Insuring Resources Commentary:
This is how Wisconsin can lead the way to show how efficient health care can be delivered. Health care reform must include incentives to providers to share their costs and quality outcomes to drive competition to more cost effective and quality care.
The WHIO Health Analytics Exchange announced today the launch of a database to assess health care quality, costs.
For more information visit WHIP at http://www.wisconsinhealthinfo.org/
___________________ _________________________
from the Milwaukee Journal Sentinel
Nov. 16, 2009 3:10 p.m. |
A 4-year-old collaborative effort to collect data from Wisconsin's insurers, hospitals, major employers and others has launched a database that can be used to analyze health systems' performance.
The WHIO Health Analytics Exchange contains information from millions of insurance claims and is being used by large medical groups, state government, business groups and other members of the Wisconsin Health Information Organization, said Julie Bartels, the organization's executive director.
The database shows, for example, that treatment for congestive heart failure in the Fox Valley and Madison costs significantly less than the statewide average, meaning those areas are much more efficient at caring for that disease, Bartels said.
Treatment for congestive heart failure costs slightly more in the Milwaukee area than the statewide average, the data show.
"The breadth of information in our repository is astounding," said Bartels, who will discuss Wisconsin's experience building the database Tuesday at an American Health Insurance Plans conference in Chicago.
"To us, the real opportunity is to look across all the claims aggregated here and get a picture of where we have cost-effective health care being delivered in Wisconsin, and where we have an opportunity to improve the cost-effectiveness of health care," said Karen Timberlake, secretary of the state Department of Health Services and a WHIO board member.
It's difficult to see trends when comparing a few heart attack treatments. But when you can look at thousands of procedures around the state, "it's really powerful," Timberlake said. "You start to see there are real differences in the way medicine is practiced."
That kind of information will help medical providers improve their care, said John Toussaint, president and chief executive of the ThedaCare Center for Healthcare Value in Appleton. If a provider discovers it is expensive or less efficient in a certain area, it "can either say, 'I'm going to put resources into this, or maybe not do it anymore,' " Toussaint said.
Ten founding members contributed $3 million to WHIO to develop the database, and six more fee-paying members have joined. The state contributed $1.55 million.
WHIO has given a three-year, $4.5 million contract to Ingenix, a health care information and research company, to manage the data warehouse and analyze the information. Ingenix is part of UnitedHealth Group Inc.
"We all know there is waste going on in health care, and it contributes to higher health care premiums," Timberlake said. "This is one way we in Wisconsin can work to hold down the cost."
Showing posts with label Efficient. Show all posts
Showing posts with label Efficient. Show all posts
Monday, November 16, 2009
Thursday, September 24, 2009
Mandate Minus Price Controls may increase healthcare costs
This is what I've been blogging about since the beginning of Insuring Resources.
Congress has been debating health insurance reform, what we need even more is health care reform to fundamentally reduce costs. To do it we need provider incentives to implement Lean processes. See my other post from earlier today on ThedaCare for more details on how to reform HEALTH CARE.
--------------- ------------------- ---------------
With lawmakers reluctant to limit what insurers may charge, there's little to slow soaring premiums. Coupled with millions of new customers, that adds up to higher costs for taxpayers and consumers.
By Noam N. Levey and James Oliphant
LA times
September 24, 2009
E-mail Print Text Size
Reporting from Washington - In the drive to bring health coverage to almost every American, lawmakers have largely rejected restrictions on how much insurers can charge, sparking fears that consumers will continue to face the skyrocketing premium increases of recent years.
The legislators' reluctance to control premium costs comes despite the fact that they intend to require virtually all Americans to get health insurance, an unprecedented mandate -- long sought by insurance companies -- that would mark the first time the federal government has compelled consumers to buy a single industry's product, effectively creating a captive market.
"We are about to force at least 30 million people into an insurance market where the sharks are circling," said California Lt. Gov. John Garamendi, a Democrat who served as the state's insurance commissioner for eight years. "Without effective protections, they will be eaten alive."
