Interoperability is the means by which computers communicate with each other. It is not necessarily the means by which people use computers to communicate. Lack of interoperability does not mean that patients cannot access their medical records, and it does not imply that physicians are unable to obtain pertinent information at the point of care. Interoperability means that communications between human beings are mediated by a computer that has the ability to parse, process, combine and use exchanged information in multiple ways. It therefore means that the information is formatted as structured and universally standardized atomic elements, translatable into identical 0 and 1 bits of electric current by all computers. Talking on the phone, faxing pieces of paper, exchanging electronic messages and documents, or sending data elements in a proprietary format, do not qualify as interoperability. There is no interoperability, unless all computers everywhere have a thorough “understanding” of everything people wish to say to each other.
Machine interoperability is being touted as the silver bullet in our quest to improve care coordination, and rightfully so. Interoperable computers are the ultimate population managers. There is no better way to ensure that people don’t fall through the cracks of an increasingly fragmented system where continuity of care is being replaced by electronic coordination of services. Computers that are interoperable are immensely better at “remembering” all the services that are needed and the dates when services are due for each individual patient. Computers can also generate reminders and alerts to make sure that everybody is adherent to recommended therapies, and keep track of results and outcomes, particularly for patients with chronic disease and multiple comorbidities. Proper care coordination can thus reduce complications, errors of omission, preventable hospital admissions and unnecessary readmissions, saving the system boatloads of wasted money. No wonder then that the United States Senate and practically all experts in the field are adamant that interoperability should be our number one priority.
The following assessment of financial waste in health care comes from the man who invented the Triple Aim and introduced the patient-centered concept into mainstream conversation, Dr. Donald Berwick, a staunch supporter of the Affordable Care Act who was chosen by the Obama administration to lead the Centers for Medicare and Medicaid Services (CMS), a physician who actually practiced medicine, and a New England liberal.
If you tilt your head to the left at just the right angle, and squint a little while looking at this graphic, you will notice the comparatively negligible waste created by failure to coordinate care. You will also notice that the majority of wasted health care dollars have almost nothing to do with actual patient care, whether it is coordinated or not.
Nevertheless, care coordination and its managed care alter ego, provided by interoperable machines, has become the battle cry of health care reform. Hospital consolidation, accountable care organizations, vertical integration, narrow networks, the proliferation of managed care, particularly for those dually eligible for Medicare and Medicaid, bundled payments, incentives and team care, all proclaim their goal to be better care coordination. Hundreds of billions of dollars are flying around, in a dizzying Triple Aim dance led by the falsetto of the interoperability orchestra. Interoperability, and the incessant regulatory deluge aimed at promoting the so called data liquidity necessary for clinical information to flow in a thousand directions, contributes almost nothing to reductions in five of Dr. Berwick’s six wedges of waste, and for administrative complexity, which is the biggest waste of all, it actually makes things infinitely worse.
So why are our government and the overwhelming majority of our industry obsessed with interoperability? Because uniformly standardized machine interoperability is the one prerequisite to the creation and accumulation of Big Data for health care in particular, and for all other surveillance purposes in general. Once enough Big Data is generated and dutifully allowed to flow uninhibited to entities beyond traditional health care organizations and their old and tired legacy systems, the fresh ideas from innovative entrepreneurs will sweep health care off its feet and transform it into a lean and mean transparent, effective and efficient machine that keeps us all safe and healthy at a fraction of today’s costs, or something like that. And, knock on wood, even immortality is now a tangible option trickling down from deranged Silicon Valley billionaires.
Back on Earth, there are early indications of how this free-flowing Big Data business will actually work. Setting an example for one and all, Medicare has begun releasing huge datasets to the public. A good illustration is the recent release of its physician payment data. The headlines triggered by this liberating act were swift and abundant: “Medicare Millionaires Emerge in Data on Doctor Payments”, “Top Medicare Ripoff Doc Is Dominican”, “Political Ties of Top Billers for Medicare”, “Sliver of Medicare Doctors Get Big Share of Payouts”, “Medicare pays hundreds of millions to Maryland providers”, “Florida has most doctors with $3 million in Medicare claims”, “Millions paid to Medicare doctors in Memphis”, “Is your doctor one of the 340 in Texas to make more than $1 million from Medicare?”, and my personal favorite, “Medicare Records Provide Tantalizing New Details Of Payments To Doctors”, plus thousands of more of the same.
