<DOC>
[108th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:98746.wais]
YOU CAN'T ALWAYS GET WHAT YOU WANT: WHAT IF THE FEDERAL GOVERNMENT
COULD DRIVE IMPROVEMENTS IN HEALTHCARE?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON CIVIL SERVICE
AND AGENCY ORGANIZATION
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 13, 2004
__________
Serial No. 108-280
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
______
U.S. GOVERNMENT PRINTING OFFICE
98-746 WASHINGTON : 2005
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COMMITTEE ON GOVERNMENT REFORM
TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky DANNY K. DAVIS, Illinois
TODD RUSSELL PLATTS, Pennsylvania JOHN F. TIERNEY, Massachusetts
CHRIS CANNON, Utah WM. LACY CLAY, Missouri
ADAM H. PUTNAM, Florida DIANE E. WATSON, California
EDWARD L. SCHROCK, Virginia STEPHEN F. LYNCH, Massachusetts
JOHN J. DUNCAN, Jr., Tennessee CHRIS VAN HOLLEN, Maryland
NATHAN DEAL, Georgia LINDA T. SANCHEZ, California
CANDICE S. MILLER, Michigan C.A. ``DUTCH'' RUPPERSBERGER,
TIM MURPHY, Pennsylvania Maryland
MICHAEL R. TURNER, Ohio ELEANOR HOLMES NORTON, District of
JOHN R. CARTER, Texas Columbia
MARSHA BLACKBURN, Tennessee JIM COOPER, Tennessee
PATRICK J. TIBERI, Ohio BETTY McCOLLUM, Minnesota
KATHERINE HARRIS, Florida ------
------ ------ BERNARD SANDERS, Vermont
(Independent)
Melissa Wojciak, Staff Director
David Marin, Deputy Staff Director/Communications Director
Rob Borden, Parliamentarian
Teresa Austin, Chief Clerk
Phil Barnett, Minority Chief of Staff/Chief Counsel
Subcommittee on Civil Service and Agency Organization
TIM MURPHY, Pennsylvania, Vice Chairman
JOHN L. MICA, Florida DANNY K. DAVIS, Illinois
MARK E. SOUDER, Indiana MAJOR R. OWENS, New York
ADAH H. PUTNAM, Florida CHRIS VAN HOLLEN, Maryland
NATHAN DEAL, Georgia ELEANOR HOLMES NORTON, District of
MARSHA BLACKBURN, Tennessee Columbia
------ ------ JIM COOPER, Tennessee
Ex Officio
TOM DAVIS, Virginia HENRY A. WAXMAN, California
Ron Martinson, Staff Director
Shannon Meade, Professional Staff Member
Reid Voss, Clerk
C O N T E N T S
----------
Page
Hearing held on September 13, 2004............................... 1
Statement of:
Blair, Dan G., Deputy Director, U.S. Office of Personnel
Management................................................. 8
Feinstein, Dr. Karen Wolk, Chair, Pittsburgh Regional
Healthcare Initiative; Dr. Neil M. Resnick, director,
University of Pittsburgh Institute of Aging; and Dr. Alan
Axelson, medical director, American Academy of Child and
Adolescent Psychiatry...................................... 26
Letters, statements, etc., submitted for the record by:
Axelson, Dr. Alan, medical director, American Academy of
Child and Adolescent Psychiatry, prepared statement of..... 46
Blair, Dan G., Deputy Director, U.S. Office of Personnel
Management, prepared statement of.......................... 11
Davis, Hon. Tom, a Representative in Congress from the State
of Virginia, prepared statement of......................... 7
Feinstein, Dr. Karen Wolk, Chair, Pittsburgh Regional
Healthcare Initiative, prepared statement of............... 29
Murphy, Hon. Tim, a Representative in Congress from the State
of Pennsylvania, prepared statement of..................... 4
Resnick, Dr. Neil M., director, University of Pittsburgh
Institute of Aging, prepared statement of.................. 36
YOU CAN'T ALWAYS GET WHAT YOU WANT: WHAT IF THE FEDERAL GOVERNMENT
COULD DRIVE IMPROVEMENTS IN HEALTHCARE?
----------
MONDAY, SEPTEMBER 13, 2004
House of Representatives,
Subcommittee on Civil Service and Agency
Organization,
Committee on Government Reform,
Pittsburgh, PA.
The subcommittee met, pursuant to notice, at 10 a.m., in
the City Counsel Room, Greentree Municipal Building,
Pittsburgh, PA, Hon. Tim Murphy (vice chairman of the
subcommittee) presiding.
Present: Representatives Davis and Murphy.
Staff present: Ron Martinson, staff director; B. Chad
Bungard, deputy staff director and chief counsel; Shannon
Meade, professional staff member; and Reid Voss, clerk.
Mr. Murphy. The Subcommittee on Civil Service and Agency
Organization will come to order.
I would like to welcome everyone here today and offer a
special thank you to those who traveled to Pittsburgh
specifically to participate in this hearing.
We are here today to look at how the Federal Employee
Health Benefits program can enhance its service to the Federal
employees and serve as a model for improving the performance of
the U.S. health care system as a whole. The FEHB program which
has often been cited as a model for employers' sponsored health
insurance programs has room for improvement. In improving its
service to employees, the FEHB program, as one of the largest
buyers of health care with about 8\1/2\ million participants,
is in a position where it can positively influence the quality
and efficiency of the health care sector throughout the United
States.
The U.S. health care system faces major challenges and the
FEHB program must lead by example. As health care costs
continue to climb by double digits each year, it is clear that
we cannot continue to do the same thing and expect different
results. Open ended fee for service did not work. Managed care
became managed money and that did not work. We need to make
fundamental changes in the health care delivery system paragon.
These changes would lower costs, improve efficiency and not
just give people what they want, but indeed give them the
health care they need. Because the Federal Government is the
largest purchaser of health care, we have the opportunity and
responsibility to take the lead in driving these changes.
A recent news report began ``Scott Wallace's dog Samatha
has computerized health records, his car does too, but he does
not.'' While an individual may get computerized treatment
information on his 14 year old Buick LaSabre, personal
computerized health records that accurately and securely keep a
patient's medical history are simply not available.
The same report told the story of a man whose heart stopped
due to a ``adverse drug event'' after one specialist prescribed
medication that conflicted with what another specialist had
already given him. It took a third doctor to figure out what
the first two had done. Unfortunately, this kind of preventable
accident is not an anomaly under the current system. It is time
for the health care industry to catch up with grocery stores,
banks and auto repair shops and provide individuals with their
own computerized health records.
Earlier this year President Bush unveiled his welcomed 10
year goal of getting most Americans a personal computerized
health record. The President's new national coordinator for
health information technology noted that with the adoption of
such information technology no longer will up to 100,000 people
die each year from medical errors and no longer will we spend
up to $300 billion a year on inappropriate treatment or up to
$150 billion a year on administrative waste.
The benefits of computerized health records are
substantial. Such technology will improve the quality of care,
reduce the redundancy of testing paperwork, virtually eliminate
prescription errors, prevent adverse effects from conflicting
courses of treatment, significantly reduce medical errors and
reduce administrative costs.
In announcing his 10 year goal the President admonished the
Federal Government has to take the lead. FEHB program is no
exception and should leverage its buying power to support these
goals.
As the Institute of Medicine's President Dr. Harvey
Fineberg stressed in his testimony before the subcommittee in
March, he said ``The FEHB program could promote data standards
and appropriate deployment of information technology
providers.''
There are many other areas where the FEHB program can lead
by example. One area is to expand and enhance high value
services. These types of services, such as comprehensive care
management, coordination of care, preventative services and end
of life care provide a high benefit at a relatively low cost.
First Health, which administers the largest plan in the
FEHB program, has offered one such high value service,
comprehensive care management. In the program since 2002 and in
the private sector since 2000 First Health testified before the
subcommittee in March that there has been decreased annual
claims filed for patients enrolled in care management and a
2003 First Health survey revealed significant levels of
satisfaction with the care management program along with
increase in the patient's understanding of conditions, self
management and productivity.
By adopting aggressive high value services the FEHB program
can serve as an example to the private sector but reaping the
rewards for its participants.
I am pleased to hear about OPM launching of its new
HealthierFeds campaign and Web site earlier this year, which is
designed to educate and support Federal employees in making
health care decisions. Health literacy is important at
preventing illness, equipping the patient with valuable
knowledge when questioning a doctor, nurse or pharmacist or
when trying to obtain health information from other public and
private sources. The FEHB program should continue to explore
ways to increase health literacy and set the standard for the
health care sector.
I look forward to the discussion from all the witnesses
this morning about the various ways of the Office of Personnel
Management through the FEHB program can assume its leadership
position in driving improvements to the U.S. health care system
as a whole.
I would also like to thank chairman of the Committee on
Government Reform Tom Davis for traveling all the way to
Pittsburgh to participate in this hearing. Also, thanks to all
of the witnesses from Pittsburgh who are going to give us their
wisdom throughout the morning as well.
And I would now like to recognize Mr. Davis for an opening
statement. Mr. Chairman.
