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Heart Failure: A Win-Win for Obamacare
One of the features we got when we got Obamacare was a new program aimed at reducing hospital readmission rates for various expensive diseases. The primary disease targeted by this new program was heart failure. Heart failure was chosen for the simple reason that spending on this condition accounts for 43% of all Medicare spending, which amounts to up to $38 billion each year.
Obamacare stipulated that hospitals that failed to sufficiently reduce the 30-day rate of readmission for their patients discharged with heart failure would be financially punished. This punishment was set at an amount equal to 3% of the hospital’s total annual Medicare payments. (That’s total Medicare payments for every Medicare patient, not just the ones with heart failure.) Given the shaky margins under which many hospitals operate, and given the size of their Medicare populations, this level of financial punishment was potentially not survivable. It was the medical equivalent of the NCAA death penalty.
So, the law did what it was intended to do. It put hospital administrators into a classic “whatever it takes” mode of operation. And the word went out from administrators to all the doctors (who, we must remind ourselves, are now largely under the pay of those selfsame administrators) that, no matter what, patients discharged from the hospital with heart failure are not to be readmitted, at least until Day 31.
Many techniques were rapidly deployed by physicians and institutions to carry out this prime directive, and too-many-to-count new companies sprung up overnight to sell hospitals various systems, strategies, and technologies to assist them in their efforts. Many of these efforts, in fact, addressed prior systematic shortcomings in the medical care of patients with heart failure, such as poor discharge planning, poor instructions, failed communications between discharging physicians and primary care providers, and failing to schedule follow-up visits. Other efforts took advantage of certain definitional loopholes (such as what constitutes an “admission” versus a period of “observation”).
Some good, I cheerfully agree, was accomplished by some of these efforts.
But, given the nature of the threatened punishment, and given the limited ability of such measures to reliably delay readmission, we must assume that other methods were used which are not discussed in polite society, or at all. Nobody ordered doctors directly and in plain language that they must never, ever readmit a heart failure patient until that mystical Day 31, no matter what. But then, nobody ordered certain retainers that they must kill Thomas Becket either.
On Nov 12, in the Journal of the American Medical Association, Gupta, et al., published an analysis of how well American hospitals have performed under this new law. The investigators analyzed data from 115,245 Medicare patients treated at 416 American hospitals. They report that the 30-day readmission rates from heart failure dropped from 20% prior to Obamacare to 18.4% afterward. This constitutes a substantial improvement.
However, Gupta, et al., also report that the 30-day post-discharge mortality rate for Medicare heart failure patients increased from 7.2% to 8.6% and that the one-year mortality rate increased from 31.3% to 36.3%. This increase in mortality reversed a decades-long trend toward improved survival in patients with heart failure.
My only quibble with Gupta, et al., is their suggestion that this increase in mortality is an unintended consequence of the new readmission program.
Nonsense. It is an entirely predictable and (I submit for your consideration) desired outcome.
Heart failure is usually a chronic, progressive condition that is very expensive and time-consuming to manage, and that almost invariably leads to early death. Major (and very, very expensive) advances in recent years in the treatment of heart failure have led to a substantial improvement in the quality of life of these patients and has somewhat prolonged their survival.
To a Medicare actuary, this means that people with heart failure (who, 20 years ago, would have taken digitalis and a diuretic — for pennies a day — and died within five years), are now living longer and consuming massive amounts of healthcare dollars while doing so.
While every patient is different, chronic heart failure tends to follow a pattern. Early in the condition, right after the diagnosis is made and initial therapy is instituted, patients tend to do quite well for a period of months or years. But as the underlying heart disease worsens, symptoms increase and hospitalizations become more frequent. As a result, when we are trying to prevent 30-day readmissions, we are generally dealing with a person who has had heart failure for some period of time, whose condition is becoming more severe, who is generally more brittle, and who is becoming more and more difficult to treat. Nonetheless, with careful and aggressive management (which may indeed include a number of hospitalizations in a relatively short period of time), these people can often be returned to a reasonably good quality of life for a while — until their next bout of deterioration.