Being tantalized is an integral part of being safe and healthy, and it seems that a good old fashioned witch-hunt is also highly recommended for rabble morale, not to mention the ad revenues generated by all this mindless click bait. Once interoperability is widespread and data flows freely, entrepreneurial companies may decide that it is in the public interest to be tantalized not only by millionaire doctors, but also by the million dollar babies who are feeding their habit. And since this is after all Big Data from certified EHRs, we can build very nifty HIPAA compliant databases to shed some light on the demographics of top health care spenders (e.g. “Millions Paid by Medicaid for Out of Wedlock Births in Mississippi”, “Sliver of Children Spend Big Share of Health Care Dollars”, “Retired Millionaires Deplete the Medicare Trust Fund “, “Sexual Preferences of Top Spenders for Medicaid”, etc.).
If I may venture a guess though, wide scale interoperability is not blocked by antiquated moral or ethical concerns some of us may have. It is blocked by money. All serious EHR vendors are perfectly willing and fully capable of opening the database floodgates to release most clinical information out into the wilderness, but doing that costs lots of money. There are labor costs, hardware costs, maintenance costs, various certification costs, and practically no return on investment, and no other tangible benefits, for their clients or their clients’ patients. Industry captains, who beat the data liberation drums the loudest, charge small fortunes for interoperability, including transaction fees for every liberated medical record. Contrary to popular belief, interoperability is good for EHR vendors’ business, and it does not alleviate the so called “vendor lock in” problem one bit, which may explain why the most respected interoperability experts hail from the largest EHR companies.
So who are the true information blockers? You are. You, and all other people who are stubbornly refusing to pay EHR vendors for allowing you to collect irrelevant data, and for transferring these data to those who are creating a tantalizing new market for the personal information of your patients, are frustrating congressional intent. You should expect stiff penalties and punishments for noncompliance, because interoperability is not about technology or the sharing of pertinent clinical information at the point of care. Universal and comprehensive interoperability of machines is about the transfer of power and wealth, from patients and doctors, to large corporations.
It seems that Dr. Shaywitz was inspired to write this article in the wake of an opinion piece in the Wall Street Journal, where a practicing physician, Dr. Mark Sklar, is railing against the oppressive bureaucracy engulfing his medical practice today. Dr. Sklar offers several opinions, one of which is that “the patient should be the arbiter of the physician's quality of care”. Unfortunately for Dr. Sklar, his other prescriptions seem to be in opposition to some Obamacare tenets, and this is guaranteed to elicit kneejerk responses from Affordable Care Act supporting journalists, who have long ago ceased to even pretend to be impartial in matters of politics.
What I find exceptional about this Forbes piece is that Dr. Shaywitz’s first instinct is to solicit a response to Dr. Sklar’s complaint not from a famous Obamacare supporting physician (of which there are many), and not from the purveyors of rules and regulations at CMS, but from none other than Mr. Vinod Khosla, the billionaire venture capitalist who insists that 80% of doctors are middling and should be replaced with his computer driven algorithms. Of course, once Mr. Khosla gets his wish (and he will), Dr. Shaywitz’s question will become moot, and we will be relieved of another mental burden on our way to perfection, or perdition, depending on your point of view.
Perhaps, we shouldn’t be surprised by the appeal to Mr. Khosla’s informed opinion, since Dr. Shaywitz admits to sharing the modern disdain for physicians in general: “doctors don’t know what they don’t know, they often provide manifestly suboptimal care, and can get away with it so long as they sweet-talk the patient”. Sweet-talk? I thought we were going for the abrupt, dismissive, inconsiderate, aloof image, but either way they can get away with it, because we are all too dumb to know the difference (present company excluded, of course). Among some random thoughts about data collection, Dr. Shaywitz poses another quintessential question which never fails to materialize in this context: “Why should I know more about my mechanic than my doctor?” Note that as always this is a rhetorical question and an answer (other than duh…) is not deemed necessary.
I don’t really know what your car mechanic experiences are, but I can tell you that I know nothing about any of the various people who worked on my cars over the years. I don’t even know if they were mechanics. I don’t know if and where they went to mechanic school, and I have no idea how long they have been practicing mechanics (I assume that older ones have been in the business longer), I have no data regarding how many Jeep carburetors they fixed well and how many they broke, I don’t know how many times people had to come back for the same problem, and I have no idea if it takes six hours to replace ball joints, or maybe just two. Heck, most of the time I don’t even know their last name, and I certainly have no idea if they worked on my car themselves or delegated the work to some trainee on his first day on the job.