Soaring premiums coupled with millions of new customers forced to buy policies would likely mean higher costs for taxpayers to cover government subsidies for lower-income families and individuals.
They could also mean bigger bills for people who get benefits through work, as well as for their employers.
"I don't think there is any degree of confidence that our costs won't continue to go up," said Keith Ashmus, chairman of the National Small Business Assn.
If premiums continue to rise as quickly as they have over the last five years, the average annual cost of a family policy will exceed $24,000 in 10 years, up from $13,375 now, according to the nonprofit Henry J. Kaiser Family Foundation and the Health Research & Educational Trust.
"If the government is going to require people to buy an insurance policy, they have to guarantee it is affordable," said Jamie Court, president of Consumer Watchdog. "It is unconscionable not to."
Soaring premiums could eventually stir market forces, increasing competition and potentially restraining costs. But that would be a lengthy process, and potential competitors would face huge start-up costs.
Many experts believe an insurance mandate is vital to a healthcare overhaul. With everyone in the system, the nation's medical bill could be spread more broadly, alleviating pressure on those who have insurance to pay for those who don't.
All of the major healthcare bills would penalize people who do not get health insurance.
But Democrats have shied away from regulating premiums in the face of charges from business leaders and Republicans that controlling what insurers charge would be meddling too much in the private sector.
As a result, while states have long supervised what companies charge for mandated automobile and homeowners insurance, the idea has been largely banished from the healthcare debate.
"That would be a very substantial additional intervention in the marketplace," said Sen. Jeff Bingaman (D-N.M.), a member of a bipartisan group of lawmakers who worked with Senate Finance Committee Chairman Max Baucus (D-Mont.) on his healthcare bill. "I just don't think the support would be there for that kind of a change."
Nor are lawmakers seriously considering any proposals to regulate what doctors, hospitals, drug makers and other healthcare providers charge -- a strategy used by several European countries to control healthcare spending.
In those systems -- some of which, like the United States, feature a blend of private insurers and government programs -- the government sets prices that providers charge to everyone.
"That is just too tough a row to hoe in America," said Peter Lee, executive director of the Pacific Business Group on Health, an association of large employers in California, many of whom are nonetheless concerned about how much they are getting charged for medical care.
Senior House Democrats have proposed the most far-reaching government regulation of the insurance industry.
Their bill, which is still being debated, seeks to control insurance premiums in part by limiting how much companies can spend on nonmedical expenses such as marketing and dividends to shareholders.
The House bill also features a new government insurance program -- or "public option" -- that advocates believe could offer consumers a lower-priced alternative to private plans and, in turn, pressure insurers to rein in premiums.
Congress has been debating health insurance reform, what we need even more is health care reform to fundamentally reduce costs. To do it we need provider incentives to implement Lean processes. See my other post from earlier today on ThedaCare for more details on how to reform HEALTH CARE.
--------------- ------------------- ---------------
With lawmakers reluctant to limit what insurers may charge, there's little to slow soaring premiums. Coupled with millions of new customers, that adds up to higher costs for taxpayers and consumers.
By Noam N. Levey and James Oliphant
LA times
September 24, 2009
E-mail Print Text Size
Reporting from Washington - In the drive to bring health coverage to almost every American, lawmakers have largely rejected restrictions on how much insurers can charge, sparking fears that consumers will continue to face the skyrocketing premium increases of recent years.
The legislators' reluctance to control premium costs comes despite the fact that they intend to require virtually all Americans to get health insurance, an unprecedented mandate -- long sought by insurance companies -- that would mark the first time the federal government has compelled consumers to buy a single industry's product, effectively creating a captive market.
"We are about to force at least 30 million people into an insurance market where the sharks are circling," said California Lt. Gov. John Garamendi, a Democrat who served as the state's insurance commissioner for eight years. "Without effective protections, they will be eaten alive."
Soaring premiums coupled with millions of new customers forced to buy policies would likely mean higher costs for taxpayers to cover government subsidies for lower-income families and individuals.
They could also mean bigger bills for people who get benefits through work, as well as for their employers.
