A Path to Lowering Health Care Costs

A Path to Lowering Health Care Costs
Investing Caffeine
Story Stream
recent articles

When I heard Golden State Warriors head coach Steve Kerr will not join his team on opening night of the NBA finals for health reasons, I thought “Oh my, he must have something serious.” Well he did, but it was not a virus or heart plaque—it was the endemic problem of too much medical care. Kerr, who had a series of operations for chronic back pain, was disabled by his most recent surgery. “I can tell you if you’re listening out there, stay away from back surgery,” Kerr said. “I can say that from the bottom of my heart. Rehab, rehab, rehab. Don’t let anyone get in there.” A recommendation Stanford spine surgeon Dr. Robert Aptekar called “good advice”.

Who paid for Steve Kerr’s back operations? From what is public information, I estimate the total cost of his two operations and complication, to be at least $130,000. By comparison, my physical therapist charges $80 per session. Kerr’s surgery was paid for by you; That is, it was paid for by his insurance company who then increases premiums based on what they payout each year. 

For years, health care reform in Washington D.C. has asked the question: How do we pay for health care? But the real questions are: How do we fix health care? How do we define value? 

In talking to spine surgeons about my own back problem, I was amazed by how many spine surgeons told me the same thing Coach Kerr said!  They warned me to beware of surgeons that will say yes when the evidence says no. But it’s not just back surgery. New medical research is narrowing treatment indications for host of common medical conditions. Within the last few years, studies in the New England Journal of Medicine have challenged surgical dogma on when we should be doing knee replacement, appendicitis, and thyroid surgery. Many of these surgeon-authors point out how we as a surgeon community have been overdoing it.

The same is true of medical doctors writing about the over-medicating and over-testing endemic. In fact, if there’s been one theme I’ve observed in the medical journals over the last few years, it’s a massive rollback of strict recommendations, including a relaxing of treatment targets for blood pressure, glucose control and screening tests. Digesting this stark reality of this new science, I wonder if we have been living in an era of over-treatment, including in certain instances, the medicalization of ordinary life. 

The trend to recognize over-treatment led my Johns Hopkins colleagues and I to conduct a study of approximately 2,000 physicians nationwide asking them how often is medical care unnecessary (excluding the respondent’s own practice)? The result—doctors say that 15-30 percent of everything done in medicine is unnecessary, a finding consistent with that of a 2012 Institute of Medicine report that stated that 30 percent of health care spending ($750 billion) is spent on things that do not make us healthier. 

Compounding the cost of this problem, A JAMA Internal Medicine study from Johns Hopkins last month found that medical bills can be marked up so high, that it can represent outright price-gouging in certain instances. When insurance pays these bills, they often pay the bill on a percent discount off the sticker price basis—a system that incentives hospitals to indiscriminately inflate their bills for everyone. This inflate-more-discount-more game of hospital billing is an arms race that has no end in sight. Each year, this game further magnifies the cost of health care being passed along to everyday Americans in the form of higher health insurance premiums.

As I visit with doctors and hospital leaders around the country, I see first-hand the quality reporting requirements burdening them. Weill Cornell researchers found that practices spent $40,069 per physician each year on quality reporting – totaling $15.4 billion annually. What’s worse, most metrics we report do not measure the one thing that matters most to patients—the appropriateness of care. Moreover, current quality measures do not adequately account for differences in patient complexity. A burden that has resulted in few meaningful metrics of quality and doctors burned out on added reporting requirements. I believe doctors and hospital leaders are not lazy, we just don’t want to spend time on things that don’t matter. 

What we need is a grass-roots change to put the patient back at the center of health care.  First and foremost, we need to tackle the problem of inappropriate and low-value medical care.  These are self-inflicted wounds. We should respond to the problem the same way that we are responding to the data on opiate over-prescribing. In fact, the story of how we (and I) unknowingly flooded the market with addictive opiates is a part of the same over-treatment story.

Consider a recent project where my research team and I convened doctors to create “appropriateness indicators” that are doctor-defined and specialty-specific so they are smart, and importantly, fair. An example of one of these new appropriateness metrics is the average number of tissue blocks that a skin cancer (Moh’s) surgeon will use to surgically remove a skin cancer. By way of background, after a surgeon removes an initial tissue area, or block, containing the cancer, it is inspected to see if there is cancer at the edge of the block, referred to as a positive margin. If there is, the surgeon will surgically remove an additional block (and gets paid per block).  The top doctors in the field, the leadership of the American College of Mohs Surgeons (ACMS), created and endorsed this appropriateness measure. In a report recently published in JAMA Dermatology, the ACMS and my team from Johns Hopkins found the national average to be 1.7 blocks per surgeon, whereas some statistical outlier surgeons had an average four or more blocks per patient—a practice pattern the ACMS deems indefensible. 

Using the expertise of physician leaders to define an acceptable range and an unacceptable range (greater than two standard deviations from the national norm), over-use in the system became obvious and, importantly, it became actionable. The ACMS sent letters to outliers, letting them know where they stand, and offered coaching and re-training help. The new Mohs surgery metric demonstrates the opportunity to reduce unwarranted clinical variation and lower health care costs by simply using clinical wisdom and the power of peer-comparison.

Value is the hottest term in health care today. But value has two components: quality and price. Without good ways to measure appropriateness, we are simply measuring price.  We did that in the 1990’s. It was called capitated payments to doctors and hospitals, but it struggled because in the end, it incentivized cutting corners. Why would they work now if they didn’t work then?  More than ever, health care today needs new ways to measure appropriateness.

Health care organizations are already applying the Mohs Surgery metric and over 100 other new appropriateness measures to their organizations to answer the question: How are we doing on high-value care? Examples of other physician metrics include: How often a doctor performs a needle biopsy before breast surgery as the national guideline recommends; What proportion of patients undergoing elective back surgery in a surgeon’s practice tried physical therapy at least once in the preceding six months? Driven by physician input, a new wave of quality metrics is growing, centered on the task of delivering on what’s important to our patients.

Medical science and clinical wisdom has a tremendous heritage of solving problems. In the case of health care costs, I believe the solution is in sight. The further I see the science of quality progress, the more I’m reminded that frontline doctors have the answers on how to fix our health care cost crisis. We just need to listen to them. Reigning in doctors who are outliers on appropriateness measures, instead of financially rewarding them, is chief among them.

If we reduced the problem of too much medical care and address high-outlier billing practices as well, we could lower health care costs in a way that is patient centered. In short time, that means we would begin to reverse the problem of rising health insurance premiums and deductibles crushing many American households and businesses today.

Dr. Marty Makary is a Johns Hopkins surgeon and professor of health policy & management at the Johns Hopkins School of Medicine. He is an advisor to Oliver Wyman’s Practicing Wisely project.



Show commentsHide Comments