Published Online 6/27/2016 in JAMA Internal Medicine.
A couple of months before Elaine died from peritoneal cancer, we hired Anila, a cheerful, hearty Albanian house cleaner. On her first visit, Anila saw that Elaine was bedridden. “Kerosene can save her,” she said. “There is science. Look it up on the Internet.” Later, Elaine and I had a good laugh over it. She said, “Maybe that’s all they have available in Albania.” But in retrospect I’ve thought, “Could it be any worse than the treatment she got here?”
Elaine was a bright light to those who knew her, one of those rare people whose inherent grace put others at ease and made them feel special. A trained pianist, she was also a gifted and productive artist who in her last year painted and gave away more than a dozen original pieces to friends and family. Continue reading “The Gold Standard for Current Cancer Treatment” →
Posted 9/21/14 on the NBCH Newsletter Blog
In today’s New York Times, Elizabeth Rosenthal describes the growing and egregious over-treatment and overpricing practices by physicians and health systems, abetted by health plans.
The excesses detailed in this article are at the core of our national health care quality and cost crisis. The best solutions are collaborative, considered actions by group purchasers, potentially the most empowered of health care’s stakeholders.
When predatory anecdotes like these come to light, the benefits managers – or better yet, the CFOs – of local employers, unions and governmental agencies should immediately call the health plan and demand that the health systems, physicians and other providers involved be removed from the provider panel. (Small communities held hostage by a few dominant health care players are a separate topic that I’ll address soon.)
As Tom Emerick, former VP Human Resources at Walmart has stated repeatedly, health care will not improve until purchasers demand different behaviors from health care vendors, focusing business on organizations that facilitate high quality care at reasonable cost, and publicly avoiding those that do not.
This is a serious issue that demands a coordinated response. It is at the top of NBCH’s agenda. Join with us on this.
Brian Klepper is the CEO of the National Business Coalition on Health.
Posted 12/02/13 on Medscape Connect’s Care and Cost Blog
The catchy title of a recent Harvard Business Review Blog post, The Big Barrier To High Value Health Care: Destructive Self-Interest, suggested that the Institute for Healthcare Improvement (IHI) is forging arrangements that can overcome fee-for-service reimbursement’s propensity to drive excess. As the honest broker, IHI could advocate for arrangements of mutual self-interest based on the right care, better outcomes and less money. Employers and unions would get lower costs, with improved health and productivity. Health systems and health plans would win more market share (at their competitors’ expense), realizing longer term relationships that could facilitate sustainability as market forces intensify.
The substance of IHI’s description was less satisfying, though. Their principles – common goals, trust, new business models, and defining roles for competition and cooperation – are obvious ingredients in any workable business arrangement. But the authors never talked about the money. That left plenty of room for skepticism by those of us who have heard more than one CFO ask, “Why should we take less money until we have to?” What, exactly, is the incentive for health care organizations to moderate their care and cost patterns?
Continue reading “Getting Beyond Fee-For-Service” →
Posted 10/10/12 on Medscape Connect’s Care & Cost Blog
When an employer sits down with his health care partners – broker, health plan, physician, hospital, drug and device firm, health IT firm – everyone but him wants health care to cost more, and each is typically in a position to make that happen.
Lynn Jennings, CEO, WeCare TLC
A new class of health care management organization is emerging that thrives by taking advantage of health care’s rampant and institutionalized waste. These firms mine the market dysfunction that has developed over decades, which will almost certainly yield enough fuel to drive a new way to manage care and cost.
The founders of these organizations have deep health care experience, and they understand the mechanisms of excess. More important, the ones I’ve met are mission-driven, with a deep sense of outrage that health care’s exploitation has become so pervasive and overt. So their businesses are purposeful.
Continue reading “A Better Way To Manage Care and Cost” →
Published in the Columbus, GA Ledger-Enquirer on Sunday, 9/15/13
I recently was privileged to deliver a keynote at the Greater Columbus Chamber’s Healthcare Symposium. I get invited to meetings like this around the country because I lay out a deeply researched and frightening national problem that can only be remedied by business.
Health care is of course very important. But as has been documented over and over (to no avail), it is out of control, with costs that have become so excessive that they literally represent the greatest threat to our national economic security. At $2.8 trillion per year or about one dollar of every five of gross domestic product, health care has become our largest, wealthiest and most politically influential industry. In turn, this has allowed it to spin every piece of health care legislation to advantage.
Continue reading “Why Employers Must Collaborate On Health Care” →
Posted August 13, 2013 on HealthBlawg
Recently, there were a couple of breathless articles about the RUC (Relative Value Scale Update Committee) published in The Washington Post and The Washington Monthly, reporting as news the state of affairs that has prevailed for years in the realm of re-setting the relative values of physician services annually for purposes of the RBRVS — which is at the heart of the Medicare Physician Fee Schedule (MPFS) and which affects physician reimbursement well beyond Medicare, since the RBRVS is used as a touchstone in determining payment levels under commercial payor agreements as well.
