Looking Forward, Looking Back: Assessing Variations in Hospital Resource Use and Outcomes for Elderly Patients With Heart Failure

By Michael K. Ong, Carol M. Mangione, Patrick S. Romano, Qiong Zhou, Andrew D. Auerbach, Alein Chun, Bruce Davidson, Theodore G. Ganiats, Sheldon Greenfield, Michael A. Gropper, Shaista Malik, J. Thomas Rosenthal and José J. Escarce
Circulation – Journal of the American Heart Association
October 13, 2009
Background: Recent studies have found substantial variation in hospital resource use by expired Medicare beneficiaries with chronic illnesses. By analyzing only expired patients, these studies cannot identify differences across hospitals in health outcomes like mortality. This study examines the association between mortality and resource use at the hospital level, when all Medicare beneficiaries hospitalized for heart failure are examined.
Methods and Results: (Warning: This section is technical and you may want to skip it for now.) A total of 3999 individuals hospitalized with a principal diagnosis of heart failure at 6 California teaching hospitals between January 1, 2001, and June 30, 2005, were analyzed with multivariate risk-adjustment models for total hospital days, total hospital direct costs, and mortality within 180-days after initial admission (“Looking Forward”). A subset of 1639 individuals who died during the study period were analyzed with multivariate risk-adjustment models for total hospital days and total hospital direct costs within 180-days before death (“Looking Back”). “Looking Forward” risk-adjusted hospital means ranged from 17.0% to 26.0% for mortality, 7.8 to 14.9 days for total hospital days, and 0.66 to 1.30 times the mean value for indexed total direct costs. Spearman rank correlation coefficients were 0.68 between mortality and hospital days, and 0.93 between mortality and indexed total direct costs. “Looking Back” risk-adjusted hospital means ranged from 9.1 to 21.7 days for total hospital days and 0.91 to 1.79 times the mean value for indexed total direct costs. Variation in resource use site ranks between expired and all individuals were attributable to insignificant differences.
Conclusions: California teaching hospitals that used more resources caring for patients hospitalized for heart failure had lower mortality rates. Focusing only on expired individuals may overlook mortality variation as well as associations between greater resource use and lower mortality. Reporting values without identifying significant differences may result in incorrect assumption of true differences.
WHAT IS KNOWN
* Substantial variation has been documented among hospitals in the resources used to care for elderly Medicare beneficiaries with chronic illnesses during the last 6 months of life.
* By only including individuals who have died in the analyses, researchers cannot identify differences on health outcomes such as survival.
WHAT THE STUDY ADDS
* This study found variation among California teaching hospitals in survival for patients hospitalized with heart failure. This variation would have been overlooked by a study that only examined heart failure patients who died.
* When analyzing all patients hospitalized for heart failure, California teaching hospitals that used more resources had lower mortality rates.
* When analyzing all patients hospitalized for heart failure, the variation in resource use among California teaching hospitals was 27% to 44% less than the variation observed when analyzing only heart failure patients who died.
http://circoutcomes.ahajournals.org/cgi/rapidpdf/CIRCOUTCOMES.108.825612v1.pdf

As the nation attempts to identify ways of slowing the excessive growth in our health care costs, it is only natural that we would look at the great variability in health care spending that does not seem to correlate with health care outcomes. John Wennberg and his colleagues, in producing the Dartmouth Atlas, have confirmed that these variations are very real, though more recent refinements have demonstrated that the differences are not quite as great when corrected for other factors.
A prior study of California hospitals showed that these differences were not limited to those areas for which there seems to be an easier explanation (private hospitals with a liberal supply of high-tech services and professionals treating wealthier patients versus under-budgeted safety-net institutions treating low-income patients), but these Dartmouth differences were also noted between the various University of California teaching hospitals, which have similar funding, staffing and equipment.
This new study looked closer at the differences between the University of California teaching hospitals (including one private teaching hospital affiliated with UCLA). The authors showed that looking back for six months at patients who had died of heart failure did confirm the differences, although not as great since more variables were considered. Higher spending did not improve outcomes for the obvious reason that patients were selected for study on the basis of a common outcome – death.
The important contribution of this study is that they selected the same disorder as used in the death study – congestive heart failure – and looked forward for six months for the outcome of survival or death. This study showed that the teaching hospitals using more resources (spending more money) had a lower incidence of death.
Okay. Now, what care are we going to refuse to fund? Just looking at congestive heart failure alone, it is going to be very difficult to sort out the details to determine which interventions are of value and which are not. Now think of the task of sorting out these differences for all other serious disorders.
So how do we select out those services that should be eliminated from coverage? Legislators and bureaucrats certainly understand that they are not up to the task, so what do they recommend? They are suggesting that we lower spending by paying only for efficient care (i.e., by paying less money), by bundling payments and using accountable care organizations. Third party payers would distribute the funds while health care professionals would micromanage the use of those funds.
Think of the logistical nightmare of contracting with all the services and facilities that would be required in an accountable care organization. Even just informally gathering these services together to accept a bundled payment would entail similar logistical barriers. But then think of the internal conflicts that would occur when it comes time to decide how to divide up the spoils. The micromanagement within these entities would not be based on projected optimal outcomes, but they would be based on pecuniary interests.
If high-quality teaching institutions within the same university system are having difficulties fine tuning health care, how could we ever expect all facilities throughout the nation to adhere to the highest standards when they aren’t even understood?
Although we can continue to study the differences and educate professionals on better practices, we can’t really look to the Dartmouth variations as a quick source of cost savings to finance our other health care needs.
But there is one quick measure that would provide a great start for achieving a higher-value health care system. Get rid of the private insurers and establish an improved Medicare system that would include all of us. That would save about $4 trillion in the next ten years that could be used on actual health care, without increasing our national budget deficit. With a single financin

