addiction or mental health problems.

Is there a way to predict who is going to be a complex patient? The issue is pertinent to general practitioners. A busy doctor's office may book six to eight patients an hour. That allows less than 10 minutes per patient, without much wiggle room. Anyone requiring longer snarls the schedule.

What's more, Canadian doctors are seeing a greater proportion of complex patients, according to a 2010 survey of 18,000 Canadian doctors. The survey showed that only 61% of Canadian doctors were able to see an urgent case with a single day's notice — a figure that was down from 65% in 2007. Asked what was eating up their time, 72% identified increasingly complex patient caseloads.

If we're able to predict in advance which of our patients will be complex cases, we could allow those cases more time. That would mean we could manage schedules more efficiently — and our patients would spend less time in waiting rooms.

But a new study, which appeared in December in Annals of Internal Medicine, reflects how difficult it can be to arrive at a definition of complexity. A team affiliated with Massachusetts General Hospital and Harvard Medical School decided to ask doctors to select what they consider to be complex patients. The 40 participating doctors were shown 120 patients at random, then asked to select which ones they considered complex.

The results are fascinating. Independent predictors of complexity included factors such as age, poorly controlled diabetes, prescription of antipsychotics, alcohol-related problems and inadequate insurance. For older people, complex patients tended to exhibit a greater need for psychotherapy and care coordination. Patients who were non-compliant with appointments or medical advice were also deemed complex.

The results suggest that non-medical issues count just as much as maladies when a doctor decides to spend more time with someone. "Our results demonstrate that in the primary care setting," researchers wrote, "physician-defined patient complexity reflects a wide range of medical, social and behavioural factors that seem distinct from other measures …"

Someone like Frank would never have been treated appropriately in a 10-minute appointment. Complex patients are best served if the doctor can spend enough quality time to assess the patient. The doctor also requires enough resources to co-ordinate after-care.

The challenge is getting everyone's agendas aligned to provide an affordable system that can support adequate time between clinician and patient. The system needs proactive solutions, not symptom-based "reactive" treatment. Band-aids can't stop the bleeding.

–Dr. James Aw is the medical director of the Medcan Clinic in Toronto. 

http://life.nationalpost.com/2012/03/06/why-we-wait-longer-at-the-doctors-office/

Pre-existing conditions: The real reason insurers won’t cover people who are already sick - Ray Fisman - Slate Magazine

There are currently tens of millions of Americans without health insurance. Some can't afford coverage at going rates. But as recently as 2009, one in seven applicants were rejected by the four largest insurance companies, who refused to sell them insurance at any price. Uninsurable Americans are mostly sick to begin with: They have heart disease, diabetes, cancer, and other pre-existing conditions that set off alarm bells for insurance sellers.

Ask why the already-sick can't buy insurance and you get an immediate and seemingly obvious answer—their health costs are too high. But just because covering people with pre-existing conditions might be more expensive doesn't explain why they can't buy insurance at all. At any price. Shouldn't they be able to buy insurance at a higher rate than healthy people, a rate that would protect the insurance company from the greater costs of their coverage?

An intriguing answer to that question comes from Nathaniel Hendren, a graduating Ph.D. student at MIT, in a study that got him offers from economics departments at Harvard, Stanford, and Princeton, among others. According to Hendren's argument, not only are sick people a lot more expensive to care for, but they also know a lot more about what their cost of care is likely to be in the future. And it's this inside information that makes the market for covering pre-existing conditions break down.

To understand Hendren's theory, it's useful to think about an extreme case. Consider the agonizing decision of whether or not to treat terminal cancer with costly and painful chemotherapy, which often provides only a small chance of remission. If you ask me what I, a healthy 41-year-old, would do, I have no idea—I've never really thought much about it, and in any event I have no real basis for weighing the costs and benefits. How painful would treatment actually be? And how would I face my own end-of-life decision?

Someone who already has cancer, by comparison, has a much greater appreciation for the treatment options available and presumably he has a much clearer sense of how far he's willing to go for a chance at survival. Different people will have reached different decisions after going through this difficult calculus, and the outcome has significant financial implications for any insurance company that's agreed to provide coverage.