It is entirely predictable that, when we pull out all the stops to delay readmissions until at least day 31 in such patients, we are likely to hasten death in some of them.
The data now bears this out, and any Medicare administrator who affects surprise or dismay at these results is trying to fool us. Contrary to any expressions of regret we might hear (though I have heard of none so far from government functionaries), this program is a raging success. Not only has it reduced short-term spending on hospital readmissions, but also it has reduced longer-term spending on chronic heart failure. It is a win-win.
I will admit to being wrong about this when Medicare apologizes and rescinds or substantially revises its readmission policy for heart failure. Even Henry II, after all, ended up giving public penance for the “unintended consequence” of his ill-considered words.
Published in Healthcare
100% agree. Lenin discussed controlling the Commanding Heights of an economy. What more than health care in todays day and age? The added bonus is total intrusion in to our medical life and control over our lives.
‘Doctor’ may have a dramatically different connotation in 100 years.
It’s a bad situation, and no one seems to have any good ideas.
Just because they aren’t easy doesn’t mean they aren’t good.
Are you Arnold Katz, my Cardiology prof at UConn in the 1980s?
Rationing Smationing. This country has plenty of resources to provide Healthcare for All; we merely lack the will to pay for it intellignetly.
The answer is simple. A free to the consumer basic benefits plan (which would have rationing) to cover 100% of legal residents of the USA. And no limits on how patients could spend their health care dollars outside the System. Within 6 months the Market would create an efficient, effective set of systems for people willing to pony up their own after-tax dollars.
My doctor has a “membership practice” where I pay her $100 per month, and I get instantaneous service, email contact 24/7, home visits if needed, etc. She is a sole practitioner, with a side business of laser hair-removal that helps pay the bills.
I positively reject any participation in Medicare, now or in the future. I refuse to have myself and my personal physician governed in any way by “what Medicare will pay for”. Currently, I pay for ALL my own medications, never having my husband’s insurance pay (so my MD and I get to determine how many I can buy at once, and how often, NOT the insurance company). And I am 68 years old and still working full-time. There is hope.
That’s a feature, not a bug.
No one on any side wants to publicly admit that there is no way to provide everything to everyone, medically or in any other area. So rationing in some form or other is inevitable. Basic econ 101, supply is limited, demand is not but a balance will be obtained in some way or other.
Gosh. My wife had two surgeries later year, each billed at 23k. Glad you are rich. For those of us under six figure incomes, we don’t have choice.
Yes. But the real question should be “Is there a politician with stones big enough to start talking about it?” Because I think most people who have had to deal with the issue of how much more care is necessary for someone who’s nearing the end of their life, and quality of life questions, etc, would be open to the conversation. They’ve already had it, with themselves, their families, and friends.
It’s a bang for the buck question. You have constrained resources in any system. They’re not infinite. But the bureaucratic/statist method seems like the roughest cut of all. I’d take rationing if it weren’t be sold to me with a big toothy smile, by the leeches we seem to enjoy putting into office.
Try 10. 20 years, max.
What was once a beautiful profession is being killed intentionally. So, so sad…
How much did your car cost? How about your house?
It is true that sometimes medical expenses can be simply overwhelming – leukemia in a child, costing a million dollars over 10 years or something. But the VAST majority of our medical expenses are not like that. Surely we don’t need a government program to pay for this, any more that you need a government program to pay for your car or house.
We used to have an insurance industry that did this as well as the government allowed them to.
Also, if you were paying cash, I will guarantee you that those surgeries would not have cost $23k. Increasing government control of healthcare money has made our billing system just bonkers. No one knows what anything costs. If you were paying it yourself, you would find out.
Bringing the government in to increase efficiency and reduce costs is insanity.
Our attempt at a solution IS the problem. Just stop. Let’s start over.