And yet, I would insist that I am the best judge of mechanic quality for my car, and I use information to render my judgment. I ask people I know for recommendations, and I ask the grease covered guy at my favorite gas station about the best body shop that’s not too far from my house, and then I pick one, go over and talk to the “guy”, and if I get a good feeling that the “guy” knows his stuff and is trustworthy, I let him fix my car. I have yet to make a truly horrific mistake. The tools and data I use to make my decisions were invented hundreds of thousands of years ago and honed to perfection by every human interaction over the millennia. I use similar tools all day every day, and I like that sometimes they are fuzzy, and I like that they are my tools to shape and alter as I please.
I use my tools to pick my lawyers, my accountants, my hairdresser, my plumber, my air-condition guy, painters, fence-builders, the tree guys, dry-cleaners, the lady that that does alterations, the fresh fish store, the stands at the farmer market, and a gazillion other products and services. Sometimes, I use customer reviews on the Internet in lieu of asking friends, but not very often, and never for personal services. I make lots of mistakes and sometimes I learn from them, and once or twice I rushed into some serious blunders, or procrastinated my way into disaster. It’s called life, and I insist on my right to make bad decisions, because it’s the only way for me to make the right decisions.
The Constitution of the United States of America gives us the right and the duty to judge the quality of the most powerful person on this planet, and we have to do that without any prior performance data and without ever meeting the candidate. We also have to judge the quality of the future executives of our respective States and towns, and from time to time we are called to actually judge the guilt or innocence of one of our peers. These are difficult decisions to make, and in spite of the seemingly egregious errors we are now making, I am not too terribly inclined to delegate these rights and responsibilities to Mr. Khosla’s computers, or the supreme intellect of the ProPublica editorial team.
We may be down and out. We may be disenfranchised right now, and plagued by broad daylight robberies, which we can’t fend off just yet, but we are not stupid. We know that the $2.8 trillion in our health care purse is enough to blind the righteous, and more than enough to attract the wicked. As a group, doctors are taking home a large chunk of that money, because we allowed them to do that in return for an ancient commitment, that means nothing to purveyors of machine ethics, but means a lot to us. We know that there are thieves and murderers among doctors, and some of us fall prey to those disturbed individuals, but as a group, physicians have proven worthy of our trust, and certainly more so than the corporate organized crime consortium and the sensationalist media outlets that serve them.
We don’t seem to be the best judges for picking our occupations, our food, our sports, our houses, our financial investments, how we educate our children, how we speak, and now how we pick our doctors and medicines. It would be so much more convenient and so much easier for all involved, if we just quit squirming and allowed the billionaires, with their computerized and biological overseers, to help us make all these complex decisions. For our own good, of course, so we can all lead happy and productive lives.
Tempting to be sure, and a merciful way to dispose of western civilization, but I’m afraid that the Reverend Dr. Martin Luther King's famous long arc of the moral universe is still bending towards justice, and away from slavery by any other name.
Health care pricing is currently a smoldering mixture of ill-conceived cost-based pricing with twisted value-based pricing components. For simplicity purposes, let’s examine the pricing of physician services. As for all health care, the pricing of physician services is driven by Medicare. The methodology is neither cost-based nor value-based and simultaneously it is both. How so? Medicare fees are based on relative value units, which are basically coefficients for calculating the cost of providing various services in various practices, of various types and specialties. The price, which is also the cost since it includes physician take home compensation, is calculated by plugging in a dollar value, called conversion factor. The conversion factor, which is supposed to represent costs, is not in any way related to actual production costs, but instead it is calculated so the total cost of physician services will not exceed the Medicare budget for these services. Buried in this complex pricing exercise is a value-based component. A committee of physicians gets to decide the requisite amount of physician effort, skills and education, for each service. Whereas in other markets the value decision hinges on buyer perceptions, in health care it is masquerading as cost.