By Michael K. Ong, Carol M. Mangione, Patrick S. Romano, Qiong Zhou, Andrew D. Auerbach, Alein Chun, Bruce Davidson, Theodore G. Ganiats, Sheldon Greenfield, Michael A. Gropper, Shaista Malik, J. Thomas Rosenthal and José J. Escarce
Circulation – Journal of the American Heart Association
October 13, 2009

Background: Recent studies have found substantial variation in hospital resource use by expired Medicare beneficiaries with chronic illnesses. By analyzing only expired patients, these studies cannot identify differences across hospitals in health outcomes like mortality. This study examines the association between mortality and resource use at the hospital level, when all Medicare beneficiaries hospitalized for heart failure are examined.

Methods and Results: (Warning: This section is technical and you may want to skip it for now.) A total of 3999 individuals hospitalized with a principal diagnosis of heart failure at 6 California teaching hospitals between January 1, 2001, and June 30, 2005, were analyzed with multivariate risk-adjustment models for total hospital days, total hospital direct costs, and mortality within 180-days after initial admission (“Looking Forward”). A subset of 1639 individuals who died during the study period were analyzed with multivariate risk-adjustment models for total hospital days and total hospital direct costs within 180-days before death (“Looking Back”). “Looking Forward” risk-adjusted hospital means ranged from 17.0% to 26.0% for mortality, 7.8 to 14.9 days for total hospital days, and 0.66 to 1.30 times the mean value for indexed total direct costs. Spearman rank correlation coefficients were 0.68 between mortality and hospital days, and 0.93 between mortality and indexed total direct costs. “Looking Back” risk-adjusted hospital means ranged from 9.1 to 21.7 days for total hospital days and 0.91 to 1.79 times the mean value for indexed total direct costs. Variation in resource use site ranks between expired and all individuals were attributable to insignificant differences.

Conclusions: California teaching hospitals that used more resources caring for patients hospitalized for heart failure had lower mortality rates. Focusing only on expired individuals may overlook mortality variation as well as associations between greater resource use and lower mortality. Reporting values without identifying significant differences may result in incorrect assumption of true differences.

WHAT IS KNOWN

* Substantial variation has been documented among hospitals in the resources used to care for elderly Medicare beneficiaries with chronic illnesses during the last 6 months of life.

* By only including individuals who have died in the analyses, researchers cannot identify differences on health outcomes such as survival.

WHAT THE STUDY ADDS

* This study found variation among California teaching hospitals in survival for patients hospitalized with heart failure. This variation would have been overlooked by a study that only examined heart failure patients who died.

* When analyzing all patients hospitalized for heart failure, California teaching hospitals that used more resources had lower mortality rates.

* When analyzing all patients hospitalized for heart failure, the variation in resource use among California teaching hospitals was 27% to 44% less than the variation observed when analyzing only heart failure patients who died.

http://circoutcomes.ahajournals.org/cgi/rapidpdf/CIRCOUTCOMES.108.825612v1.pdf

Comment:

By Don McCanne, MD

As the nation attempts to identify ways of slowing the excessive growth in our health care costs, it is only natural that we would look at the great variability in health care spending that does not seem to correlate with health care outcomes. John Wennberg and his colleagues, in producing the Dartmouth Atlas, have confirmed that these variations are very real, though more recent refinements have demonstrated that the differences are not quite as great when corrected for other factors.

