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Remarks as Prepared to the American Medical AssociationPresident Plested (Dr. William Plested, President of the AMA), thank you very much [for the introduction]. And to the Board of Trustees and the ladies and gentlemen of the House of Delegates, it�s a privilege for me to be invited here today as your guest. I want to congratulate, first of all, those who were honored in previous sessions, including, I might add, two officers of the United States Public Health Service. I had occasion over the course of the last several hours to walk among you and to be surprised at just how many friends I have made in the last couple of years as I�ve gone to various association meetings. On the trips that I�ve made, I�ve bumped into several people who I sat next to in evacuation shelters from Katrina. This association and your members do a remarkable service to this country. And what a great country this is that we live in. In September, I met with the Board of Trustees of AMA in Chicago, in what felt to me, a very candid and helpful conversation about a long list of challenges that we all face. One of those was the physician rate reimbursement, which I�m sure we�ll have a chance to talk about later. We agreed that there is a powerful stirring of change in the health care marketplace. I told them I felt an urgency to spend time talking with a lot of doctors to assure that I understood your perspective. I want to learn. I am ready to be taught. In the past two months, I have traveled personally to about 20 states and met with small groups of physicians, generally in the headquarters of the state medical association. As planned, we just talked. And, may I say, I have learned. I see our time together today as a continuation of that effort. I�d like very much to share a few thoughts with you about the future, about the way I see the future. I�d also like to report back to you on some of the things I�ve learned over the course of the last couple of months visiting with many of you. Lastly, I�d like to hear from you. I�d like to hear whatever is on your mind. And I�d like to know if I�m learning the right things. I want to thank the officers of AMA and the various state and local medical associations who have welcomed and arranged my visits. I would also like to express appreciation for the AMA�s leadership on quality issues. You have been the driving force on so many issues related to health care that listing them is impossible, but I do want to acknowledge your work this year on the development of quality standards and measures. The week following my meeting in Chicago with the Trustees, a nice thing happened to my wife, Jackie, and me. We became grandparents for the second time in a year. A friend of mine, who is a veteran grandfather, explained why there is such a strong bond between grandparents and grandchildren. He said, �They have a common enemy.� I�m going to pass on the opportunity to show pictures of my grandchildren, but I do want to tell you one way that the experience has affected me. I have begun to see the passage of time in a different way. Standing at a hospital bed, I watched my daughter holding this tiny little soul and suddenly I realized how quickly the past 25 years have passed. It was just yesterday, yesterday that your former President John Nelson, who delivered our children, handed her to me as the father. The lesson: Time passes. I am 55 years old. When I was born, health care in this country occupied about 4% of the total economy. When my daughter was born 25 years later, health care had doubled; it occupied 8% of the total economy. This year, a generation later, as my grandchildren was born, it had doubled again. Health care occupies 16% of the GDP (Gross Domestic Product). I�ve begun to feel the rhythm of life, so I know it won�t seem long before I�m going to their soccer games and dance recitals. And though it won�t seem possible, they will turn nine years old. By then, health care will be 20% of the economy. Soon I'll get a call, �Grandpa, I got my drivers license.� Then time will flash again and my granddaughter will be the one holding a new baby. And by that time, unless something changes, health care will be 25% of the GDP of this country. Time passes. Now if you�re like me, you are skeptical of logarithmic projections of current trends. We all know that can�t happen. We will either change our course, or our nation will have been eliminated from the economic competition. In a global economy, there�s no place on the leader board for a nation that spends 25% of its economy on health care. It won�t be possible for us to stay prosperous. The human body has a warning system. It�s called pain, and when it occurs, we are motivated to do things we otherwise might not be able to do. The economy is good but people are feeling serious anxiety about health care. Consumers are feeling it in their paychecks. Recently the teachers in my home state were given the biggest salary increase in many years because the economy�s good. Two weeks later, I saw a story saying that the take-home pay of most of the teachers went down because of health-care costs. Employers are feeling it. They�re beginning to question their ability to be competitive in a global marketplace. Doctors and hospitals are feeling it. There is a growing imperative for action. Change on this scale�when you�re talking about a healthcare sector that makes up $2 trillion, 16% of the Gross Domestic Product�won�t happen quickly. But there is an imperative for change. Something has to happen. Because we can no longer prosper, we can no longer continue to do what we do, unless we change the way we approach this particular sector of the economy. And 10 years from now, when we look back, we will see a decade of sweeping change. Before I go any further, there is something I need to say, something I committed to myself that I would say whenever I speak on this subject. It is something that is intuitive to all of you, but it cannot be