The commercial insurance market adds a more familiar layer of complexity to the already convoluted Medicare fee schedule baseline. Unlike Medicare fees, which are nonnegotiable, private payers will engage in value-based negotiations with larger physician groups and health systems that employ them. Monopolistic health systems in a given geographical area can pretty much charge whatever the market can bear, just like the beer vendor at your favorite ballpark does, and brand name institutions get to flex their medical market muscles no differently than Under Armour does for socks. This is value-based pricing at its best. Small practices have of course no negotiation power in the insurer market, but as shortages of physician time and availability begin to emerge, a direct to consumer concierge market is being created, providing a new venue for independent physicians, primary care in particular, to move to a more profitable value-based pricing model.
Unsurprisingly this entire scheme is not working very well for any of the parties involved, except private insurers who thrive on complexity and the associated waste of resources. Upon what must have been a very careful examination of the payment system, Medicare concluded that it does not wish to pay physicians for services that fail to lower Medicare expenditures, and Medicare named this new payment strategy value-based health care, not because it has anything in common with value-based pricing, but because it sounds good. Another frequently used term in health care is value-based purchasing, which is attempting to inject the notion of quality as the limiting factor for cost containment. However, since Medicare is de facto setting the prices for its purchases, there is really no material difference between these two terms.
We need to be very clear here that value-based health care is not the same as quality-based health care. The latter means that physicians provide the best care they know how for their patients, while the former means that physicians provide good health care for the buck. To illustrate this innovative way of thinking, let’s look at the newest carrots and sticks initiative, scheduled to take effect for very large medical groups (over 100 physicians) in 2015. Below is a table that summarizes the incentives and penalties that will be applied through the new Medicare Value-based Payment Modifier.
There are several things to note here. First, if your patients receive excellent care and have excellent outcomes, you will receive no perks if that excellence involves expensive specialty and inpatient services, whether those are the accepted standard of care or not. You would actually be better off financially if you took it down a notch and provided mediocre care on the cheap. The second thing to notice is that you will not get penalized for providing horrendously subpar care, if you do that without wasting Medicare’s money.
Another intriguing aspect of this new program is that you have no idea how big the incentives, if any, are going to be. The upside numbers in the table are not percentages. They are multipliers for the x factor. The x factor is calculated by first figuring out the total amount of penalties, and that amount is then divided among those who are due incentives. If there are few penalties, there will be meager incentives. Lastly, those asterisks next to the upside numbers, indicate that additional incentives (one more x factor) are available to those who care for Medicare patients with a risk score in the top 25 percent of all risk scores.
As with everything Medicare does, this too is a zero sum game. For there to be winners, there must be losers. One is compelled to wonder how pitting physician groups against one another advances collaboration, dissemination of best practices, or sharing of information, and how it benefits patients. Leaving philosophical questions aside, the optimal strategy for obtaining incentives seems to be transition to a Medicare Advantage type of thinking: get and keep the healthiest possible patients, and make sure you regularly code every remotely plausible disease in their chart. Stay away from those dually eligible for Medicare and Medicaid, the very frail, the lonely, the infirm, or the very old, and don’t be tempted to see a random person who is in a pinch, because there is always the chance that he or she will be attributed to your panel following some hospitalization or other misfortune.
The Value-based Payment Modifier is for beginners. It is just the training wheels for the full-fledged risk assumption that Medicare is seeking from physicians and health care delivery systems in general. The grand idea is not much different than providing an aggregated and risk adjusted defined contribution for a group of assigned members, and having the health care delivery system absorb budget overruns, or keep the change if they come in under budget. There is great value in such a system for Medicare and commercial payers certain to follow in its footsteps, and perhaps this is why they decided to call it value-based. Ironically, the equally savvy health care systems are fighting back precisely by building the capacity to create a true value-based pricing model for their services through consolidation, monopolies, corralled customers, artificial shortages, confusing marketing, and diminished physicians.
It is difficult to lay blame at the feet of health systems for these seemingly predatory practices, because transition to a perpetual volume-reducing health care system is by definition unsustainable. The infrastructure and resources needed to satisfy all the strategizing, optimizing, counting and measuring activities required for value-based health care, whether the modest payment modifier or the grown up accountable care organization (ACO), are fixed costs added to health system expenses year after year. However, the incentives or shared-savings are temporary at best, because at some point volumes cannot be reduced further without actually killing people. Either way, in the near future, and for already frugal systems, in the present, all incentives will dry up leaving only massive outlays for avoiding penalties coupled with increased risk for malpractice suits.
And as these titans are clashing high above our little heads, two outcomes are certain: individual physicians will be paid less and individual patients will be paying more for fewer services. This is how we move from volume to value. Less volume for us, more value for them.
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