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Will we ever know if our $3 trillion annual health care investment is improving health?

Will we ever know if our $3 trillion annual health care investment is improving health?

Picture of David Lansky
Photo: Mario Villafuerte/Getty Images

There’s not much question that we Americans spend a lot of time and money to stay healthy and to get treatment when we’re sick. We’re now spending above $3 trillion per year — about 17 percent of our national wealth — on the medical-industrial complex: the vast array of professionals, institutions, suppliers and services that declare their interest in improving our health and well-being. The U.S. spends more than twice as much per capita as is spent by France or Canada. Is our health twice as good?

Broad international comparisons suggest that we are not spending this money wisely. The Commonwealth Fund tells us we rank last among 11 developed countries in quality, access and patient satisfaction, and we rank last among developed countries in “mortality amenable to health care.” And our high spending doesn’t seem to translate into longer lives, as this Vox graphic shows.

In the face of extraordinary spending and mediocre quality, the Affordable Care Act and a subsequent $200 billion Medicare reform package have prompted many efforts to redesign the health care system and focus our health industry on producing “value.” Congress has directed Medicare to start paying hospitals and doctors based on the quality of care they deliver, and to implement a new system for measuring quality as a basis of setting payment rates. Health care providers have already started to absorb that message and develop new ways of organizing and delivering care.

So how will we know if our continued high spending and the new efforts to better manage it are yielding a corresponding benefit to society? Are particular ways of organizing health care, and particular providers, better or worse at achieving better health? How will we know if an “Accountable Care Organization” (ACO) does a better job at producing healthy results than an old-fashioned HMO – or than just letting my local primary care doctor make her own decisions about which specialists and hospitals to use?

Since the purpose of health care spending is to achieve good health outcomes, we need to start measuring those outcomes and rewarding efforts to improve them. If we continue to measure and reward providers based only on how many services are provided (volume measures), or even how well those services match current medical guidelines (process measures), we will continue to send the wrong signal to our health care community, and we will remain incapable of telling the public whether it is getting value for the money spent.

We need to measure outcomes both for our health system as a whole and for specific groups of people, like those with asthma or in need of knee replacement. If we had this information, we could tell a patient which doctors or health systems are most likely to be successful treating their asthma or knee pain, and which have a track record of helping people stay healthy.

Unfortunately, the measures that are likely to be used for the next stage of health care reform – implementing the Medicare reform law – will make only a nod to measuring these outcomes.  Early indications are that the measures for payment will be based on the recent work of a public-private consortium led by the nation’s insurance plans.  This group endorsed many of the established measures of health care processes – like whether recommended tests were performed – and put off using measures of symptoms or quality of life until some future time (see the oncology measures, for example). It’s too bad, because there are many tools to measure outcomes in use in the U.S. and all over the world.

Here are a couple of examples of the kinds of measures that we should be putting into the new payment formulas to help us measure whether we’re getting value:

  • How well a health plan cares for a large population: At the population level, the Medicare Advantage program uses the “Health of Seniors” survey as part of its overall payment program. It measures the “percent of all plan members whose physical health was the same or better than expected after two years” and whose mental health was the same or better. These are brilliant measures. They take into account the declines in physical health that you’d naturally expect among people over 65 as well as other risk adjustment factors, so that it’s possible to compare how well two health care organizations do at achieving the best possible health outcomes for a population of enrollees. These measures are included in the Stars program Medicare uses to pay bonuses to higher-scoring health plans each year. (Trudy Lieberman has appropriately critiqued how this program operates recently on this blog.) Unfortunately, these data are buried in the complex Stars formula and the public is not provided with concise statements that would make sense to you or me (i.e., “Plan A does a better job than Plan B at keeping people as healthy as possible over a two year period.”).
  • Measuring patient health after major procedures: At the condition level, it seems obvious that we would want to know if people are able to walk, perform routine activities, and experience less pain after an expensive and invasive treatment like a knee replacement or heart surgery. Many such measures could be made available to determine the results of treatment. In England, the National Health Service measures the outcomes of care for every patient undergoing hip or knee replacement, hernia surgery, or varicose vein surgery. A patient or journalist can see these results for every hospital in England. Sweden does the same thing and is able to systematically evaluate whether changes in its health system since 2007 have led to improvements in patients’ outcomes.

If we financially reward health care providers for achieving health gains for their patients, we also liberate them to innovate and find new ways to get the desired outcomes. Perhaps medication is as effective as surgery in relieving a patient’s angina; perhaps removing mold and dust from rugs is as effective as corticosteroids in improving an asthma patient’s breathing; perhaps stretching and strengthening is as effective as a spine operation in relieving low back pain. What we care about, and want to pay for, is the result of a care process. Every time you see a performance measure that rewards only compliance with a process rather than an outcome, you are seeing an obstacle to innovation and patient-centered care.

As Congress and the Medicare program move forward with major changes to how we pay doctors, hospitals and other health care organizations, it’s time we found out whether all this money is bringing us better health. Many tools are available to evaluate whether particular interventions lead to improvements in health. In areas like cardiology, asthma, back pain, oncology, migraine, and depression, we know how to measure health outcomes. If we are interested in shifting to value, and stimulating a meaningful modernization and transformation of how we help people achieve health, we need to signal to doctors and hospitals that their compensation depends on their patients’ measurable well-being. We’ll know we’ve had real health care reform when we can show we’ve improved Americans’ health.

David Lansky is the president and chief executive officer of the Pacific Business Group on Health.


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