“billed” at 23K is not what was reimbursed, was it? If that was the billed amount the providers probably got about half of that. You do have choices and I don’t mean foregoing necessary surgery.
A note re: “rationing”. Just wait until boomers find out that joint replacements are most usually elective!
No, but Arnie Katz once tried to recruit me to run EP at UConn, back in ’85 or ’86. Very nice guy.
Another informative post from Dr. Rich. Thx.
Sadly, our own personal unwillingness to face the certainty of death sometimes exacerbates the cost of medical care. My father, in the last stages of multiple myeloma, should have died at home. He had a DNR in place, but my poor step-mother did not have the courage to prevent the EMTs from tubing dad when he went into arrest. As a result, they “saved” his life, he spent 30 days in a coma in CICU, and died the day after he woke up.
The hospital tab (15 years ago, mind you) came to more than $300,000. Who knows what was actually paid. But the reality was – my dad wanted to avoid such an end.
A physician friend of mine told me at the time that our ability to keep a patient alive often outruns our wisdom as to whether that is the best thing to do for the patient.
Just wanted to like this more than once.
I agree. If it weren’t for covert rationing of Medicare, we would have run out of money to finance anything else years ago.
But you’re making my point: covert rationing has been proven to work, as you state above. Overt rationing has failed numerous times in the past. The two biggest examples that come to my mind are SGR and the IPAB. Both were rescinded/euthanized by the very politicians who enacted them. That doesn’t portend well for our national appetite for open rationing.
In my opinion, deliberate and open rationing is the only fair way to run Medicare as a publicly-funded fee-for-service enterprise. I just don’t see any stomach for imposing those controls, aside from a few niches (like Ricochet and some high-brow newsmagazines) on either the right or the left.
This is most definitely one of our biggest problems. Why did your wife’s surgeries cost 23K each? I just do not understand why we cannot get a handle on the extraordinary cost of healthcare. I had a couple of cataract/lens replacement procedures this year that were billed out at about 10K each. They took about 1 hour total prep through exit. The doc can perform about 3 of these a day easily. The facility could do a dozen per day. If I wanted to pay my own way, I would go through all my savings eventually just trying to stay well. It is infeasible under the current non cost competitive, third party pay system. Our health care is great. Too bad we can’t afford it.
I agree completely with this, and indeed have proposed just such a plan in two of my books (the most recent being “Open Wide and Say Moo! — The Good Citizen’s Guide to Right Thoughts and Right Actions Under Obamacare”). This plan would fulfill our ongoing contractual obligations to provide “healthcare” to all citizens (constrained by a strict rationing system), and also allow for a robust free market in “extra” healthcare for people who do not want to be limited by government rationing.
The real fight, as I see it, will be in “allowing” Americans to spend any of their own money on their own healthcare outside the designated system. To allow this would completely ruin the Progressives’ plan for us. When they say “single-payer” that is really what they are talking about. I predict they will fight to the death to forbid any free choice outside their system.
As usual, however, they won’t say so out loud. They will spend the next decade or two gradually leading us to that place, decrying a “two-tiered” healthcare system, and demonizing the rich who go outside the system to get unapproved care.
Since the majority of Americans only use basic healthcare in any given year, your simple solution would still mean that most Americans would be subject to healthcare rationing in most of their doctor’s/HCP visits. I don’t think that’s anything to sneeze at.
More to the point, I don’t think there’s any political will to switch routine health care for the vast majority of Americans from private plans to government-run plans with open rationing.
The most reliable figure is that 5% of Americans account for over 50% of total US healthcare spending in any given year, at an average of about $47,000/year for those high-cost patients. the least-expensive 50% of the population only accounts for about 3% of total expenditures.
So the majority of our medical expenses are indeed incurred by a small group of expensive patients.
I’ve heard that the reimbursement on cataract surgery has not kept pace with innovation in the procedure. That is, ophthalmologists are being paid too much.