So now let's consider the problem facing an insurance company, say a Blue Cross, that wants to offer coverage to cancer patients with similar diagnoses. While they may look similar to the company's statisticians, different patients may choose very different courses of treatment. Some may decide to pursue aggressive options. Others may opt out of what's expected to be a long and painful fight. The patients' medical expenses will be drastically different, despite their similar prognoses.

Now suppose the Blue Cross offers them all the same policy for, say, $10,000 per year, based on data showing that the annual medical costs of cancer victims is about $8,000 on average. Who is going to take the insurer up on the offer? A patient who expects his expenses to cap out at just a few thousand dollars won't sign up—for him, the coverage isn't worth it. But the patients who have already decided that they'll take advantage of aggressive and expensive treatments will enroll. The cost per person of all patients with a cancer diagnosis may be $8,000, but if the only patients who enroll are the ones who expect their costs to be more than $10,000, that's a money-losing proposition for the insurer.

Suppose the Blue Cross goes through with higher-priced coverage for cancer survivors anyway, and finds that the policyholders end up with medical expenses of $15,000 per year on average—could it solve the problem simply by raising the price to, say, $20,000? It can't, because that would only make the problem worse by getting rid of the relatively cheap-to-insure customers who were willing to pay $10,000 for coverage but no longer find it worthwhile at a price of $20,000. Each time it raises the price, the insurer gets stuck covering an ever more expensive set of cases. It's a no-win situation for insurers, so they choose not to offer coverage at all.

Hendren didn't invent the idea of markets falling apart because customers know something that companies don't. Nobel prizes were awarded to a trio of economists in 2001 for developing this idea of adverse selection in the 1970s. But his use of the concept may at least partly resolve the puzzle of why those with pre-existing conditions can't get insurance.

There are two critical ingredients to Hendren's argument. First, as he puts it, there's only one way to be healthy, but many different ways to be sick. As a result, there's wide variability in the costs that someone with cancer, heart disease, and other uninsurable conditions will impose on an insurer. With a bit of luck, a heart attack victim who takes his medicine, watches his diet, and exercises regularly can stay healthy and out of hospital for a long time. Less diligent survivors are more likely to be in and out of the hospital and end up in the operating room for multiple bypass surgeries, running up a tab of hundreds of thousands in expenses. Similarly, a cancer sufferer who opts out of aggressive treatment won't cost much to an insurer, while the monthly cost of many chemotherapy drugs run into the tens of thousands.

Equally important to Hendren's argument is the idea that sufferers of heart disease and cancer have greater self-knowledge than healthy people in terms of what their likely medical care costs will be. The market for insurance unravels, in Hendren's model, when patients have a clear view of their future health care costs and people who anticipate lower-cost futures self-select out of insurance coverage.

Hendren tests his assumption using the Health and Retirement Study, which has surveyed Americans 55 and older since 1992. The HRS asks a battery of questions about participants' futures, including the probability that they'll end up in a nursing home, be disabled, or dead sometime in the next decade. Crucially for Hendren, the survey also asks about existing medical conditions, so it's possible to sort HRS respondents based on whether they have conditions which, according to insurance underwriting guidelines, would be grounds for rejection. For example, those with strokes or previous bouts of home care can't get long-term care insurance that would cover nursing homes; people with back conditions or obesity are ruled out of disability insurance; and stroke and cancer victims aren't eligible for life insurance.

Hendren then examines whether those suffering from illnesses that freeze them out of insurance markets are better at predicting their medical futures. Across all three markets, he finds this to be the case. On the prospect of nursing homes, insurable respondents' predictions are no better than random guesses, after accounting for age, gender, and other things that an insurance company can use to calculate customer risk. They're not much better at predicting future disability or the arrival of the Grim Reaper. By contrast, across all categories, predictions made by uninsurable respondents do much better than random, and always out-predict their insurable counterparts by significant margins. This backs up Hendren's theory that the reason insurers won't cover patients with pre-existing conditions isn't that they're too sick—it's that they're too knowledgeable about their likely future medical costs.

