My work in health care-related issues has evolved over the past year to advocacy for broad-based employer health programs to much more targeted initiatives in four areas:

• Prevention and wellness, especially programs that have rapid and significant return on investment, such as immunizations;
• Wellness programs;
• Providing information to patients that improves their engagement in managing their health more effectively; and
• Hospital patient safety.

This last subject, patient safety in hospitals, is of broad interest to the federal government because the number of deaths occurring in hospitals because of deficient patient safety practices exceeds 200,000 people a year.  If these deaths occurred in spectacular airplane crashes, it would be equivalent to 10 fully loaded 747’s crashing every week and having every passenger die. Unnecessary deaths in hospitals are the third-leading cause of death in America, larger than every cause than cancer or heart disease.  More people die in one month in American hospitals than have died in the entire history of the Iraq and Afghanistan conflicts combined.

This is a particular area of focus for Dr. Don Berwick, the new head of CMS, the federal government agency responsible for both Medicare and Medicaid programs. I am going to do my best in 2011 to make sure it is of equal importance to hospitals, health plan administrators, and those who pay for hospital care, namely, businesses and individuals.

The New York Times highlighted this issue in the November 25, 2010, issue with a front-page story reported by Denise Grady, entitled “Hospitals Make No Headway in Curbing Errors.” In the article, Ms. Grady reports on a five-year study conducted in 10 North Carolina hospitals, which found that harm to patients was common and that the number of incidents did not decrease over time.  According to my good friend and colleague at the Harvard Advanced Leadership Institute program, Dr. Chuck Denham, the founder and head of TMIT, a non-profit devoted to transforming health care, there are three root causes to patient safety issues:

• Hospital acquired infections;
• Adverse drug events; and
• Deficiencies in care transitions or hand-offs (between emergency rooms and the remainder of the hospital, between shifts, between caregivers, between acute care and care after people leave hospitals, and from one hospital to another).

The Society of Actuaries, in a 2008 study, just focusing on the documentable costs at hospitals, found that hospital patient safety errors cost almost $20 billion a year, and it is highly probably that this estimate significantly understates the total cost. There are many cost-saving opportunities in the health care system that will be resisted, because they involve cutting payments to health care providers, reducing health care capacity, reducing health insurance coverage, or requiring people to pay more for health care.  However, no one can defend spending money on health care that kills or injures people, or results in serious, hospital-acquired infectious diseases. Saving money by reducing the frequency of bad hospital care practices is a no-brainer.

Dr. Denham pointed out that, while the airline industry has never had this intolerable unsafe record, it was far more dangerous to fly 40 years ago than it is today.  He referred me to a book by John Nance entitled Why Hospitals Should Fly.  Nance points out that many of the solutions to the patient safety are relatively easy, low-tech solutions, such as the consistent use of checklists, a practice that airline pilots and air traffic controllers have used for decades.  Many hospital errors occur simply because humans forget to check or recheck something they need to do.

Safety across all activity sectors also requires the elimination of excessive error-prone steps in processes in which errors create risks.  The simple substitution of putting bar codes on drug containers that eliminate human key entry errors reduces the frequency of people administering the wrong medicines.

This past summer, my daughter worked in a research lab and made an error frequently made in hospitals.  She picked up the wrong glass vial to commence an experiment.  When she described what happened, I pointed out to her that she made an error for the same reason errors are often made in hospitals: the vial was not color-coded to help remind her of its contents.  Hospitals make this same mistake with much deadlier consequences, by having health care workers confuse medications with saline solutions or water, because the containers are not clearly marked.

The incidence of hospital-acquired infections is often a result of health care workers not attending to a process of washing their hands frequently enough.  While it is easy to blame them, the opportunity to make hand washing easier is easy to create. At Pitney Bowes, we put hand-sanitizers everywhere, and we reduced the frequency of seasonal influenza, as well as upper respiratory infections.

Hospital workers and doctors sometimes believe that taking the time to wash hands reduces their productivity in terms of the number of patients they can see during the day, but increasing staffing to give everyone time to wash their hands is an investment that easily pays itself back.

