January 27, 2023
Dear Interested Readers,
Financial Troubles, Workforce Concerns, Access Issues, and Concerns For Quality of Care
One of my biggest post-pandemic surprises is that healthcare has moved down, not up, on the cascade of concerns that worry most people. Before the pandemic, during the elections of 2016 and 2018, politicians talked a lot about improving healthcare, and voters seemed to be interested in what they had to say. Healthcare was consistently in the top three to five of the issues that voters cared about. I reviewed several lists of issues for the 2022 election and none mention healthcare in the top five. Most did not mention healthcare at all. The AARP article did say that Medicare and the cost of medications were a concern for older adults
If you think back to the early months of the 2020 presidential campaign, you might remember a vigorous debate between the Democratic candidates for president. Bernie Sanders favored “Medicare For All.” Pete Buttigieg talked about “Medicare For Those Who Want It.” Elizabeth Warren’s proposal was very similar to Bernie Sanders’ ideas but with a slightly different timeline. All of the candidates you can remember and some that you have probably forgotten like billionaires Michael Bloomberg and Tom Steyer had a lot to say about healthcare. Late in 2019, there were 26 Democratic candidates and every one of them thought having a healthcare position for the voters to hear was important. After the South Carolina primary on February 29, 2020, the debate was just between Sanders with Medicare For All and Biden with his upgrades to the ACA. On March 13, 2020, Trump declared COVID a national emergency, and except for Bernie’s fading efforts to convince us that taxing billionaires would give us all better lives, healthcare became a second-tier issue in the election.
The pandemic dramatically showed us that the viability of our system of care required a constant flow of expensive elective surgeries and diagnostic tests. American healthcare has been driven by financial issues and was built to generate profit, and did not evolve as a system to adequately meet the needs of the population. COVID showed us that the system that many people thought was the most technically advanced in the world was vulnerable to labor shortages and supply chain problems and produced COVID results that made us look like a third-world country.
Thoughtful people had warned us for years that we were vulnerable to an inevitable pandemic of some sort. Like Jeremiah’s warnings to the people of Isreal, the advice of those who could look down the road was ignored and the consequence was a medical and economic disaster from which we have not yet recovered. For me, the most shameful reality to emerge from this embarrassing national failure which everyone wants to quickly consider a past historical event is the revelation that our system is so inequitable that even if a person has medical coverage their race can add to the possibility that they might not survive. In our country, your economic status is a significant factor in your risk of death even if you are white. It was a surprise to learn that where you live made a big difference in your risk of dying from COVID. If you lived in a rural area, your chances of survival were lower. Finally, the dominant political party where you lived had an impact on your chance for survival. Death rates in “red states” were reported to be 38% higher than in “blue states.”
The crepe that I am hanging is not meant to diminish the enormous achievement of our production of vaccines or the healthcare achievements of the Biden administration which I believe are not recognized by the majority of voters who have been focused on their own economic status, ongoing concerns about the war in Ukraine, and a host of other issues like global warming, crime rates, gun deaths, immigration policy, and homelessness that push the cost, availability, and quality of healthcare for everyone further down the list of our shared concerns. The confusing reality is that healthcare has been pushed off the political stage even as we experience measurable increases in cost, labor shortages that deteriorate access and quality, and continued inequities in many domains such as race, location, and socioeconomic status.
For months now I have been struggling with how to begin to refocus on what needs to change in healthcare without blithely saying “Everything!” I have quoted Dr. Ebert’s analysis many times over the last fifteen years and the COVID experience has made it seem more valid now than ever before. In case you may have missed it, Dr. Ebert wrote in 1965:
“The existing deficiencies in health care cannot be corrected simply by supplying more personnel, more facilities and more money. These problems can only be solved by organizing the personnel, facilities and financing into a conceptual framework and operating system that will provide optimally for the health needs of the population.”