I thought this confluence of publications was a good excuse to call up Brian Klepper, who is an expert critic of the RUC, to discuss the latest stories and talk about the prospects for meaningful reform.
Have a listen to our conversation (about 30 minutes long):
Brian Klepper on RUC HealthBlawg Interview with David Harlow 07262013
Brian Klepper – RUC – HealthBlawg
A transcript is appended to this post.
As detailed in our conversation, the RUC is a committee of the American Medical Association, and it operates behind a veil of secrecy. When it issues its annual update recommendations, CMS generally accepts the recommendation, and promulgates the update as a rule: the annual MPFS rule. The RUC is dominated by specialists, so the system tends to overvalue procedures and to undervalue “cognitive” services, or primary care.
Continue reading “The RUC (Again): Is there a Light at the End of the Tunnel? A Conversation with Brian Klepper” →
Loren Bonner , DOTmed News Online Editor
August 15, 2013
DMN: After Steven Brill’s blockbuster article in Time Magazine came out a few months ago, it feels like everyone is interested to know the real scoop on hospital pricing and what’s driving up the cost of health care. I think you have some opinions on this. Can you share your thoughts?
BK: Egregious hospital unit pricing is certainly one driver, but the truth is that over the last several decades, every health care sector has devised ways to extract money from the rest of us that they’re not legitimately entitled to. I’ve written extensively about the Specialty Society Relative Value Scale Update Committee (or RUC), the secretive AMA committee that has jiggered the relative value scheme that Medicare, Medicaid and most commercial payment systems are based on, driving up cost.
In my day job, I see health systems buying stakes in Pharmacy Benefit Management (PBM) firms, jacking up the generic pricing to their own members by 200% or more then telling their members that they’re managing their cost. Physicians are doing unnecessary procedures on patients, which not only costs a great deal but puts those patients at risk of physical harm. Primary care reimbursement has been driven down by Medicare and the commercial plans, which decreases visit time and increases the rate of specialty referrals and in turn produces much more costly care unnecessarily. Health plans push “choice” in networks, but having the right to go to a lousy doctor or hospital does nobody any favors, except by driving the cost up for less effective and efficient care. I could provide many, many more examples.
Continue reading “DOTmed – An Interview with Brian Klepper” →
Posted 8/12/13 on Medscape Business of Medicine
“One of the biggest mistakes we made … is that we took the RUC … back in 1992 and gave it to the AMA. … It’s incredibly political, and it’s just human nature…the specialists that spend more money and have more time have a bigger impact.”
This was Tom Scully, former Bush II Administrator of the Centers for Medicare and Medicaid Services (CMS), previously the Health Care Finance Administration (HCFA). He was a panelist in a May 10, 2012 Senate Finance Committee RoundTable discussion by former HCFA/CMS Administrators and has become one of the RUC’s most outspoken critics. He was explaining how the American Medical Association’s (AMA) Relative Value Scale Update Committee (RUC), a group that asked if it could help the government by overseeing a valuation process for medical services, came to dominate and distort the pricing used in Medicare, Medicaid and commercial health plans.
Mr. Scully echoed this sentiment recently.
“The idea that $100 billion in federal spending is based on fixed prices that go through an industry trade association in a process that is not open to the public is pretty wild. … Having the AMA run the process of fixing prices for Medicare was crazy from the beginning.”
Gail Wilensky, HCFA Administrator under Bush I, was wistful. “It happened innocently enough.”
It is remarkable and compelling to hear these federal health program ex-stewards express regret about a fiasco they had a hand in. Their “mea culpas” are almost palpable. Mr. Scully, in a recent Washington Post video interview, gave a quick aside, “It’s partially my fault.”
Continue reading “The RUC Is Bad Medicine: It Has To Go” →
Brian Klepper and Paul Fischer
Posted 8/09/13 on The Health Affairs Blog
With the recent release of two mainstream exposes, one in the Washington Post and another in the Washington Monthly, the American Medical Association’s (AMA) medical procedure valuation franchise, the Relative Value Scale Update Committee (RUC), has been exposed to the light of public scrutiny. “Special Deal,” Haley Sweetland Edwards’ piece in the Monthly, provides by far the more detailed and lucid explanation of the mechanics of the RUC’s arrangement with the Centers for Medicare and Medicaid Services (CMS). (It is also wittier. “The RUC, like that third Margarita, seemed like a good idea at the time.”)
For its part, the Post contributed valuable new information by calculating the difference between the time Medicare currently credits a physician for certain procedures and actual time spent. Many readers undoubtedly were shocked to learn that, while the RUC’s time valuations are often way off, in some cases physicians are paid for more than 24 hours of procedures in a single day. It is nice work if somebody else is paying for it.