A prior study of California hospitals showed that these differences were not limited to those areas for which there seems to be an easier explanation (private hospitals with a liberal supply of high-tech services and professionals treating wealthier patients versus under-budgeted safety-net institutions treating low-income patients), but these Dartmouth differences were also noted between the various University of California teaching hospitals, which have similar funding, staffing and equipment.

This new study looked closer at the differences between the University of California teaching hospitals (including one private teaching hospital affiliated with UCLA). The authors showed that looking back for six months at patients who had died of heart failure did confirm the differences, although not as great since more variables were considered. Higher spending did not improve outcomes for the obvious reason that patients were selected for study on the basis of a common outcome – death.

The important contribution of this study is that they selected the same disorder as used in the death study – congestive heart failure – and looked forward for six months for the outcome of survival or death. This study showed that the teaching hospitals using more resources (spending more money) had a lower incidence of death.

Okay. Now, what care are we going to refuse to fund? Just looking at congestive heart failure alone, it is going to be very difficult to sort out the details to determine which interventions are of value and which are not. Now think of the task of sorting out these differences for all other serious disorders.

So how do we select out those services that should be eliminated from coverage? Legislators and bureaucrats certainly understand that they are not up to the task, so what do they recommend? They are suggesting that we lower spending by paying only for efficient care (i.e., by paying less money), by bundling payments and using accountable care organizations. Third party payers would distribute the funds while health care professionals would micromanage the use of those funds.

Think of the logistical nightmare of contracting with all the services and facilities that would be required in an accountable care organization. Even just informally gathering these services together to accept a bundled payment would entail similar logistical barriers. But then think of the internal conflicts that would occur when it comes time to decide how to divide up the spoils. The micromanagement within these entities would not be based on projected optimal outcomes, but they would be based on pecuniary interests.

If high-quality teaching institutions within the same university system are having difficulties fine tuning health care, how could we ever expect all facilities throughout the nation to adhere to the highest standards when they aren’t even understood?

Although we can continue to study the differences and educate professionals on better practices, we can’t really look to the Dartmouth variations as a quick source of cost savings to finance our other health care needs.

But there is one quick measure that would provide a great start for achieving a higher-value health care system. Get rid of the private insurers and establish an improved Medicare system that would include all of us. That would save about $4 trillion in the next ten years that could be used on actual health care, without increasing our national budget deficit. With a single financing system, we would then be able to make some gradual headway with the Dartmouth variations.

Regence campaign: Consumers must make choices to reduce health care costs

By Paul Beebe
The Salt Lake Tribune
November 14, 2009
As the battle over health care reform rages in Congress, Regence BlueCross BlueShield is using a slick Internet site, social media and billboards to say that consumers bear much of the blame for high premiums.
The message isn’t that bald, but it’s there.
“It really is about motivating people about the real cost of health care and how the choices they make each day impact those costs. To motivate consumers to take action is really what it’s all about,” Regence spokeswoman Georganne Benjamin said Wednesday.
“Cost is a big factor in this debate, and we need to address the high rate of medical spending, or we will not have meaningful health care transformation. This campaign does play a role in that,” she said.
The heart of Regence’s campaign is an interactive Web site (What’s the Real Cost?). But if a visitor overlooks or doesn’t click on a link next to a navigation button, he won’t easily discern that the site was put up by (Regence BlueCross BlueShield).
Regence is also using traditional tactics.
It has erected billboards along Interstate 15 that display two messages: “Health care hums like a machine with no off button because we don’t question it” and “Should ‘Because it’s covered’ be guiding health care?”
http://www.sltrib.com/business/ci_13562042
What’s the Real Cost? (a game):
http://www.whatstherealcost.org

How many people do you know that request health care that they know they don’t need but they want to have “because it’s covered”? In over thirty years of my very busy family practice, I cannot recall one single patient with such a request. Yet the thrust of this Regence BlueCross BlueShield campaign is to blame the patient for requesting too much health care.
We know the primary sources of the very high costs for health care in the United States. First, the administrative excesses of our fragmented financing system waste hundreds of billions of dollars each year (about four trillion in the next ten years, reformers please note). Also our prices are much higher than in other nations. Although technological advances have increased costs, they do not account for our excess spending since the level of use is comparable to that of most other nations.
So what about the excess of unnecessary care? Health care decisions are predominantly supply-side, provider-driven decisions. In spite of the plethora of anecdotes of patients demanding too much care, very few health care decisions are demand-side, patient-driven decisions. Regence couldn’t be further off target with this campaign.
Regence BlueCross BlueShield is a not-for-profit insurer, theoretically a traditional Blues plan. But it, like the other not-for-profits, has adopted the market innovations of the other Blues such as WellPoint that have converted to for-profit for the primary purpose of making money, with patient service being only a secondary necessity.
Regence BlueCross BlueShield is part of the reason for our outrageous health care costs, both for the administrative waste from its own activities and the administrative burden placed on providers, plus its ineffectiveness in improving value by improving the allocation of our health care dollars. For Regence to place the blame with the patients for demanding too much care is the ultimate of chutzpah.

