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2003-12-22 -- Wall St Journal's tips to ease rationing

This is the latest in the Wall Street Journal's series "Who Gets
Health Care?" The series has already established that
  *  healthcare rationing exists,
  *  it applies to the poor, and
  *  the decisions are made by hospitals and doctors as well as poor
patients simply not requesting services they cannot afford.

This article is remarkable in the breadth and detail of possible ways
to decrease health costs and promote efficiency without once
mentioning eliminating the profits and bureaucracy of private health
insurance.

Instead, we are offered a mixture of worthwhile plans for improved
patient care, attempts to deal with the chaos of private insurance,
and "consumer empowerment" where patients decide for themselves they
cannot afford healthcare that private insurance does not cover.

Wall Street Journal, Monday, December 22, 2003

Six Prescriptions
To Ease Rationing
In U.S. Health Care

By LAURA LANDRO

Scanning a bank of video screens, Joseph Cooke zoomed in on one
elderly patient lying in an intensive-care unit across the street. Dr.
Cooke gave the man a quick visual exam. Then he checked the vital
signs on the computer, looking for any change in blood pressure, heart
rate or oxygen levels that might signal an impending cardiac arrest or
life-threatening infection.

From his remote command post, Dr. Cooke watches three units on
different floors at one hospital. That could help solve a massive
nationwide problem: With a shortage of ICU specialists, patients
aren't well-enough monitored, leaving them vulnerable to complications
that lead to longer hospital stays and force hospitals to ration beds.
At the New York-Presbyterian Healthcare System, where Dr. Cooke works,
two new "eICU" stations cover six units in two different hospitals,
and plans call for an expansion into all 30 of its hospitals.

Slowly, the drive to improve quality and efficiency that has swept
through corporations is starting to arrive at the famously inefficient
world of hospitals. Across the country, rising costs have forced some
hospitals to effectively ration services, making life-and-death
choices about who gets care and who goes without. But by boosting
efficiency, cutting waste and medical error, and sticking to
treatments that demonstrably work, medical experts are finding that
many harsh decisions about who gets care might not have to be made in
the first place. The new strategies range from installing high-tech
systems that replace doctors' scribbled notes to simple practices,
such as making sure that patients' beds are properly tilted so
infections don't set in.

The crusade to bring the quality movement to hospitals, pushed in the
past mainly by nonprofit groups, is now starting to get a boost from
Medicare and powerful employer groups. Today, the federal Department
of Health and Human Services plans to release the first national
report on the quality of health care in America, which is expected to
acknowledge gaps in key areas such as preventive care and
chronic-disease care, and endorse many of the solutions quality
experts propose for fixing them.

"We need to take back the money that goes into waste and harm in the
system and make it an ethical imperative to free it up for the things
that really add value," says Margaret O'Kane, president of the
National Committee for Quality Assurance, a nonprofit group that
accredits about half of the nation's managed-care organizations.
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How big could the savings be? Donald M. Berwick, chairman of the
Boston-based nonprofit Institute for Healthcare Improvement, estimates
the U.S. could cut 15% to 30% of its $1.4 trillion annual health-care
tab by operating more efficiently and improving quality. David
Wennberg, director of the Center for Outcomes Research and Evaluation
at Maine Medical Center, says Medicare could trim 30% of its $285
billion budget, by bringing the highest-spending regions of the U.S.
in line with the lowest. A study published by Dr. Wennberg and a group
of colleagues this year found that Medicare enrollees in
higher-spending regions receive more care than those in lower-spending
regions but don't have better health outcomes or satisfaction with
care.

Adopting information technology could save $125 billion just by
eliminating unnecessary paperwork, according to research by the Markle
Foundation. Eliminating medical errors would save $37.6 billion, says
the National Academy of Science's Institute of Medicine. Reducing the
overuse of just three antibiotics would have a big impact: $1 billion
in potential savings, according to VHA Inc., an alliance of 2,200
nonprofit hospitals across the country, including the Mayo Clinic and
Cedars-Sinai.

Some rationing is here to stay, given America's appetite for health
care and an aging population that will need more of it. That will
require facing tough issues, such as whether it is justified to pay
millions of dollars to keep a few patients alive if those same dollars
could keep hundreds more healthy. But by redirecting money spent on
unnecessary or ineffective care, and improving the quality of care,
it's possible to have a system of "rational" rationing.