"I don't think there is any degree of confidence that our costs won't continue to go up," said Keith Ashmus, chairman of the National Small Business Assn.
If premiums continue to rise as quickly as they have over the last five years, the average annual cost of a family policy will exceed $24,000 in 10 years, up from $13,375 now, according to the nonprofit Henry J. Kaiser Family Foundation and the Health Research & Educational Trust.
"If the government is going to require people to buy an insurance policy, they have to guarantee it is affordable," said Jamie Court, president of Consumer Watchdog. "It is unconscionable not to."
Soaring premiums could eventually stir market forces, increasing competition and potentially restraining costs. But that would be a lengthy process, and potential competitors would face huge start-up costs.
Many experts believe an insurance mandate is vital to a healthcare overhaul. With everyone in the system, the nation's medical bill could be spread more broadly, alleviating pressure on those who have insurance to pay for those who don't.
All of the major healthcare bills would penalize people who do not get health insurance.
But Democrats have shied away from regulating premiums in the face of charges from business leaders and Republicans that controlling what insurers charge would be meddling too much in the private sector.
As a result, while states have long supervised what companies charge for mandated automobile and homeowners insurance, the idea has been largely banished from the healthcare debate.
"That would be a very substantial additional intervention in the marketplace," said Sen. Jeff Bingaman (D-N.M.), a member of a bipartisan group of lawmakers who worked with Senate Finance Committee Chairman Max Baucus (D-Mont.) on his healthcare bill. "I just don't think the support would be there for that kind of a change."
Nor are lawmakers seriously considering any proposals to regulate what doctors, hospitals, drug makers and other healthcare providers charge -- a strategy used by several European countries to control healthcare spending.
In those systems -- some of which, like the United States, feature a blend of private insurers and government programs -- the government sets prices that providers charge to everyone.
"That is just too tough a row to hoe in America," said Peter Lee, executive director of the Pacific Business Group on Health, an association of large employers in California, many of whom are nonetheless concerned about how much they are getting charged for medical care.
Senior House Democrats have proposed the most far-reaching government regulation of the insurance industry.
Their bill, which is still being debated, seeks to control insurance premiums in part by limiting how much companies can spend on nonmedical expenses such as marketing and dividends to shareholders.
The House bill also features a new government insurance program -- or "public option" -- that advocates believe could offer consumers a lower-priced alternative to private plans and, in turn, pressure insurers to rein in premiums.
Health Affairs article on ThedaCare's Lean Processes
This is what I have been advocating from the start and now Health Affairs, the prestigious journal on health policy, has published an article on their practices.
The link-
http://content.healthaffairs.org/cgi/content/full/28/5/1343?ijkey=kECL9wF9SR8IE&keytype=ref&siteid=healthaff
This spells out the successes of ThedaCare and lessons for health care reform across America.
Below are small excerpts from the article
------------
Here's the abstract- U.S. taxpayers waste far too much money on health care that is merely average or worse. Some health care providers, including ThedaCare, a major Wisconsin health care company, are using the tools of lean manufacturing to eliminate millions of dollars of waste that obstructs the provision of effective medicine. ThedaCare studies care delivery processes to improve care and lower costs. Lessons from lean manufacturing and the Institute for Healthcare Improvement are lowering incidence of preterm births, improving heart attack response rates, and changing the way care is delivered in hospitals to a collaborative, team-based approach.
ThedaCare's results- Since Collaborative Care began with a pilot unit in 2007, we have cared for 2,400 people and recorded dramatic improvement in patient satisfaction, quality performance, and medication reconciliation (Exhibit 1). The cost of care in a Collaborative Care ward is 30 percent less than in a traditional ward. These data convinced ThedaCare board members to convert all hospital beds to Collaborative Care. This decision was projected to improve the buildings’ net present value by 63 percent, or more than $25 million.
Conclusion-
The changes we have described involve a fundamental shift in the way people think about and deliver care. It is not just about saving money or doing less with more. This is about returning to the core scientific principles of modern medicine.