By Paul Beebe
The Salt Lake Tribune
November 14, 2009

As the battle over health care reform rages in Congress, Regence BlueCross BlueShield is using a slick Internet site, social media and billboards to say that consumers bear much of the blame for high premiums.

The message isn’t that bald, but it’s there.

“It really is about motivating people about the real cost of health care and how the choices they make each day impact those costs. To motivate consumers to take action is really what it’s all about,” Regence spokeswoman Georganne Benjamin said Wednesday.

“Cost is a big factor in this debate, and we need to address the high rate of medical spending, or we will not have meaningful health care transformation. This campaign does play a role in that,” she said.

The heart of Regence’s campaign is an interactive Web site (What’s the Real Cost?). But if a visitor overlooks or doesn’t click on a link next to a navigation button, he won’t easily discern that the site was put up by (Regence BlueCross BlueShield).

Regence is also using traditional tactics.

It has erected billboards along Interstate 15 that display two messages: “Health care hums like a machine with no off button because we don’t question it” and “Should ‘Because it’s covered’ be guiding health care?”

http://www.sltrib.com/business/ci_13562042

What’s the Real Cost? (a game):
http://www.whatstherealcost.org

Comment:

By Don McCanne, MD

How many people do you know that request health care that they know they don’t need but they want to have “because it’s covered”? In over thirty years of my very busy family practice, I cannot recall one single patient with such a request. Yet the thrust of this Regence BlueCross BlueShield campaign is to blame the patient for requesting too much health care.

We know the primary sources of the very high costs for health care in the United States. First, the administrative excesses of our fragmented financing system waste hundreds of billions of dollars each year (about four trillion in the next ten years, reformers please note). Also our prices are much higher than in other nations. Although technological advances have increased costs, they do not account for our excess spending since the level of use is comparable to that of most other nations.

So what about the excess of unnecessary care? Health care decisions are predominantly supply-side, provider-driven decisions. In spite of the plethora of anecdotes of patients demanding too much care, very few health care decisions are demand-side, patient-driven decisions. Regence couldn’t be further off target with this campaign.

Regence BlueCross BlueShield is a not-for-profit insurer, theoretically a traditional Blues plan. But it, like the other not-for-profits, has adopted the market innovations of the other Blues such as WellPoint that have converted to for-profit for the primary purpose of making money, with patient service being only a secondary necessity.

Regence BlueCross BlueShield is part of the reason for our outrageous health care costs, both for the administrative waste from its own activities and the administrative burden placed on providers, plus its ineffectiveness in improving value by improving the allocation of our health care dollars. For Regence to place the blame with the patients for demanding too much care is the ultimate of chutzpah.

Insurer ends health program rather than pay out big

By William Ehart
The Washington Times
October 14, 2009
Ian Pearl has fought for his life every day of his 37 years. Confined to a wheelchair and hooked to a breathing tube, the muscular dystrophy victim refuses to give up.
But his insurance company already has.
Legally barred from discriminating against individuals who submit large claims, the New York-based insurer simply canceled lines of coverage altogether in entire states to avoid paying high-cost claims like Mr. Pearl’s.
In an e-mail, one Guardian Life Insurance Co. executive called high-cost patients such as Mr. Pearl “dogs” that the company could “get rid of.”
“The insurance companies are cheating in order to have obscene profits,” (Mr. Pearl’s father) said.
Guardian, a 150-year-old mutual company, reported profits of $437 million last year, a 50 percent increase over $292 million in 2007. It paid dividends of $723 million to policyholders and had $4.3 billion in capital reserves, according to its annual report. The company’s investment income totaled $1.5 billion that year, a small increase from the year earlier.
http://washingtontimes.com/news/2009/oct/14/ny-insurance-company-tries-to-rid-itself-of-high-c/