The other big issue, which the recent health care reform legislation makes an effort to address, is the problem with preventable readmissions.  Many people end up back in the hospital for the simple reason that they fail to comply with the instructions hospitals provide them when they are discharged.  Early this year, I visited a major academic medical center that had a world-class electronic health information system, thanks, in part, to the work the brother of a close friend of ours had done.

However, despite the world-class information system that existed within the hospital, the discharge instructions provided to the patient upon discharge were in paper form.  There was no easy-to-use and standardized system for getting these instructions to the primary care physician for the patient or to whoever could most closely help the patient manage the post-hospital health care process.

The health care reform legislation will provide incentives to those hospitals,which do the best job in reducing preventable readmissions.  This is a welcome change in the law, but we have to go much further if we are going to reduce and eventually eliminate this problem.  Dr. Denham has done a wonderful and hard-hitting documentary entitled Waiting for Zero, which eloquently portrays the problem, with the help of actor Dennis Quaid, who, despite his wealth and influence, and his ability to secure what he believed to be the best available for his twin daughters, almost lost both of his twins because of hospital errors several years ago.

The hospital safety problem is the largest piece of a broader systemic problem of sloppy, error-prone health care in our country.  The solution is not a single-payer, or single-provider, system, or consumer-directed health care, but a relentless focus on error-free care delivery in every part of the health care system.

I should note that health care errors do not just happen in acute care settings.  In 1989, we lost a son at birth because of a poorly-administered lab test that prevented physicians from from diagnosing a condition that would have led to a early, planned, and, most likely successful cesarean birth.  Medical errors can happen anywhere and have devastating results.

Regardless of what else I do in 2011, I would expect that focusing on patient safety will be a high priority.

There is a relatively easy pair of solutions to the unemployment crisis.  The biggest issue for private sector employers which have provided retirement benefits for their employees is the burden of providing for future benefits for current and future retirees. (Government accounting is different. Government employers only have to provide for what they out in the current year.)  What many people do not understand is that when a private employer provides such benefits, it not only covers what it pays in the current year, but a share of what it will pay out in future years.  The exact allocation between current and future year benefit expenses varies from employer to employer, but there is no question that portion of current-year benefit expense allocable to future years is huge and it gets in the way of employers hiring new workers.

So how do we solve this problem?  It’s very simple, but the answer varies between pension and retiree medical expenses.

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As the son of a mother who, mercifully died suddenly as a result of an automobile accident when she was in the early stages of Alzheimer’s disease, and a father who deteriorated over an 15-month period, all of which was spent in a rehabilitation center and a nursing home after he broke his hip at age 82, I have thought a lot about end-of-life issues.

As a result, I was gratified to see an incredibly incisive and thoughtful article on this subject by Dr. Atul Guwande of Harvard Medical School in the August 2, 2010, issue of The New Yorker. The subject of end-of-life care for individuals with terminal illnesses or diseases is not a new one, but Guwande brings new insight to it.

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Daniel Henninger wrote a significant an Op-Ed piece in The Wall Street Journal on July 22 entitled “The Liberal’s Dilemma.” The “dilemma” of which Henninger speaks is the conflict between the broad agenda many liberals, virtually all Democrats, have in place to improve the well-being of broad swaths of the U.S. population and the narrow, but disproportionate demands of public sector employees’ unions, active and powerful private sector unions like SEIU and the narrow, but powerful and well-organized political classes that contribute a sizable chunk of campaign financing for the Democratic party.

The problem those who want to produce broad societal change face is that, to the extent they honor and defend the retirement benefit obligations and other huge financial benefits demanded by the unions and the political classes, the funds available for the much broader agenda drop well below critical mass.  In fact, it is fair to say that, absent a major pullback from these long-term retirement benefit obligations, almost no money will be available for the or below broader agenda.

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Many people have wondered why I, who have been passionate about universal access to health care, would have been, at best, lukewarm about both the recently enacted Patient Protection and Affordable Care Act (the name of the national health insurance reform legislation) and the earlier Massachusetts health insurance reform legislation.