repeated enough. The biggest reason health care costs are skyrocketing is that we don�t take good care of ourselves. I�m talking about you, and I�m talking about me, and I�m talking about the American public in general. Until we begin to pursue prevention and staying healthy with the same rigor that we give treatment, our cost problems will persist. Keeping ourselves healthy is clearly at the heart of cost containment; it is clearly the best cost containment strategy. Each of us as individuals own this problem, every one of us. I want to talk about another problem we have to own. I�d like to talk about the health-care system. We call it a health-care system; but in reality, we don�t have a health-care system. What we have is a large, robust, rapidly growing health care sector. Millions of Americans provide health care, or work in related businesses, but there is not a system�there is nothing that connects them together. Now, I have a cell phone that I carry. Most of you do too. Sellers aggressively work to sell us phones and minutes, but they all connect�we can all call one another�and they all use the same system for the purpose of being able to optimize the value they bring to us. That�s a system. I came here on an airline. Airlines aggressively competed for your business. Every airline uses the same system to optimize the quality and price they could offer you. That�s a system. Banks compete aggressively to have you carry their card, yet we can use an ATM anywhere in the world to transact business with our bank. They compete, but use the same economic system to create value for those they serve. That�s not true for health care. Eighty-five percent of all medical records are paper and kept manually. Nothing connects them. Telecommunications, banks, and airlines are more than connected computer systems. They are organized systems of competition with understandable components of value where people can make judgments, and value is rewarded. I acknowledge the differences between those systems and the healing arts of medicine, but there are also commonalities. Health care is a very large, complex business. And a significant contributor to our health cost dilemma is that patients and physicians are disconnected from the consequences of price, and quality is simply not measured. I believe it is our task, our challenge, and our obligation for the next decade to reshape the health care sector into a true health-care system. Here�s the vision:
It is a vision of health care competition based on value. A $2 trillion sector does not organize easily into a health care system. But I believe the process has already begun:
Within two years, competition based on value will begin to happen in selected communities on a hand-full of frequent procedures and conditions. Within five years, I believe the word �value� will be a standard part of the medical lexicon. In a decade, it will be ubiquitous. That is the future I�ve been out talking to doctors about. In preparation for our meeting here today, I sat down with a yellow pad and sketched out a list of the things I�ve learned on my visits and conversations with physicians over the past three months. Our time is limited, so I�ll talk about as many as possible in the next few minutes, and then I�d like to hear from you. I want to know if you think I�m learning what I should, or are there things I�m missing? Let�s start with electronic health records. Here�s what I�ve learned: 1. I�m persuaded that physicians understand very clearly the long-term value of interoperable electronic health records and are ready to adopt them. However, in the short run, some�especially small practice doctors�see them as added expense without a clear business model that justifies the investment. Doctors are asking the logical question: �How are we going to pay for this?� 2. I�m seeing hearing a sense of uncertainty. A lot of small practices have been putting investment off because they haven�t been certain which system to buy; they want to make sure they buy a system that is interoperable, but interoperable with what? I want to pause here and make some observations. I want to acknowledge that this is a very serious change in small practices. System building requires a significant investment of money and time. It represents a change in the basic economic model and practice patterns of people who have done things one way, in many cases, for decades. But this change is being driven by an economic and humanitarian imperative. We have to find a way to do this better, or we will cease to be prosperous as a nation. It is happening�it has to happen. It is intuitive to think about buying a system of electronic health records like we would an automobile. It has utility, but the car by itself has limited value. When combined with a system of roads, the value of the automobile is expanded dramatically. The investment in a car is not about the car, but the places you can go in it: The system it will allow you to navigate. A system of electronic medical records in a small practice will have value. The early adopters are quick to say that it is hard to get going but once it�s operating, it provides value. However, I don�t think anyone has yet seen the value fully realized. Like cars and roads, real value from electronic medical records comes when a medical practice becomes connected to a large national system of health care. It is a system we do not yet have. When we do achieve critical mass, the value of electronic medical records will increase so fast that being without one will make it impossible to compete. The more inclusive the system becomes, the more value it creates. Payers of health care are resolved to move toward a system of competition based on value, and interoperable electronic medical records must be the backbone of that system. Every part of the medical family needs to move toward that kind of a vehicle so they can navigate the system. Some quick observations on how we can go about paying for this:
About a year and a half ago, I stood at a pathology table at Stanford University. A doctor there who was just leaving to set up practice in Tennessee asked me the question that is on the mind of small practice physicians all over America. He said, �I believe what you said about electronic health records. I just have one question: What system should I buy? I can only afford to do this one time. I can�t afford to be wrong.� A year and a half ago, I didn�t have an answer to his question. Today I do. The answer is clear: Invest in electronic medical record systems that have been certified by the Certification Commission for Health Information Technology (CCHIT). If you do, and if your vendor maintains CCHIT certification, you are on the pathway to interoperability. That�s a big step forward. We�ve made progress. In addition, Congress has given the Secretary of HHS the authority to make exceptions to the Stark Amendment for health information technology. I have used that authority, and so hospitals can now help doctors integrate into their systems. The only requirement is that the systems have to be on a pathway to interoperability. Systems certified by CCHIT meet that criterion. Hospitals are budgeting for 2007 to begin that process. Many small practices will see significant help. Another important part of this progress must be a macroeconomic change in the way health care is financed. The expense will become part of normal overhead of a practice and the benefits factored into the expected outcomes. That will happen more gradually than is ideal, but the reward will be there. Reward almost always follows risk, not the other way around. Now, back to the list of things I�ve learned. 3. There are the things I�ve learned about quality. I�ve learned we�re not very good at quality measurement yet. Over the last few months I have visited 29 cities where people in the medical community are working together to figure out how to do this best. And some remarkable things are happening. In most clinical settings, quality measurement is a nurse who comes in on a Saturday and sorts through a stack of paper medical records to see when somebody got their hemoglobin A1c tested or if Mrs. Jones was advised to quit smoking. The nurse will communicate that manually to somebody who combines it with the work of other nurses and nine months later, the results are published. That is not a scaleable model. We have a lot to learn about measuring quality, and even more distance to travel until we can collect the information efficiently. It will require interoperable electronic health records. I was walking through an airport recently and saw a Formula Race car on display. It occurred to me that when we talk about building this system, people envision the equivalent of a race car that travels at 238 mph around a track. The reality is, we have a little pile of wheels, a small frame, a lawnmower engine and makeshift sheering wheel. We�re assembling a go-cart just to demonstrate that we can make it work. Once we have, we will build it into a race car. We have to start at a very rudimentary place and grow into it. 4. The next thing I�ve learned is that quality measurement has to be done locally. There are two reasons. The first one we just talked about. Most quality data has to be collected in a clinic from paper files. By definition, it has to be local. That will change in time, but the second, more important reason won�t: Trust. I don�t believe now, or in the future, that physicians will trust a quality measurement system that happens in Washington. I met an OB from Indiana. He told me how surprised he was to see on a quality report card that he was a 20% doctor on the measure of testing for HIV in his pregnant patients. He said, �I knew that was wrong. I practice alone and that test isn�t optional. I give it to everybody.� His first thought was maybe our systems are breaking down. He pulled all the files and every test was completed. Then he thought perhaps he was losing money and not billing them. So he pulled every billing record. Every one had been billed. He didn�t let it drop and just kept pursuing it until he discovered that the grader was using a process code and his office was using a billing code. He said that was resolvable�he knew them and he could work with them to fix it. But he said, �iIagine the problems if the measures were coming out of Washington, DC. Doctors and hospitals aren�t going to trust processes that take place in far off places. They need to be involved and quality must be measured locally. 5. If the MDs don�t develop quality measures, the MBAs will. I have observed first hand that it is physicians that are driving the quality movement and that quality standards have to be developed by the doctors. It will be a lot better if the MDs do it than the MBAs. We need your continued involvement in this subject. The AMA has been heroic in their willingness to engage the specialty societies and to work to develop quality measures. Please keep it up. Conversations with the medical family, when combined with an ongoing dialog with large employers, unions, and health insurance plans, has taught me that the natural tension of this marketplace between measuring quality quickly and measuring quality perfectly is clearly alive and well. Here are a few other things I�ve learned: 6. I�ve learned that the ratelimiting factor in the implementation of this vision isn�t technology; it�s sociology. 7. I have learned that the uncompensated care system in America is a mess and needs to be overhauled. 8. I hear loud and clear that the medical liability system is driving up the cost of medicine up and people out. 9. I have no lack of clarity on what a big problem the new Medicare rate reimbursement rule is for all of you. 10. We are measuring the wrong things and physicians don�t like the system of reimbursement any more than I do. That�s what I�ve learned. But I�m ready to be taught, and I�d like to hear from you. Last revised: November 16, 2006 |
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