[The prepared statement of Hon. Tim Murphy follows:]
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[GRAPHIC] [TIFF OMITTED] T8746.002
Mr. Davis. Well, thank you, Chairman Murphy.
As all of us here recognize the importance of the FEHB
program to the Federal Government. It is one of the primary
recruitment and retention goals that the FEHB covers over 8.6
million individuals including 2.3 million Federal and postal
employees, 1.9 million Federal annuitants and 4.5 million
dependents. The program provided approximately $24 billion in
health care benefits last year alone.
We also recognize it is one of the Nation's largest
purchasers of health care services. The Federal Government can
and should lead by example to drive improvements in health care
for all Americans.
Market orientation and consumer choice have been hallmarks
of the program's success, allowing consumers to tailor their
health care coverage through individual needs and enabling them
to compare the cost benefits and features of different plans.
Health care premiums have increased by an average of well
over 10 percent a year since 1998, a trend which promises to
continue into the near future given the increased costs of
prescription drugs and outpatient care. The time for action is
here.
There are many areas where the Federal Government can
promote high quality, affordable, flexible, responsible health
care for all Americans through the FEHBP, and it must do so
particularly through the hearing today and the issues of
promoting preventative care and the use of health information
technology to reduce costs and medical errors.
I commend this subcommittee for taking a look at this issue
today. I look forward to hearing the testimony of our
distinguish panelists. I look forward to working with all of
you as we continue to explore how the Federal Government can
leverage its unique abilities to see how the FEHBP cannot only
continue to be a model for employer provided health care
coverage, but also serve as a model for improving health care
for all Americans.
Thank you.
[The prepared statement of Hon. Tom Davis follows:]
[GRAPHIC] [TIFF OMITTED] T8746.003
Mr. Murphy. Thank you Chairman Davis.
I ask unanimous consent that all Members have 5 legislative
days to submit written statements and questions for the hearing
record and that any responses to written questions provided by
the witnesses also be included in the record. Without
objection, it is so ordered.
I also ask unanimous consent that all exhibits, documents
and other materials referred to by Members and the witnesses
may be included in the hearing record, and that all Members be
permitted to revise and extend their remarks. Without
objection, it is so ordered.
On the first panel we're going to hear from the Honorable
Dan Blair, Deputy Director of the U.S. Office of Personnel
Management. Let me just give a little bio here first.
He is the Deputy Director since December 2001. Prior to
this he served as senior counsel to Senator Fred Thompson of
the U.S. Senate Committee on Governmental Affairs. He was also
a staff director for the House of Representatives Subcommittee
on the Postal Service and minority general counsel for the
House of Representatives Committee on Post Office and Civil
Service Reform.
Coming from Joplin, Missouri. He received a bachelor of
journalism degree from the School of Journalism at the
University of Missouri--Columbia and his juris doctorate from
the School of Law at University of Missouri--Columbia in 1984.
And now he lives in Washington, DC.
As you know, it is a standard practice for all who testify
before this committee to take an oath. So if all the witness
today could please stand including those who may be answering
questions later, I'll administer the oath.
[Witnesses sworn]
Mr. Murphy. Let the record reflect that the witnesses have
answered in the affirmative. And we are ready to proceed.
Well, Mr. Blair, thank you for joining us today. You are
recognized for 5 minutes. Please proceed.
You know how the lights work; green means continue, yellow
means windup and red means--well, we will see if we can
continue.
Thank you, Mr. Blair.
STATEMENT OF DAN G. BLAIR, DEPUTY DIRECTOR, U.S. OFFICE OF
PERSONNEL MANAGEMENT
Mr. Blair. Thank you, Chairman Davis, Chairman Murphy. I am
glad to be here this morning in Pittsburgh.
I would also like to introduce you to Anne Easton. Anne is
our Senior Policy Analyst in OPM's Strategic Human Resources
Policy division and will assist me should I get any technical
questions. So, I would indulge the committee to help me rely on
her as well.
I am pleased to be here on behalf of Kay Coles James and
the Office of Personnel Management [OPM] to comment on the role
of the Federal Employees Health Benefits Program [FEHBP] in
relation to cutting edge health care issues that could impact
the delivery of health care services across the Nation.
I have a written statement. I ask that be included for the
record. I'm happy to summarize.
To provide a context of our discussion, I want to give you
a little background on the FEHB Program and the role of OPM as
Program Administrator.
The FEHB Program provides for the offering of health
benefits for Federal workers, much like large employers'
purchasers in the private sector. More than 8 million Federal
employees, retirees, and their dependents are covered by the
program. OPM administers the Program by contracting the private
sector health plans, offering more than 200 choices to Federal
consumers. OPM does not, however, contract the providers. We
don't process claims, nor do we do independent clinical
research or mandate specific program initiatives. Those
functions are carried out by the private sector health care
plans.
OPM has consistently encouraged those plans to be creative
and responsive to consumer interests and to be innovative in
developing plan-specific programs that would benefit the
patients while controlling costs. By working closely with the
health plans to improve the quality of services they offer, we
have moved the program forward without locking the health plans
into predetermined solutions.
You have asked me today to focus on six cutting edge issues
in the health care arena. I want to highlight our activity in
each area. We are closely monitoring these issues, and we work
in these areas by encouraging and collaborating with our health
plans and our other purchasers of health care services.
First, let me talk about preventive services and chronic
care. Our plans offer excellent preventive services and chronic
care benefits. In the recent year our annual call letters to
the carriers has stressed the importance of both preventive
services and comprehensive care for chronic conditions. For
example, in our call letter last year, we strongly encouraged
carriers to provide coverage for the full range of screenings
for colorectal cancer, and the carriers' responses were
overwhelmingly positive.
My written statement details some of our collaborative
efforts with the health care community, both Government and
private sector, to encourage initiatives on preventive
services. One particular collaboration is with the Centers for
Medicare and Medicaid Services and Johns Hopkins University to
assess the needs of patients with multiple chronic conditions.
Let me talk about the impact of good health practices on
premiums. At OPM, we believe that Federal employees and their
families are intelligent health care consumers, and it is to
everyone's benefit to provide them with sound information.
Educating Federal consumers leads to more patient involvement
in health care decisionmaking and subsequently more consumer
responsibility and awareness of costs. To paraphrase a popular
advertising line, ``an educated health care consumer is our
best customer.''
As one way to achieve this goal, OPM last year launched the
HealthierFeds Campaign in support of President Bush's
HealthierUS Initiative. The campaign places emphasis on
educating Federal employees and retirees on healthy living and
best treatment strategies. It established a consumer Web site
aimed at providing information on nutrition, physical fitness,
avoidance of risky behavior, and prevention. We also operate
wellness programs.
One cutting edge issue we would like to talk about today is
pay for performance. Many health plans who participate in the
FEHB Program engage in techniques that encourage high standards
of quality. Our written statement details a few examples of
this work. However, since FEHB law does not allow for premium
differentials and since OPM contracts with health plans, not
providers, we have no mechanism to reward providers directly
for superior performance. However, we will continue to monitor
and encourage developments in the industry and will consult
with health plans as they evaluate various approaches and begin
to assess best practices.
In your opening statement today you referenced President
Bush's Executive order for health information technology. In
response, OPM issued a report expressing our intent to explore
a variety of options to speed the nationwide phase-in of health
information technology or HIT. These options are detailed in my
written statement.
Finally, I would like to talk about measuring efficacy and
value of alternative treatments. As I've mentioned, OPM is a
large purchaser of employee health benefits, but we do not
perform clinical research. We do, however, work with health
plans and others and support their efforts. We do not preclude
FEHB plans from voluntarily participating in studies, and we
encourage them to include our Federal members in such studies.
OPM relies on other Federal agencies for medical research. For
example, for benefits coverage such as drugs and biologicals,
we rely on the Food and Drug Administration.
Further, OPM continues to stress health literacy by
encouraging FEHB enrollees to become more informed about their
health care. We provide information on our Web site and
participate in various groups that stress health literacy, such
as the National Quality Forum and the Quality Interagency Task
Force.
In summary, while the primary role of OPM as administrator
of the FEHB program is to contract with health plans to provide
health care coverage for Federal employees, retirees, and their
families, we have used our leverage as a major purchaser to
facilitate meaningful efforts by the health plans to improve
the quality of services they provide. Within the framework of
this mission, we believe we can and should contribute to the
overall efforts to make and keep the American health care
system among the best in the world.
Thank you again for your invitation to testify. I am happy
to answer any of your questions.
[The prepared statement of Mr. Blair follows:]
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Mr. Murphy. Thank you.
I will defer now to Chairman Davis for some questions.
Mr. Davis. Mr. Blair, let me ask, health care savings
accounts are something that the Congress has now put into
application to a limited extent in the private sector. I know
that OPM has been looking at this. One of the arguments against
it, that I hear from some of my Federal employee groups and
particularly the retired Federal employees, is that this takes
people that are paying into a larger pool out and their dollars
would be out of that, which would raise costs to other people.
Obviously, to the government workers and the like and it offers
a great opportunity for some savings. What are your feelings
and what have we done with that?
Mr. Blair. We feel that health savings accounts offer a
viable alternative and a good option for Federal enrollees. In
our call letter this year we encouraged plans to look at those
and to come up with plans to offer something like that.
