We don’t need to crash the plane: Three Keys to Fixing Healthcare

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My father told a story about his experience as a young, airborne meteorologist in World War II. He would fly around in a four-engine B-17 to check out what was going on with the weather to see if other planes could fly. One of the engines had been replaced, and they went up to test it.

They were flying along and all the instruments looked fine. To further strain the engine, the pilot feathered three of the props, meaning he turned them off and flew along on just the new engine. The instruments still looked great, so, for a lark, the pilot feathered that fourth prop. Quiet fell on the airplane. They started to glide toward the jungle and enjoyed the silence for a little while. Then, my father, sitting in front with the pilot and co-pilot behind him, heard a click as the pilot reached over to flip the switch to restart the engines. But nothing happened. They didn't have power. There was a little more pregnant silence at this point as they realized what was happening. He then heard the co-pilot say loud and clear, "Boy, have you got a problem."

The story obviously had a happy ending (I’m here). What is less obvious… one of the side gunners remembered they had a gas-powered generator in the bomb bay for when they landed at airfields without power. He crawled back, started up the generator, and they were able to unfeather the props and restart the plane’s engines. Everything went fine.

For those of us in healthcare, Intermountain is like that gunner who crawled back in and figured out how to save the plane. We are having real trouble in healthcare right now. Everybody knows it, and we're all in that airplane.

The severity of the problem has been made clear by what's happening to state budgets across the nation over the last few years. Healthcare costs are rising -- and taking many of the resources that would otherwise go to needed public services. It would be one thing if we were doing a great job. But much of what we're spending in healthcare is waste.  And we need places like Intermountain to show us a path for how to reduce that waste and make healthcare affordable.

The basic approach is simple: study what you're doing, track the outcomes, learn from the variation, and then make the changes that will improve quality. This is what Intermountain has done for so many conditions, ranging from acute respiratory distress syndrome to diabetes.  We at Dartmouth have taken this approach to studying the healthcare system as a whole. We look at quality and spending in the delivery of healthcare and we see incredible variations.

Per capita spending in the Medicare program varies by a factor of more than two, as does spending for commercial insurance. According to data published last year, healthcare spending for commercial insurance in Rochester, New York, was $2,200 per person, and in New York City it was $4,100. For Medicare spending in Rochester, the per capita amount was $7,200, and for New York City it was $13,600.

Is that because people are sicker in New York City than in Rochester? No, huge differences are not explained by differences in underlying health status. Are the higher-spending places providing much better quality? Absolutely not. There is no relationship between spending and quality. In fact, when you can measure it well, higher quality is associated with lower costs. What it means is that if everyone could practice the way Intermountain is, the way Rochester is, we could probably reduce the cost of healthcare in the United States by 30 to 50 percent.

There are three major challenges we have to address:

1. We need better data. Use data to identify pockets of excellence, find out what's working, what's not, and improve it. There is a real opportunity we have not yet achieved, which is to measure the health outcomes that really matter to patients. I can't tell you which of the high-rate or low-rate regions are doing a better job on joint replacement because we don't know whether people can walk better in one place compared to another. There are tremendous opportunities in measuring outcomes that matter to patients, and linking them to process.

2. We need to recognize that patients’ values, preferences, and attitudes to risks vary dramatically. There's a great example from joint replacement. An Ontario, Canada population-based study looked at how many people had joint pain and were eligible for joint replacement. The study had physicians interview and examine potential patients and determine who was eligible for surgeries. The rate of joint replacement that would have been delivered to people in Ontario if everyone who was eligible had gotten the procedure would have been 35 per thousand residents, more than 30 percent higher than the highest rate in the United States. But a second part of the study involved giving people information about how long it takes to recover, how much physical therapy is important, and what the chances might be of having a subsequent failure and needing another surgery in 10 years. With that information, only one in eight of the patients “eligible” for surgery wanted to have the procedure, which -- if it were the basis for decision-making -- would have lowered the rate to well below that of the lowest region in the United States.

The opportunity to improve care by engaging us in making wise choices that are aligned with our preferences is tremendous.

3. We need to change the payment system. Fee for service medicine, where you pay for each individual service, rewards overuse and rewards poor quality. Get sick and get readmitted? We get paid to fix it again. It also reinforces the fragmented care that almost everyone experiences as soon as they are seriously ill, and it keeps it fragmented.

We need to complete the transition to new payment models. There are bunch of them out there, and we're starting to make some progress. Episode payments, where you pay for a 90-day episode of a joint replacement, is a step forward. Global payment, where the provider and the plan work together, and the providers are responsible for the whole course of care for a defined population of patients, is much more promising than fee for service. I had the fun of helping come up with the idea of accountable care organizations and your former governor Mike Leavitt has been leading the Accountable Care Learning Collaborative. We're learning a lot about what works, and I hope our new administration continues what really is a bipartisan approach to moving forward to pay for value.

RELATED: Turning Value-Based Care into a Business Model

Your Transformation Center is going to help teach the world how to radically improve care, and spread those insights within Intermountain and -- I hope -- across the country.  I am convinced that if one region of the country could show that it's possible to lower costs and improve care, make it affordable, make it better, everyone else would want to follow no matter where they are in the U.S. or around the world. We need you now more than ever.