"We know that not everyone gets the health-care services they need,
but more problematically, too many people get services they do not
need," says David Dranove, a professor at Northwestern University's
Kellogg School of Management and author of a recent book on rationing.

Hospitals are now experimenting with new ways to achieve rational
rationing. Here are six of the most promising ideas:

Wiring the Health System

Many medication mistakes are caused by illegible prescriptions and
decimal point errors. As many as 20% of such preventable mistakes are
life threatening, says the Leapfrog Group, a coalition of major
employers trying to cut health-care costs.

One medication mistake, the group says, adds more than $2,000 to the
cost of hospitalization. That translates to $2 billion per year
nationwide. Using computerized order entry -- electronic prescribing
systems that avoid handwritten errors -- can make a huge difference.
Boston's Brigham and Women's Hospital, a pioneer in the use of such
systems, reduced error rates by 55% over eight months. Rates of
serious medication errors fell by 88% over a four-year period in a
subsequent study.

Technology can give hospitals a better handle on what's working. St.
Luke's Hospital, the largest hospital in the Kansas City area, is
investing about 4% of its operating budget in information systems,
compared with an average of 2.5% in the industry. It uses an
electronic data system to track 58 measures of quality, such as how
many patients are re-admitted or have to return to the operating room.
Units get "balanced scorecards" to see areas where things are going
well and where they need to improve.

Group Health Cooperative in Seattle, one of the largest managed-care
nonprofit health plans in the country, recently spent more than $40
million on a clinical information system for its 560,000 members. The
system manages patient records, delivers lab results online,
automatically refills prescriptions and checks for possible drug
interactions. "On the day it turned on across the state of Washington,
9,000 pieces of paper stopped flowing around the system," says Ted
Eytan, associate medical director for clinical informatics.

Evidence-Based Medicine

As much as half of the care provided to Americans is unnecessary,
including procedures that don't do any good, tests that are repeated,
and drugs for which there is no evidence of benefit, according to
studies cited by a 2001 report of the National Institute of Medicine,
a government advisory group.

Meanwhile, patients often don't receive the care that evidence shows
is effective. Between 17% and 32% of surgeries performed on Medicare
patients are unnecessary, according to Dr. Wennberg, the outcomes
researcher. A survey by Rand Corp., a think tank in Santa Monica,
Calif., says patients only receive recommended care about half of the
time, noting a "tremendous gap between what we know works and what
patients are actually getting." For example, national data show that
less than 25% of people with hypertension have it under control with
recommended blood-pressure medications.

One way to close that gap is "evidence-based medicine": insisting that
a doctor's opinion is backed by published evidence of a treatment's
effectiveness. After using its electronic records to identify people
at risk for heart attacks, Group Health will soon start 11,000
previously untreated patients on cholesterol-lowering drugs called
statins. It based the move on evidence of the effectiveness of statins
in the Heart Protection study, a five-year trial of more than 20,000
patients. The decision "will cost us $700,000 per year we didn't
budget for," says Vice President Peter Adler, "but it will improve the
wellness of our patients and is likely to save us $5 million in the
long run."

Another opportunity to save money is to eliminate the overuse of
antibiotics, which account for 15% to 20% of the average hospital drug
budget. Overuse has caused resistance to many antibiotics, leading to
more medical complications and costs.

A study of 11 hospitals by VHA found that three common antibiotics
used in patients with kidney failure or urinary-tract infections were
overused or unnecessarily used, based on clinical guidelines for their
conditions. By using lower doses or less-expensive drugs, the average
250-bed hospital found savings of $100,000 annually -- which indicates
more than $1 billion could be saved nationwide in all hospitals, says
VHA Vice President John Hitt, who oversaw the study.

Money saved could be redirected into proven care, Dr. Hitt says. "If I
could take the money I was spending on excess drugs used after surgery
and give everyone a beta blocker after a heart attack, it would be
ideal," says Dr. Hitt. While hospitals have been improving the rate at
which they prescribe beta-blocker drugs after a heart attack to
prevent a second one, for example, as many as 30% of patients still
don't get them.

