Transparency Metrics For high deductible and self insured clients Gary Fradin Copyright © HealthInsuranceCE, LLC, 2013 All rights reserved. This book may not be duplicated in any way, either in books, digital form or any other medium without the expressed written consent of Gary Fradin, except in the form of brief excerpts or quotes for the purposes of review. ISBN: 978-1-300-87920-6 1 2 The Author Gary Fradin is President of HealthInsuranceCE, a provider of insurance continuing education classes, and of TheMedicalGuide, an online tool that helps patients make wise, well-informed medical decisions. His previous books include: Moral Hazard in American Healthcare, 2007 Healthcare Problems and Solutions, 2008 Understanding Health Insurance, 2010 Uninformed: The Plight of America‘s Patients, 2013 Gary holds Masters degrees from both London and Harvard Universities and a Bachelors degree from Lancaster University in England. He lives in Easton, Massachusetts 3 4 Table of Contents Preface …………………………………………………………………………… Page 7 Introduction: The Need for Outcome Transparency and Metrics…………. Page 11 Chapter 1: The Transparency Quality Problem………………………………. Page 17 An international perspective ……………………………………….. Page 18 Unnecessary care by geography………………………………….. Page 27 Low quality and unnecessary care by hospital…………………… Page 36 Care quality by medication ………………………………………… Page 43 Orthopedic surgery and the need for comparative studies……… Page 47 Screening tests……………………………………………………… Page 52 April 4, 2012 ‗for the first time in history‘ ………………………… Page 63 Some concluding thoughts………………………..……………….. Page 69 Review Questions ……………………………………………….... Page 73 Chapter 2: Insurance Industry Solutions ………………………………. Page 77 Consumer driven healthcare………………………………………… Page 81 Insurance industry medical care quality measures………………… Page 93 Review Questions …………………………………………………… Page 105 Chapter 3: Consumer Engagement: Policy vs. Outcome Considerations … Page 109 Review Questions …………………………………………………… Page123 Chapter 4: Sickness Metrics and Some Cost Implications for Your Clients…… Page 127 High cholesterol and heart attacks………………………………… Page 135 PSA and prostate cancer……………………………………………. Page 144 We‘re making more sick people……………………………………. Page 150 Review Questions …………………………………………………… Page 155 Chapter 5: A Four Step Metric for Making More Informed Medication, Test and Treatment Decisions: some cost and quality implications………. Page 159 Learn your starting risk ……………………………………………… Page 160 Learn how much medicine can help…………………………………. Page 164 Learn how much medicine can harm ……………………………… Page 167 Learn the Number Needed to Treat ………………………………… Page 180 Review Questions ……………………………………………………. Page 190 5 Chapter 6: Metrics and Indicators for Hospital and Physician Choice……. Page 195 Which provider is ‗best‘?……….……………………………………… Page 195 Should you defer medical decisions to your doctor? ……………… Page 204 Review Questions ……………………………………………………. Page 217 Chapter 7: 19 Educational Modules for Brokers to Present to their Clients …. Page 221 Module 1: Understanding medical claims…………………………... Page 222 Module 2: How to choose a hospital……………………………….. Page 227 Module 3: How to choose a specialist………………………………. Page 232 Module 4: How to choose a primary care physician………………. Page 236 Module 5: How can you tell if medicine works? …………………… Page 241 Module 6: Understanding annual physicals …………………………. Page 247 Module 7: Which medical risks matter most? ………………………. Page 253 Module 8: Introducing the Number Needed to Treat ………………. Page 260 Module 9: Introducing the Number Needed for Harm …………….. Page 265 Module 10: What is Unnecessary, Dangerous Medical Care? …… Page 270 Module 11: Understanding medical ads ……………………………. Page 276 Module 12: Where you go is what you get ………………………….. Page 281 Module 13: Better safe than sorry? …………………………………. Page 288 Module 14: Are you sick? …………………………………………….. Page 293 Module 15: What types of advice does a doctor give? ……………. Page 299 Module 16: Some disease starting risks ……………………………. Page 304 Module 17: Overdiagnosis ……………………………………………. Page 309 Module 18: Some key sources of medical information …………….. Page 317 Module 19: What do 5-year survival rates mean? …………………. Page 324 Summary and references …………………………………………….. Page 330 Chapter 8: The Broker‘s Professional Responsibilities……………………… Page 339 The problem of unequal knowledge …………………………… Page 340 Do your fellow a favor …………………………………………… Page 344 Review questions ……………………………………………….. Page 354 Chapter 9: Some Concluding Thoughts ………………………………………. Page 358 6 Preface I‘m a huge fan of medical care. I‘ve seen the following during the past several years, a partial list from my own family and small circle of friends: My father recovered from a major heart attack 20 years