Ebert begins by expressing doubt about care in the mid-60s and the futile attempts to improve care by just spending more, by hiring more staff, and building more facilities. He was pointing to the need for better systems of care that were built to produce equitable outcomes measured in the population. The undertone is that he had lost confidence in a system that persists until today to ever be adequate no matter how much it is tweaked. Let me bore you by deconstructing the last phrase of the paragraph to make a few points. He implies that our system of care should be constructed to provide optimally for the health needs of the population. COVID showed that it is not. From my personal contact with Dr. Ebert, I know that he believed that a system of care that was organized on a fee-for-service chassis would never adequately provide for our health needs. Even our nonprofit organizations function as if they had shareholders and were traded publicly. The CEOs of the largest systems earn many millions of dollars per year and hire consulting firms to enhance collections from people who are entitled to free care as was exposed by the New York Times in one of its podcasts earlier this week. In the podcast, I was amused to hear the famous quote from Sister Irene Krause, the legendary CEO of the 70s and 80s who led one of the largest Catholic systems in the country. She famously said:
I think Sister Kraous’ words have been used out of the context that concerned her. Now, when you hear those four words you know that some administrator is trying to justify the pursuit of a business plan that will probably and paradoxically negatively affect individuals or whole populations while pursuing greater profits by methods that undermine the intent of the mission. Those words are said in healthcare board meetings about as often as the Lord’s prayer is recited in church. I imagine that healthcare CEOs and their boards have those four words tattooed on their chests or permanently embedded in their brains on a little computer chip.
If you clicked on either Sister Krause or on the four words you will learn that her wisdom has been misdirected and they have been coopted from a focus on sustaining mission for people to a reality where people, especially the poor, are the victims of a diverted charitable focus. In the 80s Sister Krause earned about 200K most of which was donated to her order. Salary data is hard to come by and usually several years old, but even in 2017 there were a staggering number of healthcare CEOs at nonprofit healthcare systems that earned more than ten million dollars per year. Those are handsome paychecks to protect “the mission” by focusing on the margin over concerns about people and the quality and affordability of their care.
Those words, “no margin, no mission,” have been used to justify much more damage to the health of individuals, communities, and the nation than is readily apparent especially when you recognize consolidations that diminish access to care, payment policies that violate principles of charity, the misuse of public programs to add to profits like the 340 B drug program that was meant to foster care in the inner city and in rural America but now support expanding services in affluent communities. I should add that there are abuses of 340B from healthcare systems and from Big Pharma, but 340 B is a great example of how a finance-driven system of care can redirect well-intended programs meant to benefit poorer patients toward other ends. In our medical industrial complex, any policy that was meant to improve care can end up as a boon to both hospitals and the industry in ways that were never intended. Finance-driven health care is not patient-centric. It is institutionally centric, and it is often wrong more than right, and there are identifiable casualties of its self-serving construction.
I was surprised and encouraged on Sunday when I opened up my local newspaper to find three articles that I would recommend to you even though they were written to address healthcare concerns in New Hampshire and Vermont. The foundation of all three is the failure of a fee-for-service system of care to address the needs of our population with a system of care that is economically stable while serving the health needs of this region.
Let me paint the picture for you. Vermont and New Hampshire have about two million residents together. Many of the people in the populous areas along the Massachusetts border get at least some of their tertiary care in the academic centers in Boston. Many of them work in Eastern Massachusetts and have chosen to live in New Hampshire for its attitude about taxes or for some other economic or lifestyle reason. In the two-state area, there are two academic medical centers. In New Hampshire, we have the recently renamed Dartmouth Health which sits about two miles from the Connecticut River and Vermont. Most of the patients in New Hampshire above Manchester and Concord plus the eastern half of Vermont get care from Dartmouth. Vermonters come to Dartmouth, but I doubt that an equal number of people from New Hampshire travel up to the University of Vermont Medical Center which is located about one hundred miles and ninety minutes from Dartmouth up Interstate 89 in Burlington, Vermont. UVM gets a substantial number of patients from rural upstate New York. Two of the articles that I read are about the care delivered at Dartmouth Health which, as I have described, gets patients from about half of Vermont and central and northern New Hampshire. The other article was about a study done to examine the effectiveness of the ACA’s Medicaid extension in New Hampshire.
