Starting With Curious

We were recently admitting a young child with pneumonia.  She was 2 years old, with a fever of 103 and moderate tachypnea; she had a left lower lobe infiltrate without effusion, and though she appeared ill she was non-toxic.  However, because of an SpO₂ that was 91 percent, we felt she should be admitted for supplemental oxygen and monitoring.  So far so good.  Then the resident suggested sending a CBC and blood culture.

• “Why the CBC?” I asked.
• “To see if it looks like an infection.”
• “What else would cause pneumonia?”
• “I guess I mean a bacterial infection.”
• “How sensitive and specific is the white blood cell count?  If it’s normal, would you not give antibiotics?”
• “No, I guess I’d still give antibiotics.”
• “So why the CBC?”
• “Well, just as a routine, to be on the safe side.”

Now, I’m not picking on the house staff, who do a wonderful job.  But I am wondering who taught her that getting any lab test is “routine,” or that “just to be on the safe side” is an acceptable rationale for ordering a test.  Every diagnostic test should have an anticipated affect on management: the result (either alone or in combination with other results) is going to change the estimate of the probability of disease sufficiently that we would cross a threshold toward a different action.  If not, then it’s not a useful test, and a waste of resources. This is one of the principles of evidence-based decision-making.

The era of “routine testing” needs to end.  We need to be much more thoughtful and selective in how we perform tests, to ensure that there is value to be obtained from the results.  Evidence-based guidelines can help us be more targeted, and (perhaps paradoxically) decrease variation. And as far as “being on the safe side,” it’s pretty clear that there are risks to diagnostic testing, in the form of spurious abnormal results.  A recent NY Times article discusses the economic and emotional impacts of chasing such results.  While this is in some ways a necessary evil (after all, if we define an abnormal result as one that is 2 standard deviations away from the norm, then by definition 5% of all results will be abnormal), risk/safety is one of the factors that ought to be considered when deciding on whether to order a test.

As far as that blood culture.

We’ve heard a lot about how health care spending in the US is not sustainable.  Thus, we are focusing on becoming more efficient, at promoting not just our quality but our value, and of pursuing the so-called “triple aim” of better care, improved patient outcomes, and lower cost.

But health care is unsustainable in another way, too – environmentally.  The health care sector is an important, and in many cases disproportionate, source of solid waste, water consumption, and energy use, all of which contribute to our outsized carbon footprint.   Here is just one statistic:  hospitals have 2.5 times the energy intensity and carbon dioxide emissions of other commercial buildings.

Although the links between the environment and health are clear, we providers and others in the health care industry have not traditionally included environmental considerations as a key element in our decision-making.  It’s not a major part of our culture.  But this is starting to change.  A number of organizations and coalitions have emerged in recent years in an effort to make the health care sector more green.

Some are focused primarily on the environmental impact of health care facilities.  One such organization is the Healthier Hospitals Initiative, comprised of some 475 hospitals from 11 large health systems.  They aim to get hospitals to reduce energy and waste, choose safer and less toxic products, and purchase and serve healthier foods.  One HHI member is Gundersen Lutheran, based in LaCrosse, which aims to be energy independent by the end of 2013, and has a stated goal of being the first hospital to be carbon neutral.  Other organizations are more broadly focused on environmental issues, dealing not only with the impact of health care on the environment, but of the environment on health.  Health Care Without Harm and Alliance of Nurses for Healthy Environments are among those who are also engaging in education and advocacy efforts to improve local and global environments to promote better health for their patients and populations.

Too often we ignore the environmental impact of the care we provide.  But if we are serious about our vision of the children in Wisconsin being the healthiest in the nation, we need to begin to include such considerations into how we think about what we do.  There is growing evidence that not only will it improve the health of our community, but also lead to lower costs in the long run.  After all, all waste is in some way, well, wasteful.  In fact, those who work on sustainability talk about the “triple bottom line”: healthier people, greater environmental sustainability, and improved profitability (a.k.a. people, planet, and profit).  Sounds suspiciously like that “triple aim.”  In future columns we’ll explore some specific things we might do, but in the meantime, I urge you to think how we – as individuals and as an organization – can improve our triple bottom line.