We begin with a hypothesis that performance could be better. Then we change the process, measure it, study its effect, and incorporate it into daily work. Before we can convince other health care organizations to join us in radically improving performance, however, there must be some incentive. If we prove that lean health care will put more money in a hospital’s pocket, only to have Medicare take it out of another pocket, we will not enlist many converts. Similarly, if a national insurance plan continues Medicare’s rules, paying more money for inefficient health care, we will get a lot more inefficient care. Quality will only thrive when quality is demanded.
There is much more than money at stake. We must find a way to reward and encourage more efficient, better-quality health care, and that’s what we will get.
The link-
http://content.healthaffairs.org/cgi/content/full/28/5/1343?ijkey=kECL9wF9SR8IE&keytype=ref&siteid=healthaff
This spells out the successes of ThedaCare and lessons for health care reform across America.
Below are small excerpts from the article
------------
Here's the abstract- U.S. taxpayers waste far too much money on health care that is merely average or worse. Some health care providers, including ThedaCare, a major Wisconsin health care company, are using the tools of lean manufacturing to eliminate millions of dollars of waste that obstructs the provision of effective medicine. ThedaCare studies care delivery processes to improve care and lower costs. Lessons from lean manufacturing and the Institute for Healthcare Improvement are lowering incidence of preterm births, improving heart attack response rates, and changing the way care is delivered in hospitals to a collaborative, team-based approach.
ThedaCare's results- Since Collaborative Care began with a pilot unit in 2007, we have cared for 2,400 people and recorded dramatic improvement in patient satisfaction, quality performance, and medication reconciliation (Exhibit 1). The cost of care in a Collaborative Care ward is 30 percent less than in a traditional ward. These data convinced ThedaCare board members to convert all hospital beds to Collaborative Care. This decision was projected to improve the buildings’ net present value by 63 percent, or more than $25 million.
Conclusion-
The changes we have described involve a fundamental shift in the way people think about and deliver care. It is not just about saving money or doing less with more. This is about returning to the core scientific principles of modern medicine.
We begin with a hypothesis that performance could be better. Then we change the process, measure it, study its effect, and incorporate it into daily work. Before we can convince other health care organizations to join us in radically improving performance, however, there must be some incentive. If we prove that lean health care will put more money in a hospital’s pocket, only to have Medicare take it out of another pocket, we will not enlist many converts. Similarly, if a national insurance plan continues Medicare’s rules, paying more money for inefficient health care, we will get a lot more inefficient care. Quality will only thrive when quality is demanded.
There is much more than money at stake. We must find a way to reward and encourage more efficient, better-quality health care, and that’s what we will get.
Saturday, September 12, 2009
LaCrosse health plan is potential model to build from
http://www.jsonline.com/business/59087997.html
This is exactly the type of health care model we should be utilizing to undertake true reform.
Efficient, quality, and integrated care. I apologize for the length of this entry. I think this is very informative, however, so I'd hate to edit it too much.
-----------------------
Here are excerpts:
La Crosse - The United States would spend less money on health care if more health systems were like Gundersen Lutheran.
This community in western Wisconsin has the fourth-lowest health care costs in the country based on Medicare spending.
Only Honolulu and two North Dakota cities, Fargo and Minot, rank lower. At the same time, the quality of care is as good as or better than most parts of the country.
Gundersen Lutheran, a health care system that employs 6,600 people, including 453 physicians, is one reason. The other is its crosstown competitor, Franciscan Skemp Healthcare, part of the famed Mayo Health System.
Both are among the health systems being cited as proof that the United States can slow the rise in health care spending without hurting quality.
"There are models available, and we happen to be one of them," said Jeff Thompson, a physician and chief executive of Gundersen Lutheran.
Medicare spent 30% less on average for each beneficiary in the La Crosse area than the national average in 2006, the most recent year for which data is available, according to the Dartmouth Atlas of Health Care.
It spent 64.5% less than in Miami and 61% less than in McAllen, Texas, the two most costly areas. And it spent 23% less than in the Milwaukee area.