But more research needs to be done. The budget for the federal Agency
for Healthcare Research and Quality is less than 0.2% of total
health-care spending, which is "grossly insufficient," researchers at
the Commonwealth Fund said last month. The nonprofit foundation
proposed a new federal agency to set national priorities for quality
and develop standards of care, much as federal highway standards
helped improve auto safety. The Institute of Medicine proposes a $1
billion "innovation fund" to improve quality and safety.

Fixing Reimbursement

The biggest barrier to improving care, many say, is a reimbursement
system that doesn't factor in quality and actually rewards waste.

"No wonder our health-care system is so screwed up -- the best
hospital in town and the worst hospital in town get paid exactly the
same thing for a heart bypass or a hip replacement," says Tom Scully,
who just stepped down as director of the Centers for Medicare and
Medicaid Services. "There is no other part of our economy besides
health care where you have zero economic penalty for being
inefficient."

Since doctors and hospitals are paid only for procedures and treatment
they provide, they are actually penalized if they eliminate
unnecessary procedures or practice preventive care. Doctors get paid
to perform heart surgery and treat patients in the hospital but not to
care for heart patients so that they avoid hospitalization.

That's starting to change. Medicare is offering incentives for doctors
in pilot programs who adopt information technology and practice
preventive medicine, and boosting payments to hospitals that report
publicly on the quality of their care. A Medicare spokesman said the
aim is to fix quality problems and cut costs in the long run. Employer
groups including the Pacific Business Group on Health and the General
Electric Co.-led "Bridges to Excellence" program are offering doctors
incentives to provide preventive care for chronic diseases, including
diabetes. But such efforts will have to be more widely adopted by big
insurers before they make a dent.

The Bridges to Excellence program, which includes self-insured health
plans run by Ford Motor Co., UPS, Procter & Gamble Co. and Verizon
Communications Inc., just doled out its first payment to doctors in a
pilot program in Louisville and Cincinnati. Doctors receive bonuses of
$100 per patient for keeping patients' blood pressure, blood sugars
and other diabetes measures under control.

"We are creating an incentive for the fundamental re-engineering of
processes and outcomes in physician's offices," says Francois de
Brantes, program leader for GE's corporate health-care initiatives.
But if the effort stays limited to self-insured purchasers, he says,
it won't be enough to spur real change. "The barrier we haven't been
able to overcome is getting health plans to fully participate."

Health plans have been wary about paying doctors for preventive
practices, because they aren't yet sure of how that would work on a
large scale or how results would be measured. Some argue that doctors
should be providing such care anyway.

Disease Management

Many experts agree the best opportunity to improve care and stave off
costly complications is disease management -- the strategy of
monitoring people with chronic conditions such as diabetes, congestive
heart failure and coronary artery disease. Those diseases are expected
to cost $510 billion this year and soar to $1.07 trillion by the 2020.
But many of those costs are related to preventable hospitalizations
and emergency-room visits.

For years, studies have shown that getting patients into
disease-management programs can avoid many of those problems. Disease
management closely monitors a patient's status on a regular basis. A
growing number of companies, under contract with Medicaid or other
insurers, now keep tabs on patients.

At nonprofit Care South Carolina, which serves 27,000 mostly
low-income patients, an electronic recordkeeping system monitors
patients with diabetes closely and ensures that they see doctors for
regular foot exams to watch for sores that might lead to amputations.
Chief Executive Ann Lewis says the center hospitalizes its patients
less frequently than others in the state -- and those hospital stays
are for less serious and less costly problems. The average payment
Medicaid has to make for their hospitalizations is $3,545, compared
with $10,894 for diabetes patients in other programs in the state, she
says.

Better preventive care can dramatically reduce hospitalization for
congestive heart failure, a chronic ailment marked by progressive
weakening of the heart's pumping strength. Yet standards are all over
the map in the U.S. Among Medicare patients, about one-third of those
with the disease haven't had the most important test to assess the
function of the part of the heart that makes it pump efficiently.
About one-third don't have a prescription for the blood pressure
medication known as an ACE-inhibitor used to treat the disease. Half
of the patients hospitalized with congestive heart failure are
readmitted within six months.

But numerous studies show marked improvement if patients take the
right medication and are closely monitored. Such care can reduce
hospital costs by more than 30% and cut rehospitalizations in half,
studies show.

