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Some clever ideas we should steal from the US

I’ve written an analysis of health election debate and policy, which has been published today at ABC’s The Drum. It draws upon some of the discussion that Croakey has been hosting in recent weeks. Thanks to all those who have been contributing.

Also a particular thanks to Associate Professor Mavis Duncanson at Notre Dame University in Sydney, who suggested that this election manifesto from the Public Health Association of NZ might be a useful starting point for such an analysis.

Meanwhile, in part 13 of our election series, health policy analyst Dr Lesley Russell, looks at where Australia can learn from the US on health reform. This post is from a speech given at the Australian Financial Review‘s national health conference on August 17.

This post is considerably longer than Croakey’s usual offerings but I thought it worth leaving in all the detail. I hope you find it informative…

Lesley Russell writes:

The path to that day last March when President Obama signed the Patient Protection and Affordable Care Act into law was long and tortuous – a series of disasters, missteps, political manoeuvres and lucky moments, and the result of much persistent hard work and commitment.

To date Australia has made only very tentative steps down the path towards health care reform.

It used to be that we looked at the US only as an example of how not to do health care.  But increasingly there are things for Australia to learn from the US in terms of doing health care well.

The first lesson is how to tackle health care reform – real and complete reform, not just providing more money to go on doing more of the same things.

And the second is about making the health care system sustainable into the future, more focused on health outcomes, and on improving quality and safety – and to show how all these goals can be achieved simultaneously.

For President Obama and the Democrats there was a key economic rationale driving health care reform and that was to tackle the rampant growth rate in health care costs. This is referred to as ‘bending the curve’.  Much of this is done in the short term by tackling fraud and abuse, waste and duplication.  That’s why e-health is a crucial element.  In the long term the real savings will be made through innovation and comparative effectiveness research.

Innovation in health care funding and delivery.

There are several key elements to health care reform that taken together will change the shape of health care funding and delivery in the future – and it is important to note that US health care providers are almost universal in their support of these approaches.

Comparative effectiveness research

Comparative effectiveness research (CER) compares treatments and strategies to improve health, providing information that is essential for both doctors and patients to decide on the best treatment. It also provides ways of measuring the performance of the health system and addressing health care disparities.

It is also a very sensitive issue – the naysayers around health care reform see it as a means of rationing health care.

The new law establishes a Patient-Centered Outcomes Research Institute (PCORI) as a nonprofit corporation that is not an agency of the government.

The Institute will have a 21-member Board of Governors, including the Directors of the Agency for Healthcare Research and Quality and the National Institutes of Health which will receive priority in funding decisions.

Data collected by the Center for Medicare and Medicaid Services will be made available to contracting research groups, and data from other federal, state, and private entities hosting patient registries and other databases can also be requested.  There will be a standing methodology committee to identify and refine methodological standards for CER studies.  And there will also be a number of advisory panels to set research priorities and oversee clinical trials.  These panels will include practicing clinicians, patient and consumer representatives, clinical and health services researchers, payers, manufacturers, and others.

The health reform bill requires the Institute to provide patients and consumers with the extra support, tools and resources necessary to be effective members of these advisory panels.

In addition, there will be public comment periods to allow the general public to provide feedback to the Institute on proposed priorities and other key decisions, in an effort to make the work of the Institute and advisory panels as transparent as possible.

The Institute will be funded through a trust fund.  By 2015, total annual funding for the Institute will reach nearly $500 million.

The law allows the Secretary to use comparative effectiveness research evidence in coverage and/or reimbursement decisions and to establish differential copayments, which could be used in a value-based reimbursement program.

Center for Innovation

One of the most important provisions in the new law is the creation of a new center within the Center for Medicare and Medicaid Services (CMS) that will focus on payment innovation.

This is a clear sign that Congress believes that the Center for Medicare and Medicaid Services needs to have the flexibility to develop, implement and evaluate new payment models for services outside of the traditional fee-for-service model.

The legislation gives broad authority and funding to the Center for Innovation todetermine what models will be tested, in what populations, and for how long, with a preference for models that reduce program costs while preserving or enhancing quality.

