Guest post by Ken Perez, vice president of healthcare policy, Omnicell.
Tracy Morgan, the “30 Rock” and “Saturday Night Live” star, once said, “Bad news travels at the speed of light; good news travels like molasses.” Such is the case with respect to the cost and clinical performance of the U.S. healthcare system.
Steven Brill, founder of Court TV and the American Lawyer, famously pilloried America’s healthcare system in “Bitter Pill: How outrageous pricing and egregious profits are destroying our healthcare,” the cover article in the March 4, 2013 issue of Time and the longest in the history of the magazine. Brill wrote, “In the U.S. people spend almost 20 percent of the gross domestic product on health care, compared with about half that in most developed countries. Yet in every measurable way, the results our health care system produces are no better and often worse than the outcomes in those countries.” In a subsequent article in the Jan. 19, 2015 issue of Time, Brill went on to describe the U.S. as having “a broken-down jalopy of a health care system.”
Brill’s “Bitter Pill” article received generous coverage by CBS, the Commonwealth Club, the Huffington Post, the Los Angeles Times, National Public Radio, the New Yorker, the New York Times, and even Jon Stewart’s “The Daily Show.”
The July 28, 2015 issue of the Journal of the American Medical Association (JAMA) included an article, “Mortality, Hospitalizations, and Expenditures for the Medicare Population Aged 65 Years or Older, 1999-2013,” that shared the findings of a study of over 68 million Medicare fee-for-service and Medicare Advantage beneficiaries by H.M. Krumholz, et al.
This lengthy, detailed, heavily footnoted, and carefully written study reported the following encouraging findings:
- All-cause mortality for all Medicare beneficiaries decreased from 5.30 percent in 1999 to 4.45 percent in 2013
- The total number of hospitalizations per 100,000 person-years declined from 35,274 to 26,930 (for fee-for-service beneficiaries)
- Mean inflation-adjusted inpatient expenditures dropped from $3,290 to $2,801
The authors of the study prudently offered a wide variety of possible reasons for these improvements, including healthier behaviors (e.g., increases in rates of exercise and decreases in rates of smoking), shifting lifetime exposures (e.g., younger seniors have benefited more from improvements in public health), technological advances (e.g., improved therapies), and other factors. Notably, the first reason mentioned was national efforts to improve the care of all patients across the study period, citing federal initiatives to improve the quality of healthcare dating from the early 1990s. It takes a long time for the healthcare system to change.
The study’s results do lend support to the belief that the U.S. healthcare system can indeed “bend the cost curve,” even under the often-criticized fee-for-service model. Interestingly, it should be noted that the sharpest annual decrease in hospitalizations (9 percent) during the period studied occurred in 2013, the first year of the Hospital Readmissions Reduction Program, which penalizes hospitals for excessive readmissions within 30 days after discharge.
Although fee for service continues to be the predominant payment system for Medicare, with the Affordable Care Act’s numerous healthcare delivery reforms, the current system can be characterized as largely fee for service with an increasingly impactful overlay of fee-for-value quality measures.
Outside the fee-for-service world, one would think that Medicare Advantage and Medicare’s accountable care organization programs—with their respective sets of quality measures with economic ramifications—should be able to generate similar improvements in clinical and financial outcomes.
In terms of media coverage, the last I checked, while some of the more “serious” healthcare publications had covered the JAMA article, none of the mainstream media that covered Brill’s article had done so. That apparently is the bitter pill that good news about the U.S. healthcare system must swallow.