About 10 years ago, a series of stories in the Milwaukee Journal Sentinel, among other places, noted that health care costs in southeastern Wisconsin were up to 55% higher than the average for the Midwest.  Several factors were felt to be responsible: high hospital and physician rates, in part due to less consolidation in the insurance business; and greater utilization (older population, less cost-sharing and more generous plans).  In addition to intense publicity, large local employers banded together to form the Business Health Care Group as a way to increase payers’ bargaining power.

So what’s happened since then?  A recent MJS article notes that the differential between SE Wisconsin and the rest of the region as shrunk to 7%, due in large part to much lower than average increases in hospital costs and utilization rates that are now consistent with, or lower than, average.  That would seem to be good news.

The bad news?  With health care costs continuing to rise faster than overall inflation, the focus is now on payments to providers, which remain substantially above the Midwest average: 191% of Medicare here vs. 158% as the Midwest average.  (As most of you know, MCW is a good bit above the SE Wisconsin average.)

We have justified our higher than average charges in part because of our academic mission, and in part as a way of making up for the fact that approximately half of our patients are on Medicaid, which pays below the cost of providing care in many cases.  A survey showed that the majority (78%) of respondents  were unwilling to pay more for access to an academic medical center; of those who were willing to pay more, the median premium was 10%.  As far as cost-shifting to cover Medicaid, there is some willingness among payers to accept such a need, but not to the extent we have done so in the past.  In short, we are not going to be able to continue to command the very high provider rates we have in the past.  The tea leaves are clear.  The fat lady has sung.

Concerning?  Of course.  But let’s not allow ourselves to be victims.  We may not be able to control our environment, but we can certainly control our response.   Time to move up to the higher rungs of the accountability ladder and determine what we’re going to do about it.

Health care costs are now an estimated 17.9% of GDP in the US, far higher than the next highest country (the Netherlands, at 12.0%), and projected to top 20% in the next 5 years.  You’ve all heard the outrage expressed in various media.  But what if health care spending were over 60% of GDP?  This is what economist William Baumol predicts will happen by 2105.  But the more shocking point he makes, in his book “The Cost Disease: Why Computers Get Cheaper and Health Care Doesn’t,” is that it is OK if the share of our national spending devoted to health care rises to that level – that it is to be expected, and is not at all a problem.  [I must admit that while the concept is fascinating, the book is overly repetitious, and a bit sloppily written and edited; it could easily have a been a Harvard Business Review or New Yorker article – in fact, it was a New Yorker article back in 2003.  That said, it’s fairly quick and easy reading, if the discussion below leads you to want to know more.]

The central concept, the “cost disease,” was first described by Baumol and William Bowen in the 1960s, in the context of higher education costs.  Here are the main points:

• Productivity increases over time.  We learn more efficient ways of doing things – assembly lines replace artisanal shops; robots replace humans.  (I’m talking strictly about economic efficiency, not quality, human dignity, etc.)  As overall productivity in the economy rises, it leads to higher wages, since more productive workers can command greater pay.
• With higher productivity, a business can create more with less.  Even after rewarding workers with higher pay, costs may remain stable or even decline.  So overall, an increasingly productive economy leads to a more prosperous society.
• Productivity rises unevenly.  Some sectors of the economy, such as manufacturing, agriculture, telecommunications, retail (scanners and self checkout lines at the grocery store), and finance (ATM’s, on-line banking), are more amenable to mechanization and outsourcing.   Others, such as health care, education, police and other public services, and entertainment, rely more on a handicraft, or human, element that is harder to replace.  The former will have above average productivity increases; the latter, below average.
• Because those productivity increases are unequal across parts of the economy, prices in the higher productivity sectors will tend to decline, or go up relatively slower than those in the areas where productivity gains are more stagnant.  Hence, computers and cell phones get cheaper, while education and health care get more expensive.