Although the individual private insurance market is infamous for discriminating against individuals with a potential for high health care costs, regulations largely prohibit group plans from singling out individuals for exclusion.
When private group plans prove to be unprofitable, they can often legally skirt the regulations by shutting down the entire plan or by withdrawing from unprofitable markets, often leaving the previously insured with very difficult or near-impossible choices. No matter how well regulated, the current proposed insurance exchanges cannot prevent an insurer that is failing in a market from shutting down. Even with guaranteed issue, other insurers would also shun unprofitable markets and unprofitable plans.
This problem is much more common than many realize. Look at the Medicare Advantage programs. This year many have declined to submit bids for renewal and will withdraw from unprofitable markets. Even this highly regulated option to Medicare can abandon patients, yet Medicare can’t. This is one more important reason why we should question the wisdom of Congress in insisting that reform be based on a market of private plans instead of an improved Medicare program for all of us.
Ian Pearl’s story has a couple of other important lessons for those supporting a public option as part of the reform package. Although private plans must always protect their business interests above the interests of the patients, a public option would have a mission requiring it to place patients first. The public option would be a victim of adverse selection since it would have to function as the safety net. Attempts to adjust risk would drive private insurers out of the exchange, leaving high-cost individuals with only very expensive options.
What about private co-ops instead, owned by the beneficiaries? That would prevent insurers from “cheating in order to have obscene profits,” as Mr. Pearl Sr said. Oops. Look at the profit statement of Guardian. It is a mutual company, and the profits are returned to the policyholders as dividends. That is essentially what a co-op is! Yet that did not prevent Guardian from jerking the rug out from under Ian Pearl. Private plans with their own segregated risk pools will always use any means legal (and sometimes illegal) to protect their reserves from being spent on health care.
Creating a public option and then throwing it into the amoral, dysfunctional private insurance marketplace to have it compete on the same perverse terms as the private insurers is a very sick solution for our health care crisis.
Single payer anyone?

By William Ehart
The Washington Times
October 14, 2009

Ian Pearl has fought for his life every day of his 37 years. Confined to a wheelchair and hooked to a breathing tube, the muscular dystrophy victim refuses to give up.

But his insurance company already has.

Legally barred from discriminating against individuals who submit large claims, the New York-based insurer simply canceled lines of coverage altogether in entire states to avoid paying high-cost claims like Mr. Pearl’s.

In an e-mail, one Guardian Life Insurance Co. executive called high-cost patients such as Mr. Pearl “dogs” that the company could “get rid of.”

“The insurance companies are cheating in order to have obscene profits,” (Mr. Pearl’s father) said.

Guardian, a 150-year-old mutual company, reported profits of $437 million last year, a 50 percent increase over $292 million in 2007. It paid dividends of $723 million to policyholders and had $4.3 billion in capital reserves, according to its annual report. The company’s investment income totaled $1.5 billion that year, a small increase from the year earlier.

http://washingtontimes.com/news/2009/oct/14/ny-insurance-company-tries-to-rid-itself-of-high-c/

Comment:

By Don McCanne, MD

Although the individual private insurance market is infamous for discriminating against individuals with a potential for high health care costs, regulations largely prohibit group plans from singling out individuals for exclusion.

When private group plans prove to be unprofitable, they can often legally skirt the regulations by shutting down the entire plan or by withdrawing from unprofitable markets, often leaving the previously insured with very difficult or near-impossible choices. No matter how well regulated, the current proposed insurance exchanges cannot prevent an insurer that is failing in a market from shutting down. Even with guaranteed issue, other insurers would also shun unprofitable markets and unprofitable plans.

This problem is much more common than many realize. Look at the Medicare Advantage programs. This year many have declined to submit bids for renewal and will withdraw from unprofitable markets. Even this highly regulated option to Medicare can abandon patients, yet Medicare can’t. This is one more important reason why we should question the wisdom of Congress in insisting that reform be based on a market of private plans instead of an improved Medicare program for all of us.

Ian Pearl’s story has a couple of other important lessons for those supporting a public option as part of the reform package. Although private plans must always protect their business interests above the interests of the patients, a public option would have a mission requiring it to place patients first. The public option would be a victim of adverse selection since it would have to function as the safety net. Attempts to adjust risk would drive private insurers out of the exchange, leaving high-cost individuals with only very expensive options.

What about private co-ops instead, owned by the beneficiaries? That would prevent insurers from “cheating in order to have obscene profits,” as Mr. Pearl Sr said. Oops. Look at the profit statement of Guardian. It is a mutual company, and the profits are returned to the policyholders as dividends. That is essentially what a co-op is! Yet that did not prevent Guardian from jerking the rug out from under Ian Pearl. Private plans with their own segregated risk pools will always use any means legal (and sometimes illegal) to protect their reserves from being spent on health care.

Creating a public option and then throwing it into the amoral, dysfunctional private insurance marketplace to have it compete on the same perverse terms as the private insurers is a very sick solution for our health care crisis.

Single payer anyone?