We believe that if adverse risk selection should occur that
we could minimize it by adjusting benefits and looking at this
over time.
Federal employees do not migrate dramatically from one plan
to another. So I think should adverse selection occur, we can
take steps over the plan period to minimize anything like that.
But again, I think that this is an example of responding to
developments in the health care field. It would improve the way
that enrollees utilized their own health care dollars. I think
it makes good sense for enrollees to look at something like
that. It is an option that is being encouraged in the private
sector and we should not deny Federal enrollees that
opportunity either.
Mr. Davis. Given that the idea of pay-for-performance is
beginning to catch on regarding the quality of centered
programs, how can the FEHBP use its leverage to encourage plans
to develop innovative approaches to improve it quality?
Mr. Blair. Well, it is beginning to catch on. It is a
relatively new concept in the health care field. There are
really no standardized metrics out there.
In addition, since we contract with the insurance plans who
then in turn pay the providers, we really have an indirect
impact on this. However, it is not an insignificant one, and it
is something that we need to continue.
What I think we want to look at is what works best in the
field right now.
A number of the plans out there already have some
initiatives underway in which pay for performance is being
utilized. I believe Blue Cross/Blue Shield has about 20
initiatives out there. And I want to say that a Blue Cross/Blue
Shield affiliate in this area, Highmark, is engaged in a
similar program. CMS is engaged in looking at pay for
performance. And they are a direct provider. They are a direct
reimburser of health care providers as well.
So, I think that there is a lot of activity in this field.
There are no standardized metrics, however, and this is
something that, while we are certainly encouraging plans to
move in this direction, we want to take note of what the best
practices are before we would standardize anything.
Mr. Davis. With regard to quality measures and critical
areas in hospital care, such as heart attacks, heart failure,
diabetes, how can the FEHBP ensure that such data on providers
is in the hands of every plan member?
Mr. Blair. Well what we do is urge our plans to get
accredited. I am told that almost three quarters of plans do
receive accreditation.
In addition, we do consumer surveys. But I think that what
we need to do in this area is really move toward what President
Bush's vision is, and that is an electronic patients' data file
that will be easily accessible by providers as well as by
patients. That Executive order was issued last spring. And this
past summer OPM issued a report on how we can help the
President achieve that vision over the next decade. And we came
up with a number of interesting ideas.
One of the things that we suggested that we look at is how
can we increase the use of what is called inter-operable health
care technology or health information technology [HIT]. And
there are ideas such as giving incentives so that when the
doctor writes a prescription, that he or she writes that
prescription on a hand-held device which is then transmitted to
the pharmacy, which is probably an online pharmacy, and then
have the prescription filled and delivered to the employee. But
you would also want to have other health care providers have
access to that information.
You certainly have privacy concerns with this. But as
Chairman Murphy referenced in his statement, it is certainly an
area that we need to go in if we are going to practice medicine
in the 21st century in the right way.
Mr. Davis. The chairman did note that. It is an information
and transaction process intensive industry. But we choose to
spend less on information technology in health care than in
almost any other sector of the economy. It is not true that it
is OPM's fault, but how can we make the FEHB Program better?
How can we promote this health information technology? What
else can we do at the congressional level?
Mr. Blair. Well, I think that what we use here is the
information that we have, the ability that we have when we
manage the program. For instance, from our report we would
strongly encourage health plans to adopt systems that are based
on Federal health architecture standards. We would encourage
those plans to highlight provider directories to indicate
individual provider HIT capabilities.
We had about nine recommendations, and I would like to
include those for the record. But basically what we want to do
is provide incentives for health plans to better utilize health
information technology.
Right now the fee structure is based such that maybe
providing incentives in the profit area for something like
this. Again, this is not taking place overnight, but this is a
direction that we are going. It is a very exciting area, and I
think that it can lead to better health care delivery for
everyone.
Mr. Davis. OK. Thank you very much.
Mr. Chairman.
Mr. Murphy. Thank you, Chairman Davis.
Mr. Blair, let me followup on a couple of these issues
here.
On the information technology, I have a bill H.R. 4805
which tries to get electronic prescribing just for Medicare
alone with estimates it would save about $27 billion a year
plus thousands of lives. It seems to me we need to be doing
some of these things, that the Federal Government can help fund
some of these startups. The purpose of this hearing, of course,
recognizing if we have 8.5 million enrollees just in FEHBP
enrollment, we should be the juggernaut that is really driving
some change in the Federal Government.
But let us see this information technology issue. What do
you see are the practical barriers out there in the health care
delivery system that is preventing them from doing this
naturally? We are talking about saving lives, saving money by
doing these things, but what are the barriers that the Federal
Government is going to encounter in trying to enact some of
these?
Mr. Blair. The FEHB program itself contracts with the
health care plans. We need to encourage the health care plans
to encourage those providers to have access and learn and
develop and utilize such technology. I would not call that a
barrier, but that is the direction that we would start to
encourage the plans to move.
We work with a number of organizations that have both
public and private sector affiliation; the National Quality
Forum, the Quality Interagency Coordination Task Force. All
these are areas in which better technology is being utilized
and which advocate for better use of technology.
The other barriers would be, you know, what do providers on
their own have to do? You know, what do doctors, what are
hospitals, what do nurse practitioners, the whole wide range of
health care providers, have out there now, and what access do
they have to technology and how can that technology talk to one
another? I think that would be the challenge in making sure
that we have a system which is truly interoperable and that can
benefit the patient.
Mr. Murphy. One of the things we will have from our next
panel and one of the reasons we are doing this hearing in
Pittsburgh, is that we have some local experts who are moving
in some of these areas and I hope you will be able to stick
around to hear that.
But I want to go back to a point here about the pay-for-
performance. Can you give me an example specifically how that
works? Now particularly again, thinking here that we are trying
to move 8\1/2\ million people as being the force behind getting
a physician's office, hospital, etc., to move toward this, can
you give me an example, or walk me through a patient care and
how that would work?
Mr. Blair. I can, and why do I not provide that for the
record as well. But I have here a Highmark Blue Cross/Blue
Shield, and they had a performance based incentive program. And
what they have done is that they have tried to encourage
quality care by reducing variation in care. They share
information with physicians which helped them provide care
based on accepted clinical standards, while reducing variations
in care. Each physician practice has a designated plan, a
medical management consultant who are experts skilled in
process, development and improvement.
They estimate that costs for the performance incentive
program members did not increase as fast as the network, and
they saw an average savings of more than $22 million.
And so you can see where although this is still in its
infancy, that pay-for-performance does have the potential for
driving better health care delivery to patients and to
Americans across the country.
Mr. Murphy. Well, let me also ask this technical question.
I know when I was a member of the State Senate and wrote the
patient bill of rights we have now in Pennsylvania, one of the
barriers we saw happen with managed care was it was supposed to
operate this way. A medical practice or hospital would see the
lump sum of money to cover 5 or 10 or 50,000 enrollees with the
idea being that if they took good care of those patients, they
would save money and there was an incentive with that, and then
otherwise they would reap the benefits. It is supposed to be, I
guess, a quasi thing of moving in this direction of pay-for-
performance, but you are talking about something entirely
different. It is not just if you do not spend, you get to keep
it, you are talking about a whole different area of almost a
rewards system for----
Mr. Blair. Well, there are financial rewards. But again, in
this area I am told that the metrics are not there yet. And so
that is why before you would want to encourage plans to adopt
something, you want to make sure that there are some
standardized metrics across the board.
This area does have a potential benefit for everyone, but
when you are moving in this area you need to be mindful of the
physicians' injunction to first ``do no harm,'' and that you
want to make sure that encouraging adoption of any standard
that might be national, while we would not want to mandate
anything like that, we would want to encourage plans to do what
is right. And before we do that, though, it seems like there is
quite a bit in this field, there is quite a bit of innovation
that people are going in different directions. But this is
something to continue to monitor. I think there is great
potential for cost savings, but more so there is better
potential for better patient care, and that is what we want to
drive.
Mr. Murphy. And how about this area of using health
education and healthy choices and good health care practices?
Again, past barriers have been health care plans have sometimes
thought well the average enrollee may have that plan for 18
months or so and then move on into another plan, although here
in the Pittsburgh region we have two carriers, basically, the
dominant forces in the marketplace. But many times it seems the
plans really have not wanted to make investments in prevention
and health choice and health education. How would that work in
what you are saying?
Mr. Blair. Well, we certainly encourage that through our
call letters. And I think that we have seen good preventive
care plans offered by a wide range of FEHB plans.
Also, each year in the Federal sector we have what is
called an Open Season that you can change plans. And during
this Open Season you have Web-based information, you have plan
brochures, you even have the private sector getting in on this
by offering comparisons to other plans.
Again, it is up to the individual enrollee to educate him
or herself, but there is information out there that can help
them place which health care plan would probably be best to fit
their needs. We encourage that. We think it is a good idea.
Plus, the HealthierFeds Program that we have implemented to
support President Bush's initiative is another way and we have
a Web site devoted to that.