Supporters of these pieces of legislation consider them a necessary first step toward longer-term health care system transformation.   Many point to a September 2009 Harvard Medical School study which estimated that lack of health insurance cost 45,000 American lives each year. If this admittedly imperfect legislation saved those 45,000 lives, how could it be negative? Moreover, how could anyone who cares about human life not enthusiastically support this legislation?

The flaw in their thinking is that they assume that the legislation has no other consequences that might result in reduced health care access, and, therefore, a potentially greater loss of lives for other reasons.

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Recently, I re-read Michael Lewis’ great book Moneyball, which, on the surface, is a book about baseball, and, particularly about Billy Beane, the General Manager of the Oakland Athletics.

Lewis, who wrote books such as Liar’s Poker, Panic, and The Big Short, is clearly intrigued by fields of endeavor in which individuals succeed because they recognize the value of data when others are operating more by the seat of their pants.  Lewis described a baseball talent evaluation marketplace in which Billy Beane, who was obsessively driven by performance statistics, battled baseball scouts, managers, and coaches who tended to evaluate players based either on their visible physical and athletic skills or the performances these individuals observed.  As a result, when Beane overruled his organization and made decisions based on his statistical analyses, he tended to acquire undervalued talent and get a premium price when he disposed of overvalued talent.

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The title of this blog is meant to provoke thinking about a fundamental dilemma that elected officials in any democracy face: when serving the public broadly means that jobs of a small number of people could disappear, what happens?

We have known for a long time that government is more responsive to a well-organized single-issue constituency, even if the vast majority of voters would oppose the position the single-issue group is taking.  For example, that is why government officials have consistently been reluctant to take on the National Rifle Association, even though the vast majority of Americans favor a more aggressive regulation of guns than is the case today.  I am not making a value judgment about this issue, other than to say that elected officials think of the electorate as a collection of well-organized, passionate special interest groups than they do a mass of voters to which they have to respond.

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Recently, I published a lengthy blog responding to Congressman Chris Murphy, a blog in which I took the position that the national health insurance reform legislation was flawed because it simultaneously increased the guaranteed access to health insurance nationally, but left critical cost management components to future actions by the Secretary of Health and Human Services and to states and localities.  To me, that was exceptionally risky for two reasons:

• It’s no different from any other situation in which you commit to spend money before you have it, and when you have confidence that you can get it, which, by the way, is why Bear Stearns and Lehman Brothers went bankrupt: they had fixed debt and contractual commitments, but found the short-term markets for getting cash temporarily closed to them.
• The obstacles to the cost reductions that could take health care spending down are formidable and, perhaps, unconquerable.

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The narrow purpose of this blog is to respond to Congressman Murphy’s comments, but the broader purpose is to give my perspective on the recently enacted health insurance reform legislation, so this blog will be very long.

Preliminary Comments

There were many good things in the legislation, including an enhanced focus on prevention, on health care quality, on expanding the reach and supply of community health centers, on tackling the challenges of long-term care, on correcting issues associated with senior citizen prescription drug coverage, and on experimenting with innovative and potentially transformational payment methods.  There was much to like about it, and I will devote my life to working with what has been enacted to make it achieve the goals of transformational and improved health care.

I empathize with lawmakers like Congressman Murphy who do not get presented with perfect, simple choices, especially on an issue like this, which is so contentious.  They have to make choices based on imperfect options.  He, like many of his colleagues, is trying to do the right thing, and has an exceptionally difficult job, and does it extremely well.

I took a few extra days to read this legislation, which was not easy to do, and his comments made me think much more carefully about my views, so I thank him on behalf of all of us.

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I have been asked by many people to comment on the health insurance legislation which was approved by both houses of Congress last night.  I waited until now, although the legislation filled 2,562 pages, so I cannot comment on all of its implications.