Continue reading “Why Congress Should Pass The Accuracy In Medicare Physician Payment Act” →
Posted 5/23/13 on Medscape Connect’s Care & Cost Blog
Several physicians have reached out recently to discuss attractive employment offers from health systems. They are invariably conflicted. They understand the trade-offs, that they’ll give up the autonomy they’ve become accustomed to in exchange for more money and fewer practice management headaches. On the down side, they’ll be accountable for generating significant revenues, sometimes independent of care appropriateness.
Most also are aware that the same care services they provide now will be considerably more expensive once they’re part of a system. Many appreciate that because health systems are corporations with a heavy focus on optimizing short term gains, their future employer’s loyalty is suspect. And then there is the question of whether the health system’s management team is competently preparing to be sustainable in a market that could change dramatically.
As health systems maneuver to dominate regional markets, driving utilization and gaining more leverage over contractual pricing, physician employment has become their principal lever. Primary care physicians (PCPs) are now precious commodities that can manage populations and steer patients into the system’s services. Other specialties – e.g., cardiology, orthopedics, neurosurgery and even gynecologic oncology – are desirable if they’re high yield, driving lucrative, intensive use of inpatient and outpatient services.
Continue reading “Physicians, Health Systems and the Drive For Market Dominance” →
Published 4/30/13 in Medical Economics
If primary care physicians have a bigger enemy than the RUC, Brian Klepper, PhD, hasn’t heard about it.
The American Medical Association’s (AMA) Relative Value Scale Update Committee (RUC) is a 31-physician panel that wields enormous influence with the Centers for Medicare & Medicaid Services (CMS) in setting the relative values of medical procedures, which are then used to determine reimbursement levels. CMS has historically accepted about 90% of the panel’s recommendations.
Continue reading “Why Aren’t Primary Care Physicians More Ticked off about the RUC? An Interview with Brian Klepper” →
Posted 4/21/13 on Medscape Connect’s Care and Cost Blog
What is the path forward for physicians who want to remain in private practice, outside the constraints of health system employment? How will the environment change and what new demands will that place on practices and physicians? What follows are the observations of one industry-watcher who has worked on all sides of health care, but who now spends most his time focused on the interests of those who pay for it. No crystal ball, but several trends are clear.
There are now concrete signs that health care’s purchasers are exhausted and seeking new solutions, that a competitive marketplace is emerging and getting increasing traction. As they abandon ineffective approaches, the paradigm that has dominated the industry for the past 50 years will be upended. The financial pressure felt by buyers will transfer to the supply side health industry that has come to take ever more money for granted.
For decades, fee-for-service payment, inclusive health plan networks, and a lack of quality, safety and cost transparency have been enforced by health industry influence over policy, effectively neutralizing the power of market forces.
Without market pressure, physicians have felt little need to understand their own performance relative to that of their peers. The variation of physician practice patterns within specialties has been high, with some physicians’ “optimizing their revenue opportunities” by veering wildly away from evidence-based practice. Even so, until recently in this dysfunctional environment, it has been nearly impossible to identify high and low performers.
Continue reading “How Physician Practices Can Prepare for a Health Care Marketplace” →
Posted 3/24/13 on Medscape Connect’s Care and Cost Blog
For a large and growing number of us with meager or no coverage, health care is the ultimate “gotcha.” Events conspire, we receive care and then are on the hook for a car- or house-sized bill. There are few alternatives except going without or going broke.
Steven Brill’s recent Time cover story clearly detailed the predatory health care pricing that has been ruinous for many rank-and-file Americans. In Brill’s report, a key mechanism, the hospital chargemaster, with pricing “devoid of any calculation related to cost,” facilitated US health care’s rise to become the nation’s largest and wealthiest industry. His recommendations, like Medicare for all with price controls, seem sensible and compelling.
But efforts to implement Brill’s ideas, on their own, would likely fail, just as many others have, because he does not fully acknowledge the deeper roots of health care’s power. He does not adequately follow the money, question how the industry came to operate a core social function in such a self-interested fashion or pursue why it has been so difficult to dislodge its abuses. For that, we need to turn our attention to a far more intractable and frightening problem: lobbying and the capture of regulation that dictates how American health care works.
Continue reading “Why Only Business Can Save America From Health Care” →
Posted 2/15/13 on Medscape Connect’s Care & Cost Blog
Health care’s purchasers crave certainty. But complexity – and therefore uncertainty – rules. Assurances are hard to come by.
The most common question asked by prospective clients of my onsite clinic/medical management firm is how much less their employee health benefits will cost if they deploy our services. They often expect that we’ll review their claims history and nail down what their health care will cost once we’re involved. Looking in the rear view mirror can inform the future, but it isn’t foolproof.
The Complexity of Health Care Risk
The challenge here is that so many different mechanisms contribute to the need for care, the ways care is accessed, the ways care is delivered, and the ways it is priced. Even mechanisms that, in isolation, are strong, often are inadequate in the context of larger cost drivers.
Continue reading “A Broader Approach To Managing Health Care Risk” →