Underlying this whole concept, though, is taking and
assuming responsibility for your own health care. That the
patient's relationship with his or her doctor, assuming those
responsibilities for your health care, making health care
lifestyle changes are all part of an overall move that you have
to assume responsibility for yourself and educate yourself. The
choices are out there. We want to encourage the best education
out there. Individual plans will help in this upcoming Open
Season and you'll see health fairs around the country. There
will be health fairs in individual agencies. I think we even
have one up in the Cannon Caucus Room each year in which the
plans are up there educating Members and staff on what might be
the best choices. But again, I think that's the hallmark and
one of the high points of the Federal system is this idea of
choice. The idea is that this choice is to be an educated one,
and we provide members with that kind of education to make
their best choices.
Mr. Davis. Mr. Chairman, just to followup.
There has been a lot of talk about extending the principles
of FEHBP nationally. One of the problems I have had,
representing a district of 50,000 Federal employees, is if you
open the current FEHB Program to everybody, it just changes the
whole mix. Federal employees tend on average to take better
care of themselves than others, and all those things change.
But do you think this model could be used nationally, maybe
with separate programs, or not?
Mr. Blair. Well, I think that is a big question. I am not
sure I am prepared to answer that. I would say that the
principles underlying the program are something that could
stand as a foundation nationally. And, I think the principles
are choice and competition, no mandates, but encouraging plans
to exercise the dynamic of the marketplace, the dynamic of the
health care arena in which new and innovative things are taking
place on a daily basis and channeling that to keep costs at a
minimum while providing the broadest range of benefits.
So I think the principles behind the FEHBP certainly can
stand as a foundation for other reforms.
Mr. Davis. I mean one of the problems came when the
prescription drug benefit plan was passed. As you know, we
wanted to ensure that FEHBP remains available for our retired
Federal employees. Currently retired Federal employees are
treated differently than active Federal employees in the sense
that they can't deduct the cost of their health insurance from
their taxes. That is a differentiation, and there is a great
fear that with the current plan that was passed by Congress
that somehow this benefit would disappear for retired Federal
employees. Well, we will just use the prescription benefit
plan. That puts us contrary to the philosophy of what we
passed, which is we are trying to keep the private plans in
existence. If the Federal Government has to pick up the tab for
everybody in prescription drugs, the costs are going to
skyrocket, whereas if we can maintain current plans being able
to pick up a portion of those costs, do you have any thoughts
on that?
Mr. Blair. Well, as you know in our plan offerings right
now we have a self and family option. We do not discriminate
between retirees or active employees. Everyone is together in
this insurance pool, and it operates quite well for us and we
have no intention of separating employees from retirees at any
point that I am aware of.
Mr. Davis. So that would not happen at least from your
perspective?
Mr. Blair. I am not aware of any plans in the works to do
anything like that.
Mr. Davis. We passed that.
Mr. Blair. I am sure we would hear from you folks as well.
Mr. Davis. Well, we passed a bill in the House that
basically said we wanted to take a look at this benefit for
Federal employees and retired Federal employees. It is sitting
in the Senate. It did not include any overall bill because the
criticism that somehow Congress was getting, is that most of
the Members of Congress who retire do not use FEHBP, but there
are some that do. And you are set up with the argument that
there are those who oppose the prescription drug benefit plan
for different reasons, and you know Congress wants their own
plan, this is not good enough for them.
I just wanted to touch on that and get your assurances, and
I appreciate it.
Thank you, Mr. Chairman.
Mr. Murphy. Thank you.
What I want to get into, and I do not know if you know the
technicalities of this, but it has to do with as we are driving
some of these changes, preventive health care and pay-for-
performance, health education, and managing diseases before
they reach the chronic state or the emergency room access
state, which is very, very expensive when you're doing that,
you said there are open enrollment times for Federal employees,
so they can go from plan to plan. What are the rules with
regard to dealing with preexisting conditions? Because some of
the complaints I get, for example, in my office, not from
Federal plans but from other ones, are that people say I have
to hang on to the insurance company I have even though the
rates are going through the roof because I have a preexisting
condition and no one else will accept me. What happens in the
Federal plans when that problem exists?
Mr. Blair. Ann, correct me if I'm wrong on this. But we
have no preexisting condition exclusion.
Mr. Murphy. There's no barriers?
Mr. Blair. You can go from plan to plan to plan. That said,
in the Federal sector you do not see migration between and
among plans very often. It is a pretty stable insurance pool
out there in that you see most people, although we encourage
innovation, encourage the competition, but most employees stay
with the plan that they are familiar with and do not change
every year.
I think I can provide for the record how many do. And that
is one of the arguments that we have always said that with the
health savings accounts that generally speaking the Federal
population is a conservative population, not so much
politically, but as in lifestyle choices in terms of not
changing things. And, so when we offer these new benefits,
people stand back and wait and see how they operate.
And, we think that new benefits are important. We think
innovations are important. At the same time, we have a very
stable population which usually stays with the plan that they
know and are most familiar with.
Mr. Murphy. It probably helps that they look at exclusions
from preexisting conditions. In the general marketplace I
really think that is one of the things that I hope to achieve,
because when you can exclude preexisting conditions, there is
not much incentive for insurance companies to get out there and
really work on patient education as much if someone does leave
a plan, because costs are going up and nobody else has to take
them. So that is probably one of the good things we have going
for us, and I hope we can continue to help the rest of the
Nation do as well.
I know often times politicians are out there saying that
everybody should have the Federal plan, too. We should make
note that this is not free for employees, including Members of
Congress.
Mr. Blair. Exactly.
Mr. Murphy. We also have to pay for it. I just want the
record to show that.
Mr. Davis. Let me also note that even for the use of the
Capitol physician we pay extra on top of FEHBP for that.
Mr. Murphy. I also want to make sure the record notes that.
I do not have any further questions. Chairman, do you?
Mr. Davis. Well, I do not either. We have testimony coming
in, and I hope you will be able to stick around and hear that
and review that, because there is some very interesting ideas
about how we can improve not just FEHBP but the total health
care system. And I think that holds some promise for us.
So, I thank you very much.
Mr. Blair. Thank you.
Mr. Murphy. I look forward to this afternoon, you are going
to make announcements about the premium rates?
Mr. Blair. It is my understanding that Kay will be making
announcements sometime this afternoon, and your staffs are
being briefed as well.
Mr. Murphy. OK. Thank you very much.
While we are getting ready for the next panel to come up
here, let me go over some of their background so we have that
information.
Let us take a couple of minutes while we are getting ready
here.
First, we will hear from Dr. Karn Wolk Feinstein. Dr.
Feinstein is the Chair of the Pittsburgh Regional Health
Initiative. They have been doing great work to improve health
care in Pittsburgh.
Dr. Neil Resnick, M.D. is a Chief of the division of
medicine at the University of Pittsburgh, co-director of the
aging there at the University of Pittsburgh Medical Center. He
leads one of the largest and most innovative geriatric programs
in the country. He has more board certified geriatricians than
any other programs in the country, I believe.
His medical degree is from Stanford. He has an impressive
list of credentials there, too, and I am excited to have you on
board.
And finally, Dr. Alan Axelson, a psychiatrist, founder and
president of Intercare, and for the sake of disclosure I should
say I used to be one of his employees, too, prior to coming
here. But I asked him here because of his innovative concepts
and things that he is going to be describing to us.
He is a member of the American Psychiatric Association's
Managed Care Committee, the American Academy of Child and
Adolescent Psychiatry Work Group on Managed Care. In these
capacities he has participated extensively in the development
of level care criteria for these two psychiatric organizations.
Also a well known and renowned writer and public speaker on
various managed care related topics.
I believe we will go with Karen Feinstein. I want to refer
to you as doctor today, we will keep it formal.
STATEMENTS OF DR. KAREN WOLK FEINSTEIN, CHAIR, PITTSBURGH
REGIONAL HEALTHCARE INITIATIVE; DR. NEIL M. RESNICK, DIRECTOR
UNIVERSITY OF PITTSBURGH INSTITUTE OF AGING; AND DR. ALAN
AXELSON, MEDICAL DIRECTOR, AMERICAN ACADEMY OF CHILD AND
ADOLESCENT PSYCHIATRY
Dr. Feinstein. And I refer to you as Representative.
Just for disclosure, I do want to say that then Senator now
Representative Murphy was part of the Pittsburgh Regional
Health Care Initiative from its inception.
The Pittsburgh Regional Healthcare Initiative is a group of
stakeholders from our area. 42 hospitals, most major purchasers
all four insurance companies who are doing business here now,
the attorney general, Representative Murphy who came together
around a certain proposition that: Better health care is
available at lower costs; that it requires work design or
redesign at the point of service to eliminate waste,
inefficiency and error; it rewards evidence-based best
practices; it requires good information on cost and quality,
requiring financing, accounting and clinical measurement
systems that are far superior to what we have in operation
today; that providers could compete on value and would
therefore deliver value; and, it was founded on a truism: What
is good for the patient is good for the payer.
So we started to test out our proposition, our value
proposition, our hypothesis. We started testing it out in a lot
of clinical settings working with providers, mostly in hospital
but also ambulatory.