Florida's Medicaid program, for example, contracted with a company
called Lifemasters to manage thousands of residents with congestive
heart failure. Patients can check in by phone or Web site, and nurses
monitor vital signs and symptoms to identify potential problems.
Beneficiaries get digital scales and electronic blood-pressure cuffs,
and even phones to call in if they need them. Lifemasters gets in
touch with doctors directly if a problem arises. Patients in the progr
am spent an average of 38 fewer days in the hospital, and the state
cut the cost of its Medicaid program by 6% in the first two years
after paying the fees for the program.

Redesigning the ICU

The sickest 1% of patients -- the chronically ill and those in the
ICU -- account for 27% of all health-care costs. Intensive care eats
up $180 billion annually, much of that on care that has little effect
on survival and isn't wanted by terminally ill patients anyway,
studies show. "Most people when dying want the comfort and care of
being surrounded by family, not the torture of all sorts of tubes in
every orifice you have," says Dr. Wennberg, the outcomes researcher.

But many complications that lead to unnecessary deaths and longer
stays could be prevented with ICU redesign programs, including new
technology such as the eICU, even if they cost money in the
short-term. A few years ago, at six hospitals run by Sentara
Healthcare in Virginia, ICU doctors were stretched. "We didn't have
enough ICU beds, we had a harder time holding on to ICU nurses and the
care was just inconsistent," says Rodney Hochman, chief medical
officer and CEO of Sentara's Norfolk General Hospital.

Two of Sentara's hospitals were the first to use an eICU, a system
designed by former intensive-care specialists who launched software
maker Visicu Inc. These systems are operating or being installed at a
total of 17 hospital groups, covering about 60 ICUs. By electronically
monitoring more patients, improving quality controls and adhering to
strict guidelines about which patients should be in the unit, Dr.
Hochman says two of his hospitals reduced ICU mortality rates,
adjusted by the severity of patient illness, 27%, and cut hospital
costs for ICU patients 25% over the last two years.

A study to be published next month in the journal Critical Care
Medicine says the eICU system has shortened the length of stays in
four of the Sentara ICUs by 17% and allowed the ICU to handle 15% more
cases. Sentara says the $2 million it spent to buy the software and
get it up and running has already paid for itself with $3.5 million in
saved costs and new revenue.

By using resources efficiently, Dr. Hochman says the hospital may be
able to avoid "having to decide between one patient and another."

Improving hospitals' practices can make a big difference in the ICU as
well. VHA, the nonprofit hospital alliance, is sponsoring a
"Transforming the ICU" program that has trained 20 ICU teams to follow
simple guidelines that are often ignored, such as correctly adjusting
the tilt of the bed of a patient on a ventilator to prevent pneumonia,
and stopping the use of antibiotics that might cause further
complications. Merely improving care of patients on ventilators has
saved 47 lives and $3 million in an average ICU with 1,000 admissions
annually, VHA says.

VHA says in the first year of the program, the collective length of
stay in the ICU was reduced from nearly 2.5 days to 1.1 days, which
means the ICU can accept 654 more patients. Together, two hospitals in
the program saved nearly 5,000 patient days and $5.3 million in one
year. Surgical-infection prevention programs, being conducted with the
Centers for Disease Control and Medicare have also saved millions of
dollars in ICU and surgical units.

Getting Patients Involved

The final barrier: the patients. Most consumers aren't actively
engaged in their care or "prepared to make judgments about treatment
alternatives based on evidence," says Paul H. Keckley, executive
director of Vanderbilt University's Center for Evidence-based
Medicine. "We have lulled consumers to be dependent on physicians."

But after years of being conditioned to expect that medical care comes
at little cost, Americans are being asked to dig deeper into their own
pocket -- which may make them think twice about which care has value,
and what is unnecessary. Everyone, including consumers, will need to
make more informed choices about which medical services are most
beneficial, says Paul B. Ginsburg, president of the Center for
Studying Health System Change. "If we are to cover everyone, we can't
cover everything."

Write to Laura Landro at laura.landro@wsj.com1

BIG LOSSES
Estimated lives and costs that could be saved each year by delivering
recommended care

PROGRAM                               DEATHS       HOSPITAL COSTS*
(in millions)
Controlling high blood pressure  28,300       $1,243
Diabetes care- HbA1c control    13,600       $178.5
Smoking cessation                      2,700        $97.7
Cholesterol management             6,500        $94.2
*Due to heart attacks and stroke

Source: National Committee for Quality Assurance