The huge regional variations in Medicare spending - documented by more than 30 years of research at Dartmouth College - occur after adjusting for age, sex and race.
They also exist among areas with similar poverty rates. And they exist within the same geographic areas, varying from one hospital to another.
The variations show that some parts of the country - and some health systems - simply make better use of health care dollars.
The doctors and hospitals in places such as La Crosse, Eugene, Ore., and Grand Junction, Colo., do a better job of eliminating duplicative and unnecessary care, preventing illness or detecting it earlier, avoiding unneeded or preventable hospitalizations, increasing productivity and reducing administrative costs.
They also challenge the contention that slowing the rise in health care spending will mean denying patients needed care. And they refute the widely held belief that more care is better care, and that expensive care is even better.
The evidence is indisputable that high-cost communities do not have better health outcomes, said Tom Oliver, a professor at the University of Wisconsin School of Medicine and Public Health.
"We are spending billions of dollars that is wasted in our health care system," Oliver said.
Quality care
No simple explanation exists why Gundersen Lutheran or the Mayo Health System can provide quality care at a fraction of the cost of their counterparts in Miami or McAllen. But both are integrated health care systems that employ doctors, and research suggests that integrated systems and large physician practices closely aligned with a hospital often produce better care at a lower cost.
Gundersen Lutheran and other integrated systems also often operate their own health insurance plans. That, too, could contribute to their lower costs by giving them an additional incentive to provide efficient care.
The Gundersen Lutheran health plan accounts for about 28% of the revenue at its hospital and its clinics. But when a patient is insured by the plan, the cost of his or her care isn't passed on to an insurance company. Gundersen Lutheran instead incurs the costs.
Being integrated gives Gundersen Lutheran a huge advantage in coordinating care, getting information on best practices to physicians and creating a culture of shared values, said Thompson, its chief executive.
Doctors run the health system, and they are expected to become involved in its operations and to work to control costs, he said.
The health system's orthopedic surgeons, for example, reduced costs by $900,000 a year just by getting together and agreeing to use medical devices from one supplier.
Standardizing care also is easier in an integrated system. The doctors at Gundersen Lutheran have developed specific guidelines and order sets for specific diseases and procedures.
When Gundersen Lutheran installed an information technology system in its hospital, it had more than 300 order sets, said Brian Mulrennan, an internist. It was told by Epic Systems Corp., the Madison-area company that designed the system, that some hospitals had none.
This means that doctors who specialize in diseases of the ear, nose and throat, for example, have developed standard orders for the post-operative care for children who have had tubes placed in their ears for chronic infections.
The standard orders lessen the variation in cost and outcomes.
At the same time, nurses no longer have to follow slightly different orders from each physician, thereby reducing the chance of error.
All this is harder to do when doctors work for dozens of small practices. First, the doctors have to be willing to take the time to develop and agree on the guidelines or standard orders.
And the hospital may be wary of antagonizing doctors who bring it patients and revenue.
There's a saying in health care that a hospital's first customer is the doctor. That's less of a problem in an integrated system that employs them.
Practice guidelines and standard order sets also can help control discretionary care, such as office visits, referrals to specialists and the use of imaging tests. It is one reason for the huge variation in health care costs.
Culture also plays a part. The doctors at Gundersen Lutheran repeatedly refer to the value placed on cooperation and on a focus on the patient. And the health system works to recruit doctors who understand those values.
Gunderson doctors are well paid and make excellent livings. They just aren't the highest paid.
When recruiting, if a doctor notes that he or she could make more money in a Chicago suburb, Thompson will say, "Then you should go."
The low costs incurred by Medicare in La Crosse also stem partly from a communitywide initiative, begun in the 1980s, to encourage people to have advance directives - legal documents that state patients' decisions about end-of-life care should they become incapacitated.
"It's now so part of the process of care that, when we don't know a patient's wishes, it's upsetting to people," said Bud Hammes, a clinical ethicist and director of medical humanities at the Gundersen Lutheran Medical Foundation.
The program, which has drawn international attention, enables doctors to know when patients don't want heroic measures taken to prolong their lives.
