MANAGED CARE December 1999. ©1999 MediMedia USA
A CONVERSATION WITH MICHAEL L. MILLENSON
This former journalist is participating in one of the biggest stories of our time: Helping health plans and physicians locate that elusive point where doing the right thing and maximizing bottom lines intersect.
Michael L. Millenson's Demanding Medical Excellence: Doctors and Accountability in the Information Age (University of Chicago Press, 1997) is the story of how American medicine is learning how to do the right thing right. Millenson was a three-time Pulitzer Prize nominee during his dozen years as a reporter with the Chicago Tribune. He brings an eye for detail, a historian's perspective, and a storyteller's narrative flow to the saga of American physicians struggling to harness the tools of the information age to better measure and improve the quality of their work.
Millenson is a principal in the Health Care and Group Benefits practice of William M. Mercer Inc. He switched from journalism to consulting to have a more direct impact on the direction of change in the health care marketplace. He is a member of the board of directors of the Association for Health Services Research, and is on Managed Care magazine's editorial advisory board. He spoke recently with Senior Contributing Editor Patrick Mullen.
MANAGED CARE: Why did you write Demanding Medical Excellence?
MICHAEL MILLENSON: I discovered the quality-of-care issue and some of the leaders in this field while I was on a journalistic fellowship in 1986. The idea that you could manage and measure quality of care struck me as having stunning implications for consumers. If you know what works best, then obviously you can work toward doing what works best. But consumers didn't have any idea that this capacity existed. Moreover, the public debate, especially today, is all about access to care and cost of care. Quality is virtually taken for granted, except when someone on one side of a debate says that if the other person gets what he's proposing, that would hurt quality of care. Americans equate quality with having access to as much care as we want, receiving it from the doctor or hospital of our choice, for as little money as we want to pay. Clearly that's not realistic, but the public often doesn't realize it.
MC: How did you come to focus on accountability?
MILLENSON: The more I got into it, the more surprised and shocked I was at the lack of consistent medical excellence in the U.S. health care system. The key question is, "If more care isn't better, what is?" The answer is that better care is better. As simple as that equation sounds, it's far from where we are in the policy debate today. When I started to write the book I had been a health care reporter for roughly 12 years, and I had done reporting in much greater depth than most reporters. In reading the medical literature about quality of care, I was stunned to find that in large cities and small towns, at academic medical centers and in community institutions, there is no guarantee that you will get the best possible care according to what the medical literature says that care is. After World War II, when it had total autonomy, the medical profession failed to act on its own to systematically improve quality, put into place evidence-based medicine, and reduce medical mistakes.
MC: What happened to change that?
MILLENSON: The lesson of that failure is that they only started talking about those things in response to threats from the outside. In other words, grab them by their wallets and their hearts and minds will follow.
MC: In the book you write about Andy Grove, Intel's CEO, and his battle with prostate cancer. He said that in his business, researchers compare their work to other people's previously published results, but that things seemed to be different in medicine. Medical researchers tended to publish their own data without comparing those data to earlier research.
MILLENSON: That was a terrific comment that he made. You would think that there would be comparisons. In fact, all you have to prove is that what you're doing is safe. It's worse than that for surgical procedures. As long as you're not using a new device or something else that needs the Food and Drug Administration's approval, the federal acts governing the FDA specifically exempt physicians from having to give any proof at all. As long as you are practicing reasonably within your community standards, and seem to be a well-educated individual who's trying hard, you're left alone. That's where managed care has the potential to make things a great deal better, which the public doesn't realize.
MC: How can managed care make things better?