One of his important points is that the relative rise in health care costs is not primarily because of the usual suspects: rising demand (there has been an even greater increase in demand for computers than for health care), lack of competitiveness in the health care sector (there is probably even less in big agriculture or telecom), or malpractice costs.  It is a consequence of the inherently human dimension of health care.   Thanks to technological advances, productivity in the computer industry rises about 60% per year.  Can you imagine a physician or nurse seeing 60% more patients each year?

But here’s where the argument gets interesting.  Over time, on average, wages will go up faster than prices, and people will be able to buy more of everything .  The standard of living for a middle class American in 2012 is substantially greater than in 1960, and he or she has lots more stuff.  Because of the cost disease, the goods and services that have a greater need for personal contact with real people – what Baumol calls the “stagnant” sectors of the economy – will be relatively more expensive, and therefore consume a greater proportion of all spending.  So health care goes from almost 18% of all spending now to 20% in 5 years to 63% in another 90.  But at the same time, we can easily fit all the rest of the stuff we need and want – and more – into the other 37%, because we’ll benefit from the awesome productivity changes in  those other sectors, leading to higher wages and crazy low prices on tablets and phones and food and so on.  In other words, spending almost 2/3 of all of our money on health care is not a problem.

Baumol argues that there are important policy implications:

• We should stop trying to control health care costs by decreasing demand for services, or by cutting per unit costs (i.e., payments to providers).   This will only lead to shortages and poor quality, especially for those of limited means, as has happened to public services of many types.
• While it is reasonable to be as efficient as possible – following evidence-based practice, developing personalized medicine, leveraging information systems, and investing in prevention and wellness – politicians and voters need to understand that this will only shift the cost curve, but not bend it.  The rate of increase will continue to outpace other areas because the human-centric basics of health care delivery will always be subject to the cost disease.
• The focus needs to be on redistribution – making sure that either wages for all continue to keep up with the cost of essential services, or that there is some subsidization for those whose earning power is slipping.

All quite provocative, and in some ways reassuring.  What health care crisis?  But there are a few crucial questions we need to ask ourselves before we get too complacent. (What, me worry?)

• How little room for productivity increase is there really?  More and more health care interventions are becoming automated (from self-service blood pressure screenings and medical Web sites as sources of information instead of physicians, to remote sensing and electronic ICU capacity that allows one intensivist to staff several ICUs), and outsourced (teleradiology in India, medical tourism).  The centrality of the face-to-face human contact is diminishing.
• How much does the increasing income disparity in the US undermine the “on average this is logical and a good thing” argument?  For example, it is precisely in those parts of the economy where productivity has been growing the fastest that wages have been most stagnant and ability to afford health care has declined.  And the concept of income redistribution has never been an easy sell in this country.  What makes sense in the economic abstract does not always translate into political reality.
• How willing are politicians and the public to engage in the sort of sophisticated analysis required to move our public policy in this direction?  It’s a whole lot easier to complain about overuse, waste, and fraud than to ask philosophical questions about the allocation of benefits in society.
• At a certain point, isn’t sticker shock going to set in and people are going to freak out?  It’s all well and good  to rationalize that we can afford, as a society, to spend 63% of our income on health care, but come on, it’s 63% of our income!

 In this last point, Baumol may be onto something.  Let’s look at music – specifically, recorded (technology-driven, fast productivity growth) vs. live (human-centered, stagnant productivity).  In 1980, the average price of a record album* was $8, and now an equivalent CD goes for around $16.  On the other hand, a ticket to a Springsteen concert was $9.50 in 1980, but averages around $95 today.  And nobody seems to flinch at paying that cost to see the Boss.

*an ancient sound recording technology similar to a CD but harder to fit into the dashboard of a car