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U.S. medical care: A critique with proposals for change

Posted by medconsumers on September 14, 2012

It has taken a long time to sink in. The United States does not have the best medical care in the world. We are spending far more than other industrialized countries and showing poorer outcomes. And if that’s not bad enough, at least one-third — $750 billion — of our medical care spending in 2009 went to unnecessary services, excessive administrative costs, fraud, and other problems, according to a new report from the Institute of Medicine.

This report, entitled “Best Care at Lower Cost,” clearly presents the situation as dire and unsustainable:  “America’s health care system has become far too complex and costly to continue business as usual. Pervasive inefficiencies, an inability to manage a rapidly deepening clinical knowledge base, and a reward system poorly focused on key patient needs, all hinder improvements in the safety and quality of care and threaten the nation’s economic stability and global competitiveness.”

The report draws on a large body of existing research that documents the health care system’s failures from the patients’ perspective. The result is lots of sobering statistics that serve as impetus for change. The rate of health care related injury, for example, is illustrated with this statistic: “One-third of all hospitalized patients are harmed by their care.” Similar back-up statistics appear with this list of italicized recommendations for improving the quality, efficiency, and cost of care:

-Use information technology [e.g., digital transfer of test results and medical records] more effectively: 20% of patients said their test results or medical records were not transferred from one place to another in time for an appointment; 25% said their health care provider has had to re-order a test to get accurate information for diagnosis.

-Improve transparency [e.g., hospitals and provider should make the cost of treatment publicly available]: 63% percent of patients do not know the cost of their care until they get the bill; 10% never find out the cost of their care.

-Promote teamwork and communication among health care providers: 50% of adults report problems with care coordination, notification of test results, and communication among their doctors.  Less than half of all patients receive clear information on the benefits and trade-offs of treatments for their conditions.  Less than half are satisfied with their level of control in medical decision-making.

The IOM report was compiled by a panel of experts, which includes my colleague Arthur A. Levin, MPH, the director of the Center for Medical Consumers, who has long been involved with patient safety issues. It takes broad view of the different ways people receive health care in the current U.S. system from small groups of physicians to large integrated delivery systems, each with different strengths and weaknesses. How can we learn from the good and the bad of these different systems? This is the crucial question taken on by the report’s authors.

Though written in the style of a health policy wonk, the chapter entitled “Creating a new culture of care” is worth reading.  Like it or not our health care system is going to change—no matter who is president after election day. It makes sense to start giving some thought to how you want to adapt. Unhappy with health care that is fragmented and diffusely organized?  This chapter describes large pioneering, integrated health care delivery systems (e.g., Mayo Clinic, the VA system, Kaiser Permanente).

These systems have many characteristics in common, such as use of electronic medical records, incentives for providers to adopt “best practices,” physicians on salary (my personal favorite), and bundled payments. An example of the “new culture” of care delivered by these systems: Readmission to the hospital would be regarded as a failure (as opposed to more income for the hospital), and the relevant staff members would come together to see how it could have been avoided.  “A culture of teamwork is fundamental to building a learning organization and ensuring a continuity of care that yields better outcomes for patients.”

Nothing like these systems is available in my neck of the woods, but I have hope for the Accountable Care Organizations, which are already up and running in some areas of the country. ACOs are pilot projects funded by the Affordable Care Act signed into law two years ago by President Obama.  ACOs are described recently by the N.Y. Times as “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 ACO is paid simply to care for a group of patients.”     read more

You can read the 360-page IOM report online for free.  This excellent interview from ProPublica is not part of the IOM report, but is definitely worth reading:  Why Patient Harm Is One of the Leading Causes of Death in America

Maryann Napoli, Center for Medical Consumers©

7 Responses to “U.S. medical care: A critique with proposals for change”

  1. AnneP said

    I am profoundly uncomfortable with ACOs. On a personal level, I have deliberately chosen my small practice of excellent doctors to avoid the bigger organizations in this town where they don’t even like doctors to refer outside of the organizations.

    When it becomes a question of only large organizations, I have very little control. (And let’s admit it, most patients don’t want or need and won’t use control, but I’m not one of those.)

    And making health care providers essentially insurers is very risky, as I mention in this blog post: http://hcrenewal.blogspot.com/2012/07/where-is-risk.html Although initially ACOs might be a way to cut down on overtreatment and overuse, they are inherently a worse method than having actual insurers who can spread risk over a bigger and more diverse (including geographically) population.

  2. Hernandez Jose A said

    Let’s make a clarification: the new report from the Institute of Medicine, the point of this post, is about “recommendations for improving the quality, efficiency, and cost of care.” If binging under control the cost of care truly is one of the goals, then you have to face the cost of malpractice lawsuits. Just the price tag of of defensive medicine is astronomical.

    As far as frivolous lawsuits, a quick search in Google shows that even President Obama, in his State of the Union speech, said that he is open to “medical malpractice reform to rein in frivolous lawsuits.”

    • The evidence about the frequency of so-called “frivolous” lawsuits and the cost of defensive medicine is far from robust. David Studdert, a medical malpractice expert, formerly at Harvard School of Public Health and colleagues, concluded in an article published in the May 11, 2006 New England Journal of Medicine; “Our findings point toward two general conclusions. One is that portraits of a malpractice system that is stricken with frivolous litigation are overblown. Although one third of the claims we examined did not involve errors, most of these went unpaid. The costs of defending against them were not trivial. Nevertheless, eliminating the claims that did not involve errors would have decreased the direct system costs by no more than 13 percent (excluding close calls) to 16 percent (including close calls). In other words, disputing and paying for errors account for the lion’s share of malpractice costs. A second conclusion is that the malpractice system performs reasonably well in its function of separating claims without merit from those with merit and compensating the latter. In a sense, our findings lend support to this view: three quarters of the litigation outcomes were concordant with the merits of the claim.” (NEJM, 2006, v.354, 2024-33)

      As to costs, Michelle Mello, Professor of Law and Public Health at Harvard School of Public Health, writing in an October, 2010 article published online in Health Affairs identifies the various components of liability system costs, generates a national estimate for each component, and discusses the level of evidence available to support the estimates. Overall annual medical liability system costs , according to Mello, including defensive medicine is estimated to be $55.6 billion in 2008 dollars, or 2.4 percent of total health care spending.

      I would characterize the cost of medical liability, including defensive medicine to the system as a fly on the rump of the health care cost giant. It may be slightly annoying to the giant – but then again more likely its not even noticed. Whatever its true costs are, they are clearly dwarfed by the IOM estimate of $750 billion dollars in total waste. As for your last remark, sadly even President Obama is not immune to medical malpractice mythology. Arthur Aaron Levin, MPH, director Center for Medical Consumers

  3. Jose A Hernandez said

    And not a word about tort reform! Interesting.

    • Tort reform is usually code for “let’s put a cap on damages for the people who have been injured by their treatment and have won a malpractice case.” We are much more interested in seeing the medical care system make reforms that would dramatically cut our nation’s high rate of medical errors and hospital-acquired infections.

      • Jose A Hernandez said

        I don’t know the exact figure but my understanding is that most of these cases are settled out of court because fighting the charges, even trumped-up charges, is too expensive for the defense. Basically, the plaintiff’s lawyer bribes the physician and hospital. They did not win a malpractice case.
        I am with you that cutting medical error and hospital-acquired infections would be of great benefit. I would add that an aggressive campaign to combat the epidemic of “Overdiagnosis” would be even more beneficial to the well-being of Americans.

        • Settlements predominate in all aspects the tort system, not just medical malpractice. One reason is the number of years it takes for a case to come to trial and the related expenses of such a protected litigation. Of the malpractice lawsuits against doctors that go to trial, two thirds are won by the doctor and of those brought against hospitals, one half are won by the hospital. Settlements are not likely to be paid by the defendant’s liability insurance carrier unless the case has some merit. Also many states require some certification by an independent party that the case has merit before it can proceed into the legal system. There is a lot of mythology about medical malpractice – the notion that most medical malpractice involves nuisance lawsuits is one. Arthur Aaron Levin, MPH, director Center for Medical Consumers

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