MILLENSON: There are only three ways to control the total cost of any good or service. The first way is to pay less. Managed care attacked the unit cost of health care on behalf of purchasers by extracting discounts from doctors and hospitals. These were often fear-related volume discounts, where the plan may promise the physician extra patients, but absolutely promises fewer patients if the doctor doesn't do this or that. So the plan gets a 20-percent discount, keeps 10 percent, gives the purchaser 10 percent, and thanks God for capitalism. This worked well when there was a surplus of doctors and hospitals. The problem is that there's a limit to that approach. Eventually, you get a balance of supply and demand, and when prices fall below a certain point, the provider community simply says "no" and walks away from managed care contracts. We've started to see that in different markets. The second way to control the total cost of any service is to use less. The original prepaid group practices did this very well because they compared themselves to highly wasteful fee-for-service medicine. The problem with that is that practice styles have changed and the obvious waste is gone, so you can't pay less. Another way that you can pay less is to increase the number of uninsured, which lowers demand for services. Then we'll have more money left to make sure that middle-class patients can get MRIs on their joggers' knees and all the expensive pharmaceuticals they want.
MC: That works well for a corporate health-benefits director, but not so well for the person running an ER at a public hospital.
MILLENSON: Precisely, and that approach eventually can backfire. So if you can't just pay less, and you can't just do less, the only way left to control the cost of any good or service is to do things better. That means achieving greater economic efficiency, delivering the same or better quality for the same or lower price. If you can't measure anything else other than price, then you turn health care into a commodity. This is the key driving force in the transformation of American medicine. If providers simply say to the purchasers, "We're all terrific, all of our doctors have really nice diplomas; all of our hospitals are accredited by the Joint Commission, so we must be high quality," then purchasers are free to say, "Fine. That's terrific. I'll just take whoever's the lowest price." Commodity health care is not something that providers or anyone else in their right mind wants. Purchasers don't just want to buy cheap. They want to buy well, so they're going toward value health care. Providers and health plans are working to measure quality. Some of them are helping to drive this change and some of them are being pushed into it.
MC: Who do you see as enlightened among the health plans?
MILLENSON: Most of the large plans have important programs, including some of the names that we all know, Harvard Pilgrim, Kaiser Permanente, Group Health Cooperative of Puget Sound. Lee Newcomer, the medical director at United HealthGroup, clearly is trying to work towards buying on the basis of quality in order to lower cost. A lot of individual plans do a good job and they're getting better. They see the move toward greater accountability as the way to go.
MC: So it becomes enlightened self-interest. Does that suggest that the antipathy between physicians and plans during the last decade might give way to a realization that they have to figure out how to do things the right way together?
MILLENSON: Yes and no. Certainly doctors are much more amenable to talking about clinical issues than they are to simply being told "discount, discount, discount," "don't do, don't do, don't do," and "I'm going to oversee you." Having said that, in the real world most physicians contract with numerous plans. If 10 different plans have 10 different diabetes management programs, then you're in trouble. As one AMA trustee pointed out, one plan told him that it was suspicious because he was doing too few C-sections, while another plan was suspicious because it thought he was doing too many. He had different shares of patients in each of those plans. So while it certainly helps that the discussion moves to clinical improvement from cost cutting, there's a long way to go to relieve physicians' administrative burden. This also opens the way for doctors to take back at least shared control of the system.
MC: Physician groups are going under in California and elsewhere. Physicians say they can't stay in business due to managed care, let alone reassert control of the system. How serious is this solvency crunch?
MILLENSON: I think it's a false issue. I belonged to an IPA 15 years ago that went bankrupt, which I guess made it a trendsetter. It went bankrupt because the physicians presumed that they would practice medicine and the finances would take care of themselves. Having a physician-run group does not assure success. Doctors are not renowned for being tremendous financial managers.
MC: In the book you compare the post-World War II American auto industry and health care system. Both were fiercely nationalistic for a long time. You talked about Chrysler's efforts to cut health-benefit costs and improve quality in the 1970s and '80s. It's now part of DaimlerChrysler, a global company competing in a world market. How will the health care system in this country change as a result of the more international perspective of its corporate customers?