ago well enough to ski in the Colorado Rockies until almost age 80. His pacemaker has provided a quality of life that would have been unimaginable years ago or in most other countries today. A close middle-aged friend had a cancerous kidney removed about 8 years ago and now lives a full, complete and virtually unrestricted life (rugby disallowed). His doctors expect him to enjoy normal longevity. An adolescent child of a friend had severe learning and emotional problems that threatened her ability to remain in public middle school. Medication and therapy helped address those problems and she ultimately graduated from a top college with honors. A child of another friend was born so prematurely at 3 pounds that she hadn‘t even developed ear ridges: her ears were completely smooth for her first day or so of life. She ultimately graduated from an Ivy League university, went into professional business management and experienced no physical or mental repercussions from her very premature birth. I had urinary frequency problems in my early 50s that negatively affected my quality of life and probably would have shortened it without a medical intervention. One ‗garden variety‘ procedure – a TURP – later and I returned to long distance bicycle riding, skiing and all regular activities. The point of this list: I‘ve seen medical care at its best and have benefited greatly from it. I‘m no anti-medicine churl. HOWEVER, I‘ve also seen medical care harm people. I‘ve seen men suffer from impotence after prostate surgery or incontinence after colon surgery, women suffer the negative psychological effects of mastectomies, kids become zombies from too much medicine, elders become exhausted and depressed from endless tests, follow ups, more tests and more follow ups, and much more. When I see these, I ask myself if the treatments were necessary or not. Certainly living with incontinence is better than dying fully continent. But living with unnecessary incontinence doesn‘t help anyone. 7 Recent medical care book titles include Overtreated, Overdosed and Overdiagnosed. The fundamental medical problem in this country has switched over the past 20 years or so (especially post Obama‘s healthcare reform) from sick people have too little medical care to healthy people have too much. It‘s causing us to go broke and some may do More Harm Than Good, the title of another recent book. After studying this issue for years, I was left with the question that I heard repeatedly during my one and only Harvard Business School class (I studied Regional Planning on the other side of the river): What are you going to do about it? And specifically, what can patients do about it? How can patients differentiate necessary from unnecessary care? How can they tell if they‘re overtested or appropriately tested, overdiagnosed or appropriately diagnosed, overtreated or appropriately treated, overdosed or appropriately dosed? How can they tell if they‘re receiving good, high quality medical care; poorer, low quality care; or unnecessary care? As I lecture, research and write, I‘m increasingly convinced that most consumers lack the necessary metrics to compare medical care interventions and make wise choices. I worry that in our market-driven, litigation oriented, fee-for-service based medical industrial complex, the incentives to overtreat outweigh the incentives to treat conservatively, that the historically tried-and-true ‗less is more‘ approach is disappearing from American medicine. I‘m also increasingly convinced that health insurance brokers have the opportunity, the incentives and the responsibility to teach their clients appropriate medical decision making mechanisms. Brokers shouldn‘t teach which medical decisions to make – they‘re not qualified or licensed to do this - but rather how to make wiser decisions, the metrics to use and processes to follow. I wrote this book to show brokers how to teach their clients the right questions to ask about their medical care and to give clients the necessary skills to make wise medical decisions. I hope it helps. ********** A word about my writing style. I‘m sometimes sarcastic, sometimes skeptical, sometimes cynical, sometimes angry and sometimes outraged but I‘m never negative. I‘m always optimistic that medical care will help sick people. 8 I hope that comes through to the reader. A word about me: I‘m not a doctor. I‘ve have taught healthcare economics to insurance brokers for the past decade. I was motivated to write this book, in part, to address the questions that arise regularly in class and the ignorance of many about how our medical care system actually works. If brokers who sell health insurance for a living don‘t know much of this information, then regular consumers who are professionally unexposed to