The headline in Sunday’s paper was “Looking to cut $120M in its budget, Dartmouth Health plans hiring freeze, job reviews” Over the last couple of decades Dartmouth has acquired several community hospitals in New Hampshire and Vermont plus a VNA that serves both states. The article identifies workforce issues as one of the root causes of Dartmouth’s malaise:
…the ongoing workforce shortage is a “primary contributor” to the health system’s financial challenges. In total, the system employs about 12,000 people. DHMC and the DH clinics had about 800 job openings listed online on Friday. Cheshire Medical Center had about 150 openings, while each of the three smaller hospitals had close to 100. The majority of the openings are for nursing or allied health positions…DH also is challenged by an inability to discharge patients to other settings in a timely manner due to a lack of beds and staff across the region.
Workforce issues with downstream disruptions of care are not unique to the Dartmouth system. Across the country, especially in non-urban systems, workforce issues have destroyed both hospital finances and care delivery. One particularly worrisome issue is that there are no Dartmouth system PCPs who are accepting new patients. Anyone needing care who does not have a PCP must get care at an urgent care facility or EW, but that is not patient-centered efficient care.
What can the system do? It was probably logical to try to create the system. Who knew that all of its good intentions would eventually force it to focus on finance and attempts to improve efficiency at the expense of patient care? Would Dartmouth or the smaller hospitals that feed it have survived if they had not consolidated? Are they trapped in a losing game where no acceptable outcome is possible? Is there any way in the current swirl of interconnected economic issues that they can survive without the help of public funds? The article continues:
On the revenue front, DH aims to increase its ability to meet demand for outpatient services at DHMC and its clinics in southern New Hampshire; improve coding and documentation to ensure it captures “appropriate reimbursement” for services; and improving the rates it’s paid by commercial insurers in part by opening up negotiations on multi-year contracts ahead of schedule.
To address margin improvement, DH seeks to grow services where new expenses are covered by increases in revenue, including expansion in pharmacy services.
To cut costs, DH is looking to reduce the cost of supplies; find more efficient ways to manage its workforce; and is welcoming employees’ suggestions for further ideas.
That last sentence surprised me. Does it mean that they are adopting Lean where the wisdom of those who do the work is captured for the benefit of the product and its customers? Most of those maneuvers described in the article sound like “cuts” or asking for more money from patients and commercial payers. Those moves may improve the balance sheet at Dartmouth Health where they continued the loss trend in the first quarter, but I don’t think that there is likely to be any improvement in access or in quality in the short term.
DH’s most recent financial results, filed with bondholders in November, show that it ended the first quarter of this fiscal year on Sept. 30 with a $41.4 million loss, or nearly 6%, on a nearly $770 million operating budget. That loss included $1.8 million in federal stimulus funds, but the health system wasn’t expecting any more federal stimulus money this fiscal year.
As is always true, the mergers that created Dartmouth’s network were advertised as creating a more cost-effective and patient-centered system of care that would benefit everyone with its efficiencies. An associated editorial entitled “Are we now receiving better care?” explores how that vision has failed. The editorial begins;
When the organization now known as Dartmouth Health first began swallowing up smaller hospitals and medical practices in the Upper Valley and in the wider region, it articulated a vision of a unified system in which patients would receive “the right care, at the right time, in the right place.”
As time went on, this vision was fleshed out to include primary care physicians who would treat routine illnesses, help patients manage chronic conditions, and coordinate care while serving as advocates when their patients required treatment by specialists. The severely ill who required complicated and specialized treatment in a hospital would go to Dartmouth Hitchcock Medical Center, while those less severely sick would be treated at the smaller, affiliated hospitals. All this would be accomplished seamlessly with the aid of a comprehensive, universal health records system.