In the last six months of life, Medicare spends 29%, or about $8,000, less on patients treated at Gundersen Lutheran than the national average. And it spends roughly $10,000 less than at Aurora St. Luke's Medical Center and Froedtert Hospital, the two hospitals in the Milwaukee area with the highest costs.
No quick cures
National data on the wide variation in costs is available to researchers only for Medicare patients. But studies suggest that how doctors and hospitals provide care for Medicare beneficiaries indicates how they treat patients covered by commercial health plans.
Gundersen Lutheran gives credence to that research. The health system says that its rate increases for commercial plans for the past three years were below the rate of inflation.
That's almost unheard of in health care.
The challenge is how to make the U.S. health care system look more like Gundersen Lutheran and other integrated systems.
That won't be easy to do.
Integrated systems, including large physician practices closely affiliated with hospitals, such as Dean Health System in Madison and the Marshfield Clinic, are common in Wisconsin. But they aren't the norm in the U.S. health care system.
As recently as 2005, roughly half of all office visits were made to practices with one or two physicians, according to the National Ambulatory Medical Care Survey.
Yet the Dartmouth research suggests that high-cost markets are characterized by a much higher percentage of physicians in solo or two-person practices. That kind of fragmentation is characteristic of the U.S. health care system.
It also will be one of the challenges in slowing the growth in health care spending.
This is exactly the type of health care model we should be utilizing to undertake true reform.
Efficient, quality, and integrated care. I apologize for the length of this entry. I think this is very informative, however, so I'd hate to edit it too much.
-----------------------
Here are excerpts:
La Crosse - The United States would spend less money on health care if more health systems were like Gundersen Lutheran.
This community in western Wisconsin has the fourth-lowest health care costs in the country based on Medicare spending.
Only Honolulu and two North Dakota cities, Fargo and Minot, rank lower. At the same time, the quality of care is as good as or better than most parts of the country.
Gundersen Lutheran, a health care system that employs 6,600 people, including 453 physicians, is one reason. The other is its crosstown competitor, Franciscan Skemp Healthcare, part of the famed Mayo Health System.
Both are among the health systems being cited as proof that the United States can slow the rise in health care spending without hurting quality.
"There are models available, and we happen to be one of them," said Jeff Thompson, a physician and chief executive of Gundersen Lutheran.
Medicare spent 30% less on average for each beneficiary in the La Crosse area than the national average in 2006, the most recent year for which data is available, according to the Dartmouth Atlas of Health Care.
It spent 64.5% less than in Miami and 61% less than in McAllen, Texas, the two most costly areas. And it spent 23% less than in the Milwaukee area.
The huge regional variations in Medicare spending - documented by more than 30 years of research at Dartmouth College - occur after adjusting for age, sex and race.
They also exist among areas with similar poverty rates. And they exist within the same geographic areas, varying from one hospital to another.
The variations show that some parts of the country - and some health systems - simply make better use of health care dollars.
The doctors and hospitals in places such as La Crosse, Eugene, Ore., and Grand Junction, Colo., do a better job of eliminating duplicative and unnecessary care, preventing illness or detecting it earlier, avoiding unneeded or preventable hospitalizations, increasing productivity and reducing administrative costs.
They also challenge the contention that slowing the rise in health care spending will mean denying patients needed care. And they refute the widely held belief that more care is better care, and that expensive care is even better.
The evidence is indisputable that high-cost communities do not have better health outcomes, said Tom Oliver, a professor at the University of Wisconsin School of Medicine and Public Health.
"We are spending billions of dollars that is wasted in our health care system," Oliver said.
Quality care
No simple explanation exists why Gundersen Lutheran or the Mayo Health System can provide quality care at a fraction of the cost of their counterparts in Miami or McAllen. But both are integrated health care systems that employ doctors, and research suggests that integrated systems and large physician practices closely aligned with a hospital often produce better care at a lower cost.
Gundersen Lutheran and other integrated systems also often operate their own health insurance plans. That, too, could contribute to their lower costs by giving them an additional incentive to provide efficient care.