Let me just take one quick example, central line associate
blood stream infection. We have found that in intensive care
units where people are diligent, we're not talking about high
tech technology doing anything that is state-of-the-art, just
basic care, we can bring central line associated blood
infections down almost to zero. How are we doing it? Simply
following protocol vigorously. And, as you know, the estimates
of the cost to this country of central line infections is up to
$1 billion; 25 to 50 percent of the people who get them die.
We have also found that when you break down the costs,
which by the way is a lot of work because of the cost
accounting systems we have now in health care, you find that
the provider never makes money on a central line infection.
They lose anywhere from $500 a patient to $42,000 depending on
the insurer and the nature of the patient's health. But also we
found that insurance companies are picking up a large amount of
the cost on an almost avoidable occurrence, which is central
line infection. So we believe that our proposition seems to be
playing out.
And we started out focusing on providers. We are looking at
the point of service. We are looking at people who deliver
care. But we realized we had made a mistake not attending to
the role the payers play, the incredible role that payers play
in bringing about a cascading effect to drive this kind of
improvement at the point of service in the quality of care
delivered in units by the people who deliver care.
So we have been collecting examples of perverse payments
within health insurance, which are really quite astounding and
we intend to present to Chairman Davis and Representative
Murphy some more background on this. It is really pretty
astonishing how many things we pay for that reward bad behavior
and preventable error and not good practice.
We think that, obviously, FEHB could vastly change the
extent to which our value proposition is realized. These are
just some ideas.
Plans should be required to pay providers for good and safe
care, and on the other hand not to reward errors and waste such
as central line associated blood stream infection. Since we
have found in almost all units where we have attacked this
issue, that it can be brought down to zero, it seems to me that
if we were not paying for these infections, if the insurers
were not picking up a lot of the cost to providers, people
would just eliminate them since we can give you evidence to
suggest this is very doable.
Plans need to provide members with available outcome data
and really drive the information flow to their members about
the differential outcomes in a way that is much more effective
and direct than we have now. Having members even just go to a
Web site and look it up we think is too indirect. That it
should be something that is made easily accessible because we
do have proof, as you know from PacifiCare and their quality
index, 6\1/2\ percent of their members moved to the higher
performing providers every year. If you start adding that up
year after year, you're going to get a movement, a reward for
those who are providing good care.
We are looking at outcomes here, not processes. I think
that is very important. I do want to suggest this distinction
which is important. People will use different processes to get
better and learn from one another.
Plans should be required to accompany the outcome
information with cost comparisons and highlight the high
quality low cost providers. As you know, again, with PacifiCare
they have had a lot of success doing that.
One challenge remains. Most hospital accounting systems do
not account the best information and allow you to easily
extract this information, as the physician to my left can tell
you. But if this were required, believe me, they would have
activity-based cost accounting systems that would allow them to
know what its costs to provide care correctly and what it costs
to introduce error and waste.
And overall, you should be, we hope, rewarding plans that
reward value. That we should pay more for those who give us
more value. And we believe that will actually prove our value
proposition that the more you increase quality and safety the
lower you are going to find your costs.
[The prepared statement of Dr. Feinstein follows:]
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Mr. Murphy. Thank you.
We'll save questions until the end.
I think that Dr. Resnick, you are next.
Dr. Resnick. As a geriatrician I've been asked to focus on
issues relevant to the concerns of the roughly half million
older retirees in the FEHB, and that's a wonderful opportunity
for someone who spent their life trying to care for older
people in group care, to actually get to talk to people who can
effect such a change is a huge honor.
It is probably important to put the issue in context.
Everybody knows that there is an explosion of older people, but
what is less well appreciated is that chronic disease is the
dominate issue in these people and that, second even less well
appreciated, is that several features of chronic disease differ
in older people compared with younger adults. Few physicians
are trained to deal with these conditions in the elderly. That
the number of such physicians is declining at the time the
number of old people is increasing. Many features of the health
care system, which is largely optimized for acute care, will
ill suit the needs for older people with chronic conditions.
I'd like to start just saying why chronic disease in older
people differs from that in younger people.
First, older people with chronic disease generally suffer
from more than one concurrently, making the detection and
diagnoses and treatment of the new disease more difficult.
Second, the generally used approach to a given condition
may be contraindicated by the other conditions or by the
multiple medications that a patient uses to treat them.
Third, while scientific evidence for chronic disease
management is limited, it is far more limited for chronic
disease in older adults and this impedes development of
appropriate guidelines.
Fourth, chronic disease in older adults often occurs in
patients who also have mental impairment or depression. And the
impact of these is exacerbated by the fact that many older
adults do not have a spouse or an advocate and these factors
hinder the physician's ability to complete an adequate
evaluation or to ensure adherence to therapy.
Fifth, older patients have much shorter life expectancies
which requires putting risks and side effects in a very
different perspective.
Sixth, considering to the issues just mentioned as well as
to ageism, older adults often have different values and goals.
When you put all this together with the multiple possible
combinations of coexisting chronic conditions that could occur
in an older person, it's easy to understand that application of
the type of disease management models currently being developed
and advocated at present will be very difficult at best. But
it's worse than just the problems with chronic illness. Despite
the complexity of chronic illness in older adults, despite the
spiraling increase in their numbers, the number of physicians
trained to deal with this has gone down. There are a variety of
reasons, and they're in my testimony, but it's important to
note as well that the number of students are not going into
geriatrics as well. Less than 3 percent of U.S. medical
students are enrolled in any geriatric course at the present
time.
It has been estimated that if we forced every medical
student to take geriatrics today, that it would take 40 years
to have enough physicians, to educate all the physicians who
need to take care of older people in this country. So we need a
way to get out to the practicing physician, and unfortunately
that's not happened. Fewer than 1 percent of practicing
physicians have any experience in geriatric care, and it's not
going up for the reasons that are outlined in my testimony.
But it is more than just the complexity of chronic disease
and the lack of access to physicians. Access to appropriate
care for older patients with chronic disease also reflects lack
of access to institutions. Hospitals often seek to avoid
admissions of such patients, especially those who are frail
since such patients have a higher risk of complications, longer
stays and nonreimbursed readmissions.
Reimbursement issues also leave many nursing homes to try
to avoid admitting patients who cannot pay privately. Home care
programs are closing nationwide. Insurers are eliminating their
HMO Medicare programs, and in the current fee-for-service
environment there is little ability or incentive to coordinate
care. The resulting fragmentation of care and competing
incentives increase the difficulty in managing chronic disease,
particularly for older patients who have the most concurrent
chronic conditions and the least ability to survive inadequate
care.
The result is is a common scenario for older patients, that
is to be referred to one patient physician after another, each
of whom adds a test or a medication which in turn engenders
another symptom so that the cycle continues until the patient's
status deteriorates and results in an acute event. The patient
is then sent by ambulance at high cost to an emergency
department at higher cost, and hospitalized at still higher
costs.
The hospitalization is generally longer than for younger
patients, more often includes complications and is more often
followed by the need for intensive care, subacute or chronic
care. The final result is an increased likelihood of the worst
of everything: An outcome that neither the patient nor the
physician will desire and at a cost that neither the patient or
society can afford.
But the situation is far from hopeless. Studies show that
students who begin medical school are attracted to caring for
older adults and the geriatricians are among the most satisfied
of medical specialists. Moreover, while the high complications
rates among older adults generate high utilization, neither one
of these is inevitable.
In addition, not only are many of the solutions to improve
geriatric care relatively inexpensive, but implementing them
could decrease the number of emergency department visits, the
number and length of hospitalizations, the number of
medications and which in turn make these interventions at least
revenue neutral, if not substantially cost saving.
What are some potential strategies? Well, in the short term
one recommendation that's in this paper is to convene a task
force of experts and stakeholders in geriatric care. I think it
would be quite easy to assemble what's already widely known
about ways to improve geriatric care. It could be integrated
into a coherent system.
The second recommendation would be because this kind of
health modification is not going to be easy and not going to be
straightforward and its stakes are high, it is certainly going
to be worth evaluating. And so my second recommendation would
be to consider funding a demonstration project, at least one if
not more. For several reasons that are outlined in the
testimony, the University of Pittsburgh Medical Center is very
well positioned to do that, both because of the high proportion
of older people in our region, the high proportion of
geriatricians who are available to care for them, one of the
country's largest portfolios of research expertise and the fact
that we also have an insurance plan so that we can identify
every cost of the care and all of the outcomes.
In conclusion, the need is great. The number of retirees in
the FEHBP is roughly half a million and growing quickly. And
the impact is even greater than the numbers would suggest since
the costs are growing more rapidly than the number of retirees
and they soon eclipse the ability of the FEHBP or its current
employees to afford.
In addition, the lack of appropriate chronic care infringes
on the productivity of current workers who must take time off
to help their parents deal with this.
Your goal is laudable. We will do everything we can to help
you with that. Clearly, I hope that this has helped cast some
degree of light on what some of the potential solutions are to
what has been a vexing problems for all of us to solve.
Thank you.
[The prepared statement of Dr. Resnick follows:]
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Mr. Murphy. Thank you, Dr. Resnick.
Dr. Axelson.
Dr. Axelson. Thank you.