All across the land similar affiliations and consolidations have occurred and many, like Dartmouth, have been found lacking in their ability to live the dream. I have a buddy who is on the board of our local hospital which is part of the Dartmouth system. He argues that without Dartmouth our little “critical access hospital” would have closed. I am happy that we still have our little hospital although I have paid very large out-of-pocket payments that I did not have for similar services in Boston. I am sure that part of the excessive charges I experienced were efforts to enhance revenue. One particularly surprising bill was for an MRI that I got there that was provided by an imaging service that pulls up a truck to the back door a few times a week. I know that the procedure would have cost much less in the system I once managed. In fact, we were sued by the same company when we terminated our contract with them because of financial practices that we considered unethical, and that we felt were designed to inappropriately increase revenue. I am sure that as the system seeks to find the 120 million it needs out of pocket costs for patients will rise.
The flow of care is complicated in both directions in a system once it begins to fail. Patients wait for a bed to open at the mother ship, and must stay longer in the tertiary center waiting for a bed at our little hospital. The biggest concern for me is the lack of access to primary care across the system. The editorial continues:
…a lack of primary care physicians in the system has resulted in DH “pausing” the acceptance of new primary care patients in some locations for nearly a year. Waiting times for existing patients to make appointments with their primary care physicians range up to six months. And when those patients do get sick with routine illnesses, they are diverted to walk-in clinics where they often wait for hours to see a physician assistant, or to stand-alone urgent care centers.
I was impressed that the editorial did seek to understand what might make things better.
In the bigger picture, it is hard to see much progress in the transition from a fee-for-service payment system to one in which health systems are financially rewarded for how effectively they keep their populations well, although DH is a participant in one such experiment in Vermont. And the effect of consolidation on prices paid by patients and insurers remains opaque.
I fear that it will be a long time before we move from fee-for-service finance toward the potentially better prospects of value-based payment for the care of a population. The COVID experience suggests to me that perhaps “just in time” inventory management and ideas and methods adopted from industries may not be appropriate in medicine where there can be a sudden increase in the need for services like we experienced with the pandemic. I hesitate to say it, but perhaps we should manage healthcare in a way similar to the military defense of the nation where the focus is as much on what might happen as it is on what is happening and we tolerate the expense of “being ready.” Similarly, we tolerate the expense of a fire department with its big trucks and equipment with a staff paid to be ready for a call. As long as no margin, no mission is the battle cry of healthcare, I fear that there will be many who will endure substandard access, and when they do get in the door they will find that the experience is not that patient-centered. The ideas of accepting the cost for adequate access and maintaining reserve resources to meet unexpected public emergencies are incompatible with a fee-for-service system of finance and are probably beyond what a system of value-based finance could accomplish. We need a national discussion about what kind of system of care we want and how we will collectively pay for it. In the design of a new system of care, equity across populations and regions needs to be the fundamental design principle.
Dartmouth has failed to achieve the vision that was used to justify its creation, but given the external challenges that all providers of care, especially rural providers, face I don’t think it ever had much of a chance. The solution to its problems will require policy changes in Concord and Washington, and a willingness to put the health of the nation before some business interests. I expect we will hobble along for a while, but I am reminded of the wisdom of Herbert Stein, the conservative economist from the University of Chicago who was Nixon’s advisor. In a statement that has come to be known as “Stein’s Law,” he articulated a principle that drives change.
If something can’t go on forever, it will stop.
What Stein’s Law does not tell us is how long it will take for us to realize that we “can’t get to where we want to go from here.” What allows us to continue on a road to nowhere is our failure to realize or accept that a system of care that is primarily driven and motivated by finance and the search for profitability can never give us the care and protection we want. Healthcare access and quality will continue to decline as more financial losses accumulate in many of the more vulnerable areas of the country. The continuing decline of healthcare for many Americans and the healthcare workforce has been largely due to our acceptance of the continuing harm and inequities that are the natural product of our current fee-for-service system of care.