Covert rationing doesn’t “work,” if by “work” you mean it actually reduces spending. It only “works” in the sense that, today, it’s the only form of rationing that is politically feasible. But by its very nature covert rationing absolutely requires as much obfuscation as you can devise, with all the waste and inefficiency that implies. Covert rationing virtually always increases costs.
Take the heart failure readmission program discussed in this post. Hospitals expended a tremendous amount in time, personnel, and technology to avoid the onerous 3% penalty. Many of the patients whose readmissions were delayed until day 31 likely had subsequent hospitalizations that were far more complicated and expensive than they would have been if somebody let them in the hospital on day 20. Hospitals that made these efforts probably saved money, given that they avoided the 3% penalty. But a cost analysis for the whole healthcare system would very likely reveal an increase in overall expenditures. This is covert rationing.
Yes, that is precisely what I meant.
Rationing which keeps costs under control by introducing needless complexity and worsening health outcomes is a very poor form of cost control. But it’s still more effective than rationing measures which are immediately emasculated by the very people who enacted them. Superior ideas are, sadly, useless without any will to actually enforce them.
And while your specific example of the heart failure incentives may indeed lead to higher overall systemic costs, the very fact that Medicare hasn’t grown to consume our entire budget despite essentially limitless demand suggests that other measures taken over the years to subtly restrict expenditures have indeed proven successful at cost control.
To prevent any misunderstanding: I think Medicare as a general policy is both doomed to always be incredibly inefficient, and is deeply immoral to boot.
But I think there’s no debate that our electorate has by and large embraced it as a crucial component of our social safety net. If we can’t rescind it, we might as well discuss the least awful measures to rein in its spending while maintaining outcomes and individual quality of life and dignity to the greatest extent possible.
Overt rationing, as you term it, is the most just and efficient way to achieve this. But I don’t see the American public being able to swallow this concept within the next 5-10 years. I think the best we can do is try to slowly educate and accustom the public to these concepts so they become more palatable when our national debts actually do start affecting our ability to borrow.
One more response to Bryan. I am not “rich” by any means, but I have ample “retirement” savings, and if those funds must be used for my health care once my husband (9 years my junior and making twice what I make) and I are no longer working, then so be it. That’s why we have savings! And I totally agree with MLH, if you pay cash you pay less, based on your negotiations with providers. My doctor has already told me that if I end up without any “insurance” that she would treat me on a cash basis. Also, right now I am covered very well under hubby’s excellent insurance plan from work at a big company. That will change when he retires, and I am ready to accept whatever comes. My company provides high-deductible plans only, and I would be covered by that if necessary.
I once had a patient who is Dutch. She came to see me because of some knee pain. She was in her early 70s at the time and covered by Medicare. She figured that she probably wasn’t going to be able to hike the Grand Canyon any more or, at least, not like she used to. She only wanted a home program because
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her health is her responsibility and not her neighbors!
@Mendel:
I think we’re largely in agreement, perhaps except for this:
“But I don’t see the American public being able to swallow this concept within the next 5-10 years.”
You are far more optimistic than I. I’d have to give it 50 years.
That may be true. The actual reimbursement of charges in the healthcare industry is so obfuscated that even when I try to unpack the bills (of which I pay none out of my own pocket) it is nearly impossible. Some charges are paid by medicare. Others are paid by my plan F supplemental. And then there is the untimely way these bills just kind of waft into my mailbox.
My wife, also an MD, required three complex operations in 2016 including the creation of two new cervical vertebrae and the fusion of three, including the new ones. Life saving, life improving very very high tech work requiring 10,8 and 5 hours of operative time, creation of prosthetic bones from her own tissues using MRI data, elaborate monitoring to avoid nerve damage. Bill for the first case alone, excluding nothing, over $ 300,000. Yeah, you read that right, $300,000. For all three, over a half mill.
insurance paid $197,000 for the first case alone—yes they did—there were write-offs, we bargained etc, the result being that our final out of pocket for the whole kitten caboodle was $9500, which we paid in full.
Good high tech medical care is costly, but an honest accounting would be a good first step.