I am Alan Axelson. I am building on the previous two
presenters because I work with Karen Feinstein at Pittsburgh
Regional Healthcare Initiative and am very concerned.
I do see patients every week, and I am speaking from 30
years of experience in health care systems. Also, I should say
that I am consultant to Highmark for the past 3 years, the Blue
Cross/Blue Shield franchise carrier in this area.
The thing I want to emphasize is innovative approaches to
behavioral health care as part of it, and then I want to
present a little bit of data. So I have a PowerPoint
presentation. I tried to get the appropriate music, but the
Rolling Stones were aging and could not make the trip to
Pittsburgh, and it is too hard getting the electronic
permission.
Traditional behavior health treatment is often considered a
separate category of illness, treated separately by a group of
specialty practitioners, often only partially treated through a
series of incomplete patient encounters rather than a full
comprehensive treatment plan. And many patients with
psychiatric illnesses are presenting in primary care offices
and are not identified and effectively treated.
Psychiatric disorders often co-occur with medical illnesses
and complicate effective and efficient treatment of those
medical illnesses. The issue is, what is the impact and what
can be done about it.
We have heard about the retirees, and certainly that is a
major issue. But the focus is also on the employees. This is
the difference in the average cost of the annual cost of the
employee both with depression and without depression. And you
can see that the costs are about double. And some of those are
in direct costs, some are in prescriptions and certainly in
lost productivity.
When you look at depression and the cost of medical
illnesses; back pain, diabetes, headache, migraine and heart
failure all increase substantially in costs when there is
complicating depression, particularly when that depression is
not appropriately treated.
The Pittsburgh Regional Healthcare Initiative is
particularly focusing on the co-occurrence of diabetes and
depression and looking at ways to comprehensively treat them.
The treatment of chronic illnesses is a major opportunity
for system improvement. In contrast to the inpatient care we
have been hearing about, this is primarily an outpatient
process and is very high volume. So you have to do things that
can apply to large numbers of patients and large numbers of
physicians.
Unless treatment is part of an integrated, comprehensive
continuing treatment plan, higher costs and sub-optimal
outcomes will be the result. It occurs more frequently in
patients that have diabetes so that you have almost a third
that have depressive symptoms. Patients with a psychiatric
history, the blood evidence of control of their diabetes shows
that it's not in control. Then the thing that's very
interesting is if you treat the depression, the diabetes gets
better, and there are reasons for that have been hypothesized.
The annual costs incurred by employers on patients, 225,000
patients, there's 57 percent increase in the annual medical
costs depending on whether there is both diabetes and
depression or just without the depression.
We have the same situation with complications with post-
myocardial infarction. We have done a lot to improve the care
of myocardial infarction, but the emphasis has been a lot on
various aspects of reducing stress, regular exercise,
medication compliance. And this is what is happening in terms
of these things in the average patient.
When you look at the patient that is depressed, they fall
down in every area so they are just really not able to follow
the treatment plans that their physician prescribes. This has a
direct implication. This is a very interesting connection
between the depression inventory, a sign of the issues of
depression, and you can see when they are not depressed, these
are the cardiac deaths. When you add depression, this is the
outcome; huge increases in cardiac deaths.
So depression is undertreated, and we have problems with it
here in therapy. What do we suggest? Innovative programs.
The wrong kind of competition has made a mess of the
American health care system. The right kinds can straighten it
out. This is from Harvard Business Review. We should support
systems that are integrated, innovative, information driven and
incentive based.
Integrated primary care physicians must effectively connect
with psychiatrists, psychologists and other mental health
professionals receiving timely consultations and support. It is
just not in the way the systems are organized today.
Treatment guidelines must be integrated into the daily
system of office-based care. Information about provider
performance should be trustworthy and transparent, available to
purchasers and consumers.
Information driven. We need electronic systems and
information shared with imbedded systems of decision support so
that we can use the systems. The information that we have, it
is very well supported in medical literature and accepted in
terms of treatment guidelines to be able to have that right
there when we are treating the patient and prompt us to order
the tests and to communicate with our other colleagues.
And it must be incentive based. Physicians are too busy and
have gone through too many ``just do this one more thing.'' We
have to find systems, pay-for-performance systems, that really
do pay and really get physicians' attention so that the
compensation is related to participation and the development of
quality programs and the effectiveness of service delivery.
So structuring the Federal benefits program to support
these things would be very helpful, and we would certainly
encourage you to do this so that it motivates physicians and
helps them get on the bandwagon, so to speak, to do the best
that they know that they can do.
Thank you.
[The prepared statement of Dr. Axelson follows:]
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Mr. Murphy. I thank the panelists.
Chairman Davis, you want to go first?
Mr. Davis. I will try. Probably be a couple of rounds on
this.
Dr. Resnick, let me start with you on the geriatric side
because we are all moving to a higher percent of the population
being geriatric. That is just a fact. The baby boomers come of
age and it puts tremendous strains on our retirement systems,
our health care systems and it sounds like the medical
community really at this point is not getting ready for it.
Dr. Resnick. Your opening remark made me think that of the
line that becoming an older person is the only minority of
which we will all become a member.
You are exactly right. We do not yet have the tools at hand
to be able to deal with chronic disease in older people. We are
just beginning, we are at the infancy of our ability to deal
with chronic disease in nonolder people, which occurs generally
as a single condition, and we have very few pieces of evidence
in which doing what you heard about works. It does seem to work
for depression. It does seem to work for heart failure. It does
seem to work for diabetes and asthma. You have heard from Dr.
Feinstein how it works for central line infections. The problem
is in older people you aggregate all of those together at one
time.
Mr. Davis. Everything breaks down?
Dr. Resnick. That is correct. So, for instance, if you have
chronic lung disease, the guideline says do not use this drug.
If you have heart disease, it says you must use that drug.
Well, old people generally have both so what is the physician
to do. He cannot comply with both of the guidelines.
Mr. Davis. It is a lawyer's dream, is it not?
Dr. Resnick. Well, it is, but it is a physician's nightmare
and a patient's nightmare. So the physician cannot do what the
few guidelines available say. Most guidelines are not developed
for the diseases old people have. All of them are unwieldy
because they are way too much in the hectic pace of primary
care, and the physician cannot figure out what to do.
The bigger problem is the patient cannot figure out what to
do because when the physician says here is what I want you to
do, the patient says, ``well, let us see, you told me to do
this for this disease and this for this disease and that for
that disease and my other doctor told me.'' Then the patients
who are doing this are scared. Often they have mental
impairment. They have depression. You put it altogether and it
is way beyond the ability of medicine as it is currently
structured to exist. And that is why we think that a new model
would be quite useful. But we believe that a new model, that
the elements for a new model are already at hand and all they
need to be is integrated into a coherent way and tested out. We
do not think we have to start all over from scratch.
Mr. Davis. But there is a supply and demand issue. You just
do not have that many physicians that understand this, that are
going into this and you have a rising number of patients?
Dr. Resnick. That is correct. And that is why the approach
that we advocate is instead of trying to train more
geriatricians, which is useful but will never happen, we need
to change the health system in a way that every doctor in
American can now apply. And we think that we can form a model
literally within a year that every doctor in American could
then follow to take better care of older patients. In other
words, we bring geriatrics into the mainstream of medicine
rather than dragging medicine into the mainstream of
geriatrics.
Mr. Davis. Do the Medicare reimbursements play a role in
getting people out of this business basically?
Dr. Resnick. Major. The Medicare reimbursements.
Mr. Davis. And they have paid in some cases when you get
into some of the nursing homes?
Dr. Resnick. Yes. Yes. And in fact, they conflict with each
other, too. Let me give you an example.
A patient is in a nursing home paid by Medicaid. They have
urinary incontinence and they do not have the staff to deal
with it. They put a tube into the bladder. That tube increases
the risk of infection. Now the patient gets an infection. Well,
that is no problem for the nursing home because they are going
to get transferred to the hospital for that care. And that is
on Medicare. But everybody loses.
The patient could die in the process. They certainly have
their care disjointed and worse, and it is because there are
conflicting incentives.
In terms of the amount of reimbursement, huge problem. For
the last 3 years prior to the current one, the care was
ratcheted down and you almost certainly know that the AMA has
documented the proportion of doctors who participate in
Medicare. And it was at a high of 96 percent, and if the last
one had gone through this last time, it would have been down to
75 percent. That is just participating.
And furthermore, much of what doctors do in Medicare is not
paid for. Some of it is denied. And there is no payment for
what patients most need. There are barriers built in.
For instance, if a doctor wants to get a patient into a
nursing home, you have to put them in the hospital for 3 days
even if they do not need a hospitalization.
Now, in the hospital they can get infections and get drugs
and get all sorts of bad things. The cost to society is huge.
There is no point to that. That is from another era.
There are other things. Care coordination is huge,
preventive services are huge, proactive chronic care management
is huge. None of that is paid for by Medicare. Neither is
telephone management.
Mr. Davis. We are starting to move in that direction
getting some preventive care in Medicare.