There was a third article about healthcare in Sunday’s paper. I was startled to see it even as I appreciated what it reported. It seems that my state is trying to decide whether or not to continue to receive federal funds for the Medicaid extension. The report did outline how the 50,000 to 90,000 low-income recipients have had their health improved by the Medicaid extension where the state’s portion of the bill is a mere 10%. The article was entitled “Analysis finds NH Medicaid expansion a boon for public health, workforce, hospitals” There were many satisfying facts revealed by this study that probably would not have been done in a state that did not have a Republican governor and a Republican-controlled legislature where there are many who would like to cut state expenses even if the cuts damaged beneficial social programs. Here is what the study found:
Continuing Medicaid expansion has done more than improve recipients’ health through earlier cancer screenings, increased dental treatment and enhanced pregnancy care, according to the analysis.
It has also allowed beneficiaries to get the health care they need to stay in the workforce, a plus for them and the state’s employers desperate for workers.
Medicaid expansion has given the state’s hospitals millions of dollars to cover health care costs for uninsured people who would otherwise be unable to pay. It has lowered the state’s cost of health care for inmates, according to the analysis.
There was even more good news:
There was a 42.3% percent drop in the number of uninsured Granite Staters in the five years following the start of Medicaid expansion compared to the five years prior.
The newly insured live in rural parts of the state, and about half are under 45. About 74% of recipients are white, and people of color are disproportionately likely to be Medicaid expansion beneficiaries relative to the overall population, the analysis found…
Compared to the state’s population, a disproportionate number of beneficiaries identify as Hispanic, at 5%, or Black or African American, at 2.1%, according to the analysis. A higher percentage of beneficiaries live in the state’s more rural areas…
I wonder just how deep in the financial hole Dartmouth Health would be without the benefits that the ACA has brought to this state. The identified benefits go on and on:
The analysis pointed to research showing that parents who enroll in expanded Medicaid are more likely to enroll their children in Medicaid. Parents covered by Medicaid are also more likely to ensure their child has an annual wellness visit, critical to monitoring a child’s physical and mental health and keeping them current with vaccines.
There are additional indirect health benefits, the analysis found, when adults are able to work and don’t have the financial burden of health insurance. That includes steady access to housing and food.
The ACA is not perfect, and it would never have been my choice. I would vote for Bernie’s Medicare For All, but even Bernie’s offering was built on a fee-for-service chassis. I hope that New Hampshire doesn’t take a step backward by failing to renew the Medicaid extension. The day when we enjoy a system of care that is constructed to provide optimally for the health needs of the population is likely to be several decades away. I hope that as a first step in that direction, we will once again hear healthcare debated by wannabe presidents and national officeholders as we approach the 2024 election season.
Well, It Is Now Really Winter
I have been indoors most of the last week except for brief trips out to feed the birds, bring in wood for the fireplace, and move around a little snow for a neighbor. It is weird. I pay to have my lawn care and snow removal done for me, but I do both for clients of our nonprofit, Kearsarge Neighborhood Partners. It is good exercise.
I took the picture in the header on Wednesday at the height of the last of three storms that together added up to about two feet of snow. The lake can’t be seen. All you see is a white background where the lake should be. If you look closely you can see a couple of my feathered friends. The next week is forecasted as cold but without much snow. I can take that. We have enough snow now to satisfy my needs.
I have a friend who was once the town “engineer.” I asked him how they handled the snow back in the era when Robert Frost wrote “Stopping By the Woods On a Snowy Evening.” I was surprised to learn that they did not remove the snow. They rolled it with horse-drawn heavy rollers. The roller would be passed from one property owner to the next along the road because each neighbor would use their own horse to pull the roller. Once rolled the roads were ready for a horse-drawn sled like the one that Frost must have been traveling in when he stopped by the woods.
Wherever you are, be safe and make the most of the winter weather. The skiing here should be excellent for several weeks to come. Now that the winds have subsided and the snow is over, the sun will be out again. So will I. I hope that you have a great winter weekend of adventure wherever you are!
Be well,
Gene