The Gundersen Lutheran health plan accounts for about 28% of the revenue at its hospital and its clinics. But when a patient is insured by the plan, the cost of his or her care isn't passed on to an insurance company. Gundersen Lutheran instead incurs the costs.
Being integrated gives Gundersen Lutheran a huge advantage in coordinating care, getting information on best practices to physicians and creating a culture of shared values, said Thompson, its chief executive.
Doctors run the health system, and they are expected to become involved in its operations and to work to control costs, he said.
The health system's orthopedic surgeons, for example, reduced costs by $900,000 a year just by getting together and agreeing to use medical devices from one supplier.
Standardizing care also is easier in an integrated system. The doctors at Gundersen Lutheran have developed specific guidelines and order sets for specific diseases and procedures.
When Gundersen Lutheran installed an information technology system in its hospital, it had more than 300 order sets, said Brian Mulrennan, an internist. It was told by Epic Systems Corp., the Madison-area company that designed the system, that some hospitals had none.
This means that doctors who specialize in diseases of the ear, nose and throat, for example, have developed standard orders for the post-operative care for children who have had tubes placed in their ears for chronic infections.
The standard orders lessen the variation in cost and outcomes.
At the same time, nurses no longer have to follow slightly different orders from each physician, thereby reducing the chance of error.
All this is harder to do when doctors work for dozens of small practices. First, the doctors have to be willing to take the time to develop and agree on the guidelines or standard orders.
And the hospital may be wary of antagonizing doctors who bring it patients and revenue.
There's a saying in health care that a hospital's first customer is the doctor. That's less of a problem in an integrated system that employs them.
Practice guidelines and standard order sets also can help control discretionary care, such as office visits, referrals to specialists and the use of imaging tests. It is one reason for the huge variation in health care costs.
Culture also plays a part. The doctors at Gundersen Lutheran repeatedly refer to the value placed on cooperation and on a focus on the patient. And the health system works to recruit doctors who understand those values.
Gunderson doctors are well paid and make excellent livings. They just aren't the highest paid.
When recruiting, if a doctor notes that he or she could make more money in a Chicago suburb, Thompson will say, "Then you should go."
The low costs incurred by Medicare in La Crosse also stem partly from a communitywide initiative, begun in the 1980s, to encourage people to have advance directives - legal documents that state patients' decisions about end-of-life care should they become incapacitated.
"It's now so part of the process of care that, when we don't know a patient's wishes, it's upsetting to people," said Bud Hammes, a clinical ethicist and director of medical humanities at the Gundersen Lutheran Medical Foundation.
The program, which has drawn international attention, enables doctors to know when patients don't want heroic measures taken to prolong their lives.
In the last six months of life, Medicare spends 29%, or about $8,000, less on patients treated at Gundersen Lutheran than the national average. And it spends roughly $10,000 less than at Aurora St. Luke's Medical Center and Froedtert Hospital, the two hospitals in the Milwaukee area with the highest costs.
No quick cures
National data on the wide variation in costs is available to researchers only for Medicare patients. But studies suggest that how doctors and hospitals provide care for Medicare beneficiaries indicates how they treat patients covered by commercial health plans.
Gundersen Lutheran gives credence to that research. The health system says that its rate increases for commercial plans for the past three years were below the rate of inflation.
That's almost unheard of in health care.
The challenge is how to make the U.S. health care system look more like Gundersen Lutheran and other integrated systems.
That won't be easy to do.
Integrated systems, including large physician practices closely affiliated with hospitals, such as Dean Health System in Madison and the Marshfield Clinic, are common in Wisconsin. But they aren't the norm in the U.S. health care system.
As recently as 2005, roughly half of all office visits were made to practices with one or two physicians, according to the National Ambulatory Medical Care Survey.
Yet the Dartmouth research suggests that high-cost markets are characterized by a much higher percentage of physicians in solo or two-person practices. That kind of fragmentation is characteristic of the U.S. health care system.
It also will be one of the challenges in slowing the growth in health care spending.
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