Keeping people healthy saves money. Duh.

Tell me something I don't know:


Ellen, an 82-year-old widow, lives in Anaheim, California. One Wednesday morning last year, she got on her scale, as she does every morning. One hundred and forty-six pounds—wasn’t that a little high? Ellen felt vaguely troubled as she poured herself a bowl of oat bran.
Half an hour later, the phone rang. It was Sandra at the clinic. She too was concerned about Ellen’s weight, which had jumped three pounds since the previous day. Sandra knew this because Ellen’s scale had transmitted its reading to the clinic over a wireless connection.

Given that Ellen had a history of congestive heart failure, a three-pound weight gain in 24 hours was a potentially dangerous development, a sign of possible fluid buildup in the lungs and increasing pressure on an already stressed heart. Sandra wanted her to come in for an immediate visit: the clinic would provide a car to pick her up and bring her back home. Ellen’s treatment began that very morning and continued for two weeks until she was out of danger. Had the warning signs not been noticed and addressed so quickly, she might easily have suffered a long, painful, and expensive hospitalization.
Dan, a retired letter carrier, is a patient at a clinic in the same system. At 87, he is decidedly frail, his once-sturdy legs now weak and unsteady. He is a classic candidate for a fall of the kind that has injured many of his friends, in some cases leading to weeks in the hospital and months of rehab. The elderly are prone to falls for many obvious reasons, including weak limbs, impaired vision, and medication side effects. But Dan’s doctors knew that some less obvious causes included shag carpets and long, untrimmed toenails. Because of this, they’d sent someone from the clinic to visit Dan’s apartment and make sure that his daughter replaced the 1980s-vintage carpets with low-pile rugs. Dan also visits the clinic regularly for light muscle-training sessions and periodic toenail clipping. Due to these preventive measures, Dan and his fellow clinic patients are one-fifth as likely as comparable patients elsewhere to suffer falls.
Joe, a 79-year-old diabetic, cut his foot when he banged it against a door. When it didn’t heal after a couple of days, he limped into the office of his family physician. After glancing at the cut, his doctor immediately sent Joe to a clinic in the same system as those that treated Ellen and Dan. For diabetics, even small cuts can be a serious matter: untended, they can become infected and contribute to an alarmingly high rate of amputation.
At the clinic, a nurse practitioner cleaned and dressed the wound, and told Joe she wanted to see him there in two days so she could inspect and treat it again—and two days after that, and two days after that, until it was fully healed. The clinic would arrange for transportation if needed. Thanks to the steady, regular care, Joe’s foot healed without any infection or threat of amputation.
Ellen, Dan, and Joe are all real people, though their names have been changed. The clinics that serve them are all affiliated with CareMore, a company based in Cerritos, California, that operates 26 care centers across the Southwest, serving more than 50,000 Medicare Advantage patients. Those numbers are likely to grow, perhaps dramatically, in the next few years: in August, CareMore was acquired by the insurer and health-services provider WellPoint, which serves 70 million people nationwide directly or through subsidiaries, and has plans to expand the CareMore model.
CareMore, through its unique approach to caring for the elderly, is routinely achieving patient outcomes that other providers can only dream about: a hospitalization rate 24 percent below average; hospital stays 38 percent shorter; an amputation rate among diabetics 60 percent lower than average. Perhaps most remarkable of all, these improved outcomes have come without increased total cost. Though they may seem expensive, CareMore’s “upstream” interventions—the wireless scales, the free rides to medical appointments, etc.—save money in the long run by preventing vastly more costly “downstream” outcomes such as hospitalizations and surgeries. As a result, CareMore’s overall member costs are actually 18 percent below the industry average.

Excuse my cynicism. But we know these kinds of measures work. And we know why they are not standard practice. Take it away, Dr. Berwick:

The access we need to create is access to help and healing, and that does not always mean—in fact, I think it rarely means—reliance on face-to-face meetings between patients, doctors, and nurses. Tackled well, I believe that this new framework will gradually reveal that half or more of our encounters—maybe as many as 80 percent of them—are neither wanted by patients nor deeply believed in by professionals. This is an example of a problem so big that we have trouble seeing it. The health care encounter as a face-to-face visit is a dinosaur. More exactly, it is a form of relationship of immense and irreplaceable value to a few of the people we seek to help, and these few have their access severely curtailed by the use of visits to meet the needs of many, whose needs could be better met through other kinds of encounters.
The alternatives to visits in the escape fire are many: self-care strongly supported and unequivocally encouraged; group visits of patients with like needs, with or without professionals involved; Internet use for access to scientific and popular information; e-mail care between patients and clinicians; and well-managed chat rooms, electronic and real, for patients and significant others who face common challenges.
Payers should take careful note: Most of you still pay only for Pulaskis. The greatest potential for reducing costs while maintaining and improving the lot of patients is to replace visits with better, more flexible and fine-tuned forms of care. But almost all current payment mechanisms, whether enforced by the market or mapped into organizations by internal compensation systems, use impoverished definitions of productivity that actively discourage the search for and incorporation of non-visit care. 

Every single country in the industrialized world spends less on healthcare than we do, and most have better outcomes. This is not an exaggeration, or a statistical trick. We have fallen behind and are going broke because we are pissing away money on poorly coordinated expensive interventions instead of cheap, proven approaches.

The proximal cause of this is the reimbursement system, the madness of the RVU model. This system pays us for doing stuff, and it pays us a lot more for stuff that involves technology, cutting and sewing, labs, scans, and specialist care. This is exactly the reason we ended up with a system with a death of primary care and an abundance of technology, cutting and sewing, labs, scans, and specialist care. We designed the system that way. Practice has followed compensation.

The VA saves money and improves outcomes the same way -- they are stuck with the person for life.

Technology has become a driver of costs, rather than a source of cost-savings, as a result of being yoked to this dysfunctional system of payments. You can check a patient's weight at home and intervene before their CHF exacerbation sends them to the ED? Say goodbye to the ED billing, the chest X-ray, the IV lasix and nitro paste, goodbye the bill for the hospital bed, the itemized charges, the bedside echo. Thousands of dollars saved by the healthcare system are thousands of doctors lost to the healthcare worker or the healthcare institution.


CareMore can do this because they get a flat fee for each patient, adjusted for their demographics and preexisting conditions. So every dollar they save is a dollar they save, rather than a dollar they lose. And the savings they are reporting are the tip of the iceberg, if we learn to follow the simple principle that we pay once, for a person's overall care -- their health -- and not piece by piece for every intervention, which rewards disjointed care and rewards failure -- sickness.

Kaiser succeeds by making its money on the insurance side -- again, they get a lump sum per patient.

I'm glad CareMore was able to strike this deal with Medicare Advantage -- it's about time that big, fat, juicy piece of pork was used for good rather than evil. But at some point can we stop being surprised by this -- stop treating it as a bold outside-the-box experiment that might go either way? It's freakin' Capitalist Economics 101: if you pay doctors to do things, and pay the most for tests and procedures and scans, they will do more things, and especially more tests and procedures and scans. If you structure the compensation to align the incentives for the individual provider or hospital with those of the patient -- who wants to be well, not sick, and have few medical interventions, not many -- you get a system that is better for patients, for caregivers, and more society as a whole.

It's time to stop gawking at the pioneers and run our whole healthcare system on this basis.