If a voluntary market for insurance for pre-existing conditions is doomed to unravel, what's to be done to accomplish the Obama administration's goal of accessible health care for all? For the time being, there's a government-run Pre-Existing Condition Insurance Plan that covers those denied coverage in the recent past. But that program's history hints at the enormous—and unexpected—costs that come from insuring people who have already had cancer, heart attacks, and strokes. The cost per participant of PCIP is projected to be nearly $30,000 in 2012, more than double what government actuaries projected. This is exactly what Hendren's model would have predicted: Only the highest-cost cases choose to purchase the insurance.

Come 2014, the Affordable Care Act will prevent insurers from discriminating based on pre-existing conditions: cancer victims and stroke survivors will be able to buy insurance at the same price as otherwise similar applicants. Insurance companies may take a hit to profits, but part of the cost will surely be passed on to the lower-cost counterparts to this high-cost pool. Healthy people might be tempted to opt out, but under the new law, they'll be required to have insurance. This individual mandate is a natural fix to the problem of adverse selection in health insurance: It keeps the lowest-cost participants from opting out, and as a result the market doesn't unravel.

Perhaps unsurprisingly, these solutions rankle the likes of Ron Paul and other libertarians who see the heavy hand of government at work here. More thoughtful alternative proposals from the free-market-is-best school of thought suggest creating a market for the right to buy insurance in the future: That way, you could enjoy your individual liberty by not buying health coverage today, but still keep open the possibility of exercising the option to buy insurance in the future. This "forward contract" to buy insurance wouldn't be undermined by the problems Hendren highlights, since purchasers would still be making the decision before they experience the stroke or heart attack that gives them inside knowledge on what their future costs will be.

But that's asking for an awful lot of foresight for the average 20-year-old, who doesn't really have much reason to think about his likely health status a few decades in the future. And indeed, the least forward-looking are also probably those that can't or don't buy insurance.

You can say that's their own fault—if insurance contracts are available and people don't buy them, that's a choice and they should deal with the consequences. Or we can accept that there are some situations—health care being one of them—where the market doesn't know best, and the guiding hand of government needs to step in to ensure fair treatment for all.

http://www.slate.com/articles/business/the_dismal_science/2012/03/pre_existing_conditions_the_real_reason_insurers_won_t_cover_people_who_are_already_sick_.single.html

With Small-Picture Approach, A.C.O.’s Gain in Health Care - NYTimes.com

CHICAGO — Even as she struggled to manage her Type 2 diabetes, Fannie Cline's condition spiraled downward. It was not uncommon for Mrs. Cline, a 69-year-old retiree, to have dizzy spells, some so bad that they landed her in a hospital emergency room near her home here on the South Side.

But last May, she began to receive extra attention from Gwlie Lloyd, a registered nurse and care manager at Advocate Health Care, which operates a number of Chicago hospitals and clinics. Ms. Lloyd frequently calls to check on Mrs. Cline; she offers advice on diet and exercise, schedules appointments, orders meals for delivery and arranges appointments with a social worker.

As a result, Mrs. Cline's health has markedly improved. She is more active, the dizzy spells have subsided and she has not been hospitalized since May. Now she spends her days visiting friends.

"It is nice to have someone call you in between your visits to the doctor's office to see how you are," Mrs. Cline said. "If my blood sugar is elevated and I feel off balance, she will ask me what I have been eating lately. She might say, 'Maybe you need more oatmeal or fruit.' "

The extra attention Mrs. Cline receives is the result of a radical departure from traditional fee-for-service medicine. Advocate runs one of the nation's first and largest accountable care organizations, a new kind of health care practice gaining momentum in part because of the Affordable Care Act signed into law two years ago by President Obama.

A.C.O.'s, as they are known, are collections of medical providers who band together under one business umbrella. The organization can include primary care doctors, specialists, social workers, pharmacists and nurses. The difference is in how these providers are paid: Instead of an insurance company or the government reimbursing each provider for each service provided to each patient, the A.C.O. is paid simply to care for a group of patients.

