Three recent articles provide some additional insight into pay-for-performance programs. Research has generally shown inconsistent results, so there is great benefit in understanding what features may make a program most successful in improving quality and outcomes.
The Food & Drug Administration and the National Institutes of Health have announced an initiative to collaborate on speeding significant research findings into products and clinical use. (FDA/NIH Announcement) Among other things the collaboration will create a leadership council to facilitate reaching its objectives. They also will award $6.75 million for the study of new regulatory methods to better assess efficacy and safety of products submitted to the FDA for marketing approval. With all due respect, don’t expect anything important to come out of this. The objectives are worthy–there are many products being created that could provide significant clinical improvements and may even save money by being curative or helping avoid expensive health services like hospitalizations. But the FDA is risk-averse and bureaucratic and doesn’t appear to have any real incentive to help manufacturers figure out how best to develop their products and get them reviewed quickly.
Towers Watson released findings from the 15th Annual Business Group on Health Survey. (Towers Survey) Employers believe that health reform, if enacted, will raise costs and lessen benefits. The annual median increase in health costs for these employers was 6% in 2008, 7% in 2009 and they expect a 6.5% rise in 2010. In trying to control health costs, the three biggest challenges these firms identified were employees’ poor health habits, high catastrophic and end-of-life care and under use of preventive services. Lack of employee engagement and insufficient financial incentives to encourage participation in programs, which seem linked, were cited as obstacles to changing employing behavior. Most are not very satisfied with the performance of their medical management vendors.
The American Academy of Family Physicians has decided that it really, really doesn’t like retail health clinics. The reason–why concerns over quality of course, couldn’t be anything else, could it, like maybe much higher cost physicians might lose some business. The cause for the shift in policy is the supposed expansion of the clinics into chronic disease care and other areas. (AAFP Statement) Fairly credible research has not suggested any significant quality issues with retail clinics. Consumers obviously like them because they are convenient and less expensive and appear to be satisfied with quality or they wouldn’t keep using them. They are a market success. Maybe the AAFP should spend a little more time trying to figure out how to lower the cost of physician services, increase consumer satisfaction and improve quality, which research does indicate could use some attention.
The Wall Street Journal has an article on the growth of peer-influenced marketing. Using social network capabilities, many patients have been connecting to share health care experiences. Product providers, especially drug companies, are working to tap into or even create this social networking to boost sales of their products. Much of this peer-influenced work is traditional TV advertising with real patients, but much is also internet-based. The FDA has expressed concerns about drug companies’ activities in this area, and more regulation might be expected. (WSJ Article)
The Wall Street Journal published an op-ed which discusses a better way to reform health care. (WSJ Op-Ed) The authors note that the critical problem is rising costs and the current bills do little to address that problem. Duh. They promote policies that would restore individual awareness of the cost of, and responsibility for payment for, health care services, and increasing competition among health insurers and providers, including eliminating the tax deduction for employment-based insurance, allowing sale of insurance policies across state lines, without regard to states’ benefit mandates and changing malpractice laws. All laudable, all not likely to pass in the current Congress. And one big problem in this individual responsibility approach, which we generally favor, is that a whole lot of health care spending is for elderly, chronically ill patients who are hardly capable of making decisions about their health care.
A new survey claims that defensive medicine is responsible for one of every four dollars spent on health care in the United States. (Jackson/Gallup Survey) (Survey Summary) Gallup surveyed 462 practicing physicians. Seventy three percent said they had practiced some form of defensive medicine in the last 12 months and they attributed 26% of overall health spending to defensive medicine and the physicians said they avoid practices and procedures that might increase medical malpractice insurance premiums. Based on this survey, Jackson Healthcare, the sponsor, suggests that over $650 billion of health spending could be avoided annually by removing the practice of defensive medicine. Not sure about that, since most other credible research doesn’t come up with a number close to that. Also pretty sure that even if physicians had no possibility of being sued they would not give up $650 billion of income, or their share of that spending.
And finally, the fun item of the week. The current issue of the Harvard Business Review has a brief summary of work by Kathleen Vohs, looking at the impact of literal hard cash on people’s feelings and actions. (HBR Article) In a recent study she had some people count money and some slips of paper. The she dipped their hands in very hot water. The people who counted money felt less pain. The article gives several other examples of the research. Cold, hard cash appears to have a number of demonstrable effects on people’s behavior. The applications to health care are obvious. For patients, if they are in pain, give them some cash. Want people to take better care of their health, give them actual cash immediately after good actions, or better yet, let them handle some cash first, take it away from them and tell them they can have it after they have completed the good health behavior. For providers and staff, similar approaches could be used.
Increasingly physicians and hospitals are measured on compliance with process of care and outcomes, in some cases being incented or penalized depending on their performance. A new study suggests how to ensure exceptions to these guidelines are properly taken into account.
A new research article examines the link between Medicare fee changes and the volume of utilization, confirming standard economic theory that the volume, or supply, of physician services does appear to be subject to normal supply and demand curves.
EBRI held a workshop on the future of employment-based health benefits, bringing together experts from disparate constituencies to discuss the topic. As expected, there was significant disagreement about reform possibilities and what might happen in the absence of reform.
The Centers for Disease Control issues a massive compendium of health facts and information called Health United States 2009. In addition to basic information regarding health care, it has some description and analysis of particular issues such as use of medical technology.
Two more studies suggest that provider price increases, particularly those of hospitals, are the cause for overall spending rises and notes that there is little competitive check on providers’ ability to raise prices. When are policy-makers going to start paying attention?
Research indicates that commercial health insurance, while it has geographic variation in spending, does not vary in the same way as Medicare. A primary factor explaining private health plan geographic spending variation appears to be the state of competition for hospital services in different locales.
The Office of Personnel Management releases a report showing progress in the number of FEHBP plans offering PHRs to members, but little use of those PHRs by patients and little ability of the PHRs to take provider-created information. Separately, Revolution Health has abandoned its PHR effort.