Dr. Resnick. There are for procedures, but the limitations
at present are that nobody asks the patient what you want. So
we will pay for your colonoscopy, but nobody talks to the
patient about what we will do if we find a cancer. And then
what we have is the unfortunate situation where the patient and
the doctor are faced with a cancer there, and the patient says
what, you mean you are going to have to open up my belly and
take this out. I do not want that. I do not have enough time to
live. I do not want to have 6 months recovery. And the doctor
says I would not do it anyway because you have trouble with
your heart and your lungs, and you would not withstand that
surgery. So we have paid for a procedure that had no point in
being done. So we expended resources and caused everybody
anxiety because we are not paying for the counseling and
determination of the values and goals the patient has.
Mr. Davis. We will come back.
Mr. Murphy. Thank you.
Let me followup on something here. This is really pretty
incredible testimony you have, and unfortunately it is so often
what happens in health care. What I hear a lot of, similar to
Chairman Davis, the people say my health care plan is too
expensive, let the Federal Government take over. And I am sure
you have heard that in psychology and psychiatry, that insanity
is doing the same thing over and over again and expecting
different results. And it seems to be that it is absurd to
think just have the Federal Government pick the tab and
continue the way we are doing things.
Dr. Feinstein, you have a chart with you, a totally
incomprehensible chart, which I love.
Dr. Feinstein. Yes.
Mr. Murphy. To get the patient the first dose of
medication, some 700 steps involved with this?
Dr. Feinstein. Yes.
Mr. Murphy. All of which can result in some error?
Mr. Murphy. This was documented at Deaconess-Glover
Hospital outside of Boston. And a team from Harvard Business
School went in.
This is what happened when one patient's medication did not
come on time. One medication did not come on time. The work
around on the part of the nursing staff and the unit staff to
get from the pharmacy the pill that never arrived.
And we wished this was funny, but if you would show this to
any nurse, they will just nod their head, oh absolutely, yes.
And that is why we talk a lot about safety and evidence-based
practice, both of which are safe practices, evidence-based
practices are very important. I do not think most people
outside of health care, particularly anyone that has ever been
to business school, would even believe the chaos that is
involved in the administration of health care at the point of
service. None of these professionals have had an hour of
systems theory, work process improvement training other than
maybe something they get stopped on in their job and it is
hardly ever followed through until the next new idea comes
along.
But the inefficiency and waste in health care also
contributes very much to the high cost. It also contributes to
error and bad practices.
Mr. Murphy. I know I have worked at several area hospitals
in Pittsburgh and each one had some different procedure for
doing the same thing. Whenever I raised the question, the most
common response is that just the way we do things here. It's
absurd that they have adapted to that sort of practice.
Dr. Axelson, your testimony it is absolutely incredible in
terms of untreated depression, which first of all has a higher
incidence among these chronic illnesses and yet when it is not
treated, the morbidity and the mortality rate go through the
roof. I mean, several times I think the costs were double you
said?
Dr. Axelson. Yes. And particularly with myocardial
infarction. Some people say it is more important to treat the
depression than to put the patient on aspirin and beta
blockers, that the outcomes in terms of death in the 6 months
following myocardial infarction is so high.
And the problem is that the general wisdom of the physician
is, yes, no wonder you are sort of sad. Anybody would be sad if
you have this kind of disease.
Mr. Murphy. I mean you just talking about----
Dr. Axelson. We are talking about the depression, yes. We
are talking about depression and what we are doing with
physicians is educating them to make the diagnoses of
depression and differentiate that from just distress. That the
patient that is depressed needs active treatment for depression
by the primary care physician because similar to the geriatric
situation, you are not having psychiatrists in growing numbers
being available to care for these patients, and the patients do
not migrate very well. So the emphasis needs to be on
developing the skills of the primary care physician and then
having just in time consultation for them so they treat the
patients with diabetes and with heart disease and with lung
disease who also have depression and anxiety. Otherwise, you
get this manifold number of tests, bad outcomes, patients are
not satisfied and the physician is frustrated.
Mr. Murphy. So we add these together. Most health costs
come from those who are chronically ill. And among those who
are chronically ill, most of their health care costs come from
not treating the whole patient with regard to their multiple
diagnoses.
Dr. Axelson. Yes.
Mr. Murphy. In this, I am sorry we were trying to track
this down, we could not get it in terms of knowing what the
copayment is for mental health treatments within the Federal
system. I know with Medicare one of the concerns I have if it
is for infections or heart disease, etc., it is at 80 percent
that the insurance picks up on many of these doctor visits, but
only 50 percent for mental health services.
Dr. Axelson. That is correct.
Mr. Murphy. So within that the system is doomed to failure.
And if that same thing exists within Federal employees'
benefits, I don't know what is, for example, postal employee
etc.; but it is doomed to failure because we have set up a
system that operates against getting comprehensive treatment.
Dr. Axelson. Yes. My experience is that the copays are not
to discriminatory in the Federal system. There are some
problems with that. The copays are higher than they are for
medical illnesses, but the Medicare is certainly something that
is a great discrimination. And physicians, primary care
physicians do not code psychiatric diagnoses because of this
concern that they will get the 50 percent reimbursement. And so
you get a situation where they are not paying attention because
not only are they not getting paid, they are getting paid less.
And so changing that; I was very disappointed. I know that came
up in the legislation about the pharmacy benefit, that was a
missed opportunity there.
You cannot get physicians to change their way of practicing
if they think the system is cynically designed to work against
them. And that is what I hear from primary care physicians all
the time is you are not paying us for this stuff, you know,
nobody wants to hear about it. If we do bring it up, we and our
patients get discriminated again.
So you really need to in bold letters say the FEHB Program
wants behavioral illnesses treated as part of the total system
of health care and not as some very separate system that is
handled a discriminatory way.
Mr. Murphy. And I know my time's up, and we will get back
to this. But let me just followup. In terms of the data you
were presenting here in terms of these morbidity and mortality
and costs being double or so, is this being done comprehensibly
with any other, for example, private business who has made this
move toward treating this comprehensibly, or would any of you
know and are they seeing any savings both in terms of the extra
cost of health care dollars that increase productivity?
Dr. Axelson. The best company I'm aware of is Bank One in
Chicago that really looks at particularly productivity and
treatment of psychiatric illnesses. And they have showed
dramatic improvements in both reduced disability costs,
patients being at work and patients doing more work when they
are at work; a thing called presenteeism. And so it is just
beginning to get down into the employer system.
The figures I was giving were for employees, because that
is part of the message to employers. Encourage their employees
to take better care of their health and to expect better care
when they go to the physician.
Mr. Murphy. Thank you.
Chairman Davis.
Mr. Davis. I'm intrigued on the geriatric thing. I guess as
I get older I start thinking about these things. The good news
is that people are getting older later, is that not true?
People are physically taking care of themselves better?
Dr. Resnick. Well, it is a mixed picture. One of the
biggest threats to health is decreased exercise and increased
weight. And both are a problem in older people.
Exercise programs are not widely used, even among the
elderly and the middle aged. And the weight of this country is
going up. And what happens is as you get older, much of what
happens is replicated in younger people who weigh too much. So
when you combine obesity with age, you actually end up getting
the ravages of both, and it could backfire that we could be in
worse shape than we would otherwise.
What is happening now when you say that we are getting old
later, that is a reflection of the fact that we are getting
better at treating heart disease and recognizing risk factors
such as high blood pressure. So because we are more aggressive
at treating those, people then do not get the strokes and the
debility that they used to get. Second, we now know that the
debility they used to get are not aging, but diseases. So we
look for the cause and treatment.
If people as they age still do not exercise as they should
and gain more weight than they ever have before in the history
of this country, then that could undue much of the benefit.
Mr. Davis. You are probably right. I hang around with a
group that works out. And I see a lot of older people running,
more than I think I would have seen 10 or 20 years ago. But you
are right, a lot of people do not do that.
Dr. Resnick. That is right. And the other issue is that----
Mr. Davis. And they tend to be more of a burden on the
system, are they not?
Dr. Resnick. That is right. That is right.
Mr. Davis. Let me ask, Ms. Feinstein, you talked about
paying for bad behavior not just in the health care system, but
do you not do that with individuals as well, people who choose
bad diets, who are obese, sometimes who smoke. I mean there is
discrimination, I guess, in terms of what they pay, what health
insurance companies charge them. You know the smokers and
nonsmokers get different insurance rates in some of these
areas. But in some of these other areas you get treated the
same when you take care of yourself or not. Is that appropriate
incentive?
Dr. Feinstein. Well, I have a personal opinion on that. Not
just speaking for the Regional Health Care Initiative.
Mr. Davis. That is fine. I would be glad to hear your
opinion. I would like to hear everybody's personal opinion.
Dr. Feinstein. This is personal. I do not see why we would
not take that into account as well. I think that there is a
contract mutual responsibility for the cost, the high cost of
care in this country. And certainly there is a consumer role in
protecting their own health. You could take it down a chain
and, you know, you could require more and more and more of the
consumer. And I think that for some of the tiered consumer
directed health plans, consumers are expected to choose the
best outcome, lower cost option or they pay for it. I think
that's the beginning of a responsibility that could spread to
other areas.
Mr. Davis. Yes. I should not say this. I ended up watching
the Jerry Springer Show late one night. There was nothing else
on. The ball games were over. It does not happen very happen.