MILLENSON: American physicians still largely perceive themselves within a nationalistic framework, as having the best health care system in the world and not having a lot to learn about system organization from other nations. Clearly, people who are into health policy are an exception to that rule. Let me give you an example. The current health-policy debate in this country is all about access to care and accusations that managed care companies engage in rationing to save money and make profits for themselves. It is entirely possible that we will decide to spend more and more money on health care. What's different from the 1980s and early 1990s is global competition, and it hasn't been recognized. It's not that American doctors in California will be replaced by doctors in India, in the way that American software workers in California can be replaced by workers in India or Ireland. The problem is that if our economy spends too much on health care, we're not going to be competitive and jobs will leave. Baby boomers can vote with their wallets for more and more health care for themselves and for their parents. We can let the percentage of gross domestic product spent on health care float up and up and up. At a certain point, people won't buy our goods and services and we'll end up with economic stagnation, like Germany. In the 1980s, the global economy was nowhere near as powerful. You may end up losing jobs because health care is a cost of doing business. That's not appreciated right now.
MC: So the question becomes one of how to allocate limited resources. Any suggestions?
MILLENSON: Ideologues on the left are anti-managed care and believe that if we just went to a Canadian single-payer system, everything would be fine. Ideologues on the right believe that if we simply went to medical savings accounts, everything would be fine. It's not simply a matter of funding. That's something we need to learn from the rest of the world. In this country we simply blame managed care. If tomorrow health care was run by the government or if everyone had medical savings accounts, there still wouldn't be enough money to give everybody everything. We still would have to figure out how to do things better because you still can't get away with simply paying less or doing less. Almost all developed countries around the world have national care systems. Regardless of their payment mechanisms, all of them are struggling with the issue of not having enough resources to give the middle class all the health care it thinks it needs. This is an international issue, and that fact has had no place at the table in the current policy debate. Canada's government has severely cut health budgets because it can't pay for everything. France, New Zealand, Australia, and other countries all around the world are dealing with this issue. Even if you have a lean and mean system that is parsimonious in terms of its budget, that doesn't mean that you're cutting out fat. A study published in JAMA showed that France and Britain have no more idea than we do of how to do the right thing and do the right thing right — that is, give the most appropriate care in the most effective manner.
MC: How is the Internet, even at this early stage, changing the physician-patient relationship and helping physicians do the right thing right?
MILLENSON: The Internet is doing to medical information what the Protestant Reformation did to the Bible, demystifying it and making it available for the masses. It's putting Medline searches in plain English a few mouse clicks away. It's giving patients the chance to get some sophisticated information, as well as a lot of misinformation, with which to confront their doctors. It's bringing into the open the fact that doctors are human and can't possibly remember every study on every disease forever. A patient in this country can sit in his doctor's examining room today and pull clinical guidelines for his condition off the U.S. Agency for Health Care Policy and Research web site on the Internet. Moving to a performance-based system means value purchasing, knowing what you're getting for your money. To know that, you have to have performance information. That information has largely been in the hands of large corporate purchasers, who use it to look at health plans, or if they wish, at individual hospitals and doctors. More of that information is becoming available to individual patients through the Internet.
MC: How should physicians respond to this flood of information?
MILLENSON: Physicians must do their jobs more effectively. We're finally reaching a point where it is no longer acceptable to have more computing power in your carburetor than in a physician's office. Doctors need information systems at least as good as those in the hands of patients bringing in printouts. They need guidelines that are available at the point of care. They must be able to do searches for information and not have to wait 20 minutes for an answer. Physicians will need automatic drug interaction guidelines built into their prescription process.
MC: How fast is this change?
MILLENSON: Not as quickly as some people would like you to think. The overwhelming majority of physicians, even those in big cities, do not have a PC on their desks. They still use computers more for financial and administrative tasks.
MC: What is technology's role?