If the organization can reduce the cost of caring for the patients while maintaining their health, it gets to keep and divide up some of the savings — a powerful incentive to do things differently, experts hope. But if the A.C.O. cannot meet quality measures and costs rise, the providers in the organization may well receive lower payments.

The A.C.O. may strike some critics as a worrying repackaging of the H.M.O. in its earliest incarnations, but there is little doubt that more Americans will be enrolled in these provider groups in the coming years. "A.C.O.'s are coming, and it will change the way we pay for health care," said Dr. Michael Cryer, national medical director for the employee benefits consultancy Aon Hewitt. "Providers are doing things in a positive way rather than a reactive way. We are seeing the beginnings of a tsunami."

For the past year, Advocate has cared for more than 200,000 patients insured by Illinois Blue Cross plans, and so far the A.C.O. has managed to reduce hospital stays and overall costs for patients, according to Steve Hamman, vice president for network management at Illinois Blue Cross. Advocate, like other A.C.O.'s, manages to do this in large part by hiring people like Ms. Lloyd to better coordinate patient care.

Care managers exist outside of A.C.O.'s, but they are particularly important in this new health care setting. Care managers keep patients like Mrs. Cline out of expensive hospitals by reminding them to take their medications, helping them to eat properly, and troubleshooting logistical problems that elderly and sick patients often encounter.

"A care manager may care for up to 150 patients, and the savings from keeping these patients healthy, and potentially out of the hospital, pays for their salary several times over," said Dr. Lee Sacks, chief medical officer at Advocate. "But it's more than just the economics. It's the right thing to do."

Private insurers nationwide have begun enrolling beneficiaries in A.C.O.'s, but they may have an even bigger effect on Medicare participants. In April, A.C.O.'s participating in the Medicare Shared Savings Program will begin accepting Medicare patients. By the end of the year, at least two million will be enrolled, according to government estimates.

Medicare plans to require that A.C.O.'s achieve 33 quality measures for patients, like reducing readmissions of patients who experience an infection or complication the hospital should have prevented. (Private insurers like Illinois Blue Cross have similar requirements, though they can vary.)

Unlike H.M.O.'s that restrict a patient's choices of doctors and hospitals to the health plan's network, A.C.O.'s must offer Medicare enrollees a choice of how they get their care and from whom. Patients in A.C.O.'s can go outside of a network and still receive reimbursement, and an A.C.O. has latitude in how it organizes providers and coordinates care.

Medicare beneficiaries will be assigned to an A.C.O. through the doctor that provides them with the most primary care services. They may opt out, but many may not even realize they are enrolled in an A.C.O.

"This is not about restricting care, but to proactively coordinate care and to ensure that the patients' needs are met early in the process," said Jonathan Blum, deputy administrator at the Centers for Medicare and Medicaid Services.

Still, some experts are concerned about the advent of an untested model of care that is expensive and complicated to put in place, and that recalls to some degree the practices of H.M.O.'s 20 years ago, when doctors were paid monthly fixed fees in hopes that they could provide all the care a patient needed — and still have money left over for a profit.

Not so long ago, politicians and the news media feasted on terrible stories of patients denied care by their H.M.O.'s. And it was not uncommon to see doctors' practices go out of business or file for bankruptcy when they were unable to manage the financial risks.

Dr. Joseph Golbus, president of NorthShore University HealthSystem's medical group, a rival to Advocate in Chicago's northern suburbs, said the A.C.O.'s structure places even more of the financial risk of caring for sick patients on providers, not the insurance companies or Medicare.

While many hospitals nationwide are snapping up local practices in hopes of transforming themselves into A.C.O.'s, others are hesitating because they worry about high administrative costs and more bureaucracy.

"The costs are going to accrue to the providers, but the benefits are going to accrue to everyone else," said Dr. Golbus. "What I think killed H.M.O.'s in the '90s was limiting access to patients and telling the doctor he is now worth 17 cents per member, per month. We don't want to see that again."

http://www.nytimes.com/2012/03/13/health/policy/with-small-picture-approach-acos-gain-in-health-care.html?src=recg&pagewanted=print