To ensure that the focus is not just on cost-cutting measures, there is a requirement for reporting on outcome measures at the “patient-level.” There is also language thatprioritizes models that will work with both public and private payers.

The Secretary can expand the duration and scope of successful models and terminate or modify models that do not work effectively without the need to go back to Congress for this authority. In the past the need for congressional approval has delayed or derailed successful initiatives.

Another critical issue is that the Center for Innovation does not have to require projects to be budget-neutral during their initial testing period. Many health care innovations require initial investments in staff, training, and infrastructure to achieve long-term efficiencies.

Although pilot projects will not have much effect on national  health care spending in the short run, they can encourage innovation in health care delivery by reducing oreliminating the link between service volume and provider revenue, and they are expected to reduce costs in the long-term.

New ways to deliver and pay for health services

The US health care reform package has a raft of measures that will develop, fund and expand new ways to deliver and pay for health care services.

Among them are:

Financially rewarding primary care practices that provide care co-ordination programs using, for example, nurse care co-ordinators and home-based monitoring systems;

Bundling payments for entire treatment needs or cycles of care, rather than paying for individual visits or procedures, with rewards for the delivery of care that improves patient outcomes; and

Limiting payments for hospital readmissions that result from hospital-acquired infections and preventable errors.

The principle here is to fund quality, not quantity, and value, not volume.

Better primary care services

When it comes to co-ordinated primary care, the US is starting from a different place than Australia.

For example, Australia already has primary care as the recognised foundation of the health care system, and arguably most Australians have, through their GP, a medical home that helps co-ordinate their care – at least in theory.

Still the US has some interesting mechanisms for financially rewarding the delivery of coordinated primary care.

And using medical homes to provide coordinated care to people with mental illness and co-occurring primary care conditions and chronic diseases is one example of an initiative that is needed and would be welcome in Australia.

In particular, I think that Australia could learn from the US approach that is very focused on improving measurement, evaluation and feedback, and paying not just for services delivered but for cost-effectiveness, quality and patient satisfaction.

It isn’t enough that care is funded and provided, it’s that the data are collected to highlight how effective it is.  That’s not something that is routinely done in Australia.

In the US one of the most successful ways to deliver a medical home and the raft of needed coordinated care services in medically underserved areas is through Community Health Centres.

Community Health Centres are community-based and patient-directed organizations that provide health care to populations with limited access to health care.  Community Health Centers must provide a full range of health related services.  This means in addition to providing comprehensive primary health care services, they also offer specialty care, dental and mental health services, as well as supportive services such as nutrition education, case management, translation services, care coordination and case management, transportation to and from health care sites, and outreach activities.

This, together with the requirement for local boards, also means the care delivered reflects community needs and is culturally appropriate.

There is excellent data to show that Community Health Centres deliver better services less expensively, eliminate unnecessary hospital visits, reduce health care disparities and increase patient satisfaction.

But the benefits extend well beyond the doors of the clinic.  Community Health Centres generate enormous economic activity in the broader community that also creates new jobs.   Every dollar spent and every job created by health centers has a direct impact on their local economies.

Those with long memories might remember that the Whitlam Government pushed to establish Community Health Centres, in cooperation with state and local governments.

So we might ask, at a time when the focus is on better coordination of state and federal governments in health care, ensuring affordable access to the range of needed services – especially prevention and care coordination – and providing services that are tailored to local needs, why are we trying to re-invent the wheel, not very successfully, with GP SuperClinics?

The answer, I suspect, has much to do with lack of institutional memory and AMA opposition to any such plan – in the 1970s and today.  And no-one has ever looked at the possibility that some version of GP SuperClinics could feed into the economies of the communities in which they are built.

It’s a good bet that the AMA will find Community Health Centres as loathsome today as they did under Whitlam.  But I suspect that the new generation of young health care professionals – doctors, nurses and others – might find the idea appealing both professionally and financially.

And the Government could help drive this by stealing another Obama idea, and establishing a National Health Service Corps to staff such health centres.

Bundled payments

The current health care delivery system is not well organized around the care needs of patients, which are rarely delivered in an isolated episode.  The existing Medicare payment system rewards doctors for delivering more services rather than better care.