MILLENSON: In the '60s and '70s, computerization seemed to become popular. In the '70s, some doctors were concerned about being replaced by computers. Today there's a saying that any doctor who can be replaced by a computer should be. There's much more acceptance of the fact that there are things that computers do better than people, like remember and sort information. Technology now is so ubiquitous that it can't be ignored. Even if you were practicing in an office that had a manual typewriter, an abacus, and a secretary licking stamps in the back office, your patients may still come in with an Internet printout. Medicare and private payers will ask you to submit computerized records. Medicine in the information age demands more information on quality. What happens when the surgeon at your local teaching hospital stands up and indignantly denounces the local health plan for rationing and violating quality of care, but another surgeon gets up and says the first surgeon is wrong? When Medicare made the transition to its prospective payment system for hospitals, doctors said this is absolutely wrong and people are going to die. You cannot kick people out of the hospital this early. Well, the changes happened and with just a little bit of adjustment we now have far shorter lengths of stay. That wasn't simply because of technology. It's because the technology that was available in 1983 and '84 and '85 was not being fully utilized because the financial incentives were not in place. There's clearly an analogy to what we're going through today even though we have not explicitly learned that lesson.
MC: What's your sense of the Zeitgeist?
MILLENSON: Accountability is part of the expectations of our era. We have report cards on teachers and on the armed services, on all kinds of functions that were once thought to be above this kind of performance data. Accountability is everywhere and medicine can't escape that. To me the key question is who will take over the health care system? How will we balance appropriate autonomy for physicians with appropriate accountability? When doctors had too much autonomy, we had price gouging, unnecessary surgery, and patients dying with nobody doing anything about it. When we went in the other direction and gave insurance companies too much power, we had inappropriate rationing of care with an eye towards making money for the insurance company.
MC: We're less than a year away from another presidential election. Two elections ago, health care was a huge issue. Speaking of the social spirit of the age, what's your early take on how big an issue it might be this time around?
MILLENSON: We need to realize that suing HMOs won't solve the problem of how to make tough decisions. We're not going to realize that in one year, so that's not what we'll be talking about next November. Once we realize that, we'll have to tackle those tough issues as a society. Because the number of uninsured is so high, we're going to talk about that. But if you give people insurance, you stimulate demand, and then what do we do? There are no easy answers in a developed country that wants to have compassion for everybody. When you talk about health care as a political issue, it has to be in the context of what politicians do for a living, which is pander to voters. Health care will come back as an issue particularly if the economy starts to soften. Apart from the health of our economy, we have an aging population, and older people need more health care. Stanford economist Victor Fuchs estimates that the cost of caring for the elderly alone could drive health care's percentage of the gross domestic product to 20 percent from 14 percent by the year 2020. We're finding new diseases and new ways to treat things that we would have never even treated before, and technology is expensive. Is society as a whole better off if somebody who would have died at 45 of a heart attack now works as an entrepreneur until age 85, until collapsing in his sleep while sailing his yacht off of the coast of Nantucket? Yes, but it shows up in the medical bill as higher medical costs. The issue of allocating and managing care is going to become more important. Some people believe we'll go to a two-tiered system. If your insurance says you can stay in this hospital for three days, you can simply decide to pay out-of-pocket and stay five days. We haven't done that.
MC: You suggest that Joseph Cardinal Bernadin, the late Catholic Archbishop of Chicago, framed the discussion wisely when he spoke of stewardship of health care resources.
MILLENSON: In the end, we come down to stewardship. There are not enough resources to go around. If we do not go to a performance-based health care system, then I believe we will allocate resources the way we always do, by lawyers and lawsuits. We'll do it by media appearances, which means that we never kill anybody who's photogenic. We'll do it by laws. If Congress has anything to say about it, we will have terrific coverage for breast cancer and prostate disease, and after that everything else is up for grabs. That would be a shame. There are a lot of terrific things happening. There's a lot of informed debate. The intellectual infrastructure is in place to move towards an information age. If you gave a speech on this topic in 1979, you would be booed or get hardly anybody there. When you give the speech in 1999 the crowds are bigger and the applause is hearty. However the follow-through is not there, because this is difficult to do.
MC: Thank you.