This legislation stopped being about health care reform, and eventually stopped being about constructive health insurance reform a while ago.  It essentially got enacted to prove that the Obama Administration could get something significant done.  As a political accomplishment, it is a landmark.  As a positive step toward fixing what is wrong with our health care system, I can only say that the President’s wish that he be the last President to have to address health care will not get fulfilled.  This legislation will require significant rework in most areas for a long time.

In every bad piece of legislation, there are good components, and this is no exception:

• There are specific areas of focus on prevention, and I commend leaders like Senator Harkin for being thoughtful in getting prevention on the agenda, and making meaningful progress on it.
• There are some small steps to improve the supply of doctors and nurses and other health professionals, and these are welcome.
• Closing the “doughnut hole” drug coverage for senior citizens was a good idea, because a deductible that kicks in at $3,400 was a great idea in theory, but a problem in practice.
• The legislation begins to address the long term care problem, which will become more significant as we all age.

What’s fundamentally wrong with the legislation?  It taxes many people to extend insurance coverage to 30 million Americans without addressing the fundamental flaws in the system that caused them and others to be without coverage in the first place.  The problems of uninsurance and underinsurance result from excessive costs which are passed on in higher insurance rates.  This legislation, by guaranteeing coverage and preventing insurers from terminating it when people get sick, will make the costs even higher and will create a vicious spiral in which in which rates go up, more people need subsidies, and taxes go up to cover those who cannot afford coverage.  In particular, the likely consequence of guaranteed coverage, regardless of current medical conditions, is that people who do not want insurance coverage will wait until they get sick to apply.  The penalty for that behavior, which undermines the financial model for this system, is far too low, and does not even go into effect until 2014.

The ways to break this spiral are also bad:

• The rate of cost increases can be reduced by reducing what insurance companies pay doctors and hospitals, but that will drive doctors out of the profession, and cause hospitals to charge more to those not securing government or state-regulated insurance, like self-insured employers and individual policyholders.
• The government and private insurance companies can start reducing what is covered and ration care, which is politically almost impossible to imagine.  This legislation is testimony to the government’s inability to deny coverage for everything every vocal interest group wants.
• The doctors will either cram more patients into an already crowded schedule, which reduces care quality for everyone, or they will delay seeing people longer, or they will simply drop service for patients who have Medicaid or other state insurance plans for low-income people.  Those individuals, who have insurance coverage, will get treated in emergency departments and drive significant cost escalation.

In effect, this legislation has the perverse effect of taxing many Americans to give more insurance coverage to people who will have inadequate access to the right kind of care.  We will be taxes heavily to enable more people who will have insurance cards to go to emergency departments.  The insurance will pay far more than if they had the right kind of care.

I would make one other prediction:  the very wealthy will drop out of the traditional insurance system altogether and access what will be a booming growth industry, concierge physician practices in which the patient pays a flat annual fee to be given a guaranteed high level of service.  Our health care system will end up having a gap between the service offered the rich and the poor far greater than what exists today.

What proponents of this legislation never understood is that health insurance access does not guarantee health care access.  In the 8^th Ward of Washington, DC, one of its poorest areas, there is one urologist serving a sizable population.  According to multiple studies done relative to that population, over 90% of the population has Medicaid or some other form of insurance coverage.

With the passage of this legislation, the percentage of the population with some form of insurance coverage increases to closer to 100%, but there will still only be one urologist, and, therefore, a large part of the population will end up going to the emergency department at the most convenient hospital to get care.  The legislation does nothing to improve health and, even if it improves the broad supply of doctors, will probably do nothing to get more doctors into the 8^th Ward.  The 8^th Ward problem is representative of a problem that exists in many parts of the country, and this legislation does little to address it.

Last year, Connecticut enacted a flawed piece of legislation over the Governor’s veto.  Like this legislation, the battle to pass it was really a political battle in which the Democratic majority won.  The good news is that the Democrats in Connecticut are earnestly working to try to do something good to improve health and health care, and work around the flaws in the legislation, and may eventually figure out how to rework this legislation to turn it into something good.  Let’s hope that the same process can play out in Washington.

There will be many more chapters to this story.