Even where MBS items are directed at management plans for chronic illnesses or multi-disciplinary care for cancer patients, the only measure of effectiveness used is the number of such services delivered.

In the United States there is now a drive in both the public and private systems, largely supported by the full range of health care providers, to move away from fee-for-service to bundled-care payments for entire treatment needs or cycles of care, which may span multiple providers and settings.

At this point in time such an approach, aimed at encouraging better management of diabetes patients, has not been viewed favourably in Australia.  However this is a particularly effective form of payment for the care delivered around an acute hospital episode and the post-acute or rehabilitation period, and there is evidence to support this effectiveness.

One example is ProvenCare, operated by Geisinger, a large, integrated private health care system in Pennsylvania. This program started an episode-based bundled payment structure for coronary artery bypass grafting and now also covers hip replacement and cataract surgery this way.

It involves a global fee that covers the work-up, surgery, hospital and professional fees, and any additional work related to complications from the initial procedure. The ProvenCare program, in effect, offers a 90-day warranty on the surgery covered. If complications arise or the patient returns to the hospital within three months, Geisinger bears the additional cost.

By changing the reimbursement structure for bypass surgery, Geisinger actually changed the way care was delivered.  Not only did the costs come down, but outcomes improved, due in large part to greater payer-provider collaboration and better organization of care.  Geisinger relies heavily on e-health records to make these improvements possible.

In the US Medicare will now not pay for the additional costs associated with treating a range of hospital-acquired problems such certain catheter-associated infections, bed sores, objects left in patients’ bodies, blood incompatibility, air embolisms and falls.

Accountable Care Organizations

An Accountable Care Organization is a relatively new concept of health care delivery that is largely driven by changing how care is delivered and paid for.  An ACO holds providers responsible for delivering comprehensive care to a designated group of patients. A typical ACO consists of primary care clinicians, specialists, and hospitals, including many individual practices.

An ACO needs to be able to care for patients across the continuum of care in different institutional settings, plan prospectively for its budgets and resource needs, and support comprehensive, valid, and reliable measurement of its performance.  ACOs that achieve quality and cost targets receive a financial bonus, and financial penalties may be incurred if targets are not met.

The goal is to create an incentive for the ACO to constrain volume growth while improving the quality of care.

This model of health care delivery also recognises that often what’s needed is not medical care but help with managing travel to medical appointments, complicated medication regimes and the out-of-pocket costs that limit patients’ compliance with recommended treatment.

An Australian ACO model would offer the possibility of linking together a Medicare Local and a Local Hospital Network – after all, we are still wondering how this would happen.

We get what we pay for in healthcare.  The current system rewards volume and intensity, paying for more services regardless of the value they provide – it’s an approach that doesn’t always keep people healthier.

Changing the incentives by changing the reimbursement system so that it pays for value not volume provides enormous potential to improve patient health, slow the growth of medical costs, and deliver greater satisfaction to both doctors and their patients.

Tackling preventable errors

Checklist-type initiatives such as those driven by Peter Provonost, Donald Berwick, now head of the Centers for Medicare and Medicaid Services, and Atul Gawande show how quickly and cheaply dramatic progress can be made in reducing hospital-acquired infections and other problems, saving lives and money.

A health care checklist is usually nothing more than a list of what every provider knows should be done for a given procedure.

But just as a checklist ensures that pilots go through all the necessary steps when flying a plane, so can a checklist help health care workers correctly manage a complicated procedure in an environment where time is critical.

The Keystone Initiative in Michigan, which began in 2004, uses a series of checklists focusing specifically on preventing infections in intravenous lines and catheters.

Within three months of implementing a simple set of interventions, Michigan ICUs slashed their bloodstream infection rates by 66 percent.

From 2004 to 2008, nearly 1,800 lives were saved and 129,000 extra days in the hospital were avoided due to this patient-safety initiative. Each hospital spent about $120,000 in staff time to implement the safety changes and estimated savings were over $200 million.

These impressive results have been sustained through to the present.

Australian efforts at using a checklist approach have shown success, but have gone nowhere.

At Geelong Hospital, Dr Stephen Bolsin provided registrars with a portable, programmed PDA device and asked them to report incidents that happen as they carry out their work in their very busy days.

This achieved 98 per cent reporting of the incidents that occurred. About half of theincidents reported had no impact or a minor impact on patient outcomes.  These may well be the “near miss” incidents that are the “holy grail” of health care safety experts.

When it is made easy people will report these events. There is a technological imperative with a PDA:  no need to get a form, write the report, then photocopy it, file a duplicate and so on.  It can be done in a few seconds with drop-down menus on a screen. This is one demonstrated way in which we can improve the medical and ethical education of trainee doctors.

These results were first reported in 2002.  So far, however, there has been limited enthusiasm from health bureaucrats for implementing a PDA-based system for adverse event reporting. We might ask why.

Conclusion

All those committees and reports the Australian government commissioned were unanimous in their advice that the healthcare system of the 21st century must focus on prevention, better management of chronic illness and the co-ordination of care.

When these services are provided effectively, they can keep people – even the chronically ill and frail elderly – out of hospital, thus helping to address problems such as crowded emergency departments and the need for more hospital beds and staff.

It used to be that Australians looked at the US as an example of what health care should not be. Now, in terms of innovative ways to both develop and evaluate new health policies and deliver and fund health care, there are effective American models we could look to implement. Such models provide better outcomes at reduced cost.

Australia isn’t bereft of such innovative approaches, although too many successful pilots have gone nowhere, victims of short-term funding and failure to capitalise on what has been learned.

The US health care reform legislation includes mechanisms for ensuring that innovation is a consistent driver, not just a series of isolated projects.

Despite the fact that it is not a single payer system, does not have a national public health insurance option, and has real restrictions on the coverage of abortion, what has happened in the US is real reform.  It hits all the key bases.  It looks forward into the future and not back to the health care needs of the last century.

Moreover, it is reform that is paid for, and that actually helps reduce the deficit out into the future.

The roll-out has already begun and is well ahead of schedule.

This stands in stark contrast to Australia where a lot of money and very few details have been put on the table, and there is little that counts as real reform.  Unless there are changes in the implementation, what we will end up with will be more of the same, with the key focus still on more hospital beds and more elective surgery, and where the measure of success is activity and the number of services delivered, not improved health outcomes and patient satisfaction.

Starting next week we are all entitled to look to our new government for some real reforms.

• Dr Lesley Russell is the Menzies Foundation Fellow at the Menzies  Center for Health Policy, University of Sydney/ Australian National  University and a Research Associate at the US Studies Centre, University of Sydney.  She is currently a Visiting Fellow at the Center for American Progress in Washington DC.

***

To see the previous posts in the Croakey election series:

http://blogs.crikey.com.au/croakey/2010/08/13/beyond-the-election-horse-race-kicking-off-a-health-policy-series/

http://blogs.crikey.com.au/croakey/2010/08/13/a-comprehensive-analysis-of-election-health-policies/

http://blogs.crikey.com.au/croakey/2010/08/13/kellie-bissets-insightful-analysis-of-election-health-policies-dont-miss-this-piece/

http://blogs.crikey.com.au/croakey/2010/08/15/where-is-the-vision-in-health-policy/

http://blogs.crikey.com.au/croakey/2010/08/15/how-do-the-major-parties-stack-up-on-general-practice-policy/

http://blogs.crikey.com.au/croakey/2010/08/16/the-govt-opposition-get-a-big-fat-f-when-it-comes-to-obesity-control/

http://blogs.crikey.com.au/croakey/2010/08/16/what-we-need-in-the-last-week-of-the-campaign/

http://blogs.crikey.com.au/croakey/2010/08/17/how-should-we-judge-election-health-policies/

http://blogs.crikey.com.au/croakey/2010/08/17/you-may-as-well-kiss-goodbye-to-real-health-reform-whoever-wins/

http://blogs.crikey.com.au/croakey/2010/08/18/on-health-the-contrast-between-labor-and-the-liberals-is-stark/

http://blogs.crikey.com.au/croakey/2010/08/18/what-will-the-election-mean-for-divisions-of-general-practice/

http://blogs.crikey.com.au/croakey/2010/08/18/where-are-the-vision-and-leadership-on-mental-health-reform/

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