He brought these tremendously huge people on there that just
are, you know, 400 or 500 pounds. Probably had depression. They
probably had a whole lot of things. But I am just saying, that
is where my health insurance might be.
You have a small group of people eating up most of the
money, and is there not some way to get some incentives to
help. Treatment for depression would certainly be part of that.
I think that you made the case on that. And, sometimes before
we get back, we are going to do some talking about this. But
also people who make poor choices ought to be paying more and
the people who make right choices, we ought to be able to get a
discount and build that into the system as well, it seems to
me. It is individual. The same way with health care plans as we
look at that.
Dr. Feinstein. It is hard as an employer to know that you
are picking up the cost of people who are taking a smoke break
every half hour.
Mr. Davis. Right. Right.
Dr. Feinstein. You are picking up the health costs.
Mr. Davis. Of course you have the labels on those things
for 40 years and they still sue the companies and blame the
companies for it. So nobody wants to take responsibility for
anything, and we are moving in that society. And yet the
foundation of freedom is that people take responsibility for
their own actions and their bad decisions.
We get divided in Washington. You know, does the government
know what is best for people do or should people be allowed to
make their own decisions? And I always come down the side
people should make their own decisions. But a lot of times they
make stupid decisions, and there should be some follow on
penalty. If not penalty, not reward for making those decision.
That is what freedom is all about.
Dr. Feinstein. Well, and there are some health plans that
are saying if you choose a low volume, poorly performing and
high cost provider, you pick up the difference. You know, we
are not. And that's a beginning. That is a beginning of a
challenge to consumer responsibility.
Mr. Davis. I just know sometimes people can do everything
right and things can go wrong. And I had two melanomas. And I
did not spend a lot of time in the sun, but I am more of your
opinion. I reviewed and caught it early enough each time. One
doctor the first time I had it said, ``You just saved yourself
30 years by finding it. If it had gone on much later, you know,
this moves, it is very, very nasty.''
So, you know, educating people is a critical part of this.
You talk about savings in the system, that is probably the best
place where you can start; educating people to make smarter
decisions, identify this earlier. You are right, none of these
systems really take that initiative.
I just want to ask one other question. I had asked this in
the previous panel. There is a movement to bring the health
care savings accounts into the Federal system, the FEHBP. My
retired Federal employees really are nervous about that because
they think at this point that is going to raise their premium
costs because basically the folks that would opt for the health
care savings account tend to be the younger workers who are
paying into the system and not using much. Any thoughts on
that? It is an ongoing debate in Washington, and I favored
these at the national level. Interested in your comment.
Dr. Feinstein. Well, I would say it is moving in a
direction that you were kind of going down the road about
consumer responsibility; what is the consumer's responsibility
to the point that they can control their demand for health
care, and there are areas where they can control it, there are
areas where they cannot.
My only concern with HSAs is they kind of break the social
contract. I mean, they distract from what I think is our, and
obviously this is a biased one because the Pittsburgh Regional
Care Initiative is founded on that, but I think our basic
responsibility right now is to deliver the best care and only
the care that is required by a person's health situation. And
to do that the stakeholders have to work together. And the HSA
distracts from that.
To that extent, you know, if you could convince me that it
was an important driver of quality and delivery at the point of
care, I would be enthusiastic. But it seems to me a bit of a
distraction right now.
What the Federal health plan could do, is have a program to
produce this kind of transparency. Even when the consumer wants
to do the right thing for their health, they lack information.
There is an extraordinary lack of information. They do not even
know what procedures cost. In fact, it is kind of scary, the
plans often do not know what procedures cost. Nobody knows what
procedures cost.
As an example, we are in so many ways paying for
preventable bad practice. And to get the information that would
allow us, the clinical and accounting measurement systems that
would allow us to bring that information to the consumer, to me
is kind of a first step, the most important step.
And so, you know, not distracting it, I do believe that
consumers need to be engaged and need to make decisions. HSAs
encourage that, but I worry that if we do not get the
information to people, really good information, they will not
be able to make the right decisions; do they need care, do they
not need care, where should they get care and what are their
options to, say, surgery, hospitalization and expensive care.
Mr. Davis. OK. Let me ask Dr. Axelson, let me ask you
another question, too.
Mental health parity is something that has come before
Congress. It has really never come before the House. It has
come before the Senate. Every member supports it, you know,
signs on the bill but they try to keep it from voting because
of the rising costs. But your testimony really says there is a
limit in terms in some of these areas between regular health
care and what we would call the physical health care costs and
being able to control the other side. Can I hear your thoughts
on that?
Dr. Axelson. As soon as we get untangled.
I think that parity is essential. I still would make the
same statement. I think parity for mental health benefits is
essential and the separation in treating them in a
discriminatory way is really not supported economically.
Many people get health care and get reimbursed for paying,
they get payment for behavioral health services just by not
putting the diagnoses down in terms of primary care
particularly. When you have parity you begin to make sense of
the system.
The costs that I work to save everyday is not so much the
direct costs in terms of psychiatric care. It is the indirect
costs in terms of inefficient medical care. Because the patient
that has an anxiety disorder is getting a huge cardiac workup
or the patient that needs very thoughtful care in terms of his
diabetes, just does not have the emotional energy to
participate in the diabetic care plan because they are
depressed. So we need to address parity.
I talked to Congressman Murphy about it, oh, every month or
so and say what are you doing?
Mr. Davis. He talks. He brings it up.
Dr. Axelson. Oh, I know he brings it up.
Mr. Davis. But the other side of it is you get efficiencies
in other areas. Maybe not the health care system or in the
economic system by having people alert and on the job----
Dr. Axelson. Absolutely.
Mr. Davis [continuing]. That kind of stuff that you cannot
measure directly but there is obviously data from the charts
and from what everybody has said, that is an important.
Dr. Axelson. The idea of psychiatric care being costly is
15 to 20 years old. We have moved systems. There was a time
when, yes, there was----
Mr. Davis. If you just left it in the box?
Dr. Axelson. Yes. But even now----
Mr. Davis. Even in the box it is costly. It is more money
out than you get in.
Dr. Axelson. But even now that box really is not very
constant. Other measures have been put into place that control
those costs. And so what we need to do is just make a part of
the overall system.
Mr. Davis. Right. Thank you very much.
Thank all three of you very, very much. It has been very
helpful to me.
Mr. Murphy. Thank you.
I have a couple of things I want to know. Dr. Feinstein, is
this, the chart, the 700 steps, is this part of a published
report?
Dr. Feinstein. Yes. It is a Harvard Business School case.
It is called the Deaconess-Glover case. And I am not allowed to
hand it out, but----
Mr. Murphy. But if you could give us a reference, I would
like to include it in our record, please?
Dr. Feinstein. It is Harvard Business School. They have a
whole case series. And this is called Deaconess Glover.
Mr. Murphy. OK.
Dr. Feinstein. Part A.
Mr. Davis. Chair, I would then ask unanimous consent that
be put in the record. That the staff can find it and put that
in. I think it would be helpful.
Mr. Murphy. And without objection, so ordered.
Similarly, I would like to ask that we include in the
record this article provided by Dr. Axelson from the Harvard
Business Review, June 2004 in terms of Redefining Competition
in Health Care by Porter and Tiesberg. And without objection,
so ordered. We will include that in as well.
I know we are just about out of time here. I just want to
really thank the panel for your comments here. Again, it
distressed me every time we see someone come up and say health
care costs so much, let us have the Federal Government pick up
the tab. And I am fond of saying the Federal Government can
provide whatever you want as long as you let us raise your
taxes so we can pay for it. And providing health care the way
it is is not really health care as much as it is just paying
the bill for a system that is broken and extremely expensive.
It is not the answer. And in this election year, like any other
time, people are out there saying we are going to take your
costs off your shoulders and have the government pay for it,
have somebody else do it. We really need to have a tremendous
bottom to top, top to bottom innovations in this system which
is actually going to save a lot of lives, keep people out of
hospitals and make them healthier and more accountable on every
level. And it is the very things that the three of you brought
up, whether it is for the elderly and how we need to look at
them comprehensively and recognizing at least on the Federal
level half a million people out there can have their health
improved is helpful, as well as the many employees that
whatever the level they are in the Federal Government to look
as such things that we think are so simple by keeping
infections down in hospitals. There are a lot of things that we
are paying for and everything. Looking at the comprehensive
aspect of behavioral health is tremendous, too.
So I thank all of you for this. You may have some staff
back in touch with you to get other information for this. We
will make sure to send it to Members of Congress and help them
understand that the issue of saying you cannot always get what
you want is a barrier to us, but if I can just continue off the
metaphor of this sung, if you try sometimes you might just find
you get what you need. Because we have to change the system to
get people what they need and stop this system that pays for
inefficiency and ill health. And that is what we're going to
continue to do.
Dr. Feinstein. Thank you, Representative Murphy. We like to
hear that.
Mr. Murphy. Keep up the good work.
And if Members have additional questions for our witnesses,
they can submit them for the record.
I would like to again thank everybody who was here today.
And this hearing is now adjourned.
[Whereupon, at 11:30 a.m., the subcommittee was adjourned.]
[Additional information submitted for the hearing record
follows:]
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