University Times

When it comes to controlling spiraling health care costs and overhauling the U.S. health care system, don’t look to the usual suspects, a lecturer here advised.

“The root cause of our challenges to health care today is not bad guys, or greedy guys or incompetent guys,” said Thomas Lee, CEO of Partners Community HealthCare, an integrated health care delivery system in Massachusetts.

“It’s not malpractice fears, it’s not the bureaucracy of the insurance companies, it’s not greedy pharmaceutical companies that are driving the increases; it’s not aging or the gaining of weight of the population driving the 10 percent year-to-year increases.”

Ironically, Lee said, “The real driving force is progress that is imposed upon a fragmented delivery system. And the result of that progress combined with fragmentation is chaos. That chaos leads to inefficiency and leads to problems with reliability of care and problems with safety.”

Lee, who also is professor of medicine at Harvard; chair of the cardiovascular measurement assessment panel of the National Committee for Quality Assurance, and associate editor of the New England Journal of Medicine, delivered the Anne C. Sonis Memorial Lecture at Pitt Oct. 8, speaking on “Chaos and Organization in Health Care.”

The Sonis lecture is sponsored by the Department of Health Policy and Management in the Graduate School of Public Health; the Center for Research on Health Care, and the Sonis family.

Regardless of the outcome of the current national debate on health care reform and financing, Lee said, “an important core strategy has to be not payment reform, but delivery system reform, that is, how health care providers actually get organized and adopt systems that improve quality and efficiency” and do so in ways that really matter to the patient.

He acknowledged that the goal was idealistic, but said he had reason for optimism, based on the successes of his employer, known as Partners for short.

“I work at a complicated organization, roughly the same size as UPMC in terms of the number of patients, the amount of dollars and the number of doctors,” Lee said. Partners was formed in 1994 by the merger of Brigham and Women’s Hospital and Massachusetts General with some community hospitals in the Boston area.

“But we did not seek to build a network around hospitals; we sought to build a network around doctors, so that we have a large network that includes about 6,000 doctors, about half of whom are not affiliated with any of the Partners hospitals,” he said. “I oversee clinical performance system-wide and then try to integrate that performance with our business strategy, overseeing the negotiation of contracts for all the physicians, and so on.”

Lee said Massachusetts, which passed legislation to provide universal health care in 2006, serves as a potential model for a national health care system. But for all its good points, it unmasked a major problem. “In Massachusetts, because we are making people buy insurance, what we’re forced to confront is that health care really isn’t affordable for middle class people who don’t have a subsidy from the government or their employer,” he said. “Medical care now accounts for 16.6 percent of the household budget, more than housing, more than food. Back when Medicare was passed [in 1965], health care was less of a bite out of the household budget than clothing and shoes were.”

Americans are growing more resistant to paying taxes that underwrite their fellow citizens’ health care costs, he noted. Lee cited a Harris Interactive survey, which annually asks the question: Do you agree or disagree that the higher someone’s income is the more he or she should expect to pay in taxes to cover the costs for people who are less well-off and are heavy users of medical services?

In 1991, 66 percent of those polled agreed with the premise; by 2006, that had slipped to 31 percent. “It looks like the willingness of the healthier and wealthier people in this country to subsidize the care of people who are sicker and poorer is weakening,” Lee said. “Regardless of whether you’re a Republican or Democrat, that’s not good news if you’re in health care, because we do need someone to step forward and write checks for what we do when we care for patients.”

That someone, of course, is the taxpayer, he added. “We’re going to get help from taxpayers, but it’s going to be a dogfight.”

So how can reforming the health care delivery system bring costs down? Is there any reason to believe fundamental change is even possible?

Lee laid out a framework for change based on unrelated theories of a Nobel Prize winning economist and a health care consultant, as well as on his experiences at Partners.

Economist John Nash (the subject of the 2001 film “A Beautiful Mind”) won the Nobel Prize in 1994 for describing the equilibrium concept for non-cooperative games, where more than one party is involved. In a Nash equilibrium, uncooperative multiple partners in a contract get frozen in their relationship, because parties have nothing to gain by changing only their own strategy, Lee said.

“We all know how complex our world of health care is, with many different parties and they’re sure not cooperating,” he said. “You can’t change anything because Blue Cross won’t pay for it, and Blue Cross doesn’t want to change their payment system because other payers won’t change at the same time and they don’t want to be at a disadvantage, and the result is nothing happens.”

But Nash equilibriums break down when the pain of maintaining the status quo for multiple parties exceeds their fear of the unknown, Lee said, which describes the state of the health care system.

“The fear of the unknown is huge. But the pain for payers, for providers, for patients also is huge and growing. We’ve reached the tipping point. So there is an openness to changing things dramatically. But it’s scary to change dramatically. That’s what is going on now in Washington: We see fear kicking in and trying to keep this Nash equilibrium from being fundamentally changed,” Lee said. “Even if they don’t do much in Washington this year, it’s not like the tension in the equilibrium is going to go away.”

So, Lee maintained, the time is ripe for an overhaul.

In Lee’s proposed framework, which he credited to Arnold Milstein, a consultant at Mercer, a human resources medical consulting firm, change comes in stages over a 10-15-year period.

“In the first stage, measures get developed for hospital and doctor quality and efficiency, and they’re put out there,” Lee said. “The measures, at first, are full of flaws. Any of us could point out problems with them. But Arnie would say: ‘Measures only get better when you use them; it’s not by having smarter people spending longer time in a room.’”

In the second stage, the measures eventually create performance sensitivity.

“They create a context where it actually matters what you do. Your performance matters. It may matter in terms of health plan design, that patients may pay more to go to someone else, rather than get less efficiency or lower quality,” Lee said.

“There would be direct rewards for buyers in a pay-for-performance program. That’s the kind of contract I negotiate at Partners,” he said.

“Since the framework is based on outcomes, the next stage is where care really starts to get re-engineered, where things really change: We get leaner, faster, better care,” Lee said.

“Partners calls itself an integrated delivery system, but I would put quotes around ‘integrated.’ We have all the pieces,” including mandatory participation in sharing electronic medical records among all affiliates, he said. “But we’re not actually organized and managed around taking care of populations of patients over time — yet. We’ve still got a lot of hospitals and doctors’ practices that go on their own bottom lines,” he said.

But the goal is to adopt a model where everyone is working for the same company and getting one pay check.

“If you’re a health plan and all your hospitals and doctors were truly one company, that would be a model. And if your patients couldn’t go anywhere else, that would be an ideal situation where you could do quite well under capitation,” that is, a payment system where a fixed per capita amount is paid to a hospital, clinic or doctor for each person served, he said.

“These are the kinds of systems we need to develop. We at Partners are making our argument for co-evolution of the provider system and the payment system, rather than create a revolution by doing something drastic with just the payment system. It’s got to be a nudging of providers along the road,” Lee said.

“What provider organizations do is qualitatively changing as we go to a world in which we’re actually being paid based on an outcome, for example, for keeping asthmatics out the hospital, for keeping patients from bouncing back and being re-admitted,” he said. “In the old world, with fee-for-service for everything, every visit, every hospitalization, the locus of knowledge was in those individual clinicians who knew what to do with a sick patient.”

With the growth of knowledge in medicine, that model clearly is unsustainable in today’s health care system, Lee said.

By contrast, he said, in the new world, measuring outcomes cannot be done by the physician alone. It takes teamwork and organizational knowledge, such as how to prevent medical errors and how to work together to prevent re-admissions.

“The concept of organizational knowledge really starts to matter when you get paid for things like preventing re-admission or taking good care of people over time, and it requires physicians in particular not just to have good clinical judgment, but to be team leaders,” Lee said.

That concept requires a cultural sea change for physicians, who first need to acknowledge they are part of a team, which is a new role for many doctors, and second requires them to be a team player by, for example, adopting the same language and terminology as everyone else.

“We know that progress has been unbelievable. It’s been great on one hand, but the change is huge. The irony is that as we know more, individual physicians feel less knowledgeable,” Lee said.

He recalled his medical school training where a mentor taught him never to open a book in front of a patient, because it’s important that a patient look to the physician as someone who knows everything.

“You can’t be all-knowing. To be all-caring, I think you can do that. But that means tracking down stuff from everyone else,” Lee said.

In addition, medicine is increasingly specialized. “We have physicians asking if a patient fits into what they do, as opposed to asking: What does this patient actually need?” The result is patients who bounce around looking for the correct specialist, Lee said.

“We have to be honest about the magnitude of the change that’s upon us. There’s one revolution where clinicians adopt systems that reduce errors. The really hard part is the cultural revolution where it’s teamwork instead of the physician as the lone cowboy, and those teams taking responsibility for populations over time and performing. That’s why it’s a provider issue. Doctors have to take responsibility and